Patent Litigation Phases

Patent litigation progresses through several distinct phases. We will cover the phases through federal district court, but then the appeals kick in. Patent litigation is a specialized litigation with its own procedures and even its own appeals court (the Court of Appeals for the Federal Circuit or CAFC). The appeals court works in the same way as conventional appeals courts, but they focus on patents and other types of specialized litigation. In this way, the CAFC sees all the patent-related appeals and has the expertise to handle these cases well.

Patent litigation is covered under patent insurance, where your costs – either as the plaintiff or defendant – are covered by insurance. Note that patent litigation costs can be very, very expensive, often topping several million dollars.

Complaint and Answer

The patentee files a complaint in federal district court to start the lawsuit, and the plaintiff serves the defendant a copy of the complaint. The defendant has 20 days to respond, although the time to respond can be extended by agreement of the parties.

The complaint will allege the defendant infringed the plaintiff’s patent and will outline all of their legal arguments. The answer will respond to each and every one of the arguments, either admitting or denying the allegations.

Case Management Conference

After the complaint and answer, the court will schedule a Case Management Conference. Before the conference, the parties must propose a collaborative joint scheduling order. Here, the proposed order will have the parties’ agreements on discovery and mediators, as well as proposed deadlines. In many cases, a jurisdiction might have local patent rules that include the types of discovery and timelines that can be incorporated into the proposed order.

The court will approve the proposed order – or will make changes or decide any differences between the parties. The scheduling order will be issued and will set the schedule for the case going forward.

Fact Discovery

Discovery is that part of the case where each side collects information from the other side. This is the phase where each side will ask for documents from the other, which might include their design specifications or source code of a product, the accounting records of the products sold and their profit, the invention records of the inventor, and other information.

Discovery also includes depositions under oath of various people. The plaintiff may depose the defendant’s product engineer and accountant, while the defendant might depose the inventor. Depositions often come after written questions, often called “interrogatories.” These questions might ask detailed questions from the other side and set the stage for the in-person depositions.

Sometimes, discovery might be two phases: infringement and damages. This is where the case will first examine whether or not infringement actually happened. If the plaintiff wins on infringement, then they proceed to determine what were the damages and how much compensation must be given.

In many patent cases, the defendant will assert that the patent is invalid for some reason. If the defendant successfully invalidates the patent, the case is over and the defendant wins.

The fact discovery phase typically takes about 9 months from the answer deadline or about 11 months after the case was initially filed.

Claim Charts

During the lawsuit, both sides will develop claim charts. Claim charts are spreadsheets where each element of the patent claim is listed in one box, and next to it is a box showing where the defendant’s product matches that claim element. If there is even one claim element that is not shown in the defendant’s product, there is no infringement. Said another way, every single limitation of the claim must be demonstrated in the defendant’s product.

During fact discovery, the plaintiff will be working to fill out their claim chart to show infringement, and they will be diving deep into the defendant’s product to demonstrate each element of the claim. Similarly, the defendant will be trying to show that the plaintiff’s claims do not read on the defendant’s product.

Claim Construction

Patent claim construction is often called a Markman Hearing, after a case by the same name. In this stage, the exact definitions of each and every word in the claim is defined, and how the phrases and limitations of the claims are defined.

Patent claim limitations are generally afforded their ordinary meaning, however there are many ways that is changed. A patent attorney might make arguments to a patent examiner that might limit the breadth of a claim, for example, or the patent description might add a different meaning or flavor to a word.

The claim construction phase has both parties exchanging their definitions of each term, then they propose definitions for each other’s terminology. The courts usually try to get the parties to agree, but when they do not agree, both parties present their arguments and the court will rule.

It should be noted that a very high percentage of cases settle at the claim construction phase. One party or the other will recognize that if they lose on claim construction, they will eventually lose at trial.

Expert Discovery

After claim construction, experts will be called on to give opinion testimony on complicated accounting/economic issues or the technical issues. Experts typically prepare reports on their topics, then the expert reports from each side are exchanged. The experts then reply to the other expert’s reports and try to argue why their point of view is correct. After the back and forth using reports, each side will depose the other side’s experts.

The expert discovery phase may last about two months after claim construction. (As in all situations, the parties may ask the court for extra time, but that is not always granted.)

Summary Judgment

Approximately 3-4 months after claim construction (approx 16 months after filing the initial complaint) there will be a summary judgment phase. Here, either side will ask the court to rule in their favor based on overwhelming evidence. Typically, the defense argues that the patent is invalid as a matter of law and should be dismissed. One example might be that the plaintiff took too long to file the lawsuit (called “laches”) and their case cannot stand. Sometimes, the plaintiff might argue that their infringement case is overwhelming and should be decided right then without a trial.

Pretrial

18 months after the complaint is filed, the parties are finally getting ready for trial. During the pretrial phase, both sides will present witness lists and file motions about what can and cannot be shown during trial. They will also propose jury instructions. The court will rule on all these details and prepare for the actual trial.

Trial

The trial goes through a conventional trial procedure: jury selection, opening statements, fact and expert testimony, and closing statements. The jury’s role is to determine the facts of the case, then apply those facts according to the law. The jury instructions are the language of how those facts are to be applied.

The jury are common people, not industry experts or technical experts. The trial often hinges on how well technical concepts can be explained to ordinary citizens, not industry professionals.

Appeal

Any two companies who have spent the average $2.3M to get to this point will almost certainly appeal the case if they lose. The appeals court is set up to hear the case “de novo,” which means that essentially the entire case gets re-tried on appeal. However, the appeals process begins with much of the discovery and expert testimony already on the record, but the losing side of the trial will find some element to challenge.