Judges Take The Lead In Controlling Electronic Discovery Cost And Complexity With New Proposed Procedures And Discovery Orders

A Model For Predicting Permanent Injunctions After eBay v. MercExchange

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The Federal Rules of Civil Procedure are based on the fundamental proposition that litigation should be “administered to secure the just, speedy, and inexpensive determination of every action and proceeding.” Patent litigation, however, is typically far from inexpensive, and efforts to avoid or ameliorate the expense of litigation may, some fear, often drive the result of litigation as much as or more than an objective determination of justice. The primary contributing factor to the expense of patent cases today is in many instances related to discovery and production of electronic documents and data. For some years, commentators have suggested that overbroad and unnecessary e-discovery can multiply the total cost of a patent defense by a factor of three or more. At a recently convened conference of the Eastern District of Texas Bench Bar Conference, the Federal Circuit Advisory Council unanimously adopted a proposed “Model Order on E-Discovery in Patent Cases” (the “Model Order”) which, if widely implemented by district courts in patent litigation, could potentially go a long way towards curtailing the runaway costs of e-discovery production in patent cases. This article will discuss the background of common e-discovery concerns and how the Model Order proposes to address some specific inefficiencies in e-discovery as it has developed over the past several years.

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*Jeffrey Sullivan would like to thank law clerk Sean McDonagh for his substantial assistance with the preparation of this article.

Sometimes, aware that Congress is unhappy with judicial precedent, courts will shake things up on their own, making adjustments in their own practices to prevent legislative intervention. In 2006, the United States Supreme Court did just that. In the face of proposed legislation that would have had a similar effect, the Supreme Court decided the landmark case eBay, Inc. v. MercExchange, L.L.C., eliminating the United States Court of Appeals for the Federal Circuit's then-existing rebuttable presumption that a permanent injunction should automatically issue against future infringement when a patent holder successfully proved an infringement claim. Since the Court’s issuance of that opinion, district courts have grappled with applying the traditional equitable standard used to determine whether an injunction should issue, such that a plaintiff, to gain an injunction, must demonstrate: (1) irreparable injury; (2) inadequate remedies available at law; (3) the balance of hardships weighs in its favor; and (4) a permanent injunction would not disserve the public interest.

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*This article first appeared in Bloomberg Law Reports - Intellectual Property April edition and was co-authored by Benjamin N. Simler of Irell & Manella.