Split Federal Circuit Hews to De Novo Claim Construction Review

28 February 2014 PharmaPatents Blog

In a six-four en banc decision in Lighting Ballast Control LLC v. Philips Electronics North Am. Corp., a divided Federal Circuit confirmed its practice of de novo claim construction review. The main question arising from the decision is whether the Federal Circuit’s lack of consensus on this important legal issue will make it attractive for Supreme Court review.

The Majority Decision

Judge Newman wrote the decision for the court, which was joined by Judges Lourie, Dyk, Prost, Moore, and Taranto.

Judge Newman describes the current review of claim construction in the opening paragraph of her opinion:

Implementing the Supreme Court’s decision in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) (Markman II), aff’g Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc) (Markman I), this court in Cybor held that patent claim construction receives de novo determination on appeal, that is, review for correctness as a matter of law. Such review is conducted on the administrative record and any additional information in the record of the district court, and is determined without deference to the ruling of the district court.

Given the Supreme Court guidance in Markman II that claim construction is “better suited to determination by a judge rather than a jury,” Judge Newman saw three options for the appropriate standard of review.

  • The first, urged by Lighting Ballast, holds that ”patent claim construction is most reasonably classified as a question of fact,” and so should be reviewed only for clear error.
  • The second, supported by the Solicitor General for the United States, holds that claim construction should be subject to a “hybrid of de novo review and deferential review,” with “the factual aspects of claim construction to be reviewed on the clearly erroneous standard, while the final conclusion receives review as a matter of law.”
  • The third is that Cybor is a “reasonable and correct” interpretation of Markman II, such that the practice of de novo claim construction review should be maintained.

This paragraph provides a succinct summary of the majority’s rationale for agreeing with the third option:

For the reasons we shall discuss, we apply the principles of stare decisis, and confirm the Cybor standard of de novo review of claim construction, whereby the scope of the patent grant is reviewed as a matter of law. After fifteen years of experience with Cybor, we conclude that the court should retain plenary review of claim construction, thereby providing national uniformity, consistency, and finality to the meaning and scope of patent claims. The totality of experience has confirmed that Cybor is an effective implementation of Markman II, and that the criteria for departure from stare decisis are not met.

 Judge Lourie’s Concurrence

Judge Lourie wrote a separate concurring opinion that makes the following points:

  • First and foremost is that the Supreme Court has held that claim construction is a question for the court rather than the jury.
  • Equally important, one of the purposes of Congress in creating our court was to achieve uniformity in the patent law. Consistent with that goal should be uniformity of interpretation in construction of patent claims. …. It would hardly promote uniformity … for us to bless a claim construction in one district court, based on that court’s judging the credibility and demeanor of the expert witnesses in one case, when a different case might lead to a different result based on a different district judge’s appraisal of  different witnesses.
  • [C]laim construction is not a process that normally involves historical facts. It primarily involves reading the patent’s written description as well as the prosecution history of the patent, and this court is quite as able to do that as any district court, sometimes better.

Judge Lourie also explains his view that the root of the problem with claim construction lies with the whole patent litigation process, not the Federal Circuit:

[T]he problem lies, not with lack of deference to district court interpretation of claims by the Federal Circuit, but to the multiplicity of actors contending in a competitive economy. The actors striving to deal with a patent in district court are often not those who made the invention, created the patent, and hence knew exactly what it meant. The solution does not lie in depriving the one institution charged with ensuring uniformity of part of its authority.

Judge O’Malley’s Dissent

Judge O’Malley wrote the dissenting opinion, which was joined by Chief Judge Rader and Judges Reyna and Wallach.

This paragraph provides a succinct summary of the dissent’s rationale:

Considerations of stare decisis … do not justify adhering to precedent that misapprehends the Supreme Court’s guidance, contravenes the Federal Rules of Civil Procedure, and adds considerable uncertainty and expense to patent litigation.

Judge O’Malley does not hold back in her criticism of Cybor:

Reversing Cybor will not “upset settled expectations on anyone’s part.” …. The one thing clear about Cybor is that no one in the legal community—except perhaps the members of the majority—has come to believe that either the wisdom or vitality of Cybor is settled. During its short life, Cybor repeatedly has been criticized as poorly reasoned. That criticism has come from members of this court, from district court judges, and from academics and practitioners across the country.

After cataloging debate within the Federal Circuit, among other federal judges, and among practitioners and academics, Judge O’Malley cites several law review articles for the proposition that “[p]arties do not make claim drafting decisions based on the standard of review we apply to trial court claim constructions. Nor could they given the panel-dependent nature of our own determinations.”

It is difficult to accept the proposition that our claim construction jurisprudence is a measure against which litigants make  important business or innovation decisions. Claim construction disputes are very fact specific—patents do not follow a formulaic structure, or even contain oft repeated language. Claims are drafted, redrafted, and amended in ways intended to reflect and capture particular inventions in a particular field, to avoid very specific prior art, and to respond to the rejections of the unique patent examiner involved in the application process. It is rare that any two claims we review contain the same phrasing, and even more rare that the context in which the phrasing is used would not alter the meaning of even almost identical words…. Combining the uniqueness of each claim term to be reviewed with the variations in rationale employed by the divergent members of this court, provides little practical guidance regarding how any claim construction dispute might be resolved in this forum—and certainly not the uniform reliability of outcome with which the majority now credits our jurisprudence in this area.

(Judges Chen and Hughes did not take part in the decision.)

One Practitioner’s View

I am surprised by the dissent’s perception that the Federal Circuit’s de novo review of claim construction does not promote predictability. While I am not comfortable predicting how a district court judge will construe a given patent claim, I am more comfortable assessing how a claim should be construed and predicting whether a district court’s claim construction will be upheld on appeal.

The paragraph from Judge O’Malley’s opinion quoted above appears to overlook the fact that patent practitioners predict how claims will be construed on a daily basis, based on the claim construction paradigms developed under Cybor. Because of the Federal Circuit’s jurisprudence in this area, we know how to delve into the “very fact specific” record, to trace the prosecution history of a claim that was “drafted, redrafted, and amended,”  to understand the “particular inventions” and the distinguishing features from the “very specific prior art.” It doesn’t matter that the claim construction in one case is not likely to apply to a different case involving a different patent. What matters is that the body of case law under Cybor has given us a framework within which to apply the principles of claim construction in a predictable manner.

If claim construction were as murky as Judge O’Malley implies, how could a patent ever fulfill its public notice function? How could innovators and competitors ever make design-around or freedom-to-operate decisions without resorting to litigating every issue?

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