Intellectual Property Section Lunch & CLE July 10

1. Intellectual Property Section Lunch & CLE July 10 "What Can Be Done About the High Costs of IP Litigation."  Speaker: Stacy L. Prall, Baker & Daniels and Nancy Tinsley of Roche Diagnostic Operations, Inc. 

2. Perhaps the greatest driving force in litigation today is discovery. Discovery abuse is a principal cause of high litigation transaction costs.  Indeed, in far too many cases, economics-and not the merits-govern discovery decisions. Litigants of moderate means are often deterred through discovery from vindicating claims or defenses, and the litigation process all too often becomes a war of attrition for all parties.... 

3. S.Rep. No. 101-650, at 20-21, as reprinted in1990U.S.C.C.A.N. 6823-24 (internal citations omitted).

4. Some estimate the e-discovery costs are as much as 40-40% of the total litigation budget. • Another estimates that first-level document review encompasses between 58-90% of total litigation costs. • Others estimate that 70% of a litigation budget is consumed by collecting, producing, and reviewing documents—including both ESI and hardcopy.

5. What can be done and why is E-discovery so costly?

6. Why is E-Discovery so Costly Multi-stage process • Collect • Collect, log, and copy content for discovery • Prepare • Restore backups, data extraction, deduplicate • Organize documents by custodian, concept, keyword, batch, or other methodology • Review • Review for relevance, responsiveness and privilege • Produce • Output data to a usable format such as PDF

7. Volume Even if companies have established Document Retention/Deletion Policies they may not be followed with respect to ESI. Following litigation, DuPont conducted an internal cost assessment of a single discovery request. Reviewed 75 million pages finding that more than 50% of the documents collected and reviewed were kept beyond their retention period. Cost of reviewing those “old” documents  was $12 million.               Follow Document Retention Policies and thereby reduce the amount of information retained (as long as there is no threat of litigation or a litigation hold in place)

8. Steps to Reduce ESI Costs • Educate • Find the custodian of your client’s ESI and educate yourself on what they have and how it is organized (appoint lawyer to be the so-called “CIO”) • Develop a Plan with Client • Who are the relevant departments/employees who may have discoverable information; what files are relevant • Preservation • Beyond a simple hold notice, ESI requires preserving metadata, and disabling auto-delete and backup overwriting processes • Culling & Searching • Utilize agreed keyword search term lists • Transparency/Documentation • Create and keep a record of the choices made and why there were made

9. Rule 502 FRE 502(b), a disclosure of privilege information does not effectuate a waiver if the holder of the privilege took reasonable steps to prevent disclosure and promptly took reasonable steps to rectify the error. Goal was to reduce costs of document review.

10. 502 CASES Rhoads Indus., Inc. v. Bldg. Materials Corp., 2008 WL 4916026 (E.D. Penn. Nov. 14, 2008), held plaintiff waived the attorney-client privilege, found plaintiff’s efforts to avoid inadvertent disclosures were not reasonable, but ruled that waiving the privilege would be unfair and inconsistent with the overriding interests of justice. Alcon Mfg., Ltd. v. Apotex, Inc., 2008 U.S. Dist. Lexis 96630 (S.D. Ind. Nov. 26, 2008), Judge Time Baker ruled the return or destruction of an inadvertently produced document that had been marked as an exhibit in two depositions; noting “Perhaps the situation at hand could have been avoided had Plaintiffs’ counsel meticulously double or triple-checked all disclosures against the privilege log prior to any disclosures. However, this type of expensive, painstaking review is precisely what new Evidence Rule 502 and the protective order in this case were designed to avoid.”

11. KEY WORD SEARCH TERMS United States v. O’Keefe, 537 F. Supp. 2d 14, 24 (D.D.C. Feb. 18, 2008), requiring expert testimony to challenge search terms ‘for lawyers and judges to dare opine that a certain search terms or terms would be more likely to produce information than the terms that were used is truly to go where angels fear to tread.’ Equity Analytics, LLC v. Lundin, 248 F.R.D. 331 (D.D.C. Mar. 7, 2008), again requiring expert testimony to challenge search terms. D’Onofrio v. SFX Sports Group, Inc., 2008 WL 4737202 (D.D.C. Oct. 29, 2008), Judge created his own list of terms. Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251 (D. Md. 2008), defendants had failed to demonstrate the keyword search they performed was reasonable; they did not identify keywords selected nor the qualifications of the persons who selected them.

12. Civility and Professionalism • Lack of Cooperation and Professionalism among attorneys increases the cost of litigation • Confuse advocacy with adversarial conduct • Lack of cooperation in discovery process • Leads to more disputes • Multiple meet and confers (some courts require these to be in person) • Unnecessary motions practice

13. “The tone of the parties' filings for purposes of the motion to dismiss or in the alternative for summary judgment does not demonstrate the level of civility that the court expects of litigants in this district. Such conduct is not persuasive and does little to advance a party's cause. The court expects a more professional approach from counsel in future filings.” Judge. Diclerico, Jr. reprimand in Hypertherm, Inc. v. American Torch Tip Co., 2007 WL2695323 (D.N.H. 2007)