The biggest news out of the E.D. Texas Bench Bar Conference from last week appears to be that the Court has entered a Model Order Focusing Patent Claims and Prior Art to Reduce Costs. The Model Order, based on the Federal Circuit model order with some important differences, is important for retailers who routinely find themselves targets of patent suits filed in the E.D. Texas. In several ways, the Model Order is more restrictive than the Federal Circuit version. Here are the key provisions (Updated based upon some thoughtful comments from Michael Smith of the E.D. Texas Weblog):
- Plaintiff Limits Asserted Claims with Claim Construction Discovery. By the PR 4-4 claim construction deadline, the patent holder must serve a Preliminary Election of Asserted Claims with no more than ten claims per patent and no more than 32 claims total. However, if the patent holder asserts only one patent all per patent limits in the Model Order increase 50%.
- Defendant Limits Prior Art. Fourteen days after service of the Preliminary Election of Asserted Claims, the defendant serves its Preliminary Election of Asserted Prior Art with no more than twelve prior art references asserted against each patent and no more than 40 references total. Multiple documents that describe a single prior art instrumentality count as a single reference.
- Final Election of Asserted Claims. 28 days before initial expert reports are due, the patent holder must serve its Final Election of Asserted Claims, identifying no more than five claims per patent, from among the original ten, and no more than sixteen claims total.
- Final Election of Asserted Prior Art. By the deadline for burden of proof expert reports, a defendant must serve its Final Election of Asserted Prior Art with no more than six asserted references per patent from the originally asserted up twelve references for the patent, and no more than twenty total references, from those previously identified. It is important to note that for the Final Election of Asserted Prior Art references (not for the Preliminary Election), each obviousness combination counts as a separate one of the six prior art references. The Model Order is a bit ambiguous on this point, but presumably each obviousness combination does not count against the twelve total prior art references.
- Modification by Agreement or for Good Cause. The parties can seek to modify the Model Order by agreement or for good cause.
Overall the Model Order seems like a nice tool for streamlining cases and creating some certainty. There appear to be two big concerns:
- It is not 100% clear that the Model Order applies to already pending cases, although depending upon the stage of a case one could see the Court imposing the Model Order on existing cases; and
- As noted above regarding the Final Election of Asserted Prior Art, it is not perfectly clear that while obviousness combinations are counted as one of six references per asserted patent that obviousness combinations are not counted against the total number of twenty references. If obviousness combinations are counted against the twenty total references allowed, it could be very restrictive. And because you can only assert six references per patent, a defendant faced with a number of dependent claims having varied limitations may find the six references to be very limiting.