Commercial Litigation and Arbitration

Federal Circuit Applies Regional Circuit Law to Discovery Matters Generally But Not When Substantive Patent Law Is Implicated

From In re Deutsche Bank Trust Co. Americas and Total Bank Solutions, LLC, 605 F.3d 1373 (Fed. Cir. 2010):

On August 19, 2009, Deutsche sought a protective order including a patent prosecution bar preventing anyone who gains access in the litigation to documents marked "confidential — patent prosecution bar" from any involvement in prosecuting any patent in the area of "deposit sweep services" during, and for a limited period after, the conclusion of this litigation. After a very short hearing, and without a written opinion, the magistrate judge assigned to the case granted Deutsche's request as to all of Island's trial counsel, but exempted Macedo, Island's lead trial counsel.***

As a threshold issue, we address whether to apply Second Circuit law or Federal Circuit law to the question before us. "[W]e have generally deferred to regional circuit law when the issue involves an interpretation of the Federal Rules of Civil Procedure." Manildra Milling Corp. v. Ogilvie Mills, Inc., 76 F.3d 1178, 1181-82 (Fed. Cir. 1996). However, we have also held that Federal Circuit law applies to discovery matters if the determination implicates an issue of substantive patent law. Advanced Cardiovascular Sys., Inc. v. Medtronic, Inc., 265 F.3d 1294, 1307-08 (Fed. Cir. 2001); In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803 (Fed. Cir. 2000). In deciding which law to apply, we consider several factors including: "the uniformity in regional circuit law, the need to promote uniformity in the outcome of patent litigation, and the nature of the legal issue involved." Manildra Milling, 76 F.3d at 1181.

A determination of whether a trial lawyer should be denied access to information under a protective order because of his additional role in patent prosecution, or alternatively be barred from representing clients in certain matters before the U.S. Patent and Trademark Office ("PTO"), is an issue unique to patent law. Moreover, and as discussed below, there is a noted lack of uniformity among district courts around the country about whether and under what circumstances a patent prosecution bar should be applied. See generally David Hricik, How Things Snowball: The Ethical Responsibilities and Liability Risks Arising from Representing a Single Client in Multiple Patent-Related Representations, 18 Geo. J. Legal Ethics 421, 442 (2005) (stating that the question of whether attorneys who prosecute patents may be barred from access to certain sensitive discovery "has split the courts"). Applying regional circuit law to this question is likely to produce differing results depending on the regional circuit in which the case originated. See Highway Equip. Co., Inc. v. FECO, Ltd., 469 F.3d 1027, 1032 (Fed. Cir. 2006) (finding that Federal Circuit law, as opposed to Eighth Circuit law, applied to what effect a dismissal with prejudice has on the legal requirements under 35 U.S.C. § 285 because otherwise the law might vary by regional circuit). Given the unique relationship of this issue to patent law, and the importance of establishing a uniform standard, we hold that the determination of whether a protective order should include a patent prosecution bar is a matter governed by Federal Circuit law.

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