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Special Master Appointed in Drone Controller Case

(CN) - A special master will determine whether the defendant in a patent dispute over remote-control drone technology improperly withheld documents during discovery, a federal judge ruled.

Drone Technologies Inc. of Taiwan sued Parrot Inc. and Parrot S.A. in Pittsburgh Federal Court in January 2014, claiming its U.S.-based rival infringed on its patent for technology that allows the "pilot" of a small drone, toy airplane or toy helicopter to operate it via a smartphone or tablet.

Attorneys for Drone Technologies complained that Parrot has improperly withheld documents during discovery based on alleged attorney-client privilege or claims the requested paperwork was attorney work product.

The plaintiff also asserts that even if a plausible argument could be made in Parrot's favor, the defendant waived any privilege it might have had by failing to timely produce privilege logs.

Concluding that the parties were at an impasse after Parrot rejected both contentions, U.S. District Judge Arthur Schwab last week appointed David White, an attorney with Burn White in Pittsburgh to assist them in unraveling the dispute.

"The proceedings in this 'exceptional' case have been fraught with disagreements over the most basic discovery matters," Judge Arthur Schwab wrote in the first of two orders stemming from the dispute. "On November 3, 2014, the Court entered default judgment as to liability against Defendants and struck their Answer and Counterclaims because of Defendant's persistent refusal' to comply with this Court's Orders and 'defiance of their Court-ordered discovery obligations' for over four months."

On November 19, 2014, Schwab scheduled the start of a jury trial on damages only on April 27, 2015, and entered a case management order providing deadlines for various pretrial processes, including discovery.

Still the parties remained at loggerheads.

Schwab noted that Drone Technologies has filed three motions in the past two months to compel discovery, and that Parrot filed objections to the latest motion just fifteen minutes before it was due to deliver documents.

Drone's response to Parrot's arguments specified that Parrot "failed to timely preserve any objection based on privilege; improperly shielded documents through assertions of privilege; not logged or produced so-called 'phantom documents'; never produced related copies of documents for which they have claimed privilege; and benefited by inhibiting Plaintiff from properly preparing for the damages trial."

The opinion states that Drone "specified that 'it [is] clear that Defendants improperly asserted privilege for communications with third parties."

"Unfortunately, as many times before, the Court is confronted with allegations of Defendants' abuse of fundamental protections ... in an alleged effort by Defendants to impede the just, speedy and inexpensive determination of this matter," Schwab wrote.

He continued, "The Court finds that the issues implicated by the most current discovery include more than just the timeliness of Defendants' production of privilege logs. Plaintiff, through briefing, has preserved both the issue of the propriety of privilege destinations and the timeliness of production of privilege logs and has demonstrated to the Court that in camera review may reveal improper use of privilege by Defendants. This finding is based, in part, upon the extraordinary procedural posture to date and Defendants' repeated failure to comply with the most basic discovery obligations."

Schwab order Parrot to comply with his order by the following afternoon. When it didn't, he issued his order, appointing the special master and giving White until February 24, to file a report and recommendation of his conclusions.

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