Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc.

Patent – Decided: January 20, 2015

Holding: When reviewing a district court’s resolution of subsidiary factual matters made during its construction of a patent claim, the Federal Circuit must apply a “clear error,” not a de novo, standard of review.

In a 7-2 opinion, with Justices Samuel B. Alito and Clarence Thomas dissenting, the Supreme Court has – yet again – altered what many considered to be a fundamental tenet of Federal Circuit jurisprudence: that claim construction decisions were reviewed entirely de novo on appeal, with no deference to any attendant factual findings.

Previously, the Federal Circuit interpreted the Supreme Court’s Markman decision as providing the court carte blanche authority to review claim construction decisions anew on appeal, with no deference to any factual findings by the district court. This rule was embraced in two en banc decisions: Cybor Corp. v. FAS Techs, Inc., 138 F.3d 1448 (Fed. Cir. 1998) and Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 744 F.3d 1272 (Fed. Cir. 2014).

In this case, after hearing expert evidence, the district court held that the claim term “molecular weight” was not indefinite. Reviewing that determination de novo, including the district court’s findings of fact pursuant to expert testimony, the Federal Circuit reversed and held the patent invalid as indefinite.

The Supreme Court vacated and remanded the decision, explaining that the question of an appropriate standard of review was rather easily answered by Federal Rule of Civil Procedure 52(a), which “clear[ly] command[s]” that findings of fact are not to be set aside unless they are “clearly erroneous.” The Court found no room for any exception. “Markman no more creates an exception to Rule 52(a) than would a holding that judges, not juries, determine equitable claims, such as requests for injunctions. A conclusion that an issue is for the judge does not indicate that Rule 52(a) is inapplicable.”

This opinion may increase patent litigation costs prior to claim construction. Parties hoping to make favorable claim construction decisions stick on appeal may now be more likely to introduce expert testimony and other evidence outside the patent in an effort to trigger some degree of appellate deference.

Hana Financial, Inc. v. Hana Bank

Trademark – Decided: January 21, 2015

Holding: Whether two trademarks may be tacked for purposes of determining priority is a question for the jury. 

Petitioner began using the name “Hana Financial” with an associated trademark in 1995, and obtained a federal trademark registration in 1996. Respondent Hana Bank began using a mark in the United States in 1994. Over time, Hana Bank modified its mark. In 2007, Hana Financial filed a trademark infringement suit against Hana Bank. At trial, the jury found that the tacking doctrine established Hana Bank’s priority. The Ninth Circuit affirmed.

Tacking is a defense to a trademark infringement suit whereby an alleged infringer can, in limited circumstances, claim an earlier priority date for its mark when the mark is a “legal equivalent” of a predecessor mark such that the two marks “create the same, continuing commercial impression.” In a unanimous decision authored by Justice Sonia Sotomayor, the Court held trademark tacking is a mixed question of law and fact that “relies upon an ordinary consumer’s understanding of the impression that a mark conveys.” Thus, tacking “falls comfortably within the ken of a jury.”

Cases To Watch

B&B Hardware, Inc. v. Hargis Industries, Inc.

Trademark – Argued: December 2, 2014.

Issue: Whether a Trademark Trial and Appeal Board’s finding of a “likelihood of confusion” precludes the alleged infringer from arguing no likelihood of confusion in a district court trademark infringement case. 

Petitioner B&B owns the registered trademark SEALTIGHT; respondent Hargis manufactures a similar product and sought the trademark SEALTITE. B&B filed an opposition to Hargis’s trademark with the TTAB. The TTAB denied Hargis’s trademark because it was “substantially identical” to B&B’s and was “used on closely related products” such that it would cause a likelihood of confusion. In a co-pending district court trademark infringement litigation, the court declined to afford the TTAB’s decision preclusive effect.

At argument, the Court grappled with whether the TTAB proceeding is sufficiently similar to the district court litigation. Justice Ruth Bader Ginsburg asked whether the stakes were the same, commenting, “It’s one thing to say that we won’t register your mark and another to say you can’t use the mark.” The Justices probed whether a middle ground exists whereby the district court could afford the TTAB proceedings preclusive effect in some circumstances (such as when the issues litigated are identical) and not in others (such as when the issues are substantially different).

Kimble v. Marvel Enterprises, Inc.1 

Patent – Cert. Granted.

IssueWhether the Supreme Court should overrule Brulotte v. Thys Co., which held “a patentee’s use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se.”