Patent holders contemplating patent litigation in the Northern District should carefully prepare their complaint, taking every available opportunity to carefully and thoroughly analyze infringement contentions prior to filing. They should additionally take every opportunity to reevaluate and update those contentions throughout the course of the litigation. The reason is the Northern District’s newly-adopted local patent rules. Just another symbol of the District’s commitment to the federal pilot program, the rules have particular significance to patent infringement plaintiffs, since Federal Circuit decisions are decidedly unambiguous in allowing district courts considerable discretion when enforcing procedural requirements of the respective local rules. Such requirements can be outcome determinative, and the Federal Circuit has similarly demonstrated no hesitation in affirming the summary dismissal of infringement claims where infringement contentions were not first properly served or updated pursuant to a district’s local rules, or where a party otherwise failed to comply with local patent rule requirements. See 02 Micro International Limited v. Monolithic Power Systems, Inc., 467 F.3d 1355 (Fed. Cir. 2006); Safeclick, LLC v. Visa International Service Assn., 2006 WL 3017347 (Fed. Cir. 2006) (unpublished decision). In both Safeclick and 02 Micro, the federal circuit upheld the discretionary power of a district court to eliminate certain infringement contentions or arguments that were not raised in the final infringement contentions advanced by each Plaintiff. In each case, the Plaintiffs’ argued that the contentions were based on new material revealed in discovery after submission of the final infringement contentions, or advanced as a refined “scope and clarity” of earlier contentions. The district courts in each case rejected these arguments, finding that the Plaintiffs were not diligent in disclosing the theories, and the Federal Circuit affirmed, demonstrating that local patent rules have real teeth, and the district courts that use and apply them have real power.
The Federal Circuit’s jurisprudence evaluating local patent rules therefore provides district court judges with considerable discretionary power to facilitate patent litigation and move along their dockets through enforcing local rule requirements, even where the exercise of that discretion can be outcome determinative. There has been no hesitation to use that discretion among Texas district courts enforcing local patent rules. MGM Well Servcs., Inc. v. Mega Lift Sys., LLC, 2007 WL 433283 (S.D. Tex. 2007) (granting plaintiff’s motion to exclude invalidity contentions, expert testimony, evidence, and argument regarding prior art patents on grounds that Defendant failed to accurately, timely, or properly disclose same in accordance with the patent rules, and with the Court’s discovery and docket control orders); SoftVault Sys., Inc. v. MicroSoft Corp., 2007 WL 1342554 (E.D. Tex. 2007) (denying plaintiff’s motion for leave to amend its claims and contentions disclosures to change the asserted priority date of the claims at-issue, acknowledging that the importance of the priority dates to the overall case weighed in favor of granting the motion, but denying on grounds that plaintiff had access to information earlier in litigation and thus could have amended in accordance with rules and order deadlines, preventing prejudice to opposing party and need for continuance). Thus, patent holders contemplating litigation in the Northern District should take particular care to heed all the procedural requirements of that District’s recently-enacted local patent rules, as the failure to comply could determine the outcome of litigation. Further, given the “abuse of discretion” standard of review on appeal, any discretionary rulings, including dismissals, based upon a failure to comply with local rule requirements in a patent case will likely prove difficult to overturn on appeal. The lesson to take away here is therefore that any patent infringement plaintiff or defendant must take seriously all discovery and procedural obligations imposed by local rule requirements – and in particular the obligations to disclose infringement and invalidity contentions – seeking experienced and knowledgeable counsel to draft and prepare them, and to review and re-examine them at every possible opportunity. All infringement and invalidity theories should be regularly re-examined and updated in accordance with local rule requirements, or should be amended in accordance with a prompt request for leave to amend in the event new information is learned during the course of discovery. Alternatively, given the broad discretion accorded district courts to enforce their local rule requirements, parties will have to be prepared to lose valid infringement and invalidity theories in the face of untimely disclosure under local rules, even where it means losing the litigation as a whole.