Archives for May 2013

USITC Adopts Final Rules Related to E-Discovery

On May 20, 2013, the U.S. International Trade Commission (USITC) announced amendments to its Rules of Practice and Procedure to address the scope of discovery in general and, in particular, the scope of e-discovery in section 337 investigations.

Among other things, the amended rules include specific e-discovery provisions similar to Fed. R. Civ. P. 26(b)(2)(B), limiting discovery of electronically stored information from sources that the producing party identifies “as not reasonably accessible because of undue burden or cost.”  The administrative law judge (ALJ) may still order discovery of such information if the requesting party shows good cause.  However, the ALJ has discretion to “specify conditions for the discovery” (e.g., cost sharing or payment of costs by the requesting party).  The amended rules also include several specific situations in which the ALJ must limit discovery in response to a motion to compel, including when the ALJ determines that “the responding person has waived the legal position that justified the discovery or has stipulated to the particular facts pertaining to a disputed issue to which the discovery is directed.”  Specific guidelines relating to the content and timing of the production of privilege logs are also included in the amended rules, along with provisions governing the inadvertent production of privileged or work-product information.

The amended rules will become effective on June 20, 2013, and will be applicable to investigations instituted after June 20.  Our Special Report on the amendments to the USITC’s Rules of Practice and Procedure is forthcoming.

En Banc Federal Circuit Unable to Reach Consensus on Patent Eligibility Standard for Computer-Implemented Inventions

On May 10, a divided Federal Circuit issued a one-paragraph per curiam decision in CLS Bank International v. Alice Corp., affirming the district court’s ruling that the claims of Alice Corp.’s patents are not directed to patent-eligible subject matter under 35 U.S.C. §101. The asserted patents relate to a computerized trading platform used for conducting financial transactions. The asserted claims include method claims, computer-readable media claims, and system claims. A majority of the court affirmed the district court’s holding with respect to the method and computer-readable media claims. However, only an equally divided court affirmed the district court’s holding with respect to the system claims.

There is no majority opinion supporting any portion of the decision. Instead, different groups of the judges filed six separate opinions demonstrating a deep divide on the appropriate standard for determining the patent eligibility of computer-implemented inventions. Only the Court’s one-paragraph per curiam decision has precedential effect, and none of the opinions constitutes authoritative guidance on how to determine patent eligibility of computer-implemented inventions. The approaches taken in the different opinions are significantly different in many respects, so that they collectively offer little, if any, clear or consistent insights, other than that future decisions of the Court are likely to be very panel-dependent.

The failure of the Court to reach a consensus most directly impacts computer-implemented business method inventions, as the state of the existing law is the most uncertain and conflicted involving this type of invention.

Our Special Report on the CLS Bank International v. Alice Corp. decision will be published next week.

U.S. Supreme Court Holds that Taking Advantage of Self-Replicating Properties of a Patented Invention May Be Infringement

In a May 13, 2013 decision, the U.S. Supreme Court held that a farmer’s unauthorized re-planting of patented seeds to make copies of those seeds for future planting was an act of patent infringement. In this case, Monsanto sued a farmer (Bowman) for gathering and re-planting seeds that were produced as a result of licensed use of Monsanto’s patented seeds. The license did not extend to such use of the patented seeds.

The Supreme Court held that such manufacture of copies of the patented product (by replanting and harvesting) was not protected by the doctrine of patent exhaustion. The Court held that non-replicating uses of the patented product (e.g., consumption by humans or animals) were the normal and intended uses of the product, and that use of the patented product to make further copies of that product is therefore not a protected activity. The Court distinguished, and expressly did not rule as to, other technologies in which the normal use involves replication (e.g., where the product’s self-replication is outside of the control of the purchaser or where replication is necessary and incidental to the intended use of the product).