Philip Brooks' Patent Infringement Updates

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.

Some Solutions to Novel Federal Expert Evidence Problems

The following is excerpted by the 'Lectric Law Library from an article titled, "Novel Expert Evidence In Federal Civil Rights Litigation" by Gordon Beggs:

The proliferation of expert proof, often novel in nature, has collided with the U.S. Supreme Court's 1993 decision in Daubert v. Merrell Dow, directing district courts to exercise discretion as gatekeepers to ensure that scientific evidence is both relevant and reliable.

The courts should explore all available methods, including non-traditional means, to allow the presentation of novel expert proof. Such non-traditional approaches include utilization of the Federal Judicial Center's (F.J.C.) Reference Manual on Scientific Evidence (Manual), appointment of a special master, use of technical advisors, and implementation of special procedures including non-adversary presentation of expert testimony.

Focusing on the appointment of a special master:

The appointment of a special master may be helpful in those cases which present extremely difficult gatekeeping issues. Federal Rule of Civil Procedure 53 empowers a special master to conduct proceedings and make a written report to the court. Rule 53 expressly authorizes a special master to rule on the admissibility of evidence.

Appointments, however, are disfavored under the Rule. In jury cases, the court may appoint a master "only when the issues are complicated;" in cases to be tried to the bench, the court may make an appointment only where "some exceptional condition requires it." Such circumstances might be present where gatekeeping issues are so theoretical, technical, or complex that the court finds itself unable to address them in the first instance. Courts handling complex cases have occasionally appointed masters to assist with other issues.

District courts considering the appointment of a special master for gatekeeping may wish to examine the cases under the National Childhood Vaccine Injury Act, where special masters have proven useful in assessing the validity of scientific evidence using the Daubert standard. The experience in these cases suggests that a special master familiar with the relevant field might significantly assist the court.

Appointments of masters, however, are sometimes controversial. Parties may object to appointments based on the potential for delay and expense. They may also claim that the appointment is a denial of their right to a jury trial under the Seventh Amendment or to a decision by a judge appointed under Article III of the Constitution. The use of a special master for the limited purpose suggested here should minimize these concerns. Given the likelihood that gatekeeping will consume significant amounts of court time, the use of a special master to hear a motion in limine may expedite both the hearing and the ultimate resolution on the merits. Confining the special master's undertaking to these tasks should minimize expense and, as with Federal Rules Of Evidence 706, the court could mitigate problems associated with fees by allocating them initially to one party.

Finally, because gatekeeping involves the exercise of the court's discretion, the use of a special master would not affect the right to a jury trial and would minimally impact the right to a decision by an Article III judge, inasmuch as the district court would (except for any subsidiary findings of fact subject to review under a clearly erroneous standard) determine the admissibility of the expert evidence de novo.

Read the full article here including a discussion on utilization of a technical advisor.

Technical Expertise in Patent Litigation - A Necessity for a Fair Trial

A report from a workshop at the AIPPI (Association Internationale pour la Protection de la Propriété Intellectuelle) 40th Congress (held in October 2006) emphasized that "the need for technical expertise in patent litigation is increasing in the wake of the introduction of new and complicated technical areas, such as biotechnology and nanotechnology."  The speakers discussed the use of specialized courts and court-appointed experts in Europe, Sweden, Germany and the United States.

An excerpt:

Mr. Peter Ludwig, member of Darby & Darby PC, presented the main features of the US system of patent litigation including a discussion of pre-trial discovery and the jury system. Under the US system, there are no technical (scientific education) requirements for the judges, who are nominated by Senators and appointed by Congress for life. All patent cases are heard in Federal District Courts, however, there is a single appellate court for patent cases located in Washington DC. Patent validity and patent infringement may be heard in the same case.

Four mechanisms are generally available for use by judges in obtaining technical information:

1. Testimony and affidavits of expert witnesses;
2. Appointment of an independent expert who may be called to testify;
3. Reference to a special master, who can hear and receive evidence, make a report and recommendation to the court (“Judicial subcontracting”); and
4. Appointment of a technical advisor who serves as a scientific law clerk (only for use in in exceptionally technically difficult cases)

Consolidation of patent cases in each District Court with designated judges experienced in patent cases may increase predictability of outcome. However, the trial rate and the reversal rate are about the same for patent cases as for cases in other areas of the law, which is a contraindication on the need for specialized patent judges. New legislation passed the US Congress in the beginning of October this year introduced a pilot program in certain Federal District courts. Under this program judges in the designated courts may elect to hear patent cases that were initially assigned to other judges thereby becoming more experienced in hearing patent cases.

Read the full report here.

Patent Prescription

Adam Jaffe of Brandeis University and Josh Lerner of Harvard author an article titled, "Patent Prescription" in IEEE Spectrum.  While offering a proposal for patent reform they touch on the role of special masters.

A major complaint of attorneys who defend infringement suits relates to the right to a jury trial. They argue that the evidence in a patent case can be highly technical and that the average juror has little competence to understand and evaluate it. Having decisions made by such a body increases the uncertainty surrounding the outcome, which is a big reason that accused infringers often settle rather than fight, even when they think they have a pretty good case.

More subtly, jurors' inability to grasp technical evidence may interact with the presumption of validity—the rule that patents must be presumed legitimate unless proven otherwise—in a way that helps patentees and hurts accused infringers. To prevail in an infringement case, an accused infringer has to present clear and convincing evidence that the patent is invalid. But if the jurors are simply befuddled by the evidence, they will most likely conclude that neither side has made a convincing case.

In effect, the "clear and convincing evidence" standard combined with decision making by juries makes it likely that the patent holder will win on validity questions—which is why most holders ask for a jury trial!

The right to a jury of one's peers is a venerated concept in Anglo-American law. But there is no real sense in which a patent jury is, in fact, a jury of peers. If we left patent cases to judges rather than to juries, we would still not have scientists and engineers, the true peers of the inventor, deciding the case.

The final part of our reform proposal is to let judges and not juries decide the merits of a patent-infringement suit. At least judges spend their professional lives evaluating evidence in many different disciplines and have typically developed some ability to sort through it. Further, a judge may always appoint a special master, an outside expert in the service of the court, who can rule on the judge's specific technical questions.

The CAFC has, in fact, put some limits on the role of juries in patent cases. In particular, it is the job of the judge, not the jury, to interpret—or construe—the patent's claims: the judge assists the jury by interpreting the technical language of the patent. But when it comes to understanding when the subject of a patent application lacks novelty or nonobviousness—which the accused infringer must convincingly prove in order to invalidate the plaintiff's patent—the jury gets no such help.

Read the full article here.

More Specialist Patent Judges

Shahnaz Mahmud writes for Managing Intellectual Property:

US district court judges may get extra help to deal with patent cases this year.

Politicians in the US House of Representatives have re-submitted a plan – the HR 34 US District Court Patent Pilot Program – designed to bolster the technical expertise of judges who handle patent cases.

If the bill is passed, the pilot programme will be tested in at least five US district courts selected from among the 15 district courts that hear the largest number of patent cases.

The bill provides $5 million of funding to train the judges who will be participating in the programme. The funding will also pay for law clerks with technical expertise to work in the courts.

District judges who want to participate in the programme will have patent cases transferred to them from those judges who have been assigned patent cases but do not want them.

Only district courts that have at least 10 judges will be eligible to participate in the pilot programme.

"Several initiatives have been talked about for a while, like having specialized courts. But this one has some teeth to it. If the judges get it right the first time in dealing with a patent case, the rates of reversal in the Federal Circuit, which are now between 30% and 40%, will get reduced. And that is a very good thing because patent cases are very costly," he [Bob Perry, a partner in the IP practice of King & Spalding in New York] said.

Read the full article here.

Symantec and Microsoft Agree on Special Master for Patent Infringement Case

Sharon Fisher, writing for Computerworld states:

The trial involving a patent infringement lawsuit filed by Symantec Corp. against Microsoft Corp. is now expected to begin in December 2007, according to an attorney familiar with the case.

After months of legal discovery, the two companies have decided on a special master, who will act as a third party to help the judge in the case interpret and understand the technical information provided during the proceedings. The special master will be Gale Peterson, a patent attorney at Cox Smith Matthews Inc., a San Antonio law firm, according to Cris Paden, a spokesman for Cupertino, Calif.-based Symantec.

In May, Symantec filed a lawsuit against Microsoft claiming that the software giant had misappropriated storage technology from Veritas, which Symantec acquired last year.

Since then, the two companies have primarily been performing discovery, each coming up with documents to support its case and producing documents demanded by the other side. However, earlier this month, after the postponement of a scheduled Oct. 12 meeting, some progress was made on the case itself.

Steve Aeschbacher, associate general counsel for Microsoft, told Computerworld this week that he expects the trial to begin a little more than a year from now.

The lawsuit was filed in U.S. District Court for the Western District of Washington in Seattle and seeks unspecified damages and an injunction barring Microsoft from using Symantec technology in Microsoft's Vista and Longhorn versions of the Windows client and server operating systems, according to the original complaint.

According to the bio on his firm's website, Mr. Peterson is Division Head for the American Bar Association, Intellectual Property Law Section.  He received a joint MD/JD from the University of Baltimore and an LLM from George Washington University.

Creative Use of Neutral Experts

Sometimes the use of a neutral expert -- one not affiliated with any party in a dispute -- can resolve issues much more efficiently.  There are a number of roles that a neutral expert can play, says Dr. Lee Hollaar, a professor of computer science who has been a court-appointed expert, arbitrator, or special master in a number of computer software cases.

Dr Hollaar writes in BNA's Expert Evidence Report:

The role of a neutral expert can run the gamut from providing a factual answer to a particular question after reviewing the evidence, to deciding the case as an arbitrator . It really depends on the creativity of the judge or a party in seeing an unconventional way to resolve a matter.

The most common role for a neutral expert is as a court-appointed expert . Federal Rule of Evidence 706 governs such an appointment.

A particularly interesting use for a court-appointed expert is the examination of computer source code to determine whether there is a trade secret misappropriation or copyright or patent infringement . There can be no question what is actually in the source code and what function it performs . The primary need for an expert is to protect trade secret status by making it unavailable to a competitor but allowing testimony about what it contains through an expert employed for that purpose.

There are advantages to both sides in using a neutral court-appointed expert . The time and expense of using a single expert will often be considerably less than if each side has its own expert, leading to a faster completion of the case . This is not only because both sides are sharing the costs of the neutral expert, but also because each side is more willing to cooperate with the court-appointed expert in providing the information needed by the expert to resolve the factual issues.

Rule 53 of the Federal Rules of Civil Procedure provides for the appointment of a special master by the court.  One instance where it may be necessary for the neutral expert to serve as a special master, rather than a court-appointed expert, is in the interpretation of the claims of a patent . The task of interpreting a claim is to determine what the claim is from the perspective of one skilled in the art of the invention, something particularly suited for an expert . But the Supreme Court has held that "the construction of a patent, including terms of art within its claim, is exclusively within the province of the court" as a matter of law.

Finally, the neutral expert can be the ultimate decision maker if the case is referred to arbitration, either because it falls under a contract with a binding arbitration clause or the parties ask the judge to order arbitration.

See the section on selection procedures for a neutral expert and the rest of the article here.

How Our Broken Patent System is Endangering Innovation

Princeton University Press will release a paperback version of "Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It" in January 2007.  A cloth version is available today.

The authors, Adam B. Jaffe and Josh Lerner, describe the United States patent system as sand rather than lubricant for the wheels of progress.  "Such is the premise behind this provocative and timely book by two of the nation's leading experts on patents and economic innovation."

Innovation and Its Discontents tells the story of how recent changes in patenting--an institutional process that was created to nurture innovation--have wreaked havoc on innovators, businesses, and economic productivity. Jaffe and Lerner, who have spent the past two decades studying the patent system, show how legal changes initiated in the 1980s converted the system from a stimulator of innovation to a creator of litigation and uncertainty that threatens the innovation process itself.

In one telling vignette, Jaffe and Lerner cite a patent litigation campaign brought by a a semi-conductor chip designer that claims control of an entire category of computer memory chips. The firm's claims are based on a modest 15-year old invention, whose scope and influenced were broadened by secretly manipulating an industry-wide cooperative standard-setting body.

Such cases are largely the result of two changes in the patent climate, Jaffe and Lerner contend. First, new laws have made it easier for businesses and inventors to secure patents on products of all kinds, and second, the laws have tilted the table to favor patent holders, no matter how tenuous their claims.

After analyzing the economic incentives created by the current policies, Jaffe and Lerner suggest a three-pronged solution for restoring the patent system: create incentives to motivate parties who have information about the novelty of a patent; provide multiple levels of patent review; and replace juries with judges and special masters to preside over certain aspects of infringement cases.

Well-argued and engagingly written, Innovation and Its Discontents offers a fresh approach for enhancing both the nation's creativity and its economic growth.

Have you read the book?  Thoughts on the proposed three-pronged solution?  I'm particularly interested in cases where you have observed the use of independent experts as special masters to judges in patent infringement cases.  Has this worked or not?

The Use of Neutral Experts in Intellectual Property Litigation

On June 24, 2006 the IEEE-USA Board of Directors approved the following policy titled, "The Use of Neutral Experts in Intellectual Property Litigation."

IEEE-USA urges courts to employ neutral experts for offering specific knowledge, advice and recommendations in the technology of a case, as a way to reduce litigation costs, and to help make technically sound decisions, particularly in intellectual property litigation.

In many instances in intellectual property litigation, the special knowledge of an expert is particularly valuable. Using a neutral expert -- either as a court-appointed expert or a special master as appropriate to the task before the court -- provides more substantial benefits overall, rather than each side presenting their own experts. Far too often, party experts becomes vehicles for presenting arguments, simply parroting lawyers’ positions rather than promoting sound views of the technology, and they do not help the trial court in its tasks.

Determining whether a software copyright has been infringed requires filtering elements that are common practice or dictated by external considerations, followed by examining the remaining material for substantial similarity. Such tasks are very suitable for a neutral expert familiar with the technology.

In cases involving proprietary software source code, experts can address whether material is similar or claim elements are present, while preserving the trade secrets in the code. But often, a party resisting discovery requests or burying the information thwarts such a straightforward activity. Using a neutral expert to say what the source code contains discourages discovery abuses, since it is in a party’s best interest to support the expert’s findings.

During patent litigation, claims need to be interpreted as what they would have meant to a person of ordinary skill in the art, at the time of the invention. While patent claim construction is a matter of law, it has an inherent factual component. The Federal Circuit has said that “The descriptions in patents are not addressed to the public generally, to lawyers or to judges, but, as section 112 says, to those skilled in the art to which the invention pertains, or with which it is most nearly connected.” Yet, it has not strongly endorsed a special role for neutral technology experts.

This statement was developed by the Intellectual Property Policy Committee of the IEEE-United States of America (IEEE-USA) and represents the considered judgment of a group of U.S. IEEE members with expertise in the subject field. IEEE-USA is an organizational unit of the Institute of Electrical and Electronics Engineers, Inc., created in 1973 to advance the public good and promote the careers and public policy interests of the 220,000 electrical, electronics, computer and software engineers who are U.S. members of the IEEE. The positions taken by IEEE-USA do not necessarily reflect the views of IEEE or its other organizational units.