In the nearly three months since the U.S. Supreme Court
ruled that subsidiary factual findings in claim construction proceedings must
be reviewed for clear error, the U.S. Court of Appeals for the Federal Circuit
has decided a handful of cases requiring it to review claim construction rulings
by a district court or the U.S. Patent and Trademark Office. The Federal
Circuit has declined to extend deference in any of those cases, and by all
indications it is unlikely to do so in many future cases.
Prior to January 20, 2015, the Federal Circuit reviewed
claim construction rulings – including subsidiary factual findings – de novo, without affording any deference
to the findings or reasoning of the lower court. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998)
(en banc). In Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., ___ U.S. ___ (Jan.
20, 2015), the Supreme Court held that district court factual findings based on
extrinsic evidence are subject to “clearly erroneous” review under Fed. R. Civ.
P. 52(a)(6). This more deferential standard applies even if the fact finding is
“nearly dispositive” of the ultimate legal question of claim interpretation.
The Teva Court indicated
that in reviewing claim construction rulings, the Federal Circuit should review
the ultimate ruling on claim construction de
novo. If the district court only considered intrinsic evidence (the claim
language, specification, and prosecution history), then the entire question of
claim construction is subject to de novo
review. If, however, the district court ventured into extrinsic evidence (such
as expert or inventor testimony), then those specific factual findings are
entitled to deference and must be reviewed for clear error. Despite that
deference, however, the Federal Circuit still reviews the ultimate claim
construction ruling de novo.
In practice, Teva’s
effect on Federal Circuit review of claim construction rulings may prove to be
limited. The appeals court has held that extrinsic evidence – the only type of
finding now afforded any deference – is much less significant in the claim
construction analysis than intrinsic evidence. See Phillips v. AWH Corp., 415 F.3d 1303, 1318 (Fed. Cir. 2005)
(“We have viewed extrinsic evidence in general as less reliable than the patent
and its prosecution history in determining how to read claim terms”). In fact,
the Federal Circuit has rarely, if ever, expressly relied on extrinsic evidence
when interpreting a claim. It is not likely to start relying on extrinsic
evidence following Teva. A review of
Federal Circuit cases since Teva
illustrates the decision’s limited impact to date.
PTAB Ex Parte Proceedings
The Federal Circuit has addressed Teva in two cases arising
from ex parte appeal proceedings
before the USPTO Patent Trial and Appeal Board. In In re Imes, 778 F.3d 1250 (Fed. Cir. Jan. 29, 2015), the
Federal Circuit reversed a PTAB ruling cancelling claims in a reexamination.
The court rejected the USPTO’s construction of the term “wireless” based on an
express and unambiguous definition of the term provided in the specification. As
a result, the court noted that, “Nothing in this case implicates the deference
to fact findings contemplated by the recent decision in Teva[.]” 778 F.3d at 1252 n.1.
In a more recent case involving an ex parte appeal from a final rejection, the Federal Circuit also
stated that its review of the USPTO’s claim interpretation did not implicate the
Teva standard. In re Bookstaff, No. 2014–1463 (Mar 26, 2015). The court reversed the
USPTO’s construction of the term “data that is indicative of a gratuity to be
charged” based on the specification and disclosed embodiments, without
considering any extrinsic evidence.
PTAB AIA Proceedings
The Federal Circuit addressed the standard for reviewing
claim interpretation during an AIA post-grant proceeding in one case, In re Cuozzo Speed Technologies, LLC,
778 F.3d 1271 (Fed. Cir. 2015). After holding that the Teva decision is applicable to PTAB trial appeals, the Federal
Circuit proceeded to exercise de novo
review. The PTAB based its interpretation of the challenged claim on the patent
specification and prosecution history. As a result, the Federal Circuit noted
that, “Because there is no issue here as to extrinsic evidence, we review the
claim construction de novo.”
District Court Actions
In two appeals from district court judgments, the Federal
Circuit also declined to apply Teva’s
clearly erroneous standard. In Fenner
Investments, Ltd. v. Cellco Partnership, 778 F.3d 1320 (Fed. Cir. 2015),
the court noted the Teva standard,
but affirmed the district court’s construction of the term “personal
identification number” based on the specification and statements made in the
prosecution history.
In Enzo Biochem Inc.
v. Applera Corp., ___ F.3d ___, (Fed. Cir. Mar 16, 2015), the court
considered an appeal from a jury verdict of infringement. The district court
ruled that the asserted claim covered both direct and indirect modes of
detecting nucleotide probes, based in part on expert testimony that a figure in
the patent specification disclosed an example of direct detection. On appeal,
the Federal Circuit reversed in a 2-1 decision, relying on claim language and
statements in the specification. The majority considered arguments based on the
expert testimony to be waived on appeal, but noted that, “Nevertheless, even if
we were to consider the district court’s finding, which would be subject to
review for clear error under Teva,
this sole factual finding does not override our analysis of the totality of the
specification, which clearly indicates that the purpose of this invention was
directed towards indirect detection, not direct detection.” In a dissent, Judge
Newman argued that the district court’s construction was based on specific
findings, including those based on expert testimony, and that, “These factual
findings are entitled to deference, in accordance with the Court’s instruction
in Teva[.]” She accused the majority
of “ignoring the testimony and the district court’s findings and the jury
verdict based on the evidence at trial.”
In Teva, the Court established that, when construing claims,
appropriate deference must be given to the findings of the district court. The
district court received some conflicting testimony, along with concessions on
cross-examination, from which the court concluded that “at least one component”
may include “the whole signaling moiety.” My colleagues show error of neither
fact nor law in the court’s findings and conclusions.
Conclusion
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