On September 13, 2013, the Federal Circuit heard oral arguments inLighting Ballast Control LLC v. Philips Electronics North America Corp. In Lighting Ballast, the Federal Circuit considered whether it should afford deference to a district court’s claim construction decision, and, if so, what aspects of the decision should receive deference.1
Although the Supreme Court has never decided the standard of review for claim construction, the Court has stated that claim construction is a “mongrel practice.”2 That is, claim construction involves both questions of fact and law. Currently, however, the Federal Circuit reviews a district court’s claim construction de novo regardless of whether the construction involved questions of fact.3 Scholars often criticize the Federal Circuit’s without-deference review as resulting in frequent reversal of the lower court’s construction, which decreases certainty and encourages parties to take a wait-and-see approach to trial.4 Under that approach, a party can go to trial knowing that they will receive de novo review on appeal. The wait-and-see approach may discourage settlement after the lower court’s construction and increase the costs of litigation.
In Lighting Ballast, the plaintiff presented undisputed expert testimony on the meaning of a “voltage source means” in the district court.5 The district court held that the plaintiff overcame the presumption that 35 U.S.C. § 112, ¶ 6 applied based in part on the plaintiff’s experts’ testimony as to how a person of ordinary skill in the art would have understood the term.6 However, the Federal Circuit reversed the district court under a de novo standard of review and held that the claim was invalid under 35 U.S.C. § 112, ¶ 2.7 The Federal Circuit reasoned that the term “voltage source means” was a means-plus-function limitation and that the specification failed to disclose corresponding structure.8 The Federal Circuit noted that the experts’ testimony suggested that structure was implied, but that did not cure the absence of structure in the specification.9 Subsequently, the Federal Circuit granted the plaintiff’s petition for en banc rehearing.10
During oral arguments, both parties agreed that the court should maintain de novo review for the ultimate legal conclusion, but create an exception for a district court’s findings of fact.11 However, the parties disagreed as to the scope of the exception. In particular, Universal Lighting Technologies (“ULT”) argued for a narrow exception for true findings of historical fact where the district court is judging credibility.12 Lighting Ballast argued for a broader exception that would essentially provide deference to every aspect of claim construction.13The Solicitor General of the United States Patent & Trademark Office (“USPTO”) agreed with ULT’s position that the court should maintain de novo review for the ultimate legal conclusion, but review findings of historical fact using a clear error standard.14
The parties also differed on what would qualify as a factual finding as opposed to a legal conclusion. ULT argued that a factual finding is a fact that needs to be decided outside of the patent.15 ULT gave specific examples of factual findings, such as a judge picking between six different dictionaries or whether a term had a specialized meaning to a person of ordinary skill in the art at the time the patent issued.16Lighting Ballast argued that the factual finding is the interpretation of the claim itself.17 The USPTO agreed with ULT’s position that a factual finding involves extrinsic evidence showing that a term had a well-recognized meaning in the art at the time the patent issued.18However, the court appeared to have difficulty drawing a distinction between findings of fact and the ultimate legal conclusion. The court noted that ULT’s counsel was having “trouble making these distinctions,”19 while Judge Moore stated that she “just do[es not] understand the historical fact question.”20 Judge Newman wondered if district courts would have to conduct Markman-like hearings to determine whether a question is factual.21
Questioning also focused on whether providing deference to aspects of claim construction would harm uniformity. ULT acknowledged that keeping Cybor’s de novo standard of review would result in greater uniformity.22 Lighting Ballast argued that de novo review harms uniformity.23 As an example, Lighting Ballast pointed the court to a case where one Federal Circuit panel affirmed the district court’s construction, but a separate panel reversed a second district court’s construction that mirrored the first district court’s construction.24 The USPTO argued that deference raises no serious uniformity concerns because of collateral estoppel.25 The USPTO explained that once a patent is proved invalid, it cannot come back to life with a subsequent claim construction.26 However, if the claim is first ruled valid, subsequent defendants can argue that the prior construction was incorrect.27 This, the USPTO argued, is not a significant problem because the effect is “a ratcheting in of the exclusive right . . . and not a surprise expansion of that right.”28
Although it is unclear Cybor will be overruled, the court appeared to lean against Lighting Ballast’s suggestion of an entirely deferential standard of review. Additionally, the court seems troubled about distinguishing between questions of fact and questions of law, let alone the type of procedure that would be necessary to determine whether an issue is a question of fact or law. Finally, the Court seems cognizant that some deference could harm uniformity, which is the purpose for which the Federal Circuit was created. Whether the Federal Circuit decides to afford some deference to a district court’s claim construction remains to be seen. If the court does provide some deference, then parties may have added certainty as to the finality of the decision -- but certainty as to finality may come at the expense of uncertainty as to what is a question of fact in claim construction.