The Supreme Court vacated a patent owner’s stipulation of non-infringement and returned the case to the Federal Circuit for reconsideration.

Azure Networks, LLC and Tri-County Excelsior Foundation sued CSR PLC, Qualcomm, Marvell Semiconductor, and other defendants for alleged infringement of U.S. Patent No. 7,756,129. The patent covers personal area networks for Bluetooth networking devices.

The district court granted the defendants’ motion to dismiss for lack of standing, finding that Tri-County had effectively assigned the patent to Azure. We discussed the standing issue here.

The district court also construed the term “MAC address” in the patent. Azure stipulated to a judgement of non-infringement based on that construction.

The Federal Circuit found that the district court improperly construed the term and remanded the case.

The Writ of Certiorari

The other defendants having settled, Marvell petitioned the Supreme Court for a Writ of Certiorari. The question presented in the petition was:

Did the United States Court of Appeals for the Federal Circuit err in using a de novo standard of review instead of a “clear error” standard of review in reviewing the factual findings made by the United States District Court for the Eastern District of Texas while construing the term “MAC Address” as used in U.S. Patent No. 7,756,129?

In a summary disposition dated April 20, the US Supreme court granted Marvell’s petition, vacated the judgement, and remanded the case to the Federal Circuit for further consideration in light of the high court’s 2015 decision in Teva Pharmaceuticals USA, Inc., v. Sandoz, Inc.

In Teva, the Supreme Court held that an appellate court must apply a “clear error,” not a de novo, standard of review to a trial court’s resolution of an underlying factual dispute.

In its petition, Marvell argued that:

The Federal Circuit, in a split decision, vacated a stipulated judgment of non-infringement based on the construction of a single patent claim term… In doing so, the Federal Circuit applied a de novo standard of review despite the existence of key underlying factual disputes.

The case is CSR PLC et al. v. Azure Networks LLC et al.

Recordings of oral arguments can be heard here.

What It Means

Before Teva, the Federal Circuit was known for reversing a high percentage of claim construction decisions by trial courts. The Azure case suggests that the number of such reversals will fall significantly.

Parties may need to invest more at trial – and especially in expert witnesses – to make the best possible record, knowing that they will only have a single bite at the apple. Some analysts also see the Teva case (and Azure in its wake) as favoring patent owners and decreasing uncertainty.