Bloomberg Inc. v. Markets-Alert Pty Ltd

When a party moves for additional discovery in a covered business method patent review, the Board applies the good cause standard of 37 C.F.R. § 42.224 (requests "may be granted upon a showing of good cause as to why the discovery is needed") and evaluates necessity using the five Garmin factors, slightly modified for CBM review: more than a possibility and mere allegation, litigation positions and underlying basis, ability to generate equivalent information by other means, easily understandable instructions, and requests not overly burdensome. The moving party bears the burden under 37 C.F.R. § 42.20(c), and the Board granted only a narrowly tailored request for materials considered by the opposing expert, limited to the declarant's recollection. The Board had directed the parties to the factors in Garmin International, Inc. et al. v. Cuozzo Speed Technologies LLC, IPR2012-00001, Paper No. 26 (PTAB, Mar. 5, 2013), and here it adopts those same five factors for CBM reviews with slight modification, reflecting the good cause standard, which is slightly lower than the interests of justice standard used in inter partes review. A petitioner can use the factors to resist broad requests for its prior art searches, litigation positions, or licensing and commercial implementation documents, but it should expect to produce materials its own expert considered if the patent owner points to specific reasons to think the expert's list is incomplete. A patent owner must give specific factual reasons, not speculation, and must show why it cannot generate the information itself, and should draft short instructions that do not sweep in every present and former employee and agent. The Board relied on Federal Circuit nexus authority, Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1324 (Fed. Cir. 2004), and SIBIA Neurosciences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349, 1358 (Fed. Cir. 2000), for the point that licenses without nexus do not overcome obviousness. LEGAL TEST OR STANDARD: Good cause under 37 C.F.R. § 42.224, with the movant bearing the burden. Five modified Garmin factors: 1. More Than A Possibility And Mere Allegation; 2. Litigation Positions And Underlying Basis; 3. Ability To Generate Equivalent Information By Other Means; 4. Easily Understandable Instructions; 5. Requests Not Overly Burdensome To Answer. Under Factor 1, 'useful' means favorable in substantive value to a contention of the movant, and the movant must give a specific factual reason for expecting reasonably that the discovery will be useful. TRIGGERING FACTS: Patent owner in a CBM review moved for additional discovery of: prior art known to petitioner but not submitted (Request 1); documents considered by petitioner in preparing the petition (Request 2); documents considered by petitioner's expert (Request 3); and licensing and commercial implementation documents from 2000 to 2011 for secondary considerations (Requests 4-5). Request 3 was granted because it was narrow, aimed at one declarant and one declaration, and backed by two specific examples of testimony apparently relying on material beyond the cited art, while the petitioner's list of considered materials was implied to be complete. Requests 1-2 and 4-5 were denied as speculative, cumulative, seeking litigation positions, obtainable by the movant's own means, and overly burdensome. KEY QUOTE: "A party may not attempt to alter the Board's trial procedures under the pretext of discovery." (Paper 32, p. 5) PRIOR PRECEDENT AFFECTED: Follows and slightly modifies the five factors in Garmin International, Inc. et al. v. Cuozzo Speed Technologies LLC, IPR2012-00001, Paper No. 26 at 6-7 (PTAB, Mar. 5, 2013), for use in covered business method patent reviews. It also cites Liberty Mutual Ins. Co. v. Progressive Casulty Ins. Co., CBM2012-00003, Paper 7 (PTAB, Oct. 25, 2012), for the point that redundant grounds based on cumulative prior art are not warranted. PRACTICE TIP: When seeking additional discovery in a CBM review, tailor each request narrowly and tie it to specific record facts showing that something useful exists, such as testimony apparently relying on undisclosed materials. Explain why you cannot get the information through your own search or expert, and avoid sweeping instructions covering all present and former employees and agents.