Across the nation, an increased number of patent cases are requiring a larger and larger portion of the courts’ time, creating a backlog of cases.

But in the U.S. District Court for the Western District of Pennsylvania, the use of special masters in patent cases may serve as a model to help streamline and improve the patent litigation process in the United States.

In 2011, the director of the Administrative Office of the U.S. Courts selected 14 district courts, including the Western District of Pennsylvania, to participate in a new patent pilot program. The 10-year program is designed to improve expertise in patent cases. To participate, each district court must have at least three judges who have requested to hear patent cases. Patent cases are then randomly assigned to judges, and the program analyzes the differences in reversal rates and disposition times between designated patent and nonpatent judges. The Western District was eligible to participate in the program because it has had local patent rules, which provide a special framework for the procedures in patent cases, in place since April 1, 2005.

With both the pilot program and local rules in effect, the Western District has seen its patent docket grow, and an increasing number of cases include court-appointed special masters to help judges understand the technological or scientific complexities present in many patent cases. The patent pilot program will carefully study this unique context for using special masters.

The appointment of a special master must follow Federal Rule of Civil Procedure 53(b). The appointing order must direct the master to proceed with all reasonable diligence and must state:

• The master’s duties, including any investigation or enforcement duties, and any limits on the master’s authority under Rule 53(c).

• The circumstances, if any, in which the master may communicate ex parte with the court or a party.

• The nature of the materials to be preserved and filed as the record of the master’s activities.

• The time limits, method of filing the record, other procedures and standards for reviewing the master’s orders, findings and recommendations.

• The basis, terms and procedure for fixing the master’s compensation under Rule 53(g).

According to the advisory committee notes for FRCP 53, the “court’s responsibility to interpret patent claims as a matter of law, for example, may be greatly assisted by appointing a master who has expert knowledge of the field in which the patent operates.” As such, there are advantages in using a special master in patent law. The initial report and recommendation by a special master can streamline and accelerate the judicial process. At the same time, because a master’s findings are reviewed de novo, the court retains the ability to be involved in the process.

For the Western District, where the local patent rules create deadlines for various pretrial submissions and proceedings, including for a claim construction, also known as a Markman hearing, a master can assist in moving the case forward in an expedited manner — and, for claim construction hearings, the court often sets deadlines on when the master is required to issue a report and recommendation.

The benefits of using a special master were confirmed in a 2009 report by Jay P. Kesan and Gwendolyn G. Ball called “A Study of the Role and Impact of Special Masters in Patent Cases” that was issued in response to a request from the Federal Judicial Center to perform a study of the use of special masters in patent litigation. The study analyzed the 116 patent cases terminated in 2005 and 2006 that involved a special master. In the 28 cases where a master issued a report and recommendation, the study found that the recommendations were adopted without change 22 times. The recommendations were adopted with modifications in five cases, and in only one case was the report rejected. It further found that “the appeal rate among cases in which special masters were employed was half that of other complex patent cases” and also that “the reversal rate is also lower for patent cases with special masters when compared to the reversal rate for all complex patent cases.”

In the Western District, special masters have been used in varying roles in patent cases. The following cases provide some examples as to the nature of such use:

• In Maxim Integrated Products Patent Litigation, No. 2:12-mc-00244, the Western District was assigned certain multidistrict litigation involving allegations of patent infringement. In this matter, the court appointed two special masters: a master to address pretrial discovery issues, including matters relating to e-discovery, and a master for claim construction. Notably, the appointment of the discovery master was made subject to the parties’ commitment to meet and confer further on additional matters relating to fees and costs. In the Western District, the fees and costs of using a master are not automatically shared equally among the parties and can be the subject of negotiation or court order. Also of note, the Western District has adopted a program whereby e-discovery masters have been trained and certified for providing assistance on e-discovery matters on both civil and criminal matters.

• In Carnegie Mellon University v. Marvell Technology Group, No. 2:09-cv-00290, which resulted in a $1.17 billion verdict, the court appointed a special master in the nature of a technical adviser to assist the court with scientific issues in the case. As noted in the court’s order of appointment, this adviser was appointed in light of the exceptional complexity of the scientific and technical issues in the case, upon consideration of the arguments and proposals of the parties, and the court’s own contact with the candidates. The adviser’s appointment was also pursuant to the federal courts’ “inherent power to provide themselves with appropriate instruments required for the performance of their duties … includ[ing] authority to appoint persons unconnected with the court to aid judges in the performance of specific judicial duties, as they may arise in the progress of a cause.” For this appointment, fees and costs were apportioned equally between the plaintiff and the defendants.

• In Sightsound Technologies v. Apple, No. 2:11-cv-01292, the court also appointed two special masters, including a master for discovery issues, including e-discovery, and a master to preside over issues relating to claim construction and the Markman hearing. In this case, both appointments were made by the court after the parties were unable to agree on a master for either role.

• In Intellectual Ventures I v. PNC Financial Services Group, No. 2:13-cv-00740, a special master was appointed to address issues relating to both claim construction and summary judgment. In other patent cases before the Western District, similar appointments of special masters on claim construction and summary judgment issues have been made.

In practice, the use of special masters varies among the judges of the Western District. For some judges, the use of special masters is the exception, and the judges desire more direct involvement in the pretrial and claim construction proceedings. For those who use a special master for claim construction, procedures can vary, as follows:

• As noted above, cost-sharing for a special master is not necessarily borne equally between plaintiffs and defendants. This matter can be discussed during the initial scheduling conference with the court or the conference or hearing at which the appointment of a special master is presented. For example, in Ravo v. Covidien, No. 2:11-cv-01637, the order of appointment specified a 40/60 splitting of fees and costs between the plaintiffs and the defendant.

• While claim construction hearings often occur at the courthouse, they have also occurred elsewhere. In some instances, a judge and his or her law clerk(s) will attend the claim construction hearing to observe. Claim construction hearings are often coupled with a tutorial presentation by both sides on the background of the technology at issue in the case.

In sum, patent litigation attorneys should pay close attention to the changing role of special masters in patent cases. As supported by the 2009 study commissioned by the Federal Judicial Center, it’s likely that judges will increasingly rely on the recommendation of special masters in their rulings, often without changes. Any attorney involved in a patent case in the Western District should be prepared to discuss the options for special masters at the initial pretrial conference. 

David G. Oberdick is of counsel to Meyer, Unkovic & Scott. He concentrates his practice on representing and providing counsel to companies and individuals in intellectual property matters. He has served as a special master in the Western District in intellectual property matters relating to patent claim construction, summary judgment and discovery.