As we reported last year, one of the issues that has divided the U.S. Court of Appeals for the Federal Circuit (the CAFC) for nearly 20 years is the proper standard of appellate review of patent claim construction rulings. No less than four CAFC en banc decisions addressed the issue. In each instance, the majority applied a strict de novo standard for appellate review with no deference to the trial court even with regard to underlying factual determinations, while vigorous dissents objected to this standard.
The dissenters have been vindicated, as the Supreme Court has now held that a trial court’s underlying factual determinations with respect to extrinsic evidence used in patent claim constructions must be reviewed on appeal under the clearly erroneous standard. This decision should, at least in theory, result in an increase in claim construction affirmances by the CAFC. It remains to be seen, however, whether there will be a significant increase.
Patent claim construction basics1
The scope of a patent is defined by its claims, and construing those claims is the heart and soul of nearly all patent litigation. The meaning of the words and phrases used in the claims is critical to not only the question of infringement, but also patent validity.
The task of construing the meaning of patent 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). Claim terms are 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 patent as a whole, including the specification (i.e., the written description and drawings that precede the claims in a patent). The court also considers the prosecution history of the patent, particularly if the patentee made statements reflective of a narrower definition of a claim term than might otherwise be the case.
The claims, specification and prosecution history are called the “intrinsic evidence,” and are essential in construing patent claims. In some instances, however, a trial court will consult “extrinsic evidence” — evidence outside of the patent itself — if the court believes such evidence will aid in the claim construction. Such extrinsic evidence includes things such as dictionaries, treatises and expert witness testimony. Though extrinsic evidence can be used to educate the trial court regarding the underlying technology or to explain the meaning of certain claim terms to one skilled in the art, it is less significant than the intrinsic record in determining the legally operative meaning of claim language.” C.R. Bard, Inc. v. U.S. Surgical Corp., 388 F.3d 858, 862 (Fed. Cir. 2004). When the interpretation of claim terminology is clear from the intrinsic evidence, extrinsic evidence may not be used to contradict such interpretation.
Appellate review of patent claim constructions — questions of fact vs. questions of law
Because patent claim construction is a question of law for the trial court to decide, on appeal the appellate court conducts a de novo review of the construction of a claim. The appellate court considers the issue anew, without deference to the determination of the trial court. However, claim constructions are sometimes based (in part) on underlying factual determinations by the trial court, such as determining the meaning of a technical term to one skilled in the art based on extrinsic evidence. But findings of fact are normally reviewed on appeal under the clearly erroneous standard — the appellate court will not overturn the trial court’s factual determinations 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).
Nevertheless, the CAFC has repeatedly held that patent claim constructions should be reviewed “de novo on appeal including any allegedly fact-based questions relating to claim construction.” Cybor Corp. v. Fas Techs., 138 F.3d 1448, 1456 (Fed. Cir. 1998)(en banc). The Supreme Court has now rejected that approach.
Teva Pharmaceuticals USA, Inc. v. Sandoz Inc. concerned Teva’s Copaxone drug used to treat multiple sclerosis. Sandoz sought to introduce a generic version of Copaxone, and challenged the validity and scope of nine Teva patents related to the Copaxone product. The validity of the patents was challenged on numerous grounds, including indefiniteness. The defendants argued that the meaning of certain claim limitations was ambiguous, and, therefore, the patents were invalid.2 The trial court, after hearing the testimony of expert witnesses for both sides, held that the patents were valid and would be infringed by Sandoz’s generic version of Copaxone. 876 F. Supp. 2d 295 (S.D.N.Y. 2012). The CAFC, however, reversed the finding of validity with respect to most of the patent claims, using strict de novo review of the trial court’s claim constructions — including the trial court’s evaluation of the expert witness testimony.
For those who slept through chemistry class, polymers are chemical compounds made up of repeating units of smaller molecules (monomers) joined together. The polymerization process, especially for large polymers, is not always precise with respect to how many monomers are joined together in each polymer chain. As a result, not every polymer molecule will have the same molecular weight. Therefore, most large polymers are characterized by their average molecular weight.
However, the simple arithmetic mean (total weight of polymer molecules divided by the number of molecules), also referred to as the number average molecular weight (Mn), is often not very informative. For example, a polymer composition having a wide range of molecular weights will often have significantly different properties than one having a very narrow range of molecular weights, even though the two compositions have the same number average molecular weight. Because of this, the molecular weight of a polymer can also be expressed as the weight average molecular weight (Mw), as well as the peak average molecular weight (Mp). A weight average molecular weight gives greater significance to larger molecules, and is almost always greater than Mn. The peak average molecular weight is the weight of the molecule that is present in the greatest amount, and is typically somewhere between Mn and Mp.
The claims at issue in Teva were directed to a particular polymer having a “molecular weight of about 5 to 9 kilodaltons.”3 The trial court construed “molecular weight” to refer to the peak average molecular weight (Mp), and therefore the claims employing such terminology were not invalid as being indefinite.
The CAFC reversed the trial court (in part), holding that some of the asserted patent claims invalid due to indefiniteness. 723 F.3d 1363 (Fed. Cir. 2013). The CAFC disagreed with trial court’s determination that “molecular weight” in the claims meant Mp, stating that the claims in question “contain an ambiguity because their plain language does not indicate which average molecular weight measure is intended.” 723 F.3d 1363, 1369 (Fed. Cir. 2013). Despite testimony from Teva’s expert witness that one skilled in the art would know that “molecular weight” in the claims means Mp, the CAFC held that the claims in question were “insolubly ambiguous”4 and therefore invalid. In doing so, the CAFC reviewed the trial court’s construction of the term “molecular weight” de novo, without giving any deference to the trial court even with respect to underlying factual determinations.
For example, some of the data provided in the specification of the patents (a plot of molecular weight shown in Fig. 1) appears to directly contradict Teva’s assertion that “molecular weight” in the patent claims meant Mp. Teva’s expert witness, however, explained that a person of ordinary skill in the art would understand that the alleged discrepancy in the data was “merely a byproduct of the process by which the data from the chromatogram would have been used to generate Figure 1.” Teva Pharms. USA, Inc. v. Sandoz Inc., 810 F. Supp. 2d 578, 589 (S.D.N.Y. 2011). The trial court adopted the views of Teva’s expert in this regard. The CAFC, however, gave no deference to the trial court’s assessment of the expert’s testimony on this issue. In fact, the CAFC entirely ignored the testimony of Teva’s expert explaining why the data in Fig. 1 of the patents appeared to be at odds with “molecular weight” referring to Mp.
Supreme Court reversal
In vacating the CAFC’s decision in Teva Pharmaceuticals USA, Inc. v. Sandoz Inc., the Supreme Court held that appellate review of patent claim construction rulings must be done in accordance with Rule 52(a)(6) of the Federal Rules of Civil Procedure, which states: “[f]indings of fact, whether based on oral or other evidence, must not be set aside unless clearly erroneous, and the reviewing court must give due regard to the trial court’s opportunity to judge the witnesses’ credibility.” Thus, though the CAFC must continue to review de novo a trial court’s ultimate interpretation of the patent claims, the underlying factual findings of the trial court must be reviewed using the clearly erroneous standard. The court stated that, “[e]ven if exceptions to [Fed. R. Civ. Pro. 52(a)(6)] were permissible, there is no convincing ground for creating an exception here.” Teva Pharm. USA, Inc. v. Sandoz, Inc., 2015 U.S. LEXIS 628, 2 (U.S. 2015).
The court likened the claim construction process to a trial court’s task of construing other written instruments such as deeds or contracts. Though the construction of such written instruments is, like claim construction, a question of law, there are sometimes underlying factual disputes such as the meaning of technical terms or established usage of trade. As the court noted, such factual determinations must be reviewed on appeal for clear error. Id. at 14. The court similarly recognized that subsidiary factfinding is sometimes necessary in patent claim construction, as well as credibility judgments with respect to witnesses. “In other words … courts may have to resolve subsidiary factual disputes” as part of the claim construction process, and appellate courts must “review all such subsidiary factual findings under the ‘clearly erroneous’ standard.” Id.
As for how the appellate court is to apply the clearly erroneous standard to any underlying factual determinations by a trial court in patent claim construction, the Supreme Court established a clear delineation between intrinsic and extrinsic evidence. “[W]hen the district court reviews only evidence intrinsic to the patent (the patent claims and specifications, along with the patent’s prosecution history), the judge’s determination will amount solely to a determination of law, and the court of appeals will review that construction de novo.” Id. at 22. However, in those cases where the trial court must “consult extrinsic evidence in order to understand, for example, the background science or the meaning of a term in the relevant art during the relevant time period,” such “subsidiary factfinding[s] must be reviewed for clear error on appeal.” Id. at 22-23.
The court reiterated, however, that a distinction must be made between subsidiary factfinding, reviewed for clear error, and the proper legal construction of claim terms that is reviewed de novo on appeal:
For example, if a district court resolves a dispute between experts and makes a factual finding that, in general, a certain term of art had a particular meaning to a person of ordinary skill in the art at the time of the invention, the district court must then conduct a legal analysis: whether a skilled artisan would ascribe that same meaning to that term in the context of the specific patent claim under review. That is because “[e]xperts may be examined to explain terms of art, and the state of the art, at any given time,” but they cannot be used to prove “the proper or legal construction of any instrument of writing.” Winans v. New York & Erie R. Co., 62 U.S. 88, 21 How. 88, 100-101, 16 L. Ed. 68 (1859).
Teva Pharm. USA, Inc. v. Sandoz, Inc., 2015 U.S. LEXIS 628, 23 (U.S. 2015). Though such a delineation seems clear, it may be difficult, at times, to apply.
The dissent in Teva (written by Justice Thomas, and joined by Justice Alito) expressed the view that patent claim construction is more akin to statutory construction rather than interpreting deeds or contracts. As such, the dissent argued that, like statutory construction, any subsidiary evidentiary findings underlying patent claim constructions should be treated as conclusions of law, therefore subject to de novo review.
The effect of Teva?
The CAFC’s application of the Supreme Court’s decision upon remand may not be as straightforward as it seems, and this demonstrates some of the difficulties the appellate court will have moving forward. In an effort to explain the application of its holding in the case at hand, the Supreme Court gave an example of an underlying factual determination by the trial court which the CAFC should have reviewed under the clearly erroneous standard. As mentioned previously, the CAFC gave no deference to the trial court’s determination that, based on the testimony of Teva’s expert, the data in Fig. 1 of the patents did not contradict Teva’s argument that “molecular weight” referred to Mp. The Supreme Court reiterated that the CAFC “should have accepted the District Court’s finding unless it was ‘clearly erroneous’.”Teva Pharm. USA, Inc. v. Sandoz, Inc., 2015 U.S. LEXIS 628, 29 (U.S. 2015).
But, even assuming that the CAFC accepts the trial court’s determination that the data in Fig. 1 does not contradict Teva’s argument that “molecular weight” in the patent claims refers to Mp, the CAFC must still decide, de novo, the proper interpretation of “molecular weight” (if there is one).
For example, at trial, Teva’s expert (Dr. Grant) testified that, in his opinion:
- data resulting from the testing method reported in the specification of the patents (size exclusion chromatography) would lead directly to a determination of Mp. Teva Pharms. USA, Inc. v. Sandoz Inc., 810 F. Supp. 2d 578, 588 (S.D.N.Y. 2011);
- “further data manipulation and calculation [would be] needed to calculate either the weight average molecular weight or the number average molecular weight” from that same data.Id.; and
- therefore, since the specification did not describe these additional calculations, it was his opinion that “a person of ordinary skill in the art would have understood, according to Dr. Grant, that the AMW ‘referred to is a peak molecular weight’.” Id.
The trial court adopted the above views of Dr. Grant. Items 1 and 2 above are, in all likelihood, factual determinations by the trial court, to be reviewed on appeal under theclearly erroneous standard. Item 3, however, would appear to be a legal conclusion subject tode novo review on appeal. As the Supreme Court noted in Teva, though experts are permitted “to explain terms of art, and the state of the art, at any given time,” … they cannot be used to prove the proper or legal construction of any instrument of writing.” Teva Pharm. USA, Inc. v. Sandoz, Inc., 2015 U.S. LEXIS 628, 23 (U.S. 2015). Accordingly, the CAFC will have to delineate the trial court’s subsidiary factfindings from its legal conclusions.
Will the decision in Teva lead to fewer claim construction reversals by the CAFC? Only time will tell. It is clear, however, that the role of extrinsic evidence in claim construction determinations will receive heightened attention — both at the trial court and at the CAFC.