The U.S. Court of Appeals for the Federal Circuit (CAFC) has once again reaffirmed that appellate review of patent claim interpretations is de novo, without deference to the trial court even for factual matters.1 The 6-4 en banc decision in Lighting Ballast Control LLC v. Philips Electronics N.A. Corp.,2 by the only appellate court having a say on patent matters, would appear to be an open invitation for the U.S. Supreme Court to finally take up the issue.
The importance of the patent claims
The scope of a patent is defined by its claims (which are found at the end of the patent). Accordingly, they are the most significant part of the entire patent instrument. Patent claims are simply collections of words, carefully crafted to encompass as much subject matter as possible while simultaneously distinguishing all prior art (to withstand a validity attack). But, because of the inherent limitations of words, one or more terms in a patent claim usually has multiple possible interpretations, and the “correct” meaning of a word or phrase depends on the context in which it is used. Further complicating matters is the fact that patent claims sometimes employ highly technical terminology that is not only amenable to more than one interpretation, but also may require guidance from experts for a court to ascertain the “correct” meaning.
Claim interpretation is the heart and soul of nearly all patent disputes. The meaning of the words and phrases used in the claims — which define the scope of the patent — is critical to not only the question of infringement, but also patent validity. Infringement and validity may turn on the meaning of a single word or phrase in a claim. The word “on,” for example, has been the subject of at least two CAFC decisions — both of which reversed a trial court’s interpretation of the meaning of the word “on.” See Inverness Med. Switz. GmbH v. Warner Lambert Co., 309 F.3d 1373 (Fed. Cir. 2002), and Senmed, Inc. v. Richard-Allan Medical Industries, Inc., 888 F.2d 815 (Fed. Cir. 1989).
Claim construction is a question of law
Nearly 20 years ago the Supreme Court held that the task of construing the meaning of the claims is a question of law for the court — not a jury — to decide. Markman v. Westview Instruments, Inc., 517 U.S. 370, 390-91 (1996). When interpreting claims, the underlying principal is that claim terms are to be given their ordinary and customary meaning to a person of ordinary skill in the relevant art. Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005). The ordinary meaning is not determined in a vacuum, however, as claim terms must be interpreted in the context of the claim as a whole, as well as other claims and the patent specification (i.e., the written description and drawings that precede the claims). For example, the written description might include a specific (or implied) definition of a claim term, or provide an indication that an alternative meaning was intended.
The prosecution history of the patent also is considered, particularly if the patentee made statements reflective of a narrower definition of a claim term than might otherwise be accorded. Though this “intrinsic evidence” (the claims, specification and prosecution history) is always considered, a trial court may also consult “extrinsic evidence” in instances where the intrinsic evidence does not adequately resolve the “correct” meaning of a claim term. Such extrinsic evidence includes things such as dictionaries, treatises and expert testimony.
The mechanism by which a trial court interprets the meaning of the claims is usually referred to as a “Markman hearing.” For claim terminology in dispute, each party will propose their own interpretation as to what certain terms and phrases would mean to someone skilled in the art, often supported by extrinsic evidence (e.g., dictionaries and expert testimony). The trial judge may adopt one of the proposed definitions, or may come up with her own (e.g., a hybrid of the proposed definitions).
In many cases, once the trial court’s claim construction is complete, the issue of infringement (and occasionally validity) is a foregone conclusion. For example, an interpretation of a single claim term in favor of the accused infringer often will mean that the patent owner cannot prove infringement. In other instances, a claim construction may make it difficult for the defendant to escape a finding of infringement, leaving only the question of damages (and perhaps validity) for trial.
If the claim construction ruling does not conclusively decide all the claims and counterclaims in the case (by summary judgment or stipulated dismissal), the case proceeds to trial based on the trial court’s claim construction ruling. The CAFC rarely accepts interlocutory appeals of claim construction rulings. If the CAFC reverses the trial court’s claim construction (which happens frequently), the case is remanded to the trial court (unless the CAFC determines that the error would not have affected the judgment). This can lead to an entirely new trial on the merits (and, perhaps, another appeal to the CAFC).
Appellate review — questions of fact vs. questions of law
Findings of fact are reviewed on appeal under the clearly erroneous standard — the appellate court will not overturn the trial court unless it has a “definite and firm conviction that a mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). Questions of law, on the other hand, are reviewed de novo — there is no presumption that the trial court’s determination was correct; the appellate court considers the issue anew, without deference to the determination of the trial court.3 However, de novo review is not so cut and dried. Even though claim construction is most certainly a question of law for the court to decide (per the Supreme Court in Markman), that still does not entirely resolve the proper standard for appellate review.
Many questions of law decided by a trial court can be characterized as “mixed questions of law and fact.” The ultimate decision is a question of law, but it is necessarily based on underlying factual determinations. In most instances, even though the question of law is reviewed de novo by the appellate court, the underlying factual determinations by the trial court are reviewed under the clearly erroneous standard (i.e., deference is given to the trial court). For example, while the obviousness (invalidity) of a patent claim is a question of law, it is often based on underlying factual determinations by the trial judge or jury. On appeal, the CAFC applies the clearly erroneous standard to those factual determinations (e.g., the scope and content of the prior art, the level of ordinary skill in the art, etc.). Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809 (U.S. 1986).
Majority in Lighting Ballast maintains strict de novo review, without deference
In Lighting Ballast, the CAFC reaffirmed its decision in Cybor Corp. v. Fas Techs., 138 F.3d 1448 (Fed. Cir. 1998)(en banc), that claim construction is “a purely legal question,” which is “review[ed] de novo on appeal including any allegedly fact-based questions relating to claim construction.” Id. Despite the factual components which are often a necessary part of the claim construction process, the court in Lighting Ballast reaffirmed that claim construction does not involve any factual determinations — rather, the facts presented at the trial court (e.g., expert testimony) merely “enlightens” and “assists” the trial judge in construing the patent claims:
we recognized that through this process of construing claims by, among other things, using certain extrinsic evidence that the court finds helpful and rejecting other evidence as unhelpful, and resolving disputes en route to pronouncing the meaning of claim language as a matter of law based on the patent documents themselves, the court is not crediting certain evidence over other evidence or making factual evidentiary findings. Rather, the court is looking to the extrinsic evidence to assist in its construction of the written document, a task it is required to perform. The district court’s claim construction, enlightened by such extrinsic evidence as may be helpful, is still based upon the patent and prosecution history. It is therefore still construction, and is a matter of law subject to de novo review.
Cybor Corp. v. Fas Techs., 138 F.3d at 1454. For example, even though each side presents expert witness testimony
arguing explaining what a particular claim term would mean to a person of ordinary skill in the art, and even though the trial court adopts the meaning asserted by one expert and rejects that proposed by the other, the trial court “is not crediting certain evidence over other evidence or making factual evidentiary findings.”
The majority in Lighting Ballast largely avoids dealing with the issues raised by Cybor, and instead relies primarily on stare decisis (the policy, sometimes ignored, which favors adherence to prior decisions).4 In doing so, the majority states that it is not diminishing the role of the trial court in patent disputes:
We do not ignore these important concerns. However, as proponents of stare decisis point out, Cybor is narrowly focused on the threshold construction of a legal document, and does not affect the traditional deference to district court findings of infringement or validity or damages or any other question of fact in patent litigation.
Of course, that deference would seem to ring hollow when claim construction rulings often determine issues of infringement and validity, leaving little left for the trial court to do but wish the parties luck at the CAFC.
Perhaps recognizing that a trial court’s claim construction ruling is often viewed as a dress rehearsal for appeal, thereby relegating trial courts to the practice squad, Judge Lourie’s concurrence in Lighting Ballast offered a pat on the back to trial courts:
Much criticism has been directed at this court for allegedly ignoring all the fine work of district court judges in construing patent claims. That criticism is premised on the misperception that we do not give a district court’s claim construction any deference. That is incorrect; perhaps one even might say “clearly erroneous.”…the “no deference” language is simply established legal jargon for a holding that, having reviewed the record, we disagree….This appellate court, when asked to interpret the claims of a patent carefully, notes and considers how the district court construed the claims. If we disagree, it is not without a degree of informal deference.5
A dissenting point of view
Not surprisingly, a vigorous dissent was penned by Judge O’Malley in Lighting Ballast. She admonished the majority for refusing to recognize that “construing the claims of a patent at times requires district courts to resolve questions of fact.” Her dissent also points out how the pure de novo review of claim construction rulings would appear to be “at odds with binding congressional and Supreme Court authority when it refuses to abide by the requirements of Rule 52(a)(6) of the Federal Rules of Civil Procedure, which expressly instructs that, on appeal, all “findings of fact . . . must not be set aside unless clearly erroneous.”6
The dissent in Lighting Ballast argued that through claim construction ultimately is a question of law, to be reviewed de novo on appeal, “claim construction often requires district courts to resolve underlying issues of disputed fact.” In light of this, the dissent stated that “[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.”
Finding the correct claim construction?
Underpinning the view that claim construction orders should be reviewed de novo, without any deference to the trial court, seems to be the belief that there is but one “correct” interpretation of claim terms as a matter of law, and that de novo review is necessary to ensure certainty and uniformity. Of course, the reality is that claim construction is nowhere near this precise. In fact, as the dissent in Lighting Ballast points out, the CAFC itself is not necessarily bound by its own prior claim constructions — even within the same case. For example, the CAFC’s decision on claim construction for purposes of a preliminary injunction is not binding on either the trial court (for purposes of the trial on the merits) or the CAFC in a later proceeding in the same case. See Glaxo Grp. Ltd. v. Apotex, Inc., 376 F.3d 1339, 1346 (Fed. Cir. 2004) (“An appellate court’s preliminary injunction opinion has no conclusive bearing at the trial on the merits and is not binding on a subsequent panel.”). In addition, a CAFC claim construction ruling, while likely binding on a patent owner, would not be binding on a new defendant (i.e., a party not involved in the prior litigation).
A pure de novo review also calls into question the true role of the trial court in claim construction. Despite the conciliatory language of Judge Lourie’s concurrence, the CAFC’s approach to appellate review of claim constructions effectively means that the trial judge is merely there to facilitate creation of a record for purposes of appeal. Many in the patent community view the Markman hearing before the trial judge as nothing more than a dress rehearsal for appellate review at the CAFC. These views are understandable given the propensity of the CAFC to overturn claim construction rulings. In fact, while trial courts will quite often adopt the claim interpretation proposed by one of the parties, the CAFC routinely finds a claim interpretation, which neither party proposed. As a result, some commentators have suggested that CAFC claim construction rulings “are often panel-dependent and result-oriented.” See Donald R. Dunner, A Retrospective of the Federal Circuit’s First 25 Years, 17 Fed. Cir. B.J. 127, 130 (2007).
Judge Mayer’s dissent in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005), provides a telling summation of how some in the patent community view the current state of appellate review of claim construction:
Now more than ever I am convinced of the futility, indeed the absurdity, of this court’s persistence in adhering to the falsehood that claim construction is a matter of law devoid of any factual component.
In our quest to elevate our importance, we have, however, disregarded our role as an appellate court; the resulting mayhem has seriously undermined the legitimacy of the process, if not the integrity of the institution.
In the name of uniformity, Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), held that claim construction does not involve subsidiary or underlying questions of fact and that we are, therefore, unbridled by either the expertise or efforts of the district court. What we have wrought, instead, is the substitution of a black box, as it so pejoratively has been said of the jury, with the black hole of this court. Out of this void we emit “legal” pronouncements by way of “interpretive necromancy”; these rulings resemble reality, if at all, only by chance. Regardless, and with a blind eye to the consequences, we continue to struggle under this irrational and reckless regime, trying every alternative —dictionaries first, dictionaries second, never dictionaries, etc., etc., etc.
Again today we vainly attempt to establish standards by which this court will interpret claims. But after proposing no fewer than seven questions, receiving more than thirty amici curiae briefs, and whipping the bar into a frenzy of expectation, we say nothing new, but merely restate what has become the practice over the last ten years — that we will decide cases according to whatever mode or method results in the outcome we desire, or at least allows us a seemingly plausible way out of the case.
Id. at 1330 (emphasis in original!).
Given the CAFC’s repeated revisiting of the issue, perhaps it is time for the Supreme Court to give it a whack. The court may very well find that the CAFC has it right. But at least, then, the issue will not remind us all of the movie “Groundhog Day.”
1 This is at least the fourth CAFC en banc decision wherein the standard of appellate review of claim construction was addressed. In each instance, vigorous dissents have objected to the use of a de novo standard for appellate review, with no deference to the trial court even with regard to underlying factual determinations.
2 2014 U.S. App. LEXIS 3176, decided Feb. 21, 2014.
3 As noted in one law review article, de novo review essentially means “is the decision right?” while review under the clearly erroneous standard asks “is the decision wrong?” See Casey, et al., Standards of Appellate Review in the Federal Circuit: Substance and Semantics, 11 Fed. Cir. B.J. 279, 287 (2001).
4 Ironically, the author of the majority opinion in Lighting Ballast was Judge Newman — one of the more vocal opponents of de novo review of claim construction in Cybor.
5 Judge Bryson played the role of cheerleader for district court judges in Cybor, stating: “While I join the opinion of the court without reservation, I think it important to note that our adoption of the rule that claim construction is an issue of law does not mean that we intend to disregard the work done by district courts in claim construction or that we will give no weight to a district court’s conclusion as to claim construction, no matter how the court may have reached that conclusion.” Cybor, 138 F.3d at 1463.
6 Somewhat cynically, Judge O’Malley also finds it surprising that even though the CAFC sought amicus curiae participation from the intellectual property community, resulting in the participation of 38 different entities and 21 briefs, the majority premised its refusal to overturn Cybor “on principles of stare decisis — that, and a professed inability to come up with a workable alternative to de novo review.”