Philip Brooks' Patent Infringement Updates

Example of Special Master Assignment

By Order of the Court, Blank Law & Technology was appointed Special Master to interview both Plaintiffs and Defendants to determine whether Defendants’ destruction of file servers containing project data in a patent infringement case was willful and whether such destruction prejudiced Plaintiffs’ case.  Blank Law & Technology established willfulness through the recovery of instant messages concerning the destruction, and rebuilt the servers so that data could be retrieved, thus avoiding irreparable prejudice to plaintiffs. 

Approximate Cost = $250,000.  See more examples here.

Special Masters and E-Discovery: The Intersection of Two Recent Revisions to the Federal Rules of Civil Procedure

The above-titled article by The Honorable Shira A. Scheindlin and Jonathan M. Redgrave appeared in the November 2008 issue of Yeshiva University's Cardozo Law Review.

This article will address the fortuity of two recent revisions to the Federal Rules of Civil Procedure. The first, which occurred in 2003, was the much-needed update of Rule 53, governing the appointment of special masters. This rule revision was undoubtedly intended to expand the use of masters in new directions in order to assist courts in coping with ever-increasing caseloads and in addressing difficult issues that require disproportionate judicial attention and expertise not otherwise available to the court. The second revision, which took effect in late 2006, updated the discovery rules (Rules 26 through 37 and Rule 45) to take account of the digital revolution that has resulted in the overwhelming majority of records being created and maintained in an electronic format. These rule changes can and should have a synergistic effect. In this article, we will first address the revisions of both Rule 53 and the discovery rules, we will then survey the use of special masters in the burgeoning world of e-discovery, and we will conclude by suggesting the appropriate uses for such masters with particular reference to both legal and technical issues. We firmly believe that court adjuncts in this field are both necessary and desirable, particularly when used in thoughtful ways.

Read the full article here.

Special Master Declares Reverse Payment Legal

Diane Bartz reporting for Reuters on February 4, 2009 writes:

Schering-Plough Corp (SGP.N) and Upsher-Smith Laboratories won a battle in a class action fight over K-Dur 20 on Wednesday when a special master recommended that a class action lawsuit against the two be dismissed.

The special master recommended that the U.S. District Court for the District of New Jersey dismiss the fight over the potassium supplement on summary judgment.

The battle is focused on whether it was legal for Schering to settle patent litigation with Upsher and ESI Lederle, which had sought to bring out generic versions of K-Dur before Schering's patent expired. Under the settlement, Upsher and ESI delayed entry into the generic market, the plaintiffs contended.

Read the full article here.

In U.S., Expert Witnesses Are Partisan

I received an email yesterday from the Expert Witnesses Committee of the American Bar Association that mentioned an August 11, 2008 article published in the New York Times by Adam Liptak titled, "In U.S., Expert Witnesses Are Partisan."  The article suggested that partisan experts may not be the best way to resolve issues at trial.  The article identified two alternatives:  a) empowering the judge to select a neutral, independent expert to testify; or b) allowing the partisan experts to testify together and to respond directly to each other (so-called "hot-tubbing").

The following are excerpted from Mr. Liptak's article:

Judge Denver D. Dillard was trying to decide whether a slow-witted Iowa man accused of acting as a drug mule was competent to stand trial. But the conclusions of the two psychologists who gave expert testimony in the case, Judge Dillard said, were “polar opposites.”

“The two sides have canceled each other out,” the judge wrote in 2005, refusing either expert’s conclusion and complaining that “no funding mechanism” existed for him to appoint an expert.

In most of the rest of the world, expert witnesses are selected by judges and are meant to be neutral and independent. Many foreign lawyers have long questioned the American practice of allowing the parties to present testimony from experts they have chosen and paid.

...a new way of hearing expert testimony that Australian lawyers call hot tubbing.

In that procedure, also called concurrent evidence, experts are still chosen by the parties, but they testify together at trial — discussing the case, asking each other questions, responding to inquiries from the judge and the lawyers, finding common ground and sharpening the open issues.

England has also recently instituted what Adrian Zuckerman, the author of a 2006 treatise there, called “radical measures” to address “the culture of confrontation that permeated the use of experts in litigation.” The measures included placing experts under the complete control of the court, requiring a single expert in many cases and encouraging cooperation among experts when the parties retain more than one. Experts are required to sign a statement saying their duty is to the court and not to the party paying their bills.

American judges are generally free to appoint their own experts, but they seldom do.

Read the full article here.

Use of a Special Master for Patent Claim Construction

Don W. Martens of Knobbe, Martens, Olson & Bear, LLP cites Judge John Shepard Wiley, Jr. from "Taming Patent: Six Steps for Surviving Scary Patent Cases":

When a patent infringement case is of monstrous scale, able parties gear up to meet the challenge.  District judges should consider doing the same.  One option is a patent special master: an experienced litigator who can supplement the regular court staff for a particularly demanding case.  The parties fund this attorney, who ideally should have the savvy and work ethic to help a beleaguered district judge pacify an unruly beast.  The rubric of "special master" is a means to this end.  Judges have an undoubted power to seek consent for such special master proposals, and parties commonly go along with bench suggestions about special masters.  The patent special master idea thus is promising and practical.  In the right case, it is worth a try.

Mr. Martens writes:

1. The special master is experienced in construing claims and trained in technology generally, even though not necessarily in the specific technology involved;
2. The parties usually are involved in selection of the special master;
3. The parties have much greater control over where and when the hearing will be held, and how long it will last;
4. The parties, or the court, can specify the date by which a decision must be made; and
5. Generally, an experienced patent lawyer is more likely to come to the right decision, and be upheld on appeal.

Read the full article here.  What is your experience as or with special masters?  Please provide your comments.

Ohio Experiments With Business-Only Courts

The following is excerpted from a September 17, 2008 editorial of The InterMountain:

Beginning next year, two judges in each of five very populous counties in Ohio will become specialists in business cases. Their courts will exist as business-only venues for four years, during a pilot program authorized by the General Assembly. After legislators have evaluated the trial run, they can decide whether to make the system permanent.

Business-only courts would deal solely with disputes among companies and involving commercial issues such as patent infringement, insurance disputes, etc. Such matters can be quite complex, and that is one reason why specialty courts have been suggested. Their judges could be educated more intensively in business law and, by handling it exclusively, would develop more expertise than is available from all-purpose courts. Another advantage of business-only courts is that they can speed up litigation and other resolution of disputes.

It will be interesting to see whether these courts also employ special masters.  Read the full editorial here.

Special Masters’ Incidence and Activity

Today I located the "Report to the Judicial Conference’s Advisory Committee on Civil Rules and Its Subcommittee on Special Masters" with the above title by Thomas E. Willging, Laural L. Hooper, Marie Leary, Dean Miletich, Robert Timothy Reagan, and John Shapard (Federal Judicial Center 2000).  The following are some excerpts from the 131 page report:

Federal Rule of Civil Procedure 53 (Rule 53) provides that a “court in which any action is pending may appoint a special master therein” and that a “reference to a special master shall be the exception and not the rule.” In discussing the powers to be assigned to special masters, Rule 53(c) appears to contemplate the traditional activity of a special master in holding evidentiary hearings and issuing reports with factual findings to facilitate a trial. Rule 53 contains neither an explicit authorization for nor a prohibition of pretrial or posttrial activities of a special master.

This report examines how pretrial and posttrial special master activity can take place under a rule designed to limit special master appointments to trial-related fact-finding in exceptional cases. More specifically, the subcommittee wanted to know how often and under what authority judges appointed special masters to serve at the pretrial and posttrial stages of litigation, whether any special problems arose in using special masters, how courts’ use of special masters compared with their use of magistrate judges, and whether rule changes are needed.

First, we looked at how often special masters were appointed. By examining a random national sample of docket entries referring to special masters (including court-appointed experts), we found that in about 3 cases out of 1,000 (0.3%), judges or parties considered formally, on the record, whether a special master should be appointed (see Table 1). Judges appointed special masters in about 60% of these cases, that is, in fewer than 2 cases in 1,000 (0.2%). Cases involving patents, environmental matters, and airplane personal injuries showed a higher than average likelihood of such consideration, but even in these types of cases, judges and parties were not likely to consider appointing a special master in more than 7 out of 100 cases (7%). Consideration and appointment of experts under Federal Rule of Evidence 706 represented less than 10% of the above activity.

Historically, Rule 53 was designed to help judges resolve fact-intensive cases. The process involved having a master review facts, organize the information, and prepare a comprehensive report to assist the judge or jury. The traditional image is one of a court-appointed accountant poring over volumes of bookkeeping records, classifying them, and perhaps applying clear legal formulas to thousands of transactions. Modern use of special masters, we found, covered a full spectrum of civil case management and fact-finding at the pretrial, trial, and posttrial stages (see Table 11). Judges appointed special masters to quell discovery disputes, address technical issues of fact, provide accountings, manage routine Title VII cases, administer class settlements, and implement and monitor consent decrees, including some calling for long-term institutional change.

Read the full report here.

District Judges’ Greater Use of Case-Specific Specialized Advisors

Chief Judge James F. Holderman of the United States District Court, Northern District of Illinois and Halley Guren, Senior Law Clerk to Chief Judge Holderman make four proposals (PTO post-grant review; the Federal Circuit’s changing the standard of review and providing more guidance; district judges’ increased use of special masters; and H.R. 34’s pilot patent program of designated district judges) in their work in progress titled, "The Patent Litigation Predicament in the United States."  They believe these proposals taken in conjunction will "provide the most comprehensive approach to correcting the intertwined problems of high costs, inaccuracy, and unpredictability that plague our current patent system."  Below, I provide their remarks related specifically to the increased use of special masters.

To benefit fully from the better guidance the Federal Circuit will be providing us as to the patent law and procedure, we district judges should increase our use of specialized advisors, such as special masters, to assist us in better understanding the technology involved in the specific patent cases before us.  A special master is generally a court-appointed attorney or professor authorized under our Federal Rule of Civil Procedure 53 to assist judges in various pretrial proceedings, such as discovery, settlement, recommendations for findings of law and fact, the formulation of remedies, or the calculation of damages. 

Because we generalist district judges in the United States are expected to decide claim term meanings from the viewpoint a person of ordinary skill in the field of invention and to determine how such a person would understand the claim at the time of invention, we typically could use some assistance in understanding the technology that is relevant to the patent in the suit.  The premise behind a district judge’s designation of a special master to assist the judge with claim construction or other tasks in patent litigation is to delegate to an individual with a better technical background an otherwise judicial task and obtain a recommendation from that person that can be evaluated by the parties and the judge before the judge decides to accept or reject the special master’s recommendation.  The special masters selected for such tasks would have technical expertise that would assist us district judges, who typically do not have the extensive background that is necessary to address a particular patent.  Employing the expertise of special masters more than we district judges do at the present time would help us to be better informed when making our claim language determinations and, hopefully, to lower the reversal rate.  For example, Judge John T. Ward in the United States District Court of the Eastern District of Texas, who has helped to make the Eastern District of Texas one of the busiest federal districts for patent litigation filings, in part due to the enactment of the Eastern District of Texas’s local patent rules, appoints technical advisors to provide recommendations as to claim construction.  More of us should follow Judge Wards’s lead and appoint special masters or technical advisors.

There are drawbacks, however, to the patent litigation system that must be considered regarding the appointment of special masters.  Our system of justice places a high value on the concept of generalist judges addressing a wide range of issues, under a theory that the decisions of many generalists judges synthesize to give rise to a better system of law.  By using a special master, whose expertise is patent or technical issues, the parties may lose some of the benefits provided by having a generalist judge experienced in all procedural aspects of litigation.  A special master typically will not have that expertise.  Generalist judges also protect against what has been referred to as the “capture” of a specialized judge, or here, a special master, who deals only with one area of law, to a particular specialized view of a special interest group.  I note that the “capture” concept is often raised by commentators as a concern associated with specialized courts and judges as well.  However, I certainly believe that we district judges can keep an open mind and decide each case on its individualized merits.  That is what our oath of office demands, and I believe we have and will continue to uniformly perform our judicial duties in that manner.

Read the full article here.

e-Discovery Special Masters

Chere Estrin, CEO of Estrin LegalEd and owner of The Estrin Report blog, wrote on February 11, 2008:

I'm telling you, when a field pops, it really pops.  Apparently, the increased use of electronic discovery has resulted in a new set of practitioners: e-discovery special masters.

According to The Daily Record, a special master is an officer of the court appointed to help with its proceedings, and may perform functions such as taking testimony or advising the court as a neutral expert.

“Essentially, you represent the judge and the court as an independent in evaluating technological disputes and electronic discovery issues,” explained Peter S. Vogel, chair of the Electronic Discovery and Document Retention Team and co-chair of the Internet and Computer Technology Practice Group at Gardere Wynne Sewell in Dallas.

Vogel, a partner at the firm, has worked on more than 20 cases with some form of an e-discovery special master. The role varies, explained Judge Shira Scheindlin, a U.S. District Court judge in the Southern District of New York and the author of several seminal opinions on e-discovery, including Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004).

Read the full post here.

Special Masters and The Patent Reform Act of 2007

A press package providing a section-by-section summary of The Patent Reform Act of 2007 appears at the Committee on the Judiciary of the U.S. House of Representatives website.  Section 16 on Special Masters states the following:

Sec. 16. Study of Special Masters in Patent Cases. This section directs the Administrative Office of the United States Courts, in consultation with the Federal Judicial Center, to study the use of special masters in patent infringement cases. District courts have occasionally appointed special masters to assist them in claims construction and other technical matters but the use of special masters in patent litigation is “the exception and not the rule” and so occurs only under “exceptional” conditions. The limited use of special masters in patent cases has produced anecdotal information that suggests their use may reduce the costs and length of litigation, and result in better district court decisions. This section directs a study to determine the benefits, if any, derived from the use of special masters in patent cases. The study itself will look into such factors as the costs and length of litigation when special masters are used, the role special masters are given in patent cases, the legal and technical background of special masters and other factors.

The July 16, 2007 Manager's Amendment to HR 1908 has more detail, but the Special Masters study is covered under Section 14.