Page 26 - Delaware Lawyer - Winter 2022

FEATURE | DELAWARE IN THE VANGUARD
der the Hatch-Waxman Act, which has been interpreted as providing no right to a jury trial. The Hatch- Waxman Act outlines the process for pharmaceutical manufacturers to file an Abbreviated New Drug Ap- plication (ANDA) for approval of a generic drug by the Food and Drug Administration (FDA). These gener- ic drug litigations between branded pharmaceutical companies and ge- neric drug manufacturers can involve multibillion-dollar products, and for a branded company, represent the difference between maintaining its position in the market and losing 80-90% of its market share. The col- lective experience of the Court has led to Delaware’s recognition as the leading forum for this specialized type of patent litigation in recent years. Although the Federal Circuit has recently tightened up venue op- tions for Hatch-Waxman litigation,5 as of late 2021 a majority of these ge- neric drug cases were still being filed in Delaware, and about 25% of Dela- ware’s patent cases are ANDA cases.
The 2010s
With the dawn of a new decade, the Court’s approach to patent litiga- tion continually and rapidly evolved, with new innovations becoming com- monplace as the Court further solidi- fied its place as a leader in intellectual property litigation.
Default Standards. In Decem- ber 2011, the District of Delaware adopted a new “Default Standard for Discover y, Including Discover y of Electronically Stored Information (ESI).” Parties are still largely free to reach their own agreements regard- ing discover y, but the Default Stan- dard applies in the absence of such an agreement or other court order. The standard formally embraces the con- cept of proportionality in discovery (before the Federal Rules formally
adopted the principle), and addresses the preservation of discoverable in- formation, privilege logs, initial dis- closures in patent litigation, and e- discovery. The court also established a separate Default Standard for Ac- cess to Source Code.
Patent Study Group. The Leahy- Smith America Invents Act (AIA) went into effect in 2012 and 2013, and is considered the most significant legislative change to the patent sys- tem in decades. Keenly aware of Del- aware’s responsibility for handling a huge volume of patent litigation, the Court created a Patent Study Group (PSG) in 2013 to help iden- tify potential “best practices” for the management of those complex cases in the post-AIA era. After soliciting input from practitioners regularly ap- pearing in the District of Delaware (including in-state and out-of-state counsel, in-house counsel and busi- ness persons), the PSG released its findings in 2014.6 The Court resolved to put greater emphasis on judicial involvement early in the case, ex- panding the scope of counsel’s Rule 26(f) conference duties, promoting the early disclosure of damages the- ories, setting firm schedules quickly (including trial dates), and holding status conferences to narrow issues as appropriate. The Court also resolved to issue decisions as promptly as pos- sible (particularly Markman rulings) and streamline certain dispute pro- cedures. Significantly, the Court sig- naled its intent to rely more heavily on referrals to magistrate judges.
Alternative Dispute Resolu- tion and the Increased Role of Magistrate Judges. Notably, the District of Delaware judges do not try to manage their dockets by strong-arm- ing litigants into settlements. Instead, the Court has implemented a highly regarded parallel but independent ADR program. Longtime Chief
Magistrate Judge Mary Pat Thynge established detailed and durable procedures for mediation, including the preparation of confidential mediation statements. With her thor- ough preparation and indefatigable
determination to look for creative business solutions short of trial, Judge Thynge gained a national reputation for helping many par- ties settle their patent disputes. The addition of three more magistrate judges in the 2010s has enabled the Court to expand its ADR program, and to assume substantive responsi- bilities in the pretrial management (and sometimes trial) of patent cases.
TC Heartland (2017). Prior to the U.S. Supreme Court’s decision in TC Heartland LLC v. Kraft Food Brands, LLC,7 it was widely under- stood that a corporation could be sued for patent infringement in any district in which it was subject to the court’s personal jurisdiction. This broad latitude for venue selection ended abruptly when TC Heartland held that for purposes of determining proper venue in a patent suit, a cor- poration “resides” only in its state of incorporation. Thus, TC Heartland effectively redistributed the filing of many patent cases from the Eastern District of Texas (a popular venue for patent plaintiffs) to Delaware, a dis- trict where approximately two-thirds of the largest U.S. companies are in- corporated. In the 13 months follow- ing TC Heartland, Delaware experi- enced an overall increase of 64% in new patent cases compared to the 13 months preceding.
The District Court took in stride all of the major legislative and appellate developments of the decade. The new post-grant review procedures under the AIA have led to an evolving body of case law on topics including mo- tions to stay district court litigation pending inter partes review (IPR) and
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