District Court Patent Rulings Now Relevant On Appeal

District Court Patent Rulings Now Relevant On Appeal

Daily Journal

January 23, 2015 by Ara Jabagchourian

 

This past week, the United States Supreme Court made District Courts’ decisions relevant again as they relate to the field of patent cases.  The law that had developed out of the Federal Circuit related to Markman heairngs (hearings regarding claim construction/scope of the patent) held that the standard of review on Markman hearings was de novo.  This was the law, even if the basis of the District Court’s ruling was founded on evidence presented by witnesses.  Under the Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. decision, where the claim construction was based on evidentiary underpinnings, those factual disputes are now to be reviewed under a “clear error” standard.

Teva Pharmaceuticals (“Teva”) brought a patent infringement suit against Sandoz related to Teva’s patent on the manufacturing method for Copaxone, a drug used to treat multiple sclerosis.  Sandoz and several other firms attempted to market a generic version of Copaxone.  Sandoz’s defense was that the patent was invalid because the phrase “molecular weight” contained in the patent was indefinite. Specifically, Sandoz put forth evidence to indicate that the phrase could have three separate meanings.

During the Markman hearing where the parties evidence as to the meaning of “molecular weight,” the District Court concluded that the patent claim was sufficiently definite.  In reaching that conclusion, the District Court found the evidence, viewed in the context of a skilled artisan, favored defining “molecular weight” in the manner advocated by Teva.

 

However, on appeal, the Federal Circuit reversed.  In reaching its conclusion, the Federal Circuit reviewed all aspects of the District Court’s ruling de novo, including its determination of subsidiary facts.

 

The Supreme Court began its analysis with Federal Rule of Civil procedure 52(a)(6) which states in part that a court of appeal “must not . . .set aside” a district court’s “[f]indings of fact” unless they are “clearly erroneous.”  The Supreme Court indicated that this rule does not set exceptions or exclude certain categories of factual findings “from the obligation of a court of appeals to accept a district court’s findings unless clearly erroneous.”

 

In reaching this conclusion, the Supreme Court alluded that it’s holding in Markman v. Westview Instruments, Inc. was being misconstrued.  The Court made clear that Markman involved a Seventh Amendment question: whether a jury or a judge construes a patent claim.  The Court ultimately held that a judge does because it involves the construction of a written instrument.  Although the Court indicated that the claim construction is a “question of law,” it stated that the task of claim construction is akin to a judge construing other written instruments, such as deeds or contracts.  However, where the definitions of words go beyond those used in their ordinary meaning or that they are not commonly used, a factual dispute arises as to what the technical term or phrase means.

 

The Supreme Court provided a pragmatic basis for its decision.  Ultimately, a district court “has a comparatively greater opportunity to gain the familiarity than an appeals court judge who must read a written transcript or perhaps just those portions to which the parties have referred.”   The district court listens to the evidence, sees the faces and the voice inflection of witnesses, and is better apt to make “credibility judgments” about witnesses.

 

With all this said, the Supreme Court was very clear in distinguishing factual disputes that are extrinsic to the patent itself from a district court’s review of only intrinsic evidence to the patent and the patent’s prosecution history.  Where the evidence being reviewed is intrinsic only, the district court’s determination will be viewed as a “determination of law” and the Federal Circuit will review the construction de novo.  Where the district court weighed extrinsic evidence, including defining a certain term of art which had a particular meaning to a person of ordinary skill in the art at the time of the invention, testimony as to its meaning may be received on the subject and is provided a “clearly erroneous” standard of review.  The Supreme Court made it clear, the ultimate interpretation of the patent “is a legal conclusion.”  The Federal Circuit can still review the district court’s ultimate construction of the claim de novo.   However, in order for the district court’s factual determination to be overturned, the Federal Circuit “must find that the judge” made a clear error.  Based on its analysis, the Supreme Court remanded the matter back to be assessed under the analysis set forth.

 

Back in the summer of 2013, District Court Judge Lucy Koh aptly defined her and her colleagues’ role at the district level as a “speed bump on the way to the Federal Circuit.”  Now, with the most recent pronouncement from the Supreme Court, Markman hearings and the decisions they produce will have a more meaningful role in the judicial process.

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