Clear Error Test Governs Review of Patent Rulings, Supreme Court Holds

The U.S. Supreme Court held 8-2 today that the Federal Circuit may no longer ignore some rulings by trial court judges on how to construe patent claims. The outcome marks a major victory for parties that win the often-decisive battles over claim construction in Markman hearings in district court.

In Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., No. 13-854, slip op. at 4 (U.S. Jan. 20, 2015), the Court held that Rule 52(a)(6) governs review of “a district court’s resolution of subsidiary factual matters made in the courtse of its construction of a patent claim.”

The case turned on the meaning of “molecular weight” in a patent on a method for making a drug, Copaxone, that doctors prescribe for multiple sclerosis. The district court heard evidence on whether “a skilled artisan” in the field would know what the term meant, found that he or she would grasp it, and rejected Sandoz’s attack on the patent as invalid for indefinitess.

On appeal, the Federal Circuit reversed, ruling de novo that “molecular weight” had no definite meaning in the patent.

Justice Breyer’s majority opinion for the Court vacated the Federal Circuit’s decision and remanded for the lower court to reconsider in light of its obligation under Rule 52(a)(6) to uphold the district court’s fact findings unless Sandoz showed “clear error”.

Although the Court’s ruling applies both to infringement plaintiffs and infringement defendants, it as a practical matter helps plaintiffs more. Parties that claim infringement often have fewer resources than defendants do and must pursue claims — if at all — on a contingent-fee basis. For firms that handle infringement claims under a contingent-fee arrangement, winning in the trial court is crucial, and holding that victory on appeal is key.

By making trial courts’ Markman determinations less subject to appellate tinkering, the Court even-handedly leveled the playing field. But infringement plaintiffs and their contingent-fee counsel are the ones smiling the most.

BARRY BARNETT GUEST BLOGGER

Barry Barnett has been a Guest Blogger in the past, his Blawgletter provides great thoughts, and insights. I read his blogs regularly. Over the years Barry and I have had a number of cases together and he is an outstanding trial partner at Susman Godfrey.