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.
http://www.supremecourt.gov/opinions/14pdf/13-854_o7jp.pdf Interestingly, the Federal Circuit had recently reaffirmed
en banc its practice of
de novo review in Lighting Ballast v. Phillips http://www.cafc.uscourts.gov/images/stories/opinions-orders/12-1014.Opinion.2-18-2014.1.PDF 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.
- 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 http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=1268&context=dlj&sei-redir=1&referer=http%3A%2F%2Fwww.bing.com%2Fsearch%3Fq%3Dinterlocutory%2Breview%2Bof%2Bmarkman%26qs%3Dn%26form%3DQBLH%26pq%3Dinterlocutory%2Breview%2Bof%2Bmarkman%26sc%3D0-25%26sp%3D-1%26sk%3D%26ghc%3D1%26cvid%3Dd95be98250ef4cd58c4a657c9291e645#search=%22interlocutory%20review%20markman%22 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 http://www.illinoislawreview.org/article/process-considerations-in-the-age-of-markman-and-mantras/ .
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.
- 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.
- 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.
