Chief Judge urges earlier discovery of—and Daubert challenges to— damages evidence in IP cases

In recent remarks to the ABA Section of IP Law, Federal Circuit Chief Judge Randall Rader expounded on the E-Discovery Model Order, unveiled last fall by the Federal Circuit’s advisory council, and recently adopted by the federal district court for the Eastern District of Texas (E.D. Tex). Judge Rader is particularly concerned that the current adjudicatory system overlooks the damages and valuation stage of IP litigation. Since plaintiffs want to postpone damages until they can prove liability—and defendants want to avoid any discussion that hints of liability—that leaves it to “my fellow judges,” Rader says, to “intervene ourselves to get a realistic valuation of the case much earlier.” He recommends:

that trial judges use their authority, including DAUBERT inquiries, to ascertain early in the case the approximate dollar value of the case. With some searching inquiry into the parties’ damages model, the trial judge can get a good idea of the worth of the contested technology and its implications in the marketplace. The parties also benefit from early damages discussions and disclosures because it can provide a realistic evaluation of both [the] defendant’s exposure and [the] plaintiff’s damages calculation and further promote early and effective mediation.
Further, by understanding a case’s “true worth,” Rader says, the trial judge would be in a better position to tailor cases to fit their size and significance. “In colloquial terms, the court may adjust timing and procedures of the case to make sure a billion-dollar case gets a ‘billion dollars’ worth’ of process, and a thousand-dollar case gets … well, less.” Read Judge Rader’s complete remarks on “The State of Patent Litigation,” posted last week by the Gibbons law firm and originally delivered to the E.D. Tex. Judicial Conference, here.