Inability to Agree on Safe Procedures for Source Code Review During Pandemic Leads to Stay of Litigation

Discovery disputes do not normally lead to a stay of litigation. But, in one recent patent infringement case, the parties’ inability to agree on a safe procedure for allowing the plaintiff’s expert to review the defendant’s source code during the COVID-19 pandemic resulted in a stay of the case until at least 2021. Plaintiff sought to compel the defendant to produce the source code for its accused cloud services product — which the defendant characterized as the company’s “crown jewels” — in Dallas, where its expert resides, arguing he was unable to travel to Boston due to health concerns associated with travel during the pandemic. The court opted instead to stay the litigation until 2021, unless the parties could agree on an alternative solution to the problem.

Key Takeaways

• Parties should be creative and flexible in devising practical solutions to difficult logistical issues that arise in view of the COVID-19 pandemic, as taking inflexible positions could result in unexpected and undesirable collateral consequences.  
• Plaintiffs should act quickly to resist any suggestion about staying litigation during the pandemic — in this instance, the court stayed the litigation just one day after the defendant submitted its response to the plaintiff’s emergency motion to compel discovery, with plaintiff having waived its right to file a reply brief, thereby leaving defendant’s proposal to stay the litigation unrebutted. 

Analysis

Courts are looking to parties to find creative and practical solutions to the sometimes difficult logistical problems created by safety concerns and travel restrictions associated with the COVID-19 pandemic, and will not look favorably upon parties they view as intransigent. Digging in your heels during discovery — and taking positions or filing motions that might have made sense in normal times — can lead to unexpected and undesirable consequences.

We saw this play out in the recent case of Uniloc 2017 LLC v. athenahealth, Inc., No. 1:19-cv-11278-RGS (D. Mass. July 29, 2020).

Uniloc sued athenahealth for patent infringement in the District of Massachusetts. Four weeks before fact discovery was set to close, Uniloc filed an emergency motion to compel athenahealth to make its source code available for inspection near where Uniloc’s Dallas-based expert resided. Uniloc offered evidence that its expert had severe health concerns that precluded airplane travel to Boston, where athenahealth had offered to make its source code available, during the pandemic. Uniloc argued that it had engaged this expert to review source code in more than a dozen actions involving the same patents, and that he was the only one able to perform the review. Engaging a Boston-based expert, according to Uniloc, would be exceedingly difficult and prejudicial when Uniloc’s presently-engaged expert was already deeply familiar with the patents and technology. As part of its emergency motion, Uniloc requested an expedited briefing schedule and waived its right to file a reply brief. 

athenahealth opposed the motion, claiming that the source code had been waiting for Uniloc’s review in Boston since December 2019, and that it could not now be practically and feasibly produced in Texas. According to athenahealth, personnel and systems for creating the source code computer and generating exports reside in Boston, and it was too late now to hand-deliver it because nobody from either side of the litigation should be required to board an airplane in the pandemic. athenahealth offered to stay the case as a potential solution to the dispute but advocated that review in Boston was the best solution. It argued that Uniloc need only select a Boston-area reviewer to complete its review. 

The next day, in a one paragraph docket entry order, the Court stayed the entire case until 2021, or until “[the parties] mutually agree on a workable solution.” The Court recapped the dilemma, and rationalized the stay by recognizing that neither party should have to bear the cost of the pandemic more than the other. Clearly, the judge was looking to the parties for a creative solution to the problem, and did not appreciate Uniloc’s “my way or the highway” attitude towards the issue. By offering to lift the stay if the parties could mutually agree on a workable solution, the judge was opening the door for Uniloc to come up with a practical solution to the dilemma that was, in part, created by its own delay in seeking to have its expert conduct the source code review.

This case highlights the risks of taking inflexible positions on discovery disputes during times that call for creative problem-solving, particularly for plaintiffs seeking to keep their cases moving forward during the COVID-19 pandemic. It also puts a spotlight on the need to act very quickly to oppose a potential stay — by ruling on the motion the day after athenahealth filed its opposition, the court gave Uniloc little time to react to athenahealth’s alternative request to have the case stayed.