Whither Bilateral Patent Prosecution Bars?

Patent practitioners involved in both litigation and prosecution might take comfort in the growing trend away from bilateral patent prosecution bars incorporated into protective orders. Defense attorneys have long contended, especially in cases brought by Non-Practicing Entities (NPEs), that any bar against patent prosecution should apply unilaterally to the NPE’s counsel. NPEs generally do not develop products, and are therefore unlikely to maintain confidential information about technology that could be inadvertently used by defendant’s counsel during prosecution.  Courts are now beginning to accept this argument, and patent litigators should consider fighting attempts to impose bilateral prosecution bars where they might otherwise not have. 

A recent order in the Eastern District of Texas explains numerous reasons against the imposition of a bilateral patent prosecution bar. Smartflash LLC v. Apple Inc., No. 6:13-cv-447 (E.D. Tex. May 12, 2014). In Smartflash, the magistrate judge found that a unilateral prosecution bar was appropriate, even though the plaintiff argued that a bilateral one was needed because plaintiff’s confidential information could contain plans for future products. The magistrate judge explained that the possibility of future product plans potentially being contained in the confidential information is not sufficient to impose a bar on defendants’ counsel.  The magistrate judge went on to explain that the parties in the case are not similarly situated, and that since the plaintiff does not currently sell any products, there is no corresponding risk of inadvertent disclosure and misuse, limiting the prosecution bar to plaintiff’s attorneys who review defendants’ highly sensitive information.

A similar result was recently ordered in the District of Delaware, where Judge Stark rejected a bilateral prosecution bar in favor of a unilateral prosecution bar against counsel for plaintiff. DN Lookup Technologies v. Charter Communications, Inc., No. 11-1177-LPS (D. Del. June 11, 2012). In DN Lookup, Judge Stark described how he was not satisfied that the plaintiff was going to produce highly confidential information of a type that would justify making the prosecution bar bilateral. The plaintiff pointed to licensing and strategy documents that the plaintiff was going to produce, but in the court’s view, those materials would not be the kind of information that could be of use or misuse by defendants in a presentation or application to the USPTO. The court was also not persuaded by the plaintiff’s suggestion that it had some type of source code sought by defendants, or that it would somehow be inequitable to have a unilateral bar. Judge Stark also explained that the parties are not similarly situated, because the plaintiff is a non-practicing entity whereas the defendants make products.

In a third case, Ventronics Systems, LLC v. Draeger Medical GmbH, No. 11-1114-RGA (D. Del. Dec. 28, 2011), the court also rejected a bilateral prosecution bar in favor of a unilateral one. The court reasoned that the plaintiff is not a manufacturer and showed no inclination to be so in the future. The court also reasoned that the plaintiff is not a competitor of the defendants in relation to the technology at issue. The plaintiff argued that the prosecution bar should be reciprocal in order to be fair, but the court rejected that argument. The court explained that the argument of “what’s good for the goose is good for the gander” no longer carries any weight after the Federal Circuit’s decision in In re Deutsche Bank Trust Co. Americas, 605 F.3d 1373 (Fed. Cir. 2010), because it “fails to take into account any differences between the goose and the gander.”

While there are many more examples from the past few years, these cases demonstrate a clear trend away from bilateral prosecution bars–at least in situations where plaintiffs are NPEs or might not otherwise have products that compete with those of a defendant. Many practitioners view bilateral prosecution bars as a foregone conclusion during litigation, but the above cases show a willingness by the courts to tailor prosecution bars to the facts of any given case.