Changes to the Federal Rules of Civil Procedure effective on December 1 will affect, among other things, the pleading requirements in patent infringement litigation and discovery procedures. The most significant changes (1) eliminate the so-called “Form 18” as setting the standard for required the level of specificity in pleadings in patent infringement cases; and (2) require discovery requests to be “proportional ” in the circumstances of each case.
In its decisions in Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the U.S. Supreme Court determined that more specificity is required in a civil complaint than what traditionally passed muster under the notice pleading standard of the Federal Rules. In fact, Iqbal and Twombly have been applied in the context of induced patent infringement cases to require a level of factual detail in the pleadings that amounts to more than just a threadbare allegation of infringement. However, in 2012, the U.S. Court of Appeals for the Federal Circuit confirmed that Form 18 is the standard by which complaints alleging direct infringement are judged. See R+L Carriers, Inc. v. DriverTech LLC, 681 F.3d 1323, 1334 (Fed. Cir. 2012) and K-Tech Telecommunications, Inc. v. Time Warner Cable, Inc. 714 F.3d 1277 (Fed. Cir. 2013). Based on Form 18, providing a patent number and identifying an accused product was sufficient. Under the December 1 changes, the rule permitting reliance on certain forms is abolished, and following Form 18 is therefore no longer enough. Instead, consistent with Twombly and Iqbal, all patent infringement complaints must include sufficient factual detail to demonstrate that the claim of infringement is “plausible.”
Rule 26 has also been amended to provide not only that discovery requests must be relevant to a party’s claim or defense, but also that the requests be “proportional to the needs of the case.” Under revised Rule 26(b)(1), factors to be considered in determining whether discovery is proportional include: (1) the importance of the issues at stake; (2) the amount in controversy; (3) the parties’ relative access to relevant information; (4) the parties’ resources; (5) the importance of discovery in resolving the dispute; and (6) the burden and expense compared to the benefit.
Other notable rule changes include the following:
- The time limit for service of a complaint after filing is reduced from 120 days to 90 days (Rule 4(m));
- The time for issuing a Scheduling Order has been reduced from 120 days to 90 days after a defendant has been served, or from 90 days to 60 days after any defendant has appeared (Rule 16(b)(2));
- Document requests can be served at any time more than 21 days after the summons and complaint are served, and responses are due within 30 days after the parties’ first Rule 26(f) conference (Rules 26(d)(2) and 34(b)(2);
- A party responding to requests for production must state that it will produce copies of documents or electronically stored information and that the production will be completed at the time “specified in the request or another reasonable time that is specified in the response” (Rule 34(b)(2)(B);
- Objections to discovery must be stated with specificity and an objection must state whether information is being withheld based on the objection (Rule 34(b)(2));
- If electronically stored information that should have been preserved is lost or destroyed because of a failure to take reasonable steps to preserve it, the Court “may order measures no greater than necessary to cure” any prejudice, and if it is established that a party acted with intent to deprive the other party of information, the Court may presume that the information was unfavorable to the party and may so instruct the jury, dismiss the action or enter a default judgment. (Rule 37(e)).
It is likely that individual District Courts will take different approaches to these new rules, e.g., with respect to the level of specificity required in pleadings in patent infringement cases, and the proportionality requirement for discovery. We will monitor cases as the new rules are implemented and report significant developments.