SAP v. Versata (CBM2012-00001, Paper 24): Protective Order, Discovery and Timing before Institution

SAP America, Inc. v. Versata Development Group, Inc., CBM2012-00001, was the first proceeding under the AIA’s transitional program for covered business method patents. It challenged U.S. Patent 6,553,350. Paper 24, entered November 15, 2012, records the Board’s rulings on a conference call held the day before, while the petition was still awaiting an institution decision.

The scheduling order entered after institution (Paper 37) is covered separately.

Background

The parties had a related district court case in which SAP’s “R/3” documentation had been raised on invalidity. They filed a joint submission listing four issues and asked the Board to resolve them. A court reporter attended the call. The order summarizes the rulings and notes that the full transcript was to be filed as an exhibit.

Covered business method reviews generally followed the rules for post-grant review, including its discovery standard. Under 37 C.F.R. § 42.224, additional discovery in those proceedings requires good cause and is limited to evidence directly related to factual assertions advanced by either party. The order does not discuss the standard in detail; it records practical rulings made on the facts presented.

What the Board decided

1. Protective order. Versata was willing to use the Board’s default protective order. SAP wanted changes matching the protective order in the district court case. The parties said they expected to agree, and the Board gave them two days to do so, with a further call if they could not.

2. Versata’s request for additional discovery. Versata sought three groups of documents from the litigation:

• Five specific documents: two expert reports, the two experts’ deposition transcripts, and SAP’s motion for judgment as a matter of law, all unredacted. SAP objected only on relevance. Asked to identify any prejudice from producing them, SAP named none. The Board ordered production once a protective order was entered.
• Appendices and exhibits cited in those documents: the Board told Versata to tell SAP which ones it needed and why, and to return to the Board only if the parties could not agree.
• A general request for anything relating to R/3 documentation: denied without prejudice to raising it again if trial was instituted.

3. Versata’s litigation experts. Versata asked to use its experts from the litigation. SAP argued this would violate the district court’s protective order. The Board took no position on whether it would.

4. Preliminary response deadline. Versata asked to move its preliminary response from November 23 to December 17, 2012. The Board noted that November 23 was the day after Thanksgiving and extended the date only to November 30.

Why it matters

The order is an early example of how the Board manages AIA trials through conference calls and short orders under 37 C.F.R. § 42.5:

• Narrow, identified requests fare better than broad ones. Five named documents were ordered produced; an open-ended category was not.
• Relevance objections need substance. SAP’s failure to identify any prejudice weighed in favor of production.
• Parties are expected to confer first. The Board sent the appendices dispute and the protective order back to the parties before it would decide them.
• The Board will not police other tribunals’ orders. Whether a district court protective order allows a use was left to the parties.
• Deadline relief is measured. The Board granted a modest extension tied to a concrete reason, not the full request.

For how CBM and PGR discovery compares with IPR, see discovery in PGR versus IPR.

Later developments

The Board went on to institute review and, in its final written decision, held the claims under review unpatentable under 35 U.S.C. § 101. The Federal Circuit affirmed the Board’s § 101 decision in Versata Development Group v. SAP America (Fed. Cir. 2015). The CBM program itself was transitional and ended on September 16, 2020; no new CBM petitions can be filed.

Key takeaways

• Paper 24 resolved four issues in the first CBM review before institution.
• Specifically identified litigation documents were ordered produced; a general category request was denied without prejudice.
• The Board took no position on the district court’s protective order and asked the parties to resolve smaller disputes themselves.
• The preliminary response deadline was moved one week to avoid a holiday, not the three weeks requested.