In a recent Notice of Proposed Rulemaking, the U.S. International Trade Commission (ITC) promulgated for comment revisions to its Section 337 discovery procedures.1 If implemented largely as proposed, which is likely given the ITC's history of follow-through with administrative rulemaking, these changes would make Section 337 more affordable to both complainants and respondents.
The ITC's Rules of Practice and Procedure are the analog to the Federal Rules of Civil Procedure. Found principally in 19 C.F.R. § 210.1, et seq., these rules cover all aspects of agency adjudication, including protective orders; forms of pleadings; motions practice; discovery; hearings; intra-agency review (appeals); and remedies. The proposed discovery additions are to Section 210.27, which is the ITC equivalent to Fed. R. Civ. P. 26.
The additional provisions generally fall into two categories: limitation of discovery in general and electronically stored information (ESI) in particular; and creation of a partial privileged document "clawback" provision.
Many parties have eschewed ITC litigation because of the expenses involved in discovery. There are far fewer limitations to discovery in the ITC than in U.S. district courts, and thus, discovery practice and costs often drive decisions regarding the venue. Patentees are sometimes less likely to file there due to the costs, and respondents often seek early settlement of cases in which they have otherwise meritorious defenses because the expense of participation through discovery is too great. One of the principal drivers of the costs is the unfettered production of ESI at the ITC, often ranging into high six-figure amounts to ESI vendors searching legacy and foreign systems with a concomitant amount in attorneys' fees for the privilege reviews.
The 2006 amendments to Fed. R. Civ. P. 26 sought to address the problem in district courts. The ESI discovery amendment conforms ITC ESI discovery practice to Fed. R. Civ. P. 26(b)(2)(B). The proposed ITC amendment provides that "[a] person need not provide discovery of electronically stored information from sources that the person identifies as not reasonably accessible because of undue burden or cost."2 The party propounding discovery must then file a motion to compel, with the burden on the party resisting discovery. The proposed ITC amendment also includes an analog to Fed. R. Civ. P. 26(a)(2)(C)'s procedure for protective orders where the discovery sought is duplicative or can be obtained from a less-burdensome source, the party seeking discovery has had ample opportunity to obtain the information or the burden of the discovery outweighs its likely benefit.
The creation of a formalized clawback provision more closely conforms ITC practice to the Federal Rules of Evidence and Federal Rules of Civil Procedure. The Federal Rules of Evidence do not technically apply at the ITC. Rather, since the ITC is engaged in administrative adjudication, the admissibility of evidence is governed by the looser standards of the Administrative Procedures Act.3 Nonetheless, the ITC has looked to the Federal Rules of Evidence for guidance on privilege waiver issues.4 The ITC also has its own procedural rules, but often looks to corresponding Federal Rules of Civil Procedure.5
Parties at the ITC have dealt with the absence of any clawback rule by entering into private agreements amongst themselves. Some Administrative Law Judges (ALJs) will incorporate those agreements into the ground rules for the case;6 others will not.7 Even if incorporated into the ground rules, their efficacy is uncertain as the parties have to resolve disputes under the clawback agreements among themselves; the ALJs will not enforce them.8
The proposed ITC clawback provision is not categorical. It provides a mechanism for dispute resolution of inadvertent production similar to that found in Fed. R. Civ. P. 26(b)(5). The ALJs would be expected to then resolve waiver issues in accordance with the principles set forth in Fed. R. Evid. 502(b). The proposed provision also requires that parties produce privilege logs, which heretofore have been ordered by the individual ALJs in their ground rules.
These proposed changes should serve to make the forum more accessible to patentees, make the ITC's rules more consistent with district courts and permit respondents to achieve resolution on the merits rather than settlement.
The public has until December 4, 2012, at 5:15 p.m. to provide written comments to the ITC on the proposed amendments.