The U.S. Supreme Court recently held that the U.S. Court of Appeals for the Federal Circuit, which has nationwide jurisdiction for patent cases, must give deference to a district court’s factual findings in claim construction decisions unless such findings are clearly erroneous. The ruling, authored by Justice Stephen Breyer, marks a significant departure from the Federal Circuit’s long-standing use of the de novo standard, which allowed the appellate court to consider the totality of the district court's claim constructions by reviewing all evidence anew. The new standard will now afford much more weight to factual considerations made by the district court during Markman rulings.

The Supreme Court’s opinion was announced just yesterday in Teva Pharmaceuticals USA, Inc., et al. v. Sandoz, Inc., et al. The Court found that when a district court only reviews evidence intrinsic to the patent (i.e., the patent itself and its prosecution history with the U.S. Patent and Trademark Office), the district court's construction amounts to a legal one, which the Federal Circuit still is to consider de novo. However, if the district court turns to extrinsic evidence to aid in claim construction—for example, conflicting expert testimony on whether a particular patent claim term has a particular meaning to a person of ordinary skill in the technical field at issue—then the district court is making a factual finding. The Federal Circuit must accept this finding unless it deems the district court's evaluation of that extrinsic evidence to be in "clear error."

Justice Breyer reasoned that the district court judge is best equipped to make such subsidiary factual determinations because he or she has presided over the presentation of evidence and therefore has a comparatively greater opportunity to determine the facts than an appeals court would by merely reviewing the record on appeal. The Court’s new standard is similar to one used with other civil matters where factual findings from evidentiary hearings and trials are reviewed on appeal under a clearly erroneous standard.

Given this new level of deference, many expect the Federal Circuit to be less apt to reverse Markman rulings. It may also prompt parties to consider whether to use extrinsic evidence in a Markman claim construction hearing as a tactical means of testing whether the resulting construction will consequently be given more or less deference. The Teva opinion certainly increases the significance of claim construction, an already important phase of patent litigation.

Ballard Spahr’s Intellectual Property Department counsels clients on patent, trademark, unfair competition, copyright, trade secret, Internet, licensing, and trade dress matters. We offer strategic due diligence guidance to companies, universities, and investors during mergers and acquisitions or portfolio restructuring. We also work with early stage growth companies and entrepreneurs in commercializing their IP assets.

If you have questions about the Supreme Court ruling, please contact  Robert R. Baron, Jr., at 215.864.8335 or baron@ballardspahr.com, or Brian W. LaCorte at 602.798.5449 or lacorteb@ballardspahr.com.


Copyright © 2015 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

Related Practices

Intellectual Property
Intellectual Property Litigation
Patents