INTRODUCTION
In the May/June 1998 issue of IP Litigator, Scott Donahey reported on the current status of the National Patent Board, a private patent court conceived by practitioners to provide services necessary to reconcile disputes concerning patent rights. Koos Rasser and Pat Lane of The Procter & Gamble Company debuted a model for the National Patent Board at the Fall, 1996 IPO annual Meeting in Washington, D.C. Through subsequent presentations and surveys, Messrs. Rasser and Lane elicited comments and suggestions on proposed procedures from the bench, the bar, business executives, academics, and others. Through the intensive fact finding mission, specific objectives for the National Patent Board evolved including the generation of a self regulating procedure, by which patent experts decide patent infringement claims on an expedited and non-binding basis in a private setting. See Generally, J.C. Rasser and P.D. Lane, "National Patent Board", as contributed to Dobrusin, Intellectual Property Litigation Pretrial Practice Guide (Aspen Law & Business 1998 Supp.) App. E.
To help meet the objectives, a Rules Committee was formed, comprising private practitioners, chief patent counsel from several corporations, and an esteemed federal judge. After several months of Committee work, and following substantial critical review of the Rules by members of the Committee and others, the National Patent Board published its proposed Rules at conferences in New York City on October 7, 1998 and in San Francisco on November 17-18, 1998. What follows is a brief overview of the general procedures set forth in the Proposed Rules. Thereafter, the Proposed Rules are reproduced.
OVERVIEW OF THE RULES
As presently contemplated, the Proposed Rules comprise the following four procedural modules:
Pursuant to the "Initiation of Proceeding" module, a National Patent Board proceeding is commenced by the filing of a request for a proceeding. Rule 1(A). A unique feature of the National Patent Board proceedings is the possibility that a potential infringer can seek an early decision of the National Patent Board at a stage earlier then a declaratory judgment proceeding would be ripe in federal court. Rule 1(B). Assuming a request meets the criteria for initiating a National Patent Board proceeding, the National Patent Board will issue a scheduling order and assign a Panel of one to three qualified practitioners, who are subject to peer review, to decide the issue in dispute. Rule 3 and 31. Because one objective of the National Patent Board is to provide an expedited resolution of patent disputes, extensions of time will only be granted in limited circumstances. Rule 9.
In the "Party-Directed Case Development" module the parties provide each other with early disclosures of certain information intended to foster issue narrowing. This is accomplished with initial disclosures of, inter alia, the potentially infringing subject matter and the basis for a claim or lack of claim of infringement. Rule 12. The parties also participate in preparing a joint pre-hearing statement to identify disputed issues and map out a joint limited discovery plan to secure proofs believed necessary to resolve the disputes. Rule 14. In cases where claim construction is in dispute, the joint pre-hearing statement also includes a claim construction statement. Rules 14 and 15. The Rules afford confidentiality to the proceedings. Rule 10. Duties of candor are also built into the Rules. See e.g., Rules 12 and 19.
After the parties complete their joint pre-hearing statement, the Panel becomes actively involved in the "Panel-Directed Case Development" module of the case. In this module, in concerted effort with the parties, the Panel works to identify issues and develop the evidence necessary to decide the issues in dispute. A pre-hearing conference will facilitate the process, at which necessary discovery will be identified and a reasonable plan for securing the discovery will be implemented. Rule 16. The Panel will have discretion to appoint an expert witness to assist the Panel. Rule 17 and 18. Moreover, as part of the "Panel-Directed Case Development" module, the parties will prepare and simultaneously file briefs, along with a joint appendix. Rule 20. The proceeding will culminate in a one-day hearing. Rule 21.
Following the hearing, in the "Decision" module, the Panel will deliberate and issue a decision. Rule 26. National Patent Board proceedings are not binding as presently contemplated. However, the parties will have the option to make the decision binding by accepting or rejecting the decision. Rule 27. The Rules have certain incentives to make the decision binding, including potential fee shifting and admissibility of decisions in subsequent litigation. Rules 14, 26 and 28.
By way of summary, the following is a chronology of events in the National Patent Board proceeding:
1. Request for hearing (petition option) initiating party/initial disclosure;
2. Designation of lead counsel and entry of confidentiality agreement;
3. Opposing party initial disclosure;
4. Joint pre-hearing statement/claim construction statement;
5. Pre-hearing conference with Panel;
6. Limited discovery/expert investigation as directed by Panel;
7. Simultaneous briefing by the parties;
8. One day hearing;
9. Panel renders decision;
10. Parties accept or rejection decision.
The Proposed National Patent Board Rules provide a self-regulating procedure offering the advantages of blue-ribbon, peer reviewed practitioner Panel in a private setting. The proceedings promise to be fast and inexpensive as compared with conventional federal court litigation or even arbitration. Though non-binding, the parties will have incentives to accept the decisions of the Panels, thereby encouraging finality of the dispute process.
1. Commencement of Proceeding
2. Scheduling Order
3. Panelist Selection
4. Communications between Parties, Executive Director, Panelists and Board Appointed Expert Witnesses
5. Legal Representatives
6. Fees; Filing and Service
8. Form of Papers
9. Extensions of Time
10. Confidentiality
11. Papers Filed and Positions Taken in National Patent Board Proceedings
12. Initial Disclosures
13. Supplementation and Amendments
14. Joint Prehearing Statement
15. Claim Construction Summary Statement
16. Prehearing Conference
17. Expert Selection
18. Report by Board-Appointed Expert
19. Test Results
20. Briefing and Appendix
21. Hearing
22. Voluntary Termination of Proceedings
23. Stay of Proceedings
24. Consolidation and Bifurcation
25. Code of Conduct for Legal Representatives
26. Finality of Decision and Effect in Subsequent Litigation between the Parties
27. Accepting or Rejecting Decision
28. Fee Shifting
29. Timing of Payment of Costs
30. Release of Liability
31. Requirements for Panelists
1. Commencement of Proceeding
A. Request for Hearing.A National Patent Board proceeding shall commence upon receipt by the National Patent Board from an initiating party of the following items:
1.A request for a National Patent Board hearing;
2.A nonrefundable request processing fee for the hearing;
3.A sworn statement stating that the subject matter contemplated as the potential infringement currently is in commercial use (or that the Executive Director has granted a petition under Rule 1-B below) and briefly describing the nature of such use, along with identification of the applicable provisions of 35 U.S.C. § 271 ; and
4.Proof of Service certifying that the opposing party has been served with the Request for National Patent Board hearing and the initial disclosure of the initiating party in conformance with Rule 12, simultaneously with the filing of the request for the National Patent Board hearing. For purposes of this subpart, the initiating party shall serve a copy of the request for hearing and any additional materials required under these rules to the opposing party at the last recorded address and any other address reasonably believed to be accurate by the initiating party. The parties are under a continuing duty to the National Patent Board to advise the National Patent Board of any recent change of address and the identification and address of an agent to accept service. The National Patent Board assumes no responsibility for assuring that a party receives a copy of the request for hearing if that party has not notified the National Patent Board of any address change.
B. Petition for Ripeness Determination.A party (the "Petitioner") seeking a determination that a proposed product, apparatus, or process (the "Project") not yet in commercial use does not infringe one or more patents owned by a single adverse party shall submit a sworn Petition for Ripeness Determination (the "Petition", Form No. NPB001), accompanied by the prescribed non-refundable Petition Fee, to the Executive Director of the National Patent Board ("NPB"), subject to the following:
1.The Petition shall contain information sufficient to enable the Executive Director to ascertain the status of Petitioner’s development of the Project, including Petitioner’s confidence that the Project will work for its intended purpose, the extent of the Project’s readiness for release for commercial use, the nature and extent of concrete steps taken toward actual commercial use, and a statement affirming Petitioner’s good faith present commitment to proceed diligently with commercial use upon receipt of a favorable decision from the NPB Panel concerning Petitioner’s right to practice in view of all the patents in question. Only one embodiment of the Project may be included in a Petition.
2.In the event that a party, following a negative decision from the NPB Panel in a prior Hearing concerning that party’s right to practice all of the patents in question, later submits another Petition concerning a modified Project, relative to one or more of the same patents involved in the former Petition, such Petitioner shall accompany the Petition with a copy of each earlier related Petition and associated NPB Panel decision. In addition to the prescribed Petition Fee and the Petition content specified in Rule 1-B-1 above, the subsequent related Petition shall also include a declaration providing a detailed explanation of Petitioner’s contentions as to why the modified Project avoids infringement of the previously considered patents as they were construed by the NPB Panel. A subsequent related Petition which is found to be ripe for consideration shall, whenever possible, be assigned to the same NPB Panel which conducted the prior Hearing.
3.The Executive Director will consider the totality of the circumstances presented in the Petition in determining whether the Project is sufficiently ripe to warrant consideration by a NPB Panel. A Project will not be considered ripe unless, at minimum: (a) The Petitioner attests to its belief that the Project will work for its intended purpose, and states in detail the basis for such belief; and (b) The Petitioner has made substantial preparation for commercial use of the Project, beyond mere design and development activity, and provides a detailed list of concrete steps taken in preparation for such use. The following guidelines apply :
a. A Project which is demonstrated to satisfy the test for ripeness for a declaratory judgment action under 28 U.S.C. §2201, or which has undergone activity which satisfies a finding of "on sale" or public use under 35 U.S.C. §102(b) (irrespective of the one-year requirement), will be considered ripe for consideration by a NPB Panel, although satisfaction of either of such tests shall not be a prerequisite;
b. Examples of concrete steps toward commercialization which will be weighed include completion of working drawings or process specifications, completion of a prototype, successful testing, ordering of production tooling, advertising or marketing preparations and expenditures, etc. The necessity for, and extent of, particular concrete steps in a given situation will depend upon a balancing of the uncertainties, risks, complexity of the subject matter and necessary expenditures;
c. An actual reduction to practice, or even the existence of a physical prototype, is not necessarily required;
d. Commercially acceptable levels of efficiency, durability and reliability are not necessarily required; and
e. The contemplated commercial use and concrete steps in preparation therefor must be by the Petitioner; the role of mere licensor or indemnitor is not sufficient.
In all cases, Petitioners should bear in mind that the purpose of a Hearing before a NPB Panel is to evaluate potential patent infringement issues concerning Projects whose development is essentially complete and as to which the Petitioner has demonstrated its commitment diligently to proceed with commercialization, rather than to aid Petitioner in selecting between or prioritizing alternative design proposals.
4.If the Executive Director determines that the Petition presents a matter that is ripe for consideration, the Executive Director shall direct the Petitioner to proceed in accordance with Rule 1-A (above).
2. Scheduling Order
A.Within 10 days of receiving all parts required under Rule 1-A (Request for Hearing), the Executive Director shall review the request and accompanying materials to determine whether the subject matter of the request presents a dispute that is appropriate for consideration by the National Patent Board. If the matter is determined to be appropriate for consideration, then the Executive Director shall notify the opposing party of the requested hearing and shall provide all parties with a scheduling order to govern the proceeding. The scheduling order shall identify the date for designation of lead counsel by the opposing party, the date for filing of a confidentiality agreement, the date for serving the initial disclosure by the opposing party, the date when the Joint Prehearing Statement must be filed, the date when payment of the case administration fee is due from the initiating party, the date of the prehearing conference and the date of the hearing. If the matter is determined not to be appropriate for consideration, the Executive Director shall reject the request and return all materials filed, except the nonrefundable request processing fee.
3. Panelist Selection
A.The Executive Director shall maintain a roster of panelists who meet the criteria for participating as National Patent Board panelists (see Rule 31) . At the time when the Executive Director issues a scheduling order, the Executive Director shall assign three (3) panelists to serve as the panel for consideration of the case. The Executive Director shall attempt to select at least two of the three panelists with technical backgrounds corresponding to the subject matter in dispute. The third panelist will be assigned by the Executive Director at random based on availability.
B.Within 10 days from the assignment of panelists, the parties may waive their right to a three- member panel in favor of a single-member panel. In such instances, the parties jointly shall select one of the three panelists assigned by the Executive Director as the single panelist. If the parties are unable to agree upon the single panelist, the Executive Director shall make such selection.
C.Any party who has an objection to a panelist shall set forth that objection in writing within 10 days of notification of the panel assignment. The Executive Director shall determine whether good cause exists to discharge one or more of the panelists and to select a different panelist.
D.All panelists shall sign an undertaking ( Form No. NPB002), identifying any potential conflicts of interest and affirming the panelists' obligations of confidentiality, file a copy with the National Patent Board, and serve a copy of the same upon the parties, all prior to commencing activities as a panelist in a National Patent Board proceeding.
4. Communications Between Parties, Executive Director, Panelists and Board Appointed Expert Witnesses
No party or its legal representative shall make any ex parte communication concerning the subject matter of the proceeding with the Executive Director, panelists, or Board appointed expert witnesses, during the pendency of a National Patent Board proceeding.
5. Legal Representatives
A. Parties to a National Patent Board proceeding must be represented by an attorney who is a member in good standing of a bar of at least one state of the United States of America.
B.No later than the date specified in the scheduling order, each party must designate one lead counsel, upon whom service shall be made throughout the proceeding.
C.All attorneys who participate in a National Patent Board proceeding must enter an appearance with the National Patent Board for that proceeding. The National Patent Board will not communicate with any attorney who has not entered an appearance with the National Patent Board for that proceeding. Attorneys who enter an appearance who are not members of the National Patent Board may be required to pay an appearance fee.
6. Fees
A.The National Patent Board shall establish and maintain a fee schedule for the following:
1.Request for Hearing Processing Fees ;
2.Petition for Ripeness Determination Fees;
3.Administrative and Case Processing Fees;
4.Petitions to Executive Director Fees; and
5.Panelists and Experts Fees.
B.Fees shall be determined on the basis of such factors as the number of patent claims to be resolved, the size of the parties, and whether a party is a member or nonmember of the National Patent Board.
7. Filing and Service
A.Any papers required to be filed with the National Patent Board shall be considered filed when the National Patent Board actually receives them. In order to expedite filing, the National Patent Board will accept filings by any of the following modes:
1.Next business day express courier;
2.Facsimile of documents, provided that such documents shall not exceed twenty (20) pages in length;
3.Electronic mail, provided that a hard copy and a diskette containing such document is also filed by next business day express courier; or
4.Hand delivery.
B.With the exception of a Petition for Ripeness Determination, no papers shall be filed with the National Patent Board without simultaneously serving the same, by use of the identical mode as used for filing, upon lead counsel for the opposing party, or upon the agent identified to accept service, if no lead counsel has yet been identified.
C.With the exception of a Petition for Ripeness Determination, each such paper that is filed with the National Patent Board must include proof of service certifying that the opposing party has been served simultaneously with the filing of the paper with the National Patent Board.
8. Form of Papers
From time to time, the Executive Director shall issue standards for the format and page limits of papers being filed with the National Patent Board.
9. Extensions of Time
A.National Patent Board proceedings shall be conducted with expediency and shall be subject to the provisions of this Rule and other deadlines established elsewhere in the Rules.
B.The National Patent Board shall strictly adhere to and enforce the deadlines set forth in these Rules and the scheduling order issued by the Executive Director. In the event a deadline falls on a holiday, such as those identified in Rule 6 of the Fed. R. Civ. P., a weekend day or on a day on which weather, other conditions or force majeure have made compliance with the deadline impossible, then the deadline shall be the next succeeding regular business day.
C.Extensions of time may be granted in advance of a deadline, but only upon petition to the Executive Director and only upon an advanced showing of good cause as to why the deadline sought to be extended can not be met. The Executive Director shall have discretion to shorten other time periods in cases where extensions of time are granted.
D.Failure to file or to serve any paper in a timely manner may be grounds for an appropriate sanction.
10. Confidentiality
A.The Executive Director and other employees of the National Patent Board, all panelists, all experts, and all parties to a National Patent Board proceeding shall be required to undertake an obligation of confidentiality as to any document or information produced or filed in the course of a National Patent Board proceeding, and as to the outcome of such proceeding.
B.Within the time scheduled by the Executive Director, the parties must execute a confidentiality agreement (Form NPB003). Prior to the effective date of the confidentiality agreement, if any document or information is shared by one of the parties, which is marked "confidential" by the disclosing party, such document or information shall be maintained as confidential and shall be limited in disclosure to outside counsel and one designated in-house attorney for the parties who have entered an appearance in the proceeding. In the event a party elects to use an in-house attorney in lieu of outside counsel, then the documents and information shall be limited under this part to such designated in-house attorney, who shall be subject to the restrictions governing confidentiality set forth in this rule.
C.All "confidential" designations either under these rules or the confidentiality agreement shall be made in good faith and, at the time of production, shall be accompanied by a certification that all such designations have been made in good faith.
D.The parties may agree in writing to a waiver of confidentiality as to part or all of any National Patent Board proceeding.
11. Papers Filed and Positions Taken in National Patent Board Proceedings
A.No counsel or party shall file any paper, take any position, or use National Patent Board proceedings for purposes of harassment, delay, or to needlessly increase the cost of the proceeding or otherwise impose hardship upon any person involved in a National Patent Board proceeding.
B.No counsel or party shall multiply the proceedings in any National Patent Board proceeding unreasonably and vexatiously.
C.A party or counsel who violates this rule or any other rule herein may be subject to sanctions as promulgated by the National Patent Board, including but not limited to:
1.Dismissal of proceeding;
2.Entry of default;
3.Refusal of National Patent Board to consider papers or arguments advanced by the party; or
4.In instances where the sanctioned conduct was the direct result of conduct undertaken by or at the direction of a party, suspension or expulsion of the party from the National Patent Board.
12. Initial Disclosures
A.All initial disclosures of the initiating party shall be made at the time a request for a National Patent Board hearing is filed and served.
B.The person holding rights under a patent shall furnish the following information as part of its initial disclosure:
1.A copy of the patent, its certified file history (unless the parties stipulate to the authenticity and completeness of another copy of the file history) and all references cited during prosecution;
a.Subject to the right of the producing party to invoke reasonable measures to preserve secrecy of the subject matter furnished, in the case of patents resulting from one or more continuing applications or which have counterpart foreign applications, the documents and information required in this part also shall be provided for all applications in the chain of priority applications (and any of their related continuing applications) and for foreign counterpart applications;
2.The identity of each patent claim that is asserted;
3.The specific identity of each product, apparatus, or process that allegedly infringes along with the identity of each patent claim allegedly infringed by such subject matter;
4.For each patent claim allegedly infringed, a claim chart (in accordance with Form NPB004) correlating each element of the claim with the accused subject matter, and explaining whether the infringement asserted is literal or under the doctrine of equivalents;
5.Test results, objective or scientific evidence, and any other evidence upon which the patentee intends to rely at the hearing to establish infringement;
6.All evidence in the possession, custody or control of such party that may have any tendency to contradict or refute any fact derived from part (5) of this rule, including the results of all tests and inspections conducted on the accused subject matter, a complete description of the testing protocol followed, and all reports, drafts of reports, preliminary results and the like prepared by a witness on behalf of or for the benefit of a party;
7.Proof of standing to sue for patent infringement;
8.The identity of any expert witness whose affidavit testimony such party intends to present to the panelists;
9.An identification of any information that is exclusively within the knowledge of the opposing party and which the person holding rights under the patent was unable to obtain, along with a statement of the efforts made to obtain such information and the reasons why the information could not be obtained;
10.A complete description of any prior art known by such party upon which the potential infringer could rely to establish that the patent claims cannot be construed in a manner that would cover the potentially infringing subject matter without invalidating the patent claim in question; and
11.A statement signed by the party or its counsel that everything required to be disclosed by such party has been disclosed.
C.A potential infringer shall furnish the following information as part of its initial disclosure:
1.The identity of each patent claim that is in question;
2.The identity of each product, apparatus, or process that is in question along with the identity of each patent claim for which a determination is sought;
3.For each patent claim for which a determination is sought, an identification of the specific elements of the product, apparatus, or process that are not believed to correspond with the claim;
4.Test results, objective or scientific evidence, or other evidence upon which the party intends to rely at the hearing to establish noninfringement;
5.All evidence in the possession, custody or control of such party that may have any tendency to contradict or refute any fact derived from the immediately preceding sub-part (4) of this rule, including the results of all tests and inspections conducted on the accused subject matter, a complete description of the testing protocol followed, and all reports, drafts of reports, preliminary results and the like prepared by a witness on behalf of or for the benefit of a party;
6.The identity of any expert witness whose affidavit testimony such party intends to present to the Panelists;
7.A sample or other representative, complete and accurate depiction of each product, apparatus or process that potentially infringes;
8.A complete description of any prior art upon which the potential infringer may rely to establish that the patent claims cannot be construed in a manner that would cover any product, apparatus, or process that potentially infringes without invalidating the patent claim in question; and
9.A statement signed by the party or its counsel that everything required to be disclosed by such party has been disclosed.
D.In cases where it is not reasonable to expect that the person holding rights under the patent has complete access to every product, apparatus, or process that potentially infringes, a potential infringer who is an initiating party shall also be required to permit the person holding rights under the patent, the panelists, or any Board appointed expert witness to inspect and record (e.g., digitally, magnetically, photographically, or the like) the operation of any accused subject matter or to otherwise enter the premises at which potentially infringing subject matter is being practiced by the potential infringer for purposes of inspection and recording. Within 15 days of any inspection, the person holding rights under the patent must supplement its initial disclosures to reflect the newly acquired information.
E.If subject matter that is required to be part of an initial disclosure is not disclosed by the date scheduled for such disclosure, the disclosing party shall not be permitted to rely upon such information except as authorized herein.
13. Supplementation and Amendments
A.There shall be a continuing obligation imposed upon each party to supplement their initial disclosures. Any supplementation must be accompanied by a statement by the supplementing party or its counsel explaining why the supplementation is necessary and could not have been provided earlier. The panelists shall have discretion to determine whether a supplementing party may rely upon such supplementation at the hearing.
B.Amendments to any papers filed with the National Patent Board may only be made at the discretion of the Executive Director, upon petition, which must set forth good cause for entry of the amendment and an explanation of why the proposed amendment was not made earlier.
14. Joint Prehearing Statement
A.An original and four (4) copies of a Joint Prehearing Statement shall be prepared and submitted to the National Patent Board. The Joint Prehearing Statement, upon signature of the National Patent Board panelists, shall become a Final Joint Prehearing Statement and shall govern the course of the proceeding, superseding all previous papers filed with the National Patent Board.
B.The initiating party shall have the responsibility for preparing the Joint Prehearing Statement. The opposing party shall cooperate in the preparation of the Joint Prehearing Statement.
C.The Joint Prehearing Statement shall include the following items:
1.A concise and objective summary of the dispute;
2.A joint glossary of relevant terms;
3.In separately numbered paragraphs, a statement of all uncontested facts;
4.A concise chronology of material facts;
5.A concise summary of all issues in dispute that require resolution by the National Patent Board, identifying whether the issue pertains to claim construction or infringement under the doctrine of equivalents;
6.If the case involves a matter of claim construction, then a claim construction summary statement in accordance with Rule 15;
7.A claim chart with disputed elements conspicuously identified;
8.An identification of any evidentiary disputes anticipated at the hearing;
9.A proposed joint plan for the conduct of any discovery should the panelists determine that extrinsic evidence is necessary for claim construction, or that evidence of equivalency or otherwise is necessary for determination of the issue of infringement;
10.Any other matter deemed necessary by the panelists; and
11.A separate written stipulation that the written decision of the National Patent Board shall be the only authentic embodiment of the decision of the National Patent Board, shall not be challenged for authenticity and shall be admissible in evidence in any subsequent litigation between the parties. The stipulation shall be binding, valid, and enforceable in any subsequent litigation between the parties and shall embody an agreement that the parties shall enter it into the record in any subsequent litigation.
15. Claim Construction Summary Statement
A.A claim construction summary statement shall be prepared for each claim under consideration.
B.The claim construction statement must specifically identify for each claim whether either of the parties believes extrinsic evidence is needed to construe the claim, and if so, the reasons why extrinsic evidence is needed.
C.The claim construction statement shall only identify those terms or phrases that are disputed by the parties.
D.As to any claim term that has a definition in dispute, each party shall set forth:
1.The specific identity (as represented by page number in an application file, or by column and line number in any patent) of any support that exists for that party's proposed definition in:
a.The claims of such patent;
b.The specification of such patent; and
c.The application prosecution history of such
patent; and
2.If a party intends to rely upon extrinsic evidence, the identity of such extrinsic evidence and any contrary extrinsic evidence.
E.A listing of the legal authority relied upon by the party with the relevant portions of such authority pinpoint cited and highlighted.
16. Prehearing Conference
A.At such time when the Executive Director establishes, and at a location established by the panelists, or agreed upon by the parties, there shall be a prehearing conference, at which the contents of the Joint Prehearing Statement and following items shall be addressed:
1.The identity of issues in dispute as identified in the Joint Prehearing Statement;
2.The determination by the panelists of a procedure for securing any proofs deemed necessary by the panelists for resolution of the disputed issues, including but not limited to requiring one or both of the parties to depose one or more witnesses, admit or deny a particular fact, answer an interrogatory or produce documents and things for inspection and copying;
3.Any expert deemed necessary by the panelists, in accordance with Rule 17 herein, and the scope of testimony from such expert;
4.The entry of a Joint Final Prehearing Statement;
5.Whether the parties agree that the decision rendered in the proceeding will be binding upon the parties, (in which case, both parties shall qualify for a reduction in their respective administration fees);
6.Any fee shifting arrangements or waiver of the fee shifting provisions herein; and
7.Any other matters that the Board deems reasonable and appropriate to address at such juncture of the proceeding.
B.No hearing may proceed in the absence of entry of a Joint Final Prehearing Statement. The Executive Director may condition entry of the Joint Final Prehearing Statement upon payment by the parties of any fees then due or which may later become due.
C.No new issues, claims, or defenses may be raised by the parties following entry of the Joint Final Prehearing Statement.
D.Except by petition of the parties and upon approval by the Executive Director, there shall be no further conferences among the parties and the panelists prior to the hearing.
17. Expert Selection
When it appears that resolution of the dispute cannot be made expeditiously and economically without the assistance of a panel-appointed expert witness, such as one who is skilled in the art to which the subject matter of the dispute pertains, the parties jointly shall stipulate to the selection of one or more persons to serve as an expert witness in the case. Apart from such expert witness, there shall be no other expert witnesses in the case. In situations where the parties are unable to jointly agree on a selection of an expert witness, the panelists shall select an expert witness, who shall sign an undertaking of confidentiality (Form NPB005) and who may be stricken only upon showing of good cause by one or both of the parties. Any such expert shall be retained by the Board, with the costs of the expert to be borne as determined by the panelists.
18. Report by Board-Appointed Expert
A.By the deadline established by the panelists, any expert appointed by the Panelists shall submit a sworn written report concerning the specific issues requested by the panelists. The report shall contain the components specified for expert reports in Fed. R. Civ. P. 26(a)(2)(B).
B.The expert shall not consult directly with the panelists in the course of conducting an investigation or preparing a written report. However, the expert shall be entitled to communicate directly with the Executive Director, who may take appropriate measures to assist the expert, including the arrangement of any communications between the expert and the panelists, with the presence or participation of the parties.
C.Any testing conducted by the panel-appointed expert shall be in the presence of lead counsel for the parties. The testing protocol employed shall be summarized jointly by such counsel and verified by the expert.
19. Test Results
A.In addition to the requirements imposed by any other rules herein, any results of ex parte testing conducted by a party shall be accompanied by a sworn affidavit setting forth the testing protocol, the appropriate foundation evidence for establishing admissibility of such evidence, and a statement by both the affiant and the proffering party certifying that neither of them has concealed any contradictory test results, drafts, modifications, other test protocols employed or the like.
B.The panelists, in their discretion, may require that further testing be conducted to support or refute an assertion.
20. Briefing and Appendix
A.Each party shall be entitled to file, by the deadline established by the Executive Director, a Hearing Brief in support of its position. The brief shall conform to the standards and page limits established from time-to-time by the National Patent Board.
B.The briefs of the parties shall be filed simultaneously.
C.The briefs of the parties shall be accompanied by a Joint Appendix. The initiating party shall have the primary responsibility for preparing the Joint Appendix. The opposing party shall have a duty to cooperate in the preparation of the Joint Appendix.
D.The Joint Appendix shall have each page numbered consecutively and shall include the following:
1.A copy of the patent-in-dispute;
2.A copy of the application file history, including any prior applications from which priority is claimed;
3.A copy of all references considered by the Patent Examiner during prosecution of the application leading to the patent in question;
4.An objective description of the accused subject matter;
5.Any supporting or contradictory evidence required to be disclosed; and
6.A copy of each case relied upon by the parties.
E.Failure to comply with the standards for briefing and this rule could result in the imposition of sanctions as deemed appropriate by the National Patent Board.
F.Issues not raised in the briefs and evidence not included in the Appendix may not be raised at the hearing by the parties.
21. Hearing
A.At the time specified in the scheduling order and at a location agreed to by the parties or otherwise established by the panelists a one (1) day hearing shall occur.
B.Unless otherwise directed by the panelists, each party shall be limited to 60 minutes of oral argument at the outset of the hearing. The person holding rights in the patent in question in any proceeding shall be entitled to argue first and may reserve a portion of its time for rebuttal.
C.Upon conclusion of oral argument, the panelists shall be entitled to examine any witnesses they deem appropriate and which they direct the parties to produce at the hearing, or to examine the expert witness based upon any matter raised by the expert witness in the expert report. Prior to such examination, the parties shall be entitled to request the panelists to examine the expert witness in accordance with a proposed line of questions. It shall be within the discretion of the panelists as to the scope of any examination conducted, or whether to afford the parties an opportunity to cross examine any witness.
D.Upon conclusion of the examination, the parties shall each be entitled to one-half (1/2) hour to summarize its position and to address any additional matters raised in the course of the expert's examination.
E.The Federal Rules of Evidence shall govern the admissibility of evidence in any proceeding. The panelists shall have discretion to admit or exclude evidence, and to determine the weight that should be assigned to such evidence.
F.Other than any testimony of an expert witness, there shall be no live testimony presented at the hearing. The presentation of documentary exhibits or other evidence, including transcripts of previous sworn testimony, affidavits and demonstratives, shall be permitted.
G.Upon conclusion of the hearing, the record shall be considered closed and may only be re-opened upon the initiative of the panelists.
H.All demonstrative exhibits must be exchanged at least 7 days in advance of the hearing, along with any summaries in accordance with Fed. R. Evid. 1006, identifying how the summary was prepared and the documents it summarizes.
I.Unless both parties agree in advance, the hearings shall not be recorded stenographically or otherwise. In cases where the parties jointly agree to record a hearing, they shall be solely responsible for all costs of transcription and for providing two (2) copies of the transcript to the National Patent Board.
22. Voluntary Termination of Proceedings
A.At any time prior to the rendering of a written decision by the Board, the parties may stipulate to the dismissal with or without prejudice of the proceeding, or to the entry of judgment for one of the parties. A proceeding once dismissed without prejudice may only be dismissed a second time with prejudice.
B.In the event of voluntary termination, the Executive Director shall have the discretion to refund a reasonable and appropriate portion of the fees paid by the parties.
23. Stay of Proceedings
A.For good cause shown, the Executive Director may stay a National Patent Board proceeding, or postpone any deadlines that have been established.
24. Consolidation and Bifurcation
A.Consolidation. When more than one National Patent Board proceeding is pending, which have common questions of law or fact, the Executive Director may order that some or all of the proceedings be consolidated. The Executive Director shall have discretion to make, or upon stipulation of the parties, may make accommodations to the scheduling order to avoid undue prejudice to one or both of the parties.
B.Bifurcation. When it appears that the issues presented to the Board in a particular National Patent Board proceeding are of such complexity that it would impose undue burden upon the panelists or one or both of the parties to pursue the matter in its entirety in a single proceeding, the Executive Director, shall have discretion to order, or upon the stipulation of both parties may order, that a separate proceeding occur.
25. Code of Conduct for Legal Representatives
From time to time, upon request of a party, the Executive Director may establish and publish Rules of Professional Conduct or ethics opinions that will further define the scope of permissible conduct of legal representatives and panelists who appear before the Board.
26. Finality of Decision and Effect in Subsequent
Litigation Between the Parties
A.Upon the conclusion of each case, the National Patent Board shall prepare a written decision that embodies the holding of the National Patent Board on all disputed issues. The National Patent Board shall issue to each party a certified copy of the decision. The decision shall not be issued by the National Patent Board unless and until the parties shall have paid any remaining fees owed to the National Patent Board, its panelists or expert witnesses. Once issued, the decision may only be modified upon petition to the Executive Director, within 10 days of the decision, showing a clerical mistake or clear and convincing evidence that the decision was procured fraudulently, or otherwise as a result of gross misconduct by a party.
B.Subject to the provisions herein, the parties may relitigate in a forum other than the National Patent Board any issue raised or disputed in a National Patent Board proceeding. However, the parties shall not be entitled to challenge the adequacy, competency or propriety of the written decision in any such litigation.
C.In any subsequent proceeding, the parties shall not call as a witness, nor conduct any discovery from the Executive Director or other employee of the National Patent Board, or any panelist or Board appointed expert, if the scope of testimony contemplated from such witness bears in any way upon a National Patent Board proceeding.
27. Accepting or Rejecting Decision
A.Each of the parties shall have thirty (30) days from the date of the decision to notify the National Patent Board whether it accepts or rejects some or all of the decision of the National Patent Board. The date of the decision of a decision that has been petitioned for modification in accordance with Rule 26-A shall be the date of the decision on such petition, unless the decision on such petition indicates otherwise.
B.If both parties accept some or all of the decision, then those portions accepted shall become binding and final, and the parties may enter judgment accordingly in any appropriate court.
C.If a party rejects some or all of a decision, then such party shall be subject to the provisions of the following rule.
28. Fee Shifting
A.Unless the parties agree otherwise prior to the prehearing conference, the parties shall agree (and such agreement shall be binding, valid and enforceable) that in the event of subsequent re-litigation of issues decided in the National Patent Board proceeding a party who both loses on a particular issue(s) decided in a National Patent Board proceeding and rejects that portion of the decision, shall be responsible for payment of fees. If that party:
1.Was the National Patent Board proceeding initiating party, and thereafter loses on that same issue(s) in a litigation either initiated or defended by such party, such party shall pay a pro rata portion of the costs of both proceedings according to a first schedule of fees to be established by the National Patent Board.
2.Was not the National Patent Board proceeding initiating party, and thereafter loses on that same issue(s) in a litigation either initiated or defended by such party, such party shall pay a pro rata portion of the costs of both proceedings according to a second schedule of fees to be established by the National Patent Board.
B.Unless otherwise agreed by the parties, in all other scenarios, there shall be no fee shifting under these rules. Any fee shifting in such circumstances shall be determined by the presiding court.
C.Nothing in this rule shall preclude a party from seeking, and a court from awarding, any sanctions otherwise authorized by Titles 28 or 35 of the United States Code, the Federal Rules of Civil Procedure, or otherwise.
29. Timing of Payment of Costs
The Executive Director may require the parties to pay all costs of expert and panelist fees prior to the rendering of a decision.
30. Release of Liability
The panelists, the Executive Director, the officers, Board of Directors and employees of the National Patent Board shall not be liable to any party for any act or omission arising in connection with a National Patent Board proceeding.
31. Requirements for Panelists
A.Candidates for Panelists must have the following minimum credentials:
1. Be either registered to practice as an attorney before the United States Patent and Trademark Office (USPTO), with substantial patent litigation and/or patent clearance (right to make) opinion-writing experience, or a litigation lawyer with substantial patent infringement litigation experience;
2. Be in good standing as a member of a state bar.
B.All candidates must have a personal interview with the Executive Director of the National Patent Board.
C. All candidates who are accepted as potential Panelists must complete training prescribed by the Executive Director.