ITC Proposes New Rules to Limit Discovery

Managing Intellectual Property

The U.S. International Trade Commission (ITC) recently proposed new rules to address concerns relating to discovery in Section 337 investigations. “The intended effect of the proposed amendments is to reduce expensive, inefficient, unjustified, or unnecessary discovery practices in agency proceedings while preserving the opportunity for fair and efficient discovery for all parties,” the Commission wrote. 77 Fed. Reg. 60952 (Oct. 5, 2012). The new rules include specific limitations on the production of electronically stored information (ESI), general limitations on discovery, and specific rules relating to privilege logs and the handling of inadvertently produced privileged information. At least one Administrative Law Judge (ALJ) has already referenced the proposed rules in resolving a discovery dispute.

The first proposed amendment states that parties are not required to produce ESI “from sources that the [party] identifies as not reasonably accessible because of undue burden or cost.” If Party A seeking the discovery then files a motion to compel the production of the ESI, Party B, from whom the discovery is sought, “must show that the information is not reasonably accessible because of undue burden or cost.” If that showing is made, the ALJ may still order Party B to produce the information if Party A “shows good cause.” The ALJ may specify conditions for the discovery, such as requiring Party A to pay all or some of the costs of production.

The second proposed amendment places general limitations on discovery and permits the ALJ to limit requested discovery if: (1) it is “unreasonably cumulative or duplicative” or can be obtained from a more convenient, less burdensome or less expensive source; (2) the party  seeking discovery has had ample opportunity to obtain the information; (3) it relates to an issue that has been mooted by waiver or stipulation; or (4) the burden or expense of the discovery outweighs its likely benefit.

The third proposed amendment imposes requirements for privilege logs and the procedure for sequestering inadvertently produced privileged information. If a party withholds information or documents on the basis of a claim of privilege or work product protection, the proposed amendment requires that the party produce a log identifying the document and specifying certain information about it. If a party inadvertently produces privileged information, the party may provide notice to the recipient, which must then destroy the information and may not use it. The recipient may then file a motion to compel the production of the information. This proposed rule is intended to mitigate the concern that the inadvertent production of privileged information will operate as a subject matter waiver of all protected information.

Though they are not yet final and in force, the proposed amendments have already begun to affect Section 337 litigation. See Certain Elec. Imaging Devices, Inv. No. 337-TA-850, Order No. 12 (Nov. 19, 2012). In Inv. No. 850, Judge Essex cited the proposed rules when he granted-in-part a motion for a protective order limiting the discovery of ESI to 15 custodians. Judge Essex found that Respondent HTC’s need for broad discovery regarding an on-sale bar did “not outweigh the undue burden and expense of unlimited discovery.” Id. at 3. While this order represents some progress toward more efficient and less expensive litigation under Section 337, Judge Essex also stated that “discovery in ITC investigations remains broad” and permitted HTC to move to expand the number of custodians. Given this caveat, one may wonder just how much impact the proposed amendments will have on patent litigation in the ITC.
By Bas de Blank and Jordan L. Coyle

This article was originally published in Managing Intellectual Property in December 2012.