November 7, 2015
Don’t Let Protective Orders Trip Up Your IPR Strategy
The PTAB recently addressed what is a common – but unnecessary – problem created by a protective order issued in a parallel Federal District Court litigation. In B/E Aerospace Industries, LLC v. MAG Aerospace Industries, LLC, the Patent Owner introduced evidence of commercial success in the Patent Owner’s Response Brief. In reply, the Petitioner wanted to introduce what it contended was contradictory evidence, namely that any commercial success was based upon features of the commercial product that were not part of the claimed invention. The problem was that the evidence was embodied in documents produced by the Patent Owner during the parallel Federal District Court litigation, and the Patent Owner marked the documents “Confidential” under the court-entered protective order. The terms of the protective order prevented use of “confidential” information in matters outside of the case.
The Petitioner twice sought an order from the Board for the Patent Owner to produce the subject documents in the IPR, so as to avoid the preclusion effect of the protective order. The first time, the Board told the parties to “attempt in good faith to agree to submittal of portions of the documents in question.” Not surprisingly, the Patent Owner would not agree. Ultimately, the Board denied the Petitioner’s request. At first questioning whether the request was a proper “discovery” request at all (since the Petitioner was already in possession of the documents), the Board found that (i) the documents would not be considered “routine discovery,” (ii) the Petitioner had not sought authorization to file a motion for “additional discovery,” and (iii) the Board was not convinced that the requested order “would promote the just and speedy resolution of this case,” citing the fact that the Petitioner’s reply brief was due in about a week and the oral argument was less than six weeks away.
The foundation for the Board’s decision is shaky at best. It is unclear how the issuance of an order for the Patent Owner to produce a limited and defined set of documents that had already been produced in the parallel Federal Court litigation would affect the “speedy” resolution of the IPR. It is even more unclear how precluding the introduction of available, material rebuttal evidence promotes the “just” resolution of a case.
In any event, this case demonstrates the tight spot that a party in an IPR can be put in as a result of a protective order in a parallel federal court litigation. But it is entirely avoidable. At last count, over 80% of IPRs were filed in response to parallel Federal Court litigation. In effect, IPRs have become, at least for the time being, an integralpart of most patent litigation. Defendants, when negotiating protective orders in Federal Court litigation, should routinely include provisions permitting use of “confidential” information in related IPR proceedings directed to the patents-in-suit. This is entirely reasonable and would avoid the headaches evident in the B/E Aerospace case.