ITC Changes eDiscovery Rules

Section 337 investigations are conducted by the United States International Trade Commission to snuff out Intellectual Property infringement and similar unfair acts. These investigations require the government agency to demand and collect electronic data from the companies being investigated to determine if a violation has occurred. The process allows the U.S. Government to assert a certain level of governance over the use and misuse of patents and trademarks in international commerce.

eDiscovery in these matters has traditionally been seen as more burdensome than the Federal Rules of Civil Procedure. Parties are currently required to search and review all emails and documents, irrespective of time, cost or burden.

Amendments to Section 210.27 of the ITC rules of procedure (19 C.F.R. § 210), adopted on May 21, 2013 and effective June 20, have changed that formulation, bringing the ITC procedures closely in line with the Federal Rules of Civil Procedure.

Under the rule changes by the ITC, parties no longer have to go to extremes to find and produce eDiscovery. Instead, any sources that are “not reasonably accessible because of undue burden or cost,” may be left out of the discovery data set. A party now has to show proof of that determination to withstand a motion to compel production, which would be decided by an administrative judge. The ITC rejected requests to limit eDiscovery to five custodians per party and other limitations, leaving to the discretion of administrative law judges to manage the conditions and limits of discovery. This includes when there are duplicative requests or ones that can be obtained more easily from another source, similar to the flexibility federal district court judges have under the Rule 26 of the Federal Rules of Civil Procedure.

These changes make the ITC’s Section 337 discovery process closely track the Federal Rules of Civil procedure in its approach to eDiscovery. The discovery amendments won’t slow down the rocket pace of the ITC’s administrative process. ITC cases could move even quicker with the most burdensome discovery tasks eliminated.

The rules might also have the unintended consequence of leading to more ITC administrative motion practice, as parties push to try and get access to documents that opponents consider burdensome to produce. If, however, ITC administrative law judges handle those discovery disputes efficiently, this could be a great step forward for international IP infringement cases.

Finally, notwithstanding the advancement of these new changes to ITC discovery procedure, ITC proceedings remain one step behind the Federal Rules of Civil Procedure, which are currently under review again in the context of when parties could be sanctioned for the destruction of unavailability of electronically stored information. Rule 37(e) currently protects parties from sanction if electronically stored information is lost due to the “routine, good faith operation of an electronic information system.”

In January 2013, the Advisory Committee on Civil Rules proposed new amendments to rule 37(e) that would give courts options short of sanctions in cases of destroyed or missing ESI and limit the imposition of sanctions where the party acted willfully or in bad faith. The proposed rule will be published for public comment in August. Advisory Committee on Civil Rules (April 11-12, 2013).