Appellate Review of Patent Claim Construction: The Reality and Wisdom of a “Mongrel” Standard

Guest Post by Professors J. Jonas Anderson (American University) and Peter S. Menell (Berkeley)

Patent scope plays a central role in the operation of the patent system, making patent claim construction a critical aspect of nearly every patent litigation.  With the resurgence of patent jury trials in the 1980s, the allocation of responsibility for interpreting patent claims between trial judge and jury emerged as a salient issue.  While the Supreme Court’s Markman decision usefully removed claim construction from the black box of jury deliberations notwithstanding its "mongrel" (mixed fact/law) character, the Federal Circuit’s adherence to the view that claim construction is a pure question of law subject to de novo appellate review produced an unusually high reversal rate. The high rate of reversal distorted the evidentiary foundation of claim construction determinations, delayed settlement of patent cases, ran up litigation costs, and turned appellate review of nearly every patent case into re-litigation of patent claim terms.

In 2004, the Federal Circuit undertook to reassess this regime in the Phillips case.  On its face, the majority en banc opinion largely stayed the course.  Indeed, the studies to have emerged since Phillips suggest that not much has changed, finding that the reversal rate remained high and that the Federal Circuit’s analytical framework remained largely unchanged.

Our recent article reports the results of a longer term, comprehensive, empirical analysis of the Federal Circuit’s claim construction jurisprudence from 2000 through 2011.  See “From de novo Review to Informal Deference: An Historical, Empirical, and Normative Analysis of the Standard of Appellate Review for Patent Claim Construction,” available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2150360.  In contrast to prior analyses, we find that the claim construction reversal rate has dropped precipitously since the Phillips decision.

 

Pre-Phillips

Post-Phillips

Percentage of terms reversed

37.6%

23.8%

Percentage of cases with at least one reversed claim term

40.7%

29.9%

Percentage of cases resulting in remand, reversal, or vacation due to claim construction error

35%

24.1%

The following figure shows the term-by-term reversal rate as a rolling average over 100 terms.  The blue line indicates the date that the Federal Circuit granted en banc review in Phillips.  The green line indicates the date of the oral argument.  The red line indicates the date that the decision issued.

Reversal Rate

As our article explains, although a majority of the Federal Circuit declined to overturn the de novo standard, just about all members of the Federal Circuit apparently concluded at or around the time of the Phillips argument that they should lighten up on their scrutiny of district court decisions.  The immediate drop in reversals that occurs following the Phillips argument suggests that the change in reversal rates cannot simply be explained by district courts having changed their practices in response to the Phillips decision.  If the real benefit of Phillips was the opinion’s value in instructing district court judges, we would expect to see a delayed and gradual drop in reversals followed by a later increase as litigants began selecting only the strongest cases for appeal.  Instead, we see an immediate and sustained drop in reversals.

As the following chart indicates, affirmance rates for all members of the Federal Circuit rose after Phillips.

Affirmance Votes

In addition, use of summary affirmances increased significantly following the Phillips decision and has remained higher than the pre-Phillips period.

SJ

Reversal rates have fallen across all technology fields except business methods. 

Technology Fields

During 2011, the average reversal rate dipped to 17%.  In the two years prior to Phillips, the rate was in the mid-40s.

This does not mean, however, that the problems of de novo review have been adequately resolved.  So long as the Federal Circuit subscribes to the view that claim construction is a question of law subject to de novo review, district courts will downplay their resort to experts and fact-finding in managing claim construction in an effort to avoid reversal.  This will undermine the quality of adjudication and appellate review by failing to elicit relevant evidence and perpetuating opaque analysis and reasoning.  We propose a “mongrel” standard of appellate review of claim construction decisions that better reflects the comparative strengths of trial judges in determining how skilled artisans understand patent claim terms. 

The proper standard integrates fact-finding based on experts who can illuminate the perspective of skilled artisans and claim draftpersons with careful review of the intrinsic record.  Lower courts’ assessments of such evidence should be upheld if not clearly erroneous or clearly contradicted by the specification or prosecution history.  The Federal Circuit would review the intrinsic record on a more independent basis, but with due regard for the district court’s deliberations, proximity to the full record, and integration of the skilled artisan perspective.  Were the Federal Circuit to embrace such a standard, lower courts would openly exercise their discretion to receive such evidence and build a forthright record supporting their interpretation.  Such a “mongrel” appellate standard would foster better development of the basis for claim construction analysis while promoting earlier settlement of patent litigation and lower litigation cost.  Where the disputed claim term is particularly susceptible to skilled artisan construction, the district court’s ruling would carry great weight.  But where the term is set forth or substantially constrained by the specification or prosecution history, then the intrinsic record would control.  But even in the latter circumstance, we believe that the Federal Circuit should apply a heightened standard – a showing by the appellant of unambiguous evidence in the intrinsic record supporting an alternative construction – so as to promote settlement and reduce litigation costs and uncertainty.

Recognizing this more limited role for appellate review of claim construction should not be viewed as abandoning the effort to improve the clarity of patent claims.  That remains a critical component of improving the efficacy of the patent system.  What our analysis shows is that achieving that goal through de novo review of patent claim construction misapprehends comparative institutional analysis at a heavy cost.  Claim clarity can and should be handled through the claim indefiniteness doctrine and through greater efforts by the Patent Office to ensure that patent claims are clear at the front end of patent protection.

The Supreme Court is currently considering whether to grant a writ of certiorari in a case presenting the standard of appellate review for claim construction decisions in Retractable Technologies, Inc. v. Becton, Dickinson and Co.  We believe that the time is ripe to formalize a “mongrel” standard.

16 thoughts on “Appellate Review of Patent Claim Construction: The Reality and Wisdom of a “Mongrel” Standard

  1. Haec Verba.

    Nice term.

    Still if a term is not used in the specification in connection with a description of the embodiments, it is subject to any constrution the examiner can support and is not rebuttable by demonstrating an inconsistent usage in the specification. See, e.g., In re Morris.

    Cf.:

    IN RE ABBOTT DIABETES CARE INC.
    link to cafc.uscourts.gov

    The Federal Circuit overturned a PTO claim construction (in a reexamination) because it was inconsistent with the specification. In construing whether a claimed electrochemical sensor could include wires connecting the sensor to a control unit, the patent office had concluded that it was required to do so under “broadest is one interpretation” because the patent specification had not disclaimed that scope. The Federal Circuit reversed on the grounds that the specification had heavily criticized the prior art sensors that used wires, and it was the whole point of the invention to eliminate wires from the sensor. Thus one reading the specification would conclude that the claimed electrochemical sensor did not include wires connecting it to its control unit.

  2. Ned:
    The claims as originally filed are part of the Specification. Further, see In re Wright, holding that claim terms need not be supported in haec verba in the Specification.
    The problem is not that the claims may not be understandable by one of ordinary skill in the art. They may well be, but in an infringement situation, counsel for the patentee may want to stretch them to cover something not thought of at the time of filing and not described or suggested in the Specification.
    Of course, EP (and many other countries) have that in hand by limiting claims to no more than the Examples of the Specification.
    If, in litigation, the patentee says that the “plain meaning” of the claim language governs, Markman Hearing may be obviated, and MSJ may be appropriate.

  3. 6, one of the most troubling things about claim construction is when a claim term itself is not used in the specification to describe embodiments.

    One way I’ve seen examiners use to fix this problem is give such terms absurd constructions that force and explanation or an amendment.

  4. Your first proposal is not a bad idea. Your second proposal is supposed to already be in practice, but I haven’t seen very many good 112 rejections. Far too many silly (and wrong) antecedent basis rejections.

    I welcome good 112 rejections, or any claim term interpretation comments at all that alert me to the fact that my claims don’t say exactly what I thought they did. And leave Miyazaki out of it – you don’t need to out-lawyer the lawyers. Just apply the law as it actually is: “The test for definiteness under 35 U.S.C. § 112, second paragraph, is whether those skilled in the art would understand what is claimed when the claim is read in light of the specification.” Give me a credible reason why a half-way reasonable person would interpret the claim in a way that I didn’t intend and I’ll amend it.

  5. It may have to be in our system as it is setup today, but in a perfect world, we’d have a crack team of lawlyers for each art that sit around and do nothing but look over claims slated for issue and make sure that they are reasonably not going to be subject to big ol’ claim construction nonsense. And we’d have a statute (or rule?) to back up what they have to say. If they find the claim lacking not in substance but in constructability form shall we say, then they send it back to the applicant for amendment not necessarily in terms of substance, but in terms of form to make the construction clear.

    Or yes, you could just teach examiners to check for this and have them do it. Which is probably a more reasonable approach. Indeed, Miyazaki is already helping with this, but it is but a mere half-measure.

  6. Perhaps mainly because the average district judge is likely to have high expertise in the latter and not so much in the former.

  7. Leo, 6, as well as it appears, Lemley, is really complaining about functionally claiming the invention, i.e., writing generic claims small disclosures.

    With today’s functional claiming, claims are not in any sense of the term particularly pointing out and distinctly claiming the invention as commanded by law since 1836. It is odd that we find ourselves in this position after the Supreme Court itself condemned the practice in any number of cases prior to ’52.

    We are in this position because of one man. Name him.

  8. That is to say, the only way to genuinely increase the predictability of claim construction is to take some of the responsibility and power out of the hands of those drafting the claims now (i.e. the applicant) and put some of that power into the hands of someone who has more of a stake in the claims being precise, legible, and easy to understand.

    And who is that, the examiner?

  9. “My hope for claim construction is that it become more definite and predictable”

    Said everyone everywhere involved in construing claims for the last 70 years.

    Imo, the only way to do that is to give the PTO expanded powers to demand preciseness in what is being discussed in the claims. That is because leaving it up to people after the claims are already written “in stone” to determine something which is all too often inherently ambiguous and expecting better outcomes is just insanity. I mean that it is insanity by definition, it is doing the same thing we’ve been doing and expecting different results.

    That is to say, the only way to genuinely increase the predictability of claim construction is to take some of the responsibility and power out of the hands of those drafting the claims now (i.e. the applicant) and put some of that power into the hands of someone who has more of a stake in the claims being precise, legible, and easy to understand.

    I note finally that it appears that what this work uncovered is that the judges all sat around after they got done with Phillips and decided that they should all make an effort to stop being an arse about claim construction and to abide by the decision’s outcome then before them, they all said “aye” and we have the result shown in the graphic. Either this literally happened, or it happened figuratively, during Phillips.

  10. The paper suggests the former. On the latter, I believe that there is more that the PTO can and should do to improve claim clarity. That is another project that I am pursuing.

  11. Thank you for this interesting work.

    My hope for claim construction is that it become more definite and predictable — even before litigation. Your work here shows that the claim construction on appeal is now more predictable once the district court makes its final determination. Can we tease out whether the change is due to deference or whether it is due to some improvement in claim construction analysis that makes the process more predictable (or something other cause)?

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