In Teva Pharmaceuticals USA, Inc., v. Sandoz, Inc., 574 U.S. __, No. 13-854, slip op. (Jan. 20, 2015) the Supreme Court changed the standard of review for the factual determinations underlying claim construction from de novo to clear error. The Supreme Court’s position was not particularly unexpected. Indeed, the U.S. Supreme Court has called claim construction a “mongrel practice,” Markman v. Westview Instruments, Inc., 517 U.S. 370, 378 (1996), indicating that it involves a mixed question of law and fact. Mixed questions of law and fact typically demand a more deferential standard of review, at least on the underlying factual components. Salve Regina College v. Russell, 499 U.S. 225, 233 (1991). Although the opinion was not unexpected, and indeed long overdue according to some, how the new dual standard will impact the reversal rate at the Federal Circuit is anyone’s guess. The opinions that have issued since Teva do not indicate much of a willingness on the part of the court of appeals to adopt any more of a “hands off” approach than they have traditionally taken. See, e.g., In re Papst Licensing Digital Camera Patent Litigation, No. 2014-1110 (Fed. Cir. Feb. 2, 2015).
That does not mean, however, that it is business-as-usual for patent attorneys. Savvy strategies for building and presenting a claim construction case in a Markman context are still based, in large part, on how the evidence presented will play on appeal. These strategies were previously informed entirely by the anticipated de novo standard of review, and the fact that claim construction is the determination most commonly reversed on appeal. See Jeffrey A. Lefstin, The Measure of the Doubt: Dissent, Indeterminacy, and Interpretation at the Federal Circuit, 58 HASTINGS L.J. 1025, 1026 (2007). Now that the mongrel practice of claim construction will invoke a mongrel review, litigants must grapple with the potential for standard-of-review-shopping in formulating and supporting their claim construction positions.
Before the Supreme Court’s ruling in Teva, it was often wise to present expert testimony directed towards how one of ordinary skill in the art would understand the term the way it is used in the claims, rather than rely entirely on intrinsic evidence. See Vincent Capuano and Kristina Caggiano, “Claim Construction Strategies for Trial and Appeal in Pharma Litigation,” Corporate Counsel Magazine (Aug. 15, 2012). Counsel was well advised to present technical information during the Markman hearing in a form that would reproduce well in a joint appendix, such as in simple slides and quotable transcripts, avoiding animation and physical props that might get overlooked on appeal, even though such dynamic aids might better keep a trial judge’s attention during the protracted Markmanprocess. Id.
Now that underlying factual determinations are reviewed for clear error, while ultimate determinations of claim scope are reviewed de novo, the positions one takes on the meaning of a term must take into account where the support for that position comes from, and what standard of review it will trigger. Whether to present live witness testimony or to seek the appointment of a technical advisor under Fed. R. Evid. 706 may depend more on whether the litigants want to insulate or expose certain constructions to plenary review, and less on whether that level of detail is actually needed to educate the district court on the issues. Cf. AFG Indus., Inc. v. Cardinal IG Co., 239 F.3d 1239, 1249 (Fed. Cir. 2001);MediaCom Corp. v. Rates Tech., Inc., 34 F. Supp. 2d 76, 78 n.1 (D. Mass. 1998).
District court judges that are more scientifically literate or tech-friendly, or judges that have a record suggesting that they are friendlier to patents, may be perceived as a more favorable forum to the construction of certain terms, as opposed to an appellate court that has seen a recent influx of generalist and patent-wary judges. If a litigant predicts that he is more likely to receive a favorable construction from the district court judge, he may be better off submitting extensive extrinsic evidence in support of his position, and couch the disputed term as a term-of-art that would have a certain meaning in the relevant art at the relevant time. The more he leverages the district court judge as an arbiter of facts, such as by presenting live testimony and in-person technological demonstrations, the more he has pushed the appellate court into a position of deferential review.
If, on the other hand, the litigant is not confident in the favorability of the results he will get at trial, characterizing his claim construction dispute in terms of entirely intrinsic evidence, estoppels, legal canons of construction, or plain and ordinary lay meaning may best preserve his chances of receiving a fresh determination on appeal. Where the ultimate determination of claim construction is more akin to statutory or contract interpretation, confined to the four corners of a document, and based on logic, grammar, and common knowledge, the Federal Circuit will retain an uninhibited de novo review.
In addition to forum shopping between the trial court and the appellate panel based on a perceived amenability to technical subject matter or claim scope politics, there is also the possibility of forum shopping based on the desire for claim construction hindsight bias. While Markman hearings are held before infringement and validity are determined at the trial court, claim constructions are reviewed on appeal after a final decision in the case. Thus, while the consequences a particular construction may not be fully appreciated by the district court at the time of a Markman hearing, the connection between a disputed term and the outcome of the case cannot be denied on appeal. Although the Federal Circuit proclaims that it does not construe claims with the object of causing a claim to be infringed or invalid, it is impossible to truly unring the bell once the consequences of the competing constructions are made plain. In that way, if a litigant predicts that the consequences of a particular claim construction will be particularly untenable to the court of appeals, he might be best served to cue the construction up for a more plenary review, when those consequences can be juxtaposed with their respective competing constructions.
Regardless of how the new standard of review will impact reversal rates and Markmanstrategies, claim construction will remain “the single most important event in the course of a patent litigation. It defines the scope of the property right being enforced, and is often the difference between infringement and non-infringement, or validity and invalidity.”Retractable Technologies v. Becton, Dickinson and Co., 659 F.3d 1369, 1370 (Fed. Cir. 2011) (Moore, J., dissenting from denial of rehearing en banc). As such, understanding how to best navigate the challenges presented by claim construction proceedings and appeals will remain one of the most important tasks before the patent litigator.