Staffed with sophisticated and respected judges that understand the significance of intellectual property disputes, the District Court of New Jersey has long had one of the heaviest patent dockets in the country. On January 1, 2009, the New Jersey District Court took another step to make New Jersey the "go to" jurisdiction for patent litigation by formally adopting local patent rules designed to expedite and streamline patent litigation.
The amended local rules attempt to pick the best practices from the local patent rules established in other jurisdictions like the Northern District of California and the Eastern District of Texas. Patent litigation in New Jersey now requires early contention and document disclosure, and has a specified process for limiting contention amendments and conducting claim construction hearings. These new rules will help to decrease the time to trial, increase the early exchange of information without discovery battles, and decrease the overall cost of litigation. In some instances, the New Jersey local patent rules are more expansive than those established in California and Texas. For example, respecting New Jersey's close connection to the pharmaceutical industry, the new local patent rules have special provisions for handling Hatch-Waxman Act cases more efficiently than other jurisdictions.
Now more than ever, litigants must strongly consider the benefits of bringing a patent litigation in New Jersey when deciding on the best venue for their case. A brief discussion of some of the key provisions of the new local patent rules is below.
Provisions Under The New Jersey Local Patent Rule
One of the main provisions under New Jersey's local patent rules requires the plaintiff patent holder to serve contentions and documents early. Within 14 days of the initial scheduling conference, the patent holder must serve "Disclosure of Asserted Claims and Infringement Contention." (L. Pat. R. 3.1) The "Disclosure of Asserted Claims and Infringement Contentions" is required to contain among other things:
(1) each claim of each patent in suit that is allegedly infringed including the applicable statutory subsections of 35 USC § 271 asserted;
(2) the identification of defendant's "Accused Instrumentality;"
(3) a chart identifying where each limitation of each asserted claim is found in each "Accused Instrumentality;"
(4) whether the alleged infringement is literal or under the doctrine of equivalents;
(5) the priority date to which each asserted claim allegedly is entitled;
(6) the basis for any willful infringement claims.
(L. Pat. R. 3.1).
Along with the above disclosure the patent holder is also required to produce documents including:
(1) documents sufficient to evidence each discussion with, disclosure to, or other manner of providing to a third party, or sale of or offer to sell, or any public use of, the claimed invention prior to the date of application for the patent in suit;
(2) documents evidencing conception, reduction to practice, design and development of each claimed invention, which were created on or before the priority date;
(3) file histories for each patent-in-suit;
(4) ownership rights of the party asserting patent infringement;
(5) and if the patent holder is asserting that its instruments practice the claimed invention, documents sufficient to show the operation that is embodied by the asserted claims. (L. Pat. R. 3.2).
Likewise, the defendant accused infringer, is required to serve "Invalidity Contentions" within 45 days after receiving plaintiff's "Disclosure of Asserted Claims and Infringement Contentions." (L. Pat. R. 3.3). The "Invalidity Contentions" are required to contain the identity of each item of prior art that would make each asserted claim invalid as obvious or anticipated, an explanation for any obviousness assertions, a chart identifying specifically where in each alleged item of prior art each limitation of each asserted claim is found, and any ground of invalidity based on 35 U.S.C. §101 and §112 for indefiniteness, enablement or written description.
The accused infringer is also required to produce documents to sufficiently show the "Accused Instrumentality," in addition to copies of any prior art identified in its "Invalidity Contentions" which did not appear in the file history of the patent(s) at issue. (L. Pat. R. 3.4). Thus, under New Jersey's local patent rules, the parties would be in possession of infringement and invalidity contentions along with related documents within two months of the initial scheduling conference.
Claim Construction Proceedings
In addition to requiring early contention disclosures and document production, the local patent rules also provide a comprehensive protocol for claim construction in a series of exchanges and filings leading up to the claim construction hearing. The initial exchange requires the parties to produce a list of their proposed claim terms. Timing of the exchange is triggered by whether validity is at issue. If validity is an issue, then the parties are required to exchange claim terms within 14 days after the defendants serve their "Invalidity Contentions." In the minority of cases where patent validity is not an issue, the parties are required to exchange the list of their proposed claim terms including means-plus-function terms if any, within 45 days after defendants have been served with the "Disclosure of Asserted Claims and Infringement Contentions." (L. Pat. R. 4.1).
Three weeks after the parties exchange their claim term list, the second exchange occurs where the parties produce their "Preliminary Claim Constructions." All supporting intrinsic and extrinsic evidence for each party's "Preliminary Claim Constructions" must also be identified at that time. (L. Pat. R. 4.2). After each exchange, the parties must meet and confer to narrow the issues and to prepare and finalize the "Joint Claim Construction and Prehearing Statement" which is due within 30 days after the parties exchange their "Preliminary Claim Constructions." (L. Pat. R. 4.3). Discovery relating to all claim construction must be completed within 30 days of serving and filing the "Joint Claim Construction and Prehearing Statement." (L. Pat. R. 4.4). The parties are also required to contemporaneously file and serve their opening Markman briefs and supporting evidence within 45 days after serving and filing the "Joint Claim Construction and Prehearing Statement." (L. Pat. R. 4.5). If the parties request a claim construction hearing, they must submit a proposed schedule to the court within two weeks after serving and filing their responding Markman briefs. (L. Pat. R. 4.6).
The New Jersey local patent rules also limit the ability to amend contentions by requiring an application and showing of good cause. Examples of good cause include: (1) a claim construction by the Court that is different from that proposed by the requesting party; (2) recent discovery of prior art despite earlier diligent search; (3) recent discovery of nonpublic information about the "Accused Instrumentality" which was not discovered, despite diligent efforts, before the service of the Infringement Contentions, and; (4) disclosure of an asserted claim and infringement contention by a Hatch-Waxman Act plaintiff under L. Pat. R. 3.6(f) that requires a response by defendant because it had not been previously presented or reasonably anticipated. Leave to amend contentions is still required despite the requirement under Fed. R. Civ. P. 26 to supplement disclosures. (L. Pat. R. 3.7).
New Jersey, the Eastern District of Texas and the Northern District of California, now all share similar provisions for exchange of contentions, document production, advice of counsel information and claim construction. The timing of the events are also comparable between the three districts. New Jersey's rules however, differ from other jurisdictions in that New Jersey's Magistrate Judges have the principal responsibility for pre-trial activities and will therefore be highly involved in implementing the schedule under the local patent rules. In addition, New Jersey's local patent rules contain special provisions reflecting the district's heavy patent docket containing cases arising under the Hatch-Waxman act.
Unlike typical patent infringement cases, the roles of the parties in Hatch-Waxman cases are reversed. For instance, the Hatch-Waxman plaintiff typically does not know who the alleged infringers are until they receive a Paragraph IV Certification letter from the alleged infringers informing them that an Abbreviated New Drug Application ("ANDA") or New Drug Application ("NDA") has been filed and their patents are being challenged. The certification letter typically sets forth detailed reasons for the alleged infringer's claim of non-infringement and/or invalidity of a patent. Upon receiving the notification letter, the patent holder has 45 days to determine whether to file suit. Therefore, in a typical Hatch-Waxman case, the potential defendant knows the patents that will be asserted, the identity of the plaintiff, and the time frame for filing the complaint, before the action is filed.
The district of New Jersey's local patent rules address this role reversal by requiring the alleged infringer to produce its contentions, documents and claim charts first. In fact, the alleged infringer is required to produce its entire ANDA or NDA at or before the initial scheduling conference. In addition, within 14 days of the initial scheduling conference, the alleged infringer is required to produce its invalidity and non-infringement contentions. (L. Pat. R. 3.6). Concurrent with the invalidity and non-infringement contentions, the defendant is required to produce documents falling within the scope of L. Pat. R. 3.4 and any document or thing that the defendant intends to rely on in defense against any infringement contentions by the patent holder. Once the defendant produces its "Non-Infringement Contentions," the plaintiff has 45 days to produce its "Disclosure of Asserted Claims and Infringement Contentions" under L. Pat. R. 3.1 for those patents referenced in the defendant's Paragraph IV Certification letter, along with any documents required under L. Pat. R. 3.2. (L. Pat. R. 3.6(f)).
New Jersey's adoption of local patent rules is a major step forward for ensuring the expeditious and efficient flow of patent cases in New Jersey. The implementation of these rules, combined with New Jersey's sophisticated jury pool and experienced bench, reinforces the District of New Jersey's reputation as an ideal venue for patent actions.
Michael Cukor is a Director, and Lisa H. Wang an Associate, in the Intellectual Property Department of Gibbons P.C. in Newark, New Jersey.