The construction of patent claims is one of the most important issues in a patent case. A construction that favors either side will usually lead to a favorable result on the issues of infringement and invalidity. Unfortunately, claim-construction decisions are overturned at the United States Court of Appeals for the Federal Circuit (the Federal Circuit) at an alarming frequency. However, the Supreme Court recently made it more difficult to overturn certain factual findings that are associated with claim-construction decisions.
The Teva Pharmaceuticals Decision
The Supreme Court made it more difficult for appellate courts to overturn certain subsidiary factual findings that a judge makes when construing patent claims in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 574 U.S. ___, 135 S. Ct. 831, 190 L. Ed. 2d 719 (2015). Specifically, the Court held that such factual findings could be reversed only when they are clearly erroneous.
Prior to the decision, it appeared that claim construction was a pure issue of law due to the Court’s opinion in Markman v. Westview Instruments, Inc., 517 U. S. 370 (1996). A pure issue of law is entitled to no deference by an appellate court, which means that the appellate court is entitled to take a fresh look at the issue in deciding whether the district judge’s ruling was correct. The term for such a review is “de novo.” As a practical matter, an appellate court is more likely to overturn a ruling that is subject to a de novo standard than a ruling that is subject to a clearly erroneous standard.
The patent owner in Teva Pharmaceuticals owned a patent that covered a method for manufacturing a multiple sclerosis drug that was marketed under the name Copaxone. The dispute centered around the construction of the term “molecular weight” within the claims. Both parties presented conflicting expert evidence to the district court judge during claims-construction proceedings.
The district-court judge used the original construction to find that the patent claims were valid. The Federal Circuit reversed the judge on the claim-construction issue and found that the patent claims were invalid. The Supreme Court concluded that the Federal Circuit applied the wrong standard of review and vacated the Federal Circuit’s ruling.
The Effect of the Teva Pharmaceuticals Decision
The Teva Pharmaceuticals decision is likely to have two effects on patent cases. First, patent attorneys will be more likely to insist that their clients hire experts to present evidence during claim-construction proceedings after the Teva Pharmaceuticals decision. The use of experts can make it more likely that a district court’s claim construction will withstand the scrutiny of an appellate court.
Second, the Supreme Court vacated five decisions by the Federal Circuit and remanded them back to the Federal Circuit for reconsideration. These cases included Lighting Ballast Control LLC v. Philips Elecs. North Am. Corp., 744 F.3d 1272 (Fed. Cir. 2014)(en banc), Azure Networks, LLC v. CSR PLC, 771 F.3d 1336 (Fed. Cir. 2014), CardSoft, LLC v. VeriFone, Inc., 769 F.3d 1114 (Fed. Cir. 2014), Shire Dev., LLC v. Watson Pharms., Inc., 746 F.3d 1326, 2014 U.S. App. LEXIS 5719 (Fed. Cir. 2014), and Butamax™ Advanced Biofuels LLC v. Gevo, Inc., 746 F.3d 1302, 2014 U.S. App. LEXIS 2877 (Fed. Cir. 2014).
The Federal Circuit considered the construction of five terms of the claims-at-issue in the Lighting Ballast case and affirmed the original ruling by the district court judge. See Lighting Ballast Control LLC v. Philips Elecs. North Am. Corp., 790 F.3d 1329 (Fed. Cir. June 23, 2015).
The Federal Circuit reached the same decision in the Cardsoft case because the original decision did not depend on any factual findings by the district court judge.CardSoft, LLC v. VeriFone, Inc., 807 F.3d 1346, 1348 (Fed. Circ. December 2, 2015).