In re Papst Licensing Digital Camera Patent Litigation

Addressing for the first time the issue of claim construction since the U.S. Supreme Court’s recent decision in Teva, the U.S. Court of Appeals for the Federal Circuit applied a de novo standard of review, giving no deference to the trial court’s findings under Teva’s clear-error standard, and vacated the lower court’s summary judgment of non-infringement after finding error in the lower court’s claim construction.  In re Papst Licensing Digital Camera Patent Litigation, Case Nos. 14-1110 (Fed. Cir., Feb. 2, 2015) (Taranto, J.).

Under Teva, the Supreme Court held that the Federal Circuit may continue to review the entirety of a lower court’s claim construction ruling de novo where the lower court relied only on intrinsic evidence to construe claim terms.  On the other hand, if a lower court relied upon any extrinsic evidence, such as expert testimony, then such “subsidiary fact findings” are entitled to deference and reviewed for clear error on appeal even if those findings relate to the legal determination of claim construction.  However, the claim construction itself must still be reviewed de novo (IP Update, Vol. 18, No. 1).

In this appeal, the parties argued whether deference should be given to the district court’s claim construction in view of Teva.  Patentee Papst claimed that Teva did not apply because expert testimony was only given as part of a technology tutorial and not toward the meaning of the claims.  The defendants argued, however, that the lower court had in fact resolved numerous “subsidiary factual disputes” that arose between opposing experts over aspects of the underlying technology and that these resolutions should be given deference on appeal. 
 
The Federal Circuit agreed with Papst and concluded that no deference would be shown to any findings that were not relied upon to understand the meaning of the claims, despite the lower court allowing expert testimony to be heard from the opposing parties during the trial court’s tutorial of the underlying technology.  The Federal Circuit reasoned that such expert testimony went to understanding the background of the technology and not directly to understanding the meaning of the claims.  Further, the Federal Circuit noted the trial court’s statement that only the intrinsic record was “necessary” to determine the proper claim constructions because, as the lower court stated, it did not rely on expert testimony and that the intrinsic evidence—the claims, the specification and the prosecution history—provided the full record necessary for claims construction.

Practice Note:  While this case appears to invoke the Supreme Court’s clear-error standard under Teva, the Federal Circuit has carved out a distinction that hinges not on whether expert testimony was given during claim construction, but rather, whether such testimony was relied upon and/or “necessary” in understanding the meaning of the claims.  Interestingly, this opinion was the first of three similar opinions released within a week where the Federal Circuit maintained that a de novo review standard on issues of claim construction was appropriate.  The other two cases, however, are non-precedential but may indicate the emergence of a trend.  See FenF v. SmartThingz (Fed. Cir., Feb. 6, 2015) and Lexington Luminance v. Amazon.com (Fed. Cir., Feb. 9, 2015) (reviewing “the district court’s claim construction de novo, because the intrinsic record fully determines the proper constructions”).

Therefore, it may be advisable where favorable testimony or other extrinsic evidence sources arise to not only have such evidence formally admitted into evidence, but also relied on as evidence in formulating the district court claim construction whenever possible.