In an order issued April 2, Chief U.S. District Judge of the Northern District of Texas, A. Joe Fish, established case management rules on a trial basis for patent cases filed in the Dallas Division. The patent rules apply to all civil actions containing an allegation of utility patent infringement and to any action seeking a declaration that a utility patent is not infringed, is invalid, or is unenforceable. The patent rules take effect on May 1, 2007 and apply to any Dallas Division patent case filed on or after that date and to certain cases filed prior to the effective date. Although other districts such as the Eastern District of Texas and the Northern District of California have had patent rules for some time, many other districts are now considering creating patent rules as well. Dallas is the first in a new wave of districts likely to enact patent rules.
In addition to the conference requirements of Federal Rule 26(f), parties in a patent case filed in Dallas must now confer on a number of additional matters common to patent cases. The patent rules also require certain disclosures designed to bring the parties to an early position on pivotal issues such as infringement and invalidity. This will decrease the average time to bring a case to trial by both avoiding common pre-trial disputes that arise in patent cases and focusing the parties on the important issues.
The patent rules are based on rules proposed after debate by the Northern District of Texas Patent Rules Task Force, which is comprised primarily of local attorneys from law firms and companies interested in patent litigation. Although modeled after rules established in the Eastern District of Texas, there are some differences. The differences include provisions requiring more detailed preliminary infringement and validity contentions (with potential sanctions for failing to comply), more liberal provisions regarding amendment of initial infringement and invalidity contentions, and a provision that the scope of discovery is not limited to the preliminary infringement or invalidity contentions.
Adoption of the patent rules along with potential changes to the venue statute governing federal actions could significantly increase the number of patent cases filed in Dallas. Currently, the federal venue provisions allow a plaintiff to sue a corporate defendant in any judicial district in which that defendant is subject to personal jurisdiction. Thus, the Eastern District is able to attract a large volume of patent filings, despite its sparse population and lack of a business presence there for many of the defendants sued.
Venue rules will be tightened should Congress enact the Patent Reform Act of 2007. Identical bills with bipartisan support were introduced in both the Senate and the House on April 18. If passed, the bills will amend the federal venue provisions to require patent cases to be brought in the district (1) where either party resides or (2) where the defendant has committed acts of infringements and has a regular place of business. This would eliminate the Eastern District as a proper venue in many cases, causing some of the cases that would have been filed in the Eastern District under the old venue rules to be filed in Dallas instead.
Upon enactment of the Patent Reform Act, the Dallas patent rules could provide additional incentive for patent holders to choose Dallas over other venues lacking patent rules. Even without the change in the venue rules, the patent rules are expected to attract litigants who would not have otherwise considered filing in Dallas.
Vincent Allen is a shareholder at Carstens & Cahoon, LLP. He focuses on the litigation of intellectual property disputes and the prosecution of patent and trademark applications.
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