Discovery in an IPR proceeding is limited compared to district court litigation in order to focus the proceedings and promote speed and efficiency. The PTAB Practice Guide and 37 C.F.R 42.51 provide for three types of discovery: mandatory initial disclosures, routine discovery, and additional discovery. Parties can agree to additional discovery, but absent agreement a party may file a motion for additional discovery. 37 C.F.R. 42.51(b)(2).
A party seeking additional discovery in an IPR must show that the additional discovery is “necessary in the interest of justice.” Id. The factors the PTAB considers in deciding a request for additional discovery are set forth in Garmin Int’l Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper 26, 6-7 (PTAB Mar. 5, 2013). We discussed the Garmin factors on the PTAB Litigation blog here.
In Bestway (USA), Inc. v. Intex Marketing Ltd., Case IPR2020-01405, Paper 30 (April 23, 2021) the PTAB denied Patent Owner’s motion for additional discovery relating to evidence of secondary considerations of non-obviousness.
Patent Owner and Petitioner both sell air mattresses. In parallel litigation, Patent Owner accused Petitioner’s products of infringing certain claims of the challenged patent. Patent Owner sought additional discovery consisting of nine requests for production focused on objective indicia of non-obviousness related to evidence of commercial success and industry praise of Petitioner’s products. Patent Owner’s motion focused on Garmin factors 1, 3, and 5.
Arguing factor 1, Patent Owner pointed to Petitioner’s product advertising that highlighted claimed features. According to Patent Owner, Petitioner’s products and the asserted claims were coextensive and the success of Petitioner’s products was due to the patented invention. Further, evidence of consumer praise for Petitioner’s products meant that it might have received similar praise from others in the industry that Petitioner did not publicize. Based on the foregoing, Patent Owner asserted that it was likely to discover non-public evidence of commercial success and industry praise.
Conversely, Petitioner argued that the alleged infringing products could not be coextensive with the asserted claims because Patent Owner alleged the same products infringe two separate patents and the products are marked with Petitioner’s own patents. Further, that pseudo-anonymous praise from customers is not indicative of industry praise, and, even if it was, that fails to show that Petitioner possesses any non-public industry praise.
With respect to factor 3, Patent Owner contended that because it was seeking only non-public information on commercial success and industry praise it could not generate this information without discovery. Petitioner argued that the relevant inquiry is not whether an opposing party has non-public information, but whether “equivalent” information is unavailable. Patent Owner and Petitioner are competitors in the same industry. Petitioner argued that Patent Owner could presumably access the same industry publications and could perform a market analysis of Petitioner’s products.
Under factor 5, Patent Owner asserted that complying with the proposed document requests would not overly burden Petitioner because the requests excluded emails, were only seeking evidence of commercial success and industry praise related to one line of products, and aligned with Patent Owner’s requests for production in parallel district court litigation—which Petitioner agreed to produce. Therefore, even if complying with the request would impose some financial or other burden on Petitioner it would only be as much as Petitioner already agreed to in parallel litigation.
In opposition, Petitioner argued that the requests for production were overly broad and required collection and review of every non-email document for broad categories like market share, consumer demand, praise, and reasons for developing the products. Also, Patent Owner was seeking financial records on over 130 products but only submitted a claim chart of one allegedly infringing product. And, Petitioner’s response to requests in parallel litigation were subject to Petitioner’s objections, which included that the requests were “unduly burdensome.” Further, discovery in the IPR process is more restrictive than district court discovery. Finally, Patent Owner and Petitioner are competitors and the discovery sought included extremely sensitive sales and financial data that would require complex confidentiality protections.
In denying Patent Owner’s motion, the PTAB first noted that Patent Owner did not specifically discuss any of its nine discovery requests. Rather “Patent Owner rests on its conclusory characterizations of all the requests as pertaining to either industry praise or commercial success.” Id. at 4. Without explanation from Patent Owner, the panel could only speculate as to how each request might be tied to production of useful evidence.
The PTAB agreed with Petitioner that praise from customers did not demonstrate evidence of industry praise. Patent Owner did not actually allege Petitioner received industry praise, and Patent Owner’s conclusory position on the connection between customer and industry praise did not provide a threshold amount of evidence or reasoning that non-public industry praise would be uncovered. In a similar fashion, Patent Owner did not allege that Petitioner’s products enjoyed commercial success. So even if Petitioner’s products and the challenged claims were coextensive, Patent Owner did not meet its burden to show useful evidence would be uncovered.
The PTAB also agreed with Petitioner on factor 3. The inquiry is whether the party seeking additional discovery can generate “equivalent” information, which the PTAB found the Patent Owner did not meet. The PTAB also expressed a tension between factors 1 and 3 stating that if the panel was to believe that Patent Owner could not generate equivalent information it might help the argument under factor 3, but at the same time confirm that under factor 1 the requests were mere speculation.
On factor 5 the PTAB again found Petitioner’s argument persuasive that the requests were overbroad and unduly burdensome. And on the facts of the case, the PTAB declined to construe Petitioner’s response to discovery in district court litigation as a binding agreement to discovery in the IPR.
Takeaway: When seeking additional discovery a party should already have some evidence or reasoning it can present to show that the requested discovery will uncover something useful. Parties should narrowly tailor discovery requests and discuss with specificity how those requests are tied to the useful evidence they seek within the framework of the Garmin factors.
Latest posts by David Maiorana (see all)
- Motion to Exclude Improper Vehicle For Addressing Non-Responsive Evidence - September 23, 2021
- In Your Dreams – Additional PTAB Discovery Remains Elusive - May 11, 2021
- Institution Mandamus Review Limited to Colorable Constitution Claims - March 25, 2021