N.D. Cal New Disclosure Rules

By Dennis Crouch

The N.D. California Court has amended its local rules used for patent infringement cases. [patent_local_rules_1-2017]. One of the most interesting change is the required “damages contentions.”

Initial Case Management: The parties shall provide the court with a non-binding, good-faith estimate of the damages range expected for the case along with an explanation for the estimates. If either party is unable to provide such information, that party shall explain why it cannot and what specific information is needed before it can do so. Such party shall also state the time by which it should be in a position to provide that estimate and explanation. . . .

Damages Contentions Within 50-days of Invalidity Contentions: Identify each … category[] of damages it is seeking for the asserted infringement, as well as its theories of recovery, factual support for those theories, and computations of damages within each category, including: 1. lost profits; 2. price erosion; 3. convoyed or collateral sales; 4. reasonable royalty; and 5. any other form of damages. (b) To the extent a party contends it is unable to provide a fulsome response to the disclosures required by this rule, it shall identify the information it requires.

Responsive Damages Contentions within 30 days: [E]ach party denying infringement shall identify specifically how and why it disagrees with those contentions. This should include the party’s affirmative position on each issue. To the extent a party contends it is unable to provide a fulsome response to the disclosures required by this rule, it shall identify the information it requires.

Early damages contentions has been pushed by former Chief Judge Rader for several years, with the intent of ensuring proportionality in litigation.  The basic idea is that cases worth lots of money justify more ‘lawyering’ and thus may be tied to reasonable attorney fees collected in exceptional cases.  The German approach is something like this.  Of course US legal tradition does not require defendants (or plaintiffs) to settle cases and traditionally does not penalize them even when the lawyer fees exceed any expected payout.

In general, I would expect that patentees will continue to take steps to avoid N.D. California for filing its patent cases.  However, that option will be severely limited if the Supreme Court tightens patent venue in the pending TC Heartland case.