The Supreme Court of the United States (“SCOTUS”) has unequivocally addressed the current standard of review for patent claim construction. Accordingly, the Court has held that a Federal Appellate Court can only overturn a District Court’s factual findings, if those findings were determined to be clearly erroneous. As such, this new standard transforms the de novo standard used by the Federal Circuit when reviewing patent claim construction.
SCOTUS granted a writ of certiorari on a patent dispute case between Teva Pharmaceuticals v. Mylan and Sandoz for alleged patent infringement based on the defendants’ application seeking FDA approval to produce and market generic forms of the drug Copaxone. In a 7-2 majority, SCOTUS reversed the Federal Circuit’s holding and remanded the case for further proceedings. As such the Court held that “when reviewing a district court’s resolution of subsidiary factual matters made in the course of its construction of a patent claim, the Federal Circuit must apply a clear error, not a de novo, standard of review.”
The Court reasoned its ruling by emphasizing that the Federal Rule of Civil Procedure 52(a)(6) instructs an appellate court give substantial deference to district court fact finding and to contravene the lower court’s factual determinations only if there is a clear error. Additionally, the Court proclaimed that, “a district court judge who has presided over, and listened to, the entirety of a proceeding has a comparatively greater opportunity to gain that familiarity than an appeals court judge.”
This new SCOTUS decision for standard of review in patent claim construction is significant because claim construction is a major aspect of patent litigation disputes, and as such, the Court of Appeals for the Federal Circuit (“CAFC”) has shown greater probability of reversing a significant number of claim construction decisions. Furthermore, this ruling by SCOTUS allows evidence determination that is intrinsic to the patent to be continued to be reviewed de novo, whereas evidence that is extrinsic to the patent to be now reviewed with deference on appeal. So for instance, consulting a dictionary to determine the meaning of a term in the relevant art during the relevant time period in a patent dispute case will now be entitled to deference given its extrinsic characteristic.
Nevertheless, what is considered intrinsic evidence v. what is extrinsic evidence will start a new wave of debate based on the new standard of review given the two forms of review in claim construction. Furthermore, it is important to note that legal analysis in claim construction is still required, and as such, CAFC will continue to retain de novo review in that aspect. Given all this, whether or not this new standard will decrease the rate of reversal by CAFC is to be seen.