District Court Claim Construction Factual Findings Reviewable for “Clear Error”

The claims of a U.S. Patent define the scope of the patent holder’s right to exclude.  In its 1996 Markman decision, the U.S. Supreme Court held that disputes over the meaning of claim terms are an issue of law to be decided by a judge, not by a jury.  A substantial percentage of patent verdicts are appealed to the U.S. Court of Appeals for the Federal Circuit, which has decided claim construction issues de novo, meaning that the appellate judges essentially start from scratch and reach their own claim construction conclusions without deferring to what the trial judge decided. Claim construction is incredibly important in patent cases because in many instances, the disputes between a patent holder and an accused infringer boil down to the meaning of words in the patent claims.

The types of evidence which district courts consider in deciding claim construction disputes are grouped into two categories: intrinsic evidence and extrinsic evidence.  Intrinsic evidence includes the patent itself and the record of the patent’s prosecution history in the U.S. Patent and Trademark Office.  Extrinsic evidence includes any evidence outside of the extrinsic evidence, such as dictionaries, learned treatises, and expert testimony.  

It is a fundamental principle of U.S. patent law that the intrinsic evidence trumps or takes precedence over the extrinsic evidence.  For example, a trial court is not free to define a claim term based on an expert’s opinion if that opinion contradicts the meaning of the term as evidenced by the patent and the prosecution history.

That being said, there has been an unanswered question as to whether a trial court’s findings of fact concerning extrinsic evidence are entitled to any deference or are simply subject to de novo review by the Federal Circuit.  The Supreme Court answered that question last week in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., __ U.S. ___ (Case No. 13-854, January 20, 2015).  For a copy of the slip opinion, click here.

In Teva the Supreme Court held that a district court’s findings of fact as to subsidiary factual issues about the extrinsic evidence must be reviewed for “clear error,” meaning that the Federal Circuit is not free to substitute its own findings as to those facts.  Instead, the appellate judges must determine if the trial court was clearly erroneous in arriving at its findings.  

The patent at issue in Teva had claims that recited the molecular weight of a polymer.  A polymer is typically a mixture of molecules that have the same repeating units of certain atoms or groups of atoms.  The individual molecules may differ in length, and thus, have different molecular weights.  As a result, scientists have developed different techniques for determining the molecular weights of polymers. Sandoz, the defendant in Teva, argued that a person of ordinary skill in the art could not tell which of three techniques should be applied when determining if an accused composition infringed Teva’s claims, and therefore, that the claims were invalid for indefiniteness.

The district court held that a person of ordinary skill would have known which of the three molecular weight calculation techniques should be used, and therefore, that Teva’s claims were valid.  In arriving at its determination, the district court considered conflicting expert opinions submitted by the parties as to how a person of ordinary skill in the art would have interpreted a figure in Teva’s patent.  The district court agreed with Teva’s expert and disagreed with Sandoz’s expert. 

The Federal Circuit gave no deference to the district court’s decision as to which expert to believe, and arrived at the opposite conclusion.  As a result, the Federal Circuit held that Teva’s claims were invalid for indefiniteness. 

The Supreme Court vacated the Federal Circuit’s decision, holding that the Federal Circuit should have accepted the trial court’s findings as to the competing expert opinions unless they were clearly erroneous. The case was remanded back to the Federal Circuit so it could reconsider its decision applying the “clearly erroneous” standard. 

The Supreme Court relied primarily on Rule 52(a)(6) of the Federal Rules of Civil Procedure which provides that findings of fact must be reviewed for clear error and further held that a trial court’s decisions concerning conflicting extrinsic evidence constitute “findings of fact.”  In a dissent, Justices Alito and Thomas disagreed with this latter conclusion.  In particular, they opined that it is impractical to attempt to distinguish findings of fact and conclusions of law in claim construction proceedings, and therefore, that the entire claim construction process should be treated as a legal determination, with no deference given to the district court’s decision. 

It is difficult to say how much impact Teva will have on patent cases.  In our experience, many district judges refuse to receive and consider extrinsic evidence, unless it is clear that it must be considered to resolve an ambiguity in patent claims (as was the situation inTeva).  Parties often provide dictionary definitions to support their claim constructions, and such definitions are considered extrinsic evidence.  However, even if those definitions drive or at least color the district court’s claim construction determination, specific findings of fact are usually not provided as to whether one or the other of the dictionary definitions should be credited.  We would expect that–whenever possible–district judges will continue to write opinions that demonstrate exclusive reliance on the intrinsic evidence so that the issue decided in Teva does not even arise.  However, in situations where patent claims are susceptible to multiple interpretations which cannot clearly be resolved by the intrinsic evidence, Teva may be important, and it may be especially important in cases where the defendant asserts that the claims are invalid for indefiniteness.