The Supreme Court Requires Appellate Deference to Claim Construction Fact Finding: The Likely Upshot

The Supreme Court decided on January 20, 2015 in Teva Pharm. v. Sandoz, Inc. that F.R.Civ.P. 52(a)(6) applies to appellate review of claim construction, and that underlying factual finding by the District Court must be reviewed under the “clear error” standard.  The Supreme Court relied on the text of the Rule and a long line of cases, going back to Learned Hand’s 1950 decision in Harries v. Air King, and specifically rejected the Federal Circuit practice of making de novo determinations of underlying fact questions.  Interestingly, the Federal Circuit had recently reaffirmed en banc its practice of de novo review in Lighting Ballast v. Phillips  but the Supreme Court was entirely unimpressed.

This result was not a complete surprise to the bar.  Its likely immediate effects will be the subject of significant debate.  Some of its second-order, or “ripple” effects are worth discussion.  Consider the following.

  1. The clamor for interlocutory review of claim construction may abate.   District Courts have certified their Markman decisions to the Federal Circuit for interlocutory review.  Unfortunately, the Federal Circuit has steadfastly refused to accept requests for interlocutory review of claim constructions.  This has required District Courts and litigants to proceed through discovery and trials based on claim constructions that the Federal Circuit often set aside, relying on a de novo standard of review.  Trial judges and litigants have chafed under this practice, wondering why they must spend their resources on discovery and trials premised on a claim construction that the Federal Circuit later brushes aside, giving no deference to the trial court’s construction.  Commentators have pointed out the Federal Circuit’s de novo review of claim construction makes early appellate review desirable and have urged that the Federal Circuit change its policy of refusing interlocutory appeals of claim construction that will be reviewed under a de novo standard .

            The Supreme Court’s decision in Teva requiring the Federal Circuit to defer to the District Court’s underlying factual determinations in claim construction will make it far more difficult to undo those claim constructions after trial.  This will likely reduce the demands for a change in the Federal Circuit’s policy against interlocutory appellate review of claim construction.

  1. Credibility is King.   The determination of the meaning of technical terms is central to many claim constructions.  Trial judges typically receive the testimony of competing experts to make this factual determination.  The Supreme Court’s decision in Teva made it clear that a District Court’s evaluation of the credibility of competing expert testimony is the province of the trial judge, and is reviewed under the clear error standard.  It is unlikely that trial judges will fail to notice this invitation to make fact findings that “may nearly be dispositive” of the claim construction and that will be heavily insulated from reversal by the Federal Circuit.  If the District Court, or a litigant, wants to make sure that a claim construction is not disturbed on appeal, that construction should be extensively grounded in determinations of the credibility of the witnesses before the trial court.
  2. We Have Not Yet Found The Limit To The Supreme Court’s Disdain For The Federal Circuit’s Policy-Based Jurisprudence.    The last several years have seen the Supreme Court repeatedly reject the Federal Circuit’s adoption of patent-specific rules and “bright line” tests that are not based in the Patent Act or Supreme Court decisions.  The Federal Circuit spent decades in pursuit of a stated effort to “strengthen” the U.S. patent system.  This has not been without controversy or disagreement, even within the court itself.  Judge Nichols’ early dissent in Weiner v. Roliform, Inc. 744 F.2d 797 (Fed Cir 1984) observed: “I further think that our exclusive jurisdiction, over certain areas of law, is not to be construed as a legislative direction to ignore the efforts of other courts to deal with the same problems, efforts exerted when over many years they shared the responsibility that is now ours.  Not only are such efforts not to be ignored, but sporadic notice of them, when it occurs, is not to take the form of selecting decisions that happen to agree with our thinking, without regard to their place in the development of the case law….”   Teva is the Supreme Court’s latest admonishment that the Federal Circuit’s must decisions must fit within the case law developed by the Supreme Court and the other Courts of Appeals.
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Professor Ellen Goodman to Speak on European Right to be Forgotten


JANUARY 29, 2015
06:00PM – 08:00PM


Panel Discussion Featuring Professor Ellen Goodman (Rutgers University) and Marcel Leonardi (Senior Public Policy Counsel, Google)

The European Court of  Human Rights, in a case involving a claimant in Spain seeking to forbid the listing of certain information,  created a process for people to remove links to unwanted content  The case created a zone of substantial debate about the scope of the right,  the entities subject to the right, the territorial implications and the complexities of compliance. Debates about these issues are taking place in Europe and across the world. Professor Goodman is engaged in a research effort concerning Google and the implementation of this right.  Professor Leonardi considers these questions both in his role as a law professor and as a member of Google’s public policy team.

This discussion is part of the Americas Round of Oxford University’s Price International Media Moot Court Competition.

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Does it Violate the First Amendment to Limit Directional Signs More than Political Signs?  Looks Likely After Supreme Court Oral Argument in Reed v. Town of Gilbert, AZ.

The town of Gilbert Arizona was made famous, to me at least, when Rachel Maddow reported on the school district’s decision to remove pages of high school biology textbooks that discussed contraception.   Now it’s famous for another reason.  Clyde Reed, pastor of Good News Community Church, rented space at an elementary school in Gilbert, Arizona in order to post about 17 signs announcing the time and location of church services. Reed received a notice from Gilbert that the signs violated the Sign Code, which restrict the size, number, duration, and location of certain types of signs, including temporary directional ones like Reed’s.  Neither political signs nor “ideological” ones are similarly limited.  Reed sued on First Amendment grounds, but lost in the District Court.  The 9th Circuit affirmed on the grounds that the restrictions were not based on the content of the signs and left open other channels of communication.

The Supreme Court heard oral argument  in Reed v. Town of Gilbert  on January 12, 2015.  Justices Breyer and Alito led the questioning and both seemed more sympathetic to the Petitioners, as did most of their peers.  Justice Kagan is thought to have a special interest in the case, since she wrote one of the leading scholarly articles on content-neutrality and government intent.   Although she was not especially vocal at oral argument, her questions did suggest that she is grappling with the meaning of content neutrality and seemed willing to accept some degree of content discrimination in order to preserve a special place for political speech.

Ultimately, the problem for Gilbert is that even its lawyer, Philip W. Savrin, had to concede that the effect of the town’s code could be “silly,” given the distinction between directional and ideological/political signs.  The town’s special, more permissive carve-out for ideological speech – probably designed to limit the impact of the restrictions on directional signs — was a red flag for both Justices Kagan and Scalia.  Kagan wanted the Town to admit that these distinctions were content based, though perhaps they could survive strict scrutiny.  Scalia was offended by a code that let government officials decide what is ideological, what is political, and which should be privileged.

Arguing for Reed was David A. Cortman, a lawyer for the religious liberty group Alliance Defending Freedom.  He argued that only content-neutral regulations are permissible.  Justice Kagan pushed him on the fact that the court has always valued political speech more highly.  And Justice Kennedy made the point that if there are no content categories at all, then an affluent person can post “Happy birthday, Uncle Fred” as many places as money will buy, and for as long.  He was worried about a “wooden distinction” that forces the Court to uphold the proliferation of signs for any purpose.  This concern seems a little strange for a Justice who has ruled with the majority in campaign finance cases holding that “speech is money,” but perhaps he sees a difference when urban beauty and safety is at stake.

Cortman agreed with Kennedy’s hypothetical, except for commercial speech.  There was no push back from the bench on the commercial speech exception, interestingly, notwithstanding the perilous position of that distinction in recent cases.  Justice Breyer asked about parts of the country that don’t want any signs at all.  They may have an exception for a sign like “Geronimo is buried here.”  If they allow that sign, but not others, he asked whether that is an impermissible content-based distinction?  He noted that the “entire U.S. code is full of content distinctions.”  For example, criminal solicitation is a more severe offense when you are soliciting for some things, and less severe when you are soliciting for other things.  This fundamental question about when we care about content-based distinctions in speech went unanswered.

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iPod trial and Steve Jobs

Steve Jobs was a revolutionary. One of the creative geniuses of all time. But did he lead his company into an antitrust violation by forcing consumers to pay more for iPods and prevent the devices from playing songs from rivals’ music stores?

That is the issue that a jury is confronting in the iPod antitrust litigation currently underway. Plaintiffs are seeking $350 million in damages, which could be tripled under antitrust law.

In this 4-minute interview with the Wall Street Journal, Distinguished Professor Michael Carrier explains the litigation and the effect it could have on Apple.

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