Shifting to electronic R&D records: Issues in-house lawyers should consider

As all types of business records continue an inevitable migration from analog to digital form, many problems and questions will arise for in-house counsel.
One issue relates to research and development efforts. A critical decision a company must make is whether to move from a paper-based laboratory notebook system to an electronic version. An electronic laboratory notebook (ELN) is a computer-based system enabling users to create, edit, and witness electronic records mirroring record-keeping functions in a paper-based system.
Advances in wireless networking have also freed ELN users from wired desktop computers, permitting the use of laptop and tablet computers for keyboard and stylus entry of data.
At first blush, ELNs may appear to be a panacea offering increased efficiencies through enhanced organization, analysis, and searching of laboratory data, as well as the potential for innovative workflow and collaborative environments. However, the same concerns applicable to other type of electronic evidence apply equally to ELNs.
The authentication of ELN records can be challenged to make them unavailable as evidence. Also, such records are typically needed years after their creation, and run the risk of being inadvertently corrupted, deleted or destroyed as the result of human error or media failure.
Laboratory notebooks can also provide critical evidence of individual inventive contributions, as well as priority of inventorship in proceedings before the United States Patent and Trademark Office and in the courts.
To prevent fraud, any evidence of inventive activities and the dates those activities occurred must be corroborated by independent, substantiating evidence. The use of ELNs must take into account the need for reliability, as well as establish techniques for providing independent corroboration of these activities.
Given the heightened importance of ELN records – which may be relevant to a wide range of issues raised in administrative proceedings, patent-related litigation, and other civil litigation – special care should be taken when making the decision to implement an ELN system.
In-house counsel should consider the following starting points in that decision-making process.

Security and authentication of ELN users and records
The implementation of an ELN system raises several security-related concerns: (i) limiting ELN access to authorized users in an effort to protect valuable corporate intellectual property assets; (ii) the authentication of the identity of those authorized users; and (iii) the creation, editing, and maintaining of ELN records in a manner sufficient to allow authentication of those records to meet statutory and evidentiary requirements related to invention and any other issue the ELN may be relied upon to substantiate.
Authentication of authorized ELN users is a point of special concern. Most computer users are familiar with one-factor authentication – the input of a user name and password. This type of authentication is often referred to as “weak” authentication because it relies entirely on what the user knows, i.e., a user name and password. Anyone armed with just that information could access the ELN as that user.
Two-factor authentication, on the other hand, requires users to submit something the user knows, like a user name, with something that the user “has”, like a smart card, or something that the user “is”, like a fingerprint obtained through a reader. This “strong” authentication provides a greater evidentiary tie between the user of the ELN and the actual identity of that user.
Another area to consider is authentication of ELN records created by each authenticated user, and individual contributions to a single record where multiple users have access to the record.
Because ELN records are similar to other forms of electronic evidence, common methods of authentication used to validate the contents of an entire hard drive or an individual word processing file may be applied to ELN records. Chief among those methods is to determine and store the hash value, or unique digital fingerprint, associated with each version of the record, or each of those portions of the record where multiple contributions are made, for later use in authenticating a disputed record.
Some ELN systems even allow for the storing of ELN record hash values with neutral third parties as a technique of providing an independent source for authenticating a record. If individual users and their editorial contributions and dates of those contributions can be authenticated, then witnesses can read and understand the records and provide dated entries consistent with legal requirements.

ELN records in electronic discovery
ELN records created using current systems must be accessible for years to come. Future electronic discovery costs may be minimized now by keeping in mind that ELN records may need to be located, restored, reviewed by in-house and outside counsel, and produced in administrative proceedings, government investigations, or civil litigation long after those records were created.
With the increased focus on “electronically stored information” – as the Federal Rules of Civil Procedure now refer to electronic evidence – many corporations have learned the hard way that corporate data backup and archiving solutions may unnecessarily complicate the electronic discovery process.
Those solutions must be scrutinized to ensure they properly preserve metadata associated with ELN files, and allow for easy views into those files stored on archival media. In civil litigation, arguments seeking to shift costs for the restoration of archived ELN records ultimately may not prove fruitful given the likely relevance and importance of ELN records to key issues.
Finally, thought must also be given to the longevity of media on which archived ELN records will be stored as well as the security of that media while in long-term storage. The probable need to retain and access ELN records many years after creation magnifies the importance of decisions concerning the vetting, planning, and implementation of an ELN system.
The decision to migrate from a paper-based laboratory notebook system to an ELN must not be made in haste. The above considerations are merely points of departure for a thorough evaluation of any ELN system a corporation is considering implementing.
Toby H. Kusmer is a registered patent attorney and head of the intellectual property department of the Boston office of the international law firm of McDermott Will & Emery LLP. He can be reached at [email protected].
Kenneth V. Nourse is an attorney and a legal consultant in Boston with Kroll Ontrack. He works with corporations and law firms on electronic evidence, and electronic discovery-related issues. He can be contacted at [email protected].