One of the district courts in the Eastern District of Texas has issued several orders in multi-defendant patent infringement cases addressing whether changes to the court's normal scheduling orders were necessary. The district court has previously expressed concern in several cases that defendants may be faced with a Hobson's choice of spending more than the settlement range on discovery "or settling for less than their cost of defending the case, regardless of the merits of the case." The district court has expressed concern that the Patent Rules may not provide the most efficient case management schedule in those situations because of the quick discovery deadlines in the Eastern District of Texas.
In addressing a plaintiff that has sued 95 defendants across seven cases, the district court began by noting that it had previously expressed concern in cases where a plaintiff may assert questionable patent claims to extract cost of defense settlements. "The Court has previously expressed concern about cases where a plaintiff asserts questionable patent claims against a large number of Defendants to extract cost of defense settlements."
Here, the district court found that this was not such a case because the plaintiff had a history of litigation. "This however is not one of those cases. Although [plaintiff] asserted the same patent in multiple cases against numerous Defendants and previous cases settled before proceeding to the Markman hearing, [plaintiff] is distinguished by its litigation history." This litigation history included litigating through a jury trial and to the Federal Circuit. The district court thus concluded that the plaintiff had demonstrated its willingness to pursue its cases through trial and not to extract cost of defense settlements.
The district also referenced the plaintiff's preparation for the status conference and its willingness to provide detailed infringement disclosures and information regarding the reasonableness of its settlement offers. "[P]laintiff's preparation for the status conference, readiness to provide detailed infringement disclosures, and in camera information regarding the reasonableness of its settlements does not raise the Hobson's choice concerns that other cases have raised for the Court."
Nonetheless, given the size of the cases, the district court explored whether consolidation would be appropriate and whether certain modifications to the scheduling order would be appropriate. As neither the plaintiff nor defendants requested consolidation, the district court did not order consolidation of the cases. It did, notably, however, make some adjustments to the scheduling order, including ordering early disclosure of defendants' sales data as well as plaintiff's licenses. The district court also scheduled an early mediation. Finally, although the district court did not consolidate the cases, it did order a combined Markman hearing for all of the cases.
As the district courts continue to address efficient case management of multi-defendant patent cases, we can continue to expect additional decisions in this area. Some courts are consolidating cases, while others are creating schedules based on the nature of the case and still others are consolidating for only part of the proceedings. Given the rising trend of multi-defendant litigation, it is prudent for both plaintiffs and defendants to be prepared to address modifications to scheduling orders and consolidation, in whole or in part, at the scheduling conference. Depending on the case, there are tactical advantages to having an early mediation, document production, Markman hearing or a summary judgment proceeding.
Uniloc v. Engrasp, Case No. 6-10-cv-00591 (E.D. Tex. May 20, 2011)