Sometimes it seems like every IP case, at some point, involves a dispute about a late disclosure and whether the Pennypack factors excuse the late disclosure.
As I've complained before, the Pennypack factors originate in an old Third Circuit case and don't fit modern litigation practices very well.
In fact, at times they can feel backwards: they require that the "importance" of the evidence weighs in favor of permitting late disclosure. But if the evidence is important, why should a litigant be allowed to withhold it? If it is important to the case, shouldn't timely disclosure be that much more critical?
And on the subject of importance, if the late-disclosed evidence or contentions are not important, why are we even fighting over them?
It can be frustrating. The test as a whole just doesn't make sense.
Or does it? In Corteva Agriscience LLC v. Inari Agriculture, Inc., C.A. No. 23-1059 (D. Del. Mar 2, 2026), visiting Judge Murphy of the Eastern District of Pennsylvania dug deeply into Pennypack and found that, in the context of the original decision, the test actually did made a lot of sense. Litigants have just been applying it wrong.
He first described some of the problems with the test as applied to modern cases:
Inari [the late-disclosing party] can also credibly say that whatever disruption Dr. Zenner’s new [damages theory] may cause, Corteva [the opposing party] will be able to catch up and prepare for trial, the date of which is set about 7 months from now (and it was almost 11 months from the date Inari served Dr. Zenner’s opinion). That is doubtless true; this is a high-stakes case and Corteva’s extremely competent lawyers can and will adjust to anything thrown at them — they probably already have. Thus, the prejudice seems curable, costly and painful as it may be. We could even shift fees to Inari for that. Nor is there any sign of bad faith. It appears that Inari’s legal team and Dr. Zenner just thought of the new approach after the close of fact discovery while working on his report. Inari doesn’t admit that, but the record offers no other possibility (aside from Corteva’s superficial inference of bad faith). . . .
Important new evidence, curable prejudice, and no bad faith? The Pennypack factors seem to be saying that this is a win for Inari. But why does that seem absurd in the context of a big patent case? The scheduling order in a case like this is heavily negotiated and exquisitely detailed. Large teams of sophisticated counsel ramp up their efforts and make tactical decisions in total reliance on that schedule. And “[d]eadlines are not suggestions. Litigants must respect them.” Archer v. Defenders, Inc., 2021 WL 3033347, at *1 (D. Del. Jul. 19, 2021) (Bibas, J., sitting by designation). Each deadline along the way, not just the one for trial, imposes forks in an unendingly forked road. With accommodations for the usual unpredictable happenstance of litigation, at some point, the parties are entitled to find repose in the scheduling order. Stripping away the clutter, Inari is saying that there’s just no such thing as trying to understand with certainty the factual basis of an opponent’s damages theory before the end of fact discovery. You’ll find out in the opening expert report and then you can adjust afterwards. How can that be right?
Id. at 6.
The Court then reviewed the original Pennypack opinion in detail, and found some real clarity—including that the original opinion addressed newly discovered witnesses:
To help dispel the cognitive dissonance, take a brief and refreshing detour into the facts of the 50-year-old Pennypack decision. That decision was about the last-minute disclosure of two “key witnesses” in a civil-rights case. Pennypack, 559 F.2d at 903-04. The witnesses were a land developer and a former president of the defendant housing association, which had been accused of racially discriminatory practices. . . . The plaintiff discovered them after the pretrial memorandum was filed. . . . They would have testified in a bench trial that the defendant had a reputation in the black community as an all-white development in which black applicants could not buy homes. . . . The testimony was “important” and its absence “critical.” . . . The Third Circuit held that the district court had abused its discretion by excluding the two late-disclosed witnesses. . . . As the decision points out, because it was a bench trial, all the district court had to do was “adopt[] perhaps, an adjournment of a few days while Pennypack conducted discovery with costs taxed to Meyers.” . . .
That sudden feeling of clarity readers may be experiencing, we submit, is the difference between an oft-excerpted list of factors and a holding set in its proper context. Dr. Zenner’s new opinions, while “important,” are not analogous to Pennypack’s two late-discovered and then disclosed third-party witnesses who knew previously unheard material facts. Dr. Zenner is a distinguished professional expert who charges $1500 per hour and relies on a team of assistants. Zenner R. ¶¶ 1-12, 19. The record does not indicate when Inari retained Dr. Zenner, but by not arguing that Dr. Zenner was a late-discovered witness (that would have been odd), we take it Inari would not disagree that Dr. Zenner was retained early enough that he had ample opportunity to develop his theories. And surely Dr. Zenner was in deep collaboration with the legal team — entirely appropriate, but the point is that the evidence of his opinions is tightly intertwined with the litigation strategy, unlike the two third-party fact witnesses in Pennypack. In the world of patent litigation, and certainly the damages side of the case, there is always another idea, always a way to adjust, always a way to improve — but the schedule forces the case to move forward to a conclusion. In its brief, Inari nowhere suggested that it did not have enough time, resources, or brainpower to come up with its damages theories on time, nor did it suggest that it had to react to some surprising turn of events.
There are differences on the prejudice side as well. In Pennypack, at most all that was required was a couple short depositions to prepare for trial testimony that itself could be received at any time convenient for the judge as part of the bench trial. Here, the scale of the prejudice is masked by the scale of this litigation. To observe that Corteva can adjust its tactics, hire a responsive expert, pursue third-party discovery, take depositions, and so on, is a function of the resources justified by the high stakes of this case. Further, the nature of an opponent’s damages theory has unpredictable, unknowable, and path-dependent consequences for a party’s overall approach to the case. Time only flows forward in litigation, and advantages and disadvantages often accrue and dissipate permanently. That is why in professional sports, some plays are reviewable and some are not.
Id. at 7-8. "Sudden feeling of clarity"? No kidding!
The Court notes that it's not criticizing Pennypack, but rather the litigants who cut-and-paste the Pennypack factors into an analysis to excuse bad behavior:
This analysis should not be read as any sort of criticism of Pennypack, which is as sound a holding today as it was 50 years ago. But this is a criticism of cutting-and-pasting the Pennypack factors into the middle of a fight about a sophisticated damages expert in a sprawling patent litigation and expecting the results to make sense automatically. Corteva should not have to pretend that Dr. Zenner’s opinions are not “important” to Inari’s case or feign inability to adjust to the new opinions before trial. Nor is there any need to sling allegations of bad faith. For exactly the reasons explained in Pennypack, this is decidedly not a situation where the schedule should flex to accommodate an important, but belated, idea. The motion to strike is granted.
Id. at 8-9.
One line in particular stands out here:
Corteva should not have to pretend that Dr. Zenner’s opinions are not “important” to Inari’s case or feign inability to adjust to the new opinions before trial.
Id. at 8. That really hits home. Truly, that's one of the fundamental problems with applying the Pennypack factors out of context.
I've always thought that it's pretty incredible that the Pennypack factors don't even consider the reason for the late disclosure, even if courts applying them often do.
But that makes sense because, as the Court here describes, Pennypack dealt with newly-discovered witnesses—and the factors actually work in that context.
If the starting point is that the evidence is newly discovered, then of course the next most significant considerations are things like surprise, prejudice, ability to cure, bad faith/willfulness, and the importance of the evidence, as Pennypack suggests.
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