In last weeks blog on the new Model Order that is being promoted by Judge Randall Rader regarding the implementation of strict limits on electronic discovery in patent suits, I mentioned in passing that the rules had already moved outside the Texas circuits into the California District Court under Judge Grewal. The case, DCG Sys., Inc. v. Checkpoint Techs, LLC, has been used as a testing ground by the judge to experiment with a change to the EDiscovery process. This post is a more detailed look at Judge Grewals approach.
On November 2nd, Judge Grewal issued an order that curtailed email production in a patent infringement case that was pending in his San Jose courtroom. Patent litigators are following the case closely to determine whether the approach will in fact reduce EDiscovery costs, or prove unworkable in the patent practice or even result in further venue shopping by litigants.
Grewals Order
Grewal’s has implemented the new order in DCG Sys., Inc. v. Checkpoint Techs, LLC, 11-03792 which involves patent litigation surrounding optical inspection of computer chips. Grewal decided to break up the EDiscovery into a series of phases (over plaintiffs objhections) with the first phase regarding an exchange between both sides of “core documentation” and only later moving into discovery regarding emails. Once emails were to be exchanged, the productions must focus on “particular issues”, with the number of search terms and custodians of records limited to only five per side, unless there is a mutual agreement to increase that number. Without an agreement, the requesting party will be forced to pay the costs of the increased production of any email information.
The unique factors surrounding Grewal’s adoption of the new Model Order is that his Order includes an explanation of his reasoning for adopting the Order, as well as some direct references to Judge Rader’s implementation speech. Specifically his order included language about the “disproportionately high expense of discovery in patent cases," and says, "these restrictions are designed to address the imbalance of benefit and burden resulting from email production in most cases." Both of these quotes are at the heart of the Model Order passed by Judge Rader.
Extending the Order Beyond Non-Practicing Entities
The original rule was aimed at non-practicing entities, often refereed to as “patent trolls” because these suits typically had a huge imbalance in the cost of discovery. Patent trolls have been known to file cases with the express hope of achieving high priced settlements from defendants in order to avoid the high cost of litigating the matter. However, DCG Sys., Inc. v. Checkpoint Techs, LLC is a suit between competitors and DGS Systems attorney, Mark Miller from O’Melveny argued that the Model Order was designed exclusively for non-practicing entity suits.
Grewal responded to this issue by saying, “"there is no reason to believe that competitor cases present less compelling circumstances in which to impose reasonable restrictions on the timing and scope of email discovery." And further, if competitor cases "lack the asymmetrical production burden often found in NPE cases, so that two parties might benefit from production restrictions, the model order would seem more appropriate, not less."
Grewal acknowledges in his order that he is breaking new ground with the Order that he crafted. "Perhaps the restrictions of the model order will prove undue," he wrote in his order. "In that case, the court is more than willing to entertain a request to modify the limits. But only through experimentation of at least the modest sort urged by the chief judge will courts and parties come to better understand what steps might be taken to address what has to date been a largely unchecked.”
Only time will tell whether this attempt at controlling EDiscovery costs will be successful.
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