Key Points

• In a Hatch-Waxman case, a months-long fight over ESI search terms led to three court orders, even though the parties had a stipulated ESI plan.
• The court held that any party claiming undue burden, including the plaintiff, must back the claim with objective, fact-specific evidence such as hit reports.
• DNJ Local Civil Rule 26.1(d) says nothing about search term protocols or hit reports, so a detailed ESI plan is the parties' main safeguard.

A recent discovery dispute saga in the District of New Jersey highlights how electronically stored information (ESI) search term negotiations can become a significant obstacle in complex patent litigation where the local rules provide only general guidance on ESI discovery.

The Case

In the consolidated Hatch-Waxman patent litigation In re Viloxazine, plaintiff Supernus Pharmaceuticals, Inc. and eight groups of generic pharmaceutical defendants became embroiled in a months-long dispute over ESI search terms that threatened to stall the broader discovery process.

The dispute illustrates how, in the absence of detailed local rules governing ESI protocols, the parties' respective positions on search term selection, hit reports and burden can quickly escalate from routine negotiation to multiple rounds of judicial intervention — even where the parties have agreed upon an ESI Plan.

The Stipulated ESI Plan and the Seeds of Dispute

As the DNJ Local Rules do not establish a default ESI protocol, the parties had negotiated and entered into an ESI Plan, which established a framework for exchanging and agreeing upon ESI search terms whereby each producing party would first propose an initial list of search terms, after which the receiving party could propose additional custodians and search terms.

The parties were then directed to "meet and confer on the selection of . . . search terms and diligently work towards generating a final list." The ESI Plan also stated that “[i]f a search yields an unduly burdensome number of identified documents, the parties shall negotiate in good faith to reduce this number by narrowing the search terms, utilizing a date range, or use of other search restrictions until the yield of documents is reasonable to the producing party.”

The Core Dispute: Hit Reports and Burden

The dispute came to a head in July when the parties raised the issue with the Court. Supernus proposed additional search terms, including wildcards, Boolean connectors, and proximity locators, for each defendant to run.

When defendants objected, Supernus requested that they produce "hit reports" (showing the number of documents returned by each search term) to substantiate their claims of undue burden. Defendants, in turn, refused to produce hit reports, arguing that the ESI Plan imposed no such requirement. In response to the parties’ initial letters, then-U.S. Magistrate Judge Michael A. Hammer (ret.) entered a text order stating in part “[t]he Court is far from satisfied that the parties have adequately met and conferred on either dispute. Accordingly, the Court will take no action on the foregoing letters.”

The Court further directed that if the parties did not make substantial progress on the issues, they would be ordered to appear for an in-person meet and confer. The Court ordered that the parties submit a joint status report in August.

The parties laid out their positions in the joint status report as follows:

Supernus's position: No party should be permitted to unilaterally refuse to use a search term without providing objective evidence, such as a hit report, demonstrating undue burden. However, Supernus proposed a "global solution" in which all parties would run each other's additional proposed search terms, eliminating the need for hit reports entirely. Supernus noted that it had already run defendants' proposed terms and would need to review over 112,000 documents as a result.

Supernus suggested in the alternative, given the impasse between the parties, that the Court order the parties to appear for the in-court meet and confer to resolve the disputes.

Defendants' position: Each defendant group submitted individual positions. Appco noted Supernus had refused to engage in further discussions. Appco also pointed out that the ESI Plan contains no requirement to provide hit reports, and that Supernus was refusing to provide any such reports. Defendants argued that the ESI Plan contemplated good-faith negotiation toward a final list, and that several of Supernus's proposed terms were overbroad, not narrowly tailored, or unlikely to generate relevant documents beyond what already-agreed terms would capture. Each of the other defendants (Aurobindo, Apotex, Zenara, Creekwood, Macleods, MSN and Zydus) argued that no impasse had been reached in the negotiations and that the parties should simply continue to meet and confer.

In addition, Apotex, Zenara, Macleods and MSN stated it was incorrect that they were unwilling to provide hit counts.

The Court's Response: Meet and Confer — With Teeth

In an August 17, 2026 text order, Judge Hammer concluded that judicial intervention was premature but issued pointed guidance. The Court observed that "the parties have not adequately meet and conferred to resolve the ESI search term issues" and that both sides bore responsibility for the stalemate. Notably, the Court agreed with Supernus in establishing an important guideline for further discussion among the parties: any party claiming undue burden — including Supernus — "must provide objective, fact-specific reasoning to substantiate the claim," which "may include hit reports, or other reasonable information as agreed by the parties." The Court cited MSP Recovery Claims Series LLC v. Celgene Corp., 2024 WL 1327990, at *5 n.3 (D.N.J. Mar. 28, 2024), in support.

The Court set a deadline of August 28, 2026 for a joint status report and warned that if “substantial progress” was not shown, "all counsel will be required to appear in the jury conference room of the assigned Magistrate Judge to conduct an all-day meet-and-confer session."

Continued Negotiations and Partial Resolution

Following the Court's order, the parties submitted another joint status report in September, informing the Court that Supernus agreed to use all of defendants' proposed search terms without narrowing or modification, and that defendants Apotex, Creekwood, and Macleods agreed to use Supernus’s additional proposed search terms. As to the remaining Defendants, the parties reported that they had not fully resolved the disputes.

Due to Judge Hammer’s retirement, newly appointed U.S. Magistrate Judge Alex D. Silagi was assigned to the case on September 10. Judge Silagi held a conference with the parties on September 21 and issued a text order the next day, ordering that a joint letter be filed October 14 raising any remaining disputes. The order directed that “the joint letter shall describe or attach objective evidence of alleged undue burden such as hit report results.”

The Gap in the Local Rules

What makes this dispute particularly interesting is that the parties entered into an ESI Plan, which is not required by the District of New Jersey's Local Civil Rules, yet they still disagreed on the scope of that ESI Plan and sought judicial intervention.

Despite the ubiquity of ESI in litigation, DNJ L. Civ. R. 26.1(d) addresses ESI discovery only in general terms and merely imposes certain duties:

• A duty to investigate and disclose: Prior to the Rule 26(f) conference, counsel must review the client's information management systems, including digital systems, to understand how information is stored and retrieved.
• A duty to notify: A party seeking digital discovery must notify the opposing party as soon as possible, identifying the categories of information that may be sought.
• A duty to meet and confer: During the Rule 26(f) conference, parties must confer on digital discovery matters, including preservation, production, procedures for inadvertent privilege disclosure, back-up or legacy data, media and format for production, and cost allocation.

Critically absent, however, is any requirement that the parties negotiate ESI search protocols or other limitations or guidelines on ESI discovery.

The DNJ Local Rules do not require the exchange of proposed search terms, mandate hit reports, set standards for evaluating the burden of proposed terms, or establish any particular methodology for selecting, refining, or finalizing ESI search terms. Similarly, the DNJ’s Local Patent Rules contain no ESI-specific provisions beyond directing parties to discuss certain topics at the initial scheduling conference.

This means that in practice, ESI search term protocols in the District of New Jersey are largely left to party agreement — typically through stipulated ESI plans negotiated at the outset of the case. When those plans are ambiguous or silent on key questions, as in In re Viloxazine, the result can be a protracted dispute that consumes significant time and resources and delays the commencement of substantive discovery.

Further, given the Court’s reluctance to micromanage ESI disputes, parties should endeavor to set up a framework to govern exchange of ESI and disputes related thereto, then attempt to resolve issues through the meet and confer process rather than seeking judicial intervention, when possible.

Takeaways

The In re Viloxazine dispute offers several practical lessons for practitioners handling ESI-intensive litigation in the District of New Jersey and similar jurisdictions:

1. Draft specific ESI protocols. Because the local rules provide only a meet-and-confer obligation, a stipulated ESI plan, if any, is the primary governing document. It should address, in detail, the process for proposing and objecting to search terms, the circumstances under which hit reports or other burden evidence will be exchanged, and the mechanism for resolving impasses.
2. Consider global approaches in consolidated cases. In multi-defendant litigation, individual bilateral negotiations can be inefficient and duplicative. Where the underlying discovery requests are substantially similar, a global approach to search terms — where all parties agree to run each other's terms — can streamline the process, as Supernus proposed.
3. Engage meaningfully in meet-and-confer. The Court's order made clear that both sides must participate in good-faith negotiations — and that merely taking a position and waiting for the other side to capitulate is not sufficient. The Court's willingness to order an all-day in-court meet-and-confer session underscores that the Court expects active, iterative engagement.

Paul W. Kalish and Jonathan J. Madara are members of the IP Litigation team in Fox Rothschild’s Princeton, NJ office and write about patent litigation decisions in the District of New Jersey. Contact Paul at pkalish@foxrothschild.com or 609.895.6751 and Jonathan at jmadara@foxrothschild.com or 609.844.7428.

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