Claim Construction Case Before the Supreme Court Considers Standard of Review for Factual Findings

On Wednesday October 15, 2014, the Supreme Court will consider the proper standard of review to apply to a district court’s findings on claim construction.

Issue

The central issue in the case (Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., U.S., No. 13-854) is whether a district court’s factual findings may be reviewed de novo or only for clear error. The former approach aligns with the requirements of the Federal Circuit, while the later comports with Federal Rule of Civil Procedure 52(a).

Background

Claim interpretation is a central issue in almost every patent case. Claim interpretation, though ultimately a question of law, may turn on the determination of underlying factual issues. This heterogenous mix of legal and factual issues has led to frustration with the current de novo standard of review for factual findings before a district court.

Lightning Ballast v. Philips

This issue was recently illuminated when Federal Circuit refused to overturn the 1998 Cybor Corporation v. FAS Technologies, Inc decision (and the de novo standard) in Lighting Ballast Control LLC v. Philips Electronics North America.

In the splintered 6-4 decision, Judge O’Malley was joined by Chief Judge Rader and Judges Reyna and Wallach. The dissenting opinion urged that the de novo standard “…adds considerable uncertainty and expense to patent litigation.”

Lighting Ballast, 744 F.3d at 1297 (O’Malley, J., dissenting). In a point underlying the current debate, the dissenting opinion continued, “[w]hen a district court makes fact-findings needed to resolve claim construction disputes, Rule 52(a) requires us to defer to those findings unless they are clearly erroneous.” Id. at 1317.

Resolution in Teva

Although the parties in Lightning Ballast have not petitioned for a writ of certiorari, the Supreme Court now considers the same issues in Teva. Many patent scholars have called for a hybrid approach to what the Supreme Court once termed the “mongrel practice” of claim construction. Markman II, 517 U.S. at 372, 378, See also: http://patentlyo.com/patent/2014/06/construction-evidentiary-character.html. This approach would subject fact findings made by a district court judge to the clear error review under Rule 52(a), and the legal determinations as to the meaning of claim terms under de novo review.

While differentiating factual and legal findings can pose a challenge in many cases, adoption of an approach that attempts to reflect the fusion of law and fact will promote national consistency in the treatment of patents while serving to streamline an often sluggish process.

Regardless of the outcome in Teva, the Supreme Court’s decision will stimulate future debate on this important issue, and is itself likely to have a substantial impact on claim construction practice, impacting nearly every future patent case in the country.