Court: Parties Must Justify Need for Claim Construction

IP Cleaning v. Annovi Research (W.D. Wisc. 2008)

IPC has accused Annovi of infringing its patent covering a high-pressure washer. Although only a single claim is in dispute, both parties requested that the court construe several claim terms. In a recent order, however, the court denied both motions for claim construction because neither party had “persuade[d] the court that construction of each specified term is necessary to resolve a disputed issue concerning infringement or invalidity” beyond the generic statement of resolving issues of infringement and validity. According to the court, it will only resolve claim construction disputes where the parties have a “concrete dispute” that will impact the outcome.

“The reason for the order is not to require parties to parrot its language before the court construes claim terms; it is to avoid the devoting judicial resources to the issuance of advisory opinions on the construction of claim terms about which the parties have no concrete dispute. As much as the parties may hate to show their hands at this early stage, they must do so, if they hope to seek the benefit of claim construction before filing motions for summary judgment. Because the parties have disregarded the order and failed to demonstrate the basis for requesting construction of the terms they dispute, their motions requesting claim construction will be denied.”

This decision is in tension with O2 Micro v. Beyond Innovation (Fed. Cir. 2008). In that case, the Federal Circuit found that the lower court had improperly refused to construe certain disputed terms. “When the parties raise an actual dispute regarding the proper scope of these claims, the court, not the jury, must resolve that dispute. . . . When the parties present a fundamental dispute regarding the scope of a claim term, it is the court’s duty to resolve it.” O2 Micro. The two cases may be distinguished on the ground that in IP Cleaning, the parties have not yet shown an “actual dispute regarding the proper scope” of the claims.

19 thoughts on “Court: Parties Must Justify Need for Claim Construction

  1. Previously I said, “and I agree Markman tells us that claim construction is a matter of law, although I think the Supremes tried to avoid the law/fact dichotomy, IIRC.”

    Mark and anonymous have corrected my sloppiness. The only part I remember correctly is that the Supremes DID avoid the law/fact dichotomy, and you’ve explained why. Thanks…

    To sum up, the Federal Circuit subsequently held (I think in Cybor) that claim construction is reviewed de novo. But I suppose they could have just as easily applied a clear error standard without running afoul of Markman.

  2. “The Supreme Court said nothing of the sort. … Please re-read Markman.”

    I stand (twice) corrected. And I will re-read Markman; it has been a while. Thanks, Mark and anonymous.

  3. I see anonymous beat me to it — I am glad that there are some patent practitioners who know how to read Supreme Court decisions.

  4. And I believe it was the Supreme Court that said that claim construction is a matter of law – that requires that the CAFC review de novo.

    The Supreme Court said nothing of the sort. Unless you think that all issues that a judge resolves (rather than a jury) must be reviewed de novo and treated as an issue of law, this ought to be as obvious as it comes (but sometimes patent practitioners live in their own world and know nothing of other fields of litigation). Please re-read Markman. The case held that claim construction was a judicial function, and thus a party has no 7th Amendment right to jury trial on the issue — it described claim construction as a “mongrel” practice that could not be characterized as law or fact. That something is a judicial function in no way means that it is an issue of law that needs to be reviewed de novo. Equitable issues for example are issues for the judge, but they are not reviewed de novo. So it is to say that “it follows logically from” the Supreme Court’s decision in Markman that claim construction is an issue of law to be reviewed de novo. It does not. It may be logical for other reasons, but the Supremes’ decision in Markman clearly avoided the issue.

  5. smashmouth, (1) the CAFC’s claim construction reversal rate is closer to 30% than 50%; (2) in Markman, the Supreme Court said that there’s no Seventh Amendment right to have claim construction tried to a jury; it was the CAFC that took the additional step of holding (in Cybor) that claim construction is reviewed de novo.

    On this second point, the separate opinions in Amgen 2 years ago indicated that there might soon be enough votes to overturn Cybor if the right case comes along.

    Judge Crabb’s order seems straightforward, unremarkable, and not at all in “tension” with O2. O2 doesn’t hold that courts have to construe every term the parties ask them to construe, without worrying about advisory opinions… In O2, when the district court didn’t construe all of the genuinely disputed terms, the parties argued their separate claim constructions to the jury, and the verdict may have turned on that. Here, it seems like the lawyers may just be covering their bases, and the judge has a right to ask how much of this is really necessary before diving into Markman hearings.

  6. “If they started charging 100k dollars per wasteful argument then it might not look so risky.”

    Hmmm… I think that’s about what “they” (outside counsel) do charge per wasteful argument.

  7. “Your example is interesting, but don’t you think it’s risky to admit infringement and challenge validity? Isn’t it often safer to defend on both grounds?”

    It depends on what your objective is. If your objective is to get the patent out of your hair for all time, then it is NOT “safer” to defend on both grounds.

    The “safer” option is to avoid effing up your invalidity arguments by making a silly non-infringement argument.

    I’m not advocating that non-infringement arguments should be avoided even when you have a rock solid argument. But arguing that a claim term should be read far more narrowly than its ordinary meaning is almost never going to be a rock solid argument. When a patentee comes at you asserting some overbroad piece of crap, it’s time to work some jujitsu, not respond with an equally lame counter-attack. Take them at face value: “yes, your claim *is* really broad, buddy. Wow! Look at how broad it is! That is so impressive and broad.”

    Lest anyone doubt the effectiveness of this strategy: link to cedmagazine.com

    That was in the Eastern District of Patent Peddlers.

  8. “Your example is interesting, but don’t you think it’s risky to admit infringement and challenge validity?”

    If they started charging 100k dollars per wasteful argument then it might not look so risky. MM’s point is not that it isn’t risky at present, but that people are wasting time for no reason, or dispicable reasons.

  9. smashmouth,
    I agree that it’s a problem, primarily because the litigation is so expensive in the first place, especially if you have invalidity contentions, accusations of inequitable conduct, etc. Claim construction shouldn’t require a lot of discovery, depositions, and the like, so how about a system where claim construction is pushed up front, and then allow interlocutory appeals? That would reduce the load at the district court level, and might not have a very big net impact on the CAFC’s workload, as many cases are likely to settle after the claim construction is final, and not come back for another appeal.

  10. MM

    I must be “too stoopit to understand Phillips”!!

    Your example is interesting, but don’t you think it’s risky to admit infringement and challenge validity? Isn’t it often safer to defend on both grounds? It just doesn’t seem realistic for an accused infringer to concede infringement and trust the court will get it right on validity. I’m just thinking in general civil procedural terms, really.

  11. Leopold

    “They did clarify the law of claim construction, in Phillips. And I believe it was the Supreme Court that said that claim construction is a matter of law – that requires that the CAFC review de novo. That’s what an appellate court is for, isn’t it?”

    I’m aware of Phillips, and I agree Markman tells us that claim construction is a matter of law, although I think the Supremes tried to avoid the law/fact dichotomy, IIRC. So when the Federal Circuit subsequently stated that claim construction should be reviewed de novo, it sort of made sense.

    I have two problems with this scheme, however. First, Phillips was an exceptionally opaque opinion that did little to clarify the issue. Second, as a practical matter, the very high reversal rate of district court claim constructions (IIRC. I think Prof. Lemley wrote about this) means there’s practically no finality in judgments of district courts. I don’t know the best solution, but I do think there’s a problem. (The reason I don’t suggest a solution is because the most straightforward answer would be Congressional action–but I have absolutely no faith whatsoever in Congress’s ability to do anything worthwhile).

  12. smashmouth football “I don’t think these problems will go away unless and until the Federal Circuit clarifies the law of claim construction, and also considers a more deferential standard of review for claim construction.”

    What Bloom said. Phillips is very clear. The problem is that Phillips is ignored by (1) attorneys who want to read limitations into claims and (2) district court judges and their clerks who are too stoopit to understand Phillips.

    Check out the CAFCs recent Opinion in Medegen (Sullivan analyzes it perfectly in his outline). It’s a classic set-up but the District Court blew it. The alleged infringer wants to narrow the claim which broadly recites a term (“plug”) that is modified in every instance in the spec (which recites an “elastomeric plug”). So the district court reads in “elastomeric” and finds no infringement. WRONG WRONG WRONG WRONG.

    The current result is that “plug” means “plug”, as agreed by both sides. And then the District Court SHOULD find the claim non-enabled because it reads on embodiments comprising rigid plugs, which are not enabled by the specification.

    Instead, the CAFC has to correct the District Court’s plainly WRONG claim construction and send it back down. What a waste.

    Who’s fault? Well, certainly the judge bears a large part of the blame. But it’s also the defendant in this case. Too many times defendants insist on a non-infringement argument even when the non-infringement argument is unnecessary and (worse) ridiculous and counterproductive to their invalidity argument (which is usually a lot stronger). Typically it’s not the attorneys who insist on the non-infringement argument but it’s the in-house counsel who just pooop their pants at the thought of admitting infringement. But folks, there is no infringement when the claim is invalid garbage. Try to remember that. Please try to remember that.

  13. “I don’t think these problems will go away unless and until the Federal Circuit clarifies the law of claim construction, and also considers a more deferential standard of review for claim construction.”

    They did clarify the law of claim construction, in Phillips. And I believe it was the Supreme Court that said that claim construction is a matter of law – that requires that the CAFC review de novo. That’s what an appellate court is for, isn’t it?

  14. Just from an institutional incentive standpoint, I would expect district courts to avoid the trouble of Markman hearings as much as possible, when you consider that the Federal Circuit reverses roughly half the time. That suggests late Markman hearings in the hope the case settles beforehand. Another alternative (which I oppose), favored by attorneys who defend alleged infringers (Mooney?), is to can Markman hearings altogether and simply get rid of the case on grounds of inequitable conduct. I don’t think this promotes just and equitable resolutions, but you can see the district judge’s point–why do all that work only to get slapped down gratuitously by the Federal Circuit? I don’t think these problems will go away unless and until the Federal Circuit clarifies the law of claim construction, and also considers a more deferential standard of review for claim construction.

  15. Actually, Judge Crabb has changed camps before. Initially, she was having Markman hearings in every case. Then, for a few years it was just on summary judgment. In the last few years or so, she went back to having Markman hearings for most cases, but most recently, she has decided only to have Markman hearings where the parties convince her it would be beneficial, but she still has Markman briefing early on if the parties want to do it.

    There is an opportunity to have terms construed on summary judgment sometimes as well, but be careful or raising brand new issues you could have raised before or arguing for a reconsideration of her cc decision. She may find that you should have done it in the Markman proceeding or timely moved to reconsider the unfavorable Markman if you don’t like it in advance of summary judgment, and thus that you waived it.

    Her rule that you justify the need for claims construction of a term started, I believe, a little over a year ago, so it is not that new. What exactly the standard is is somewhat hard to tell from her decisions.

    I agree that it is not inconsistent with O2, and she has distinguished that case on exactly that ground in opinions I beleive.

  16. Well, there are disputed terms by the parties, according to the court’s order. There just wasn’t any reason presented on why it was necessary for the court to construe them at this juncture. At summary judgment, the court will *have* to construe them (this would be the tension with O2 Micro), along with considering the infringement/invalidity arguments.

    The bigger tension illustrated here is the balancing act that district courts must perform with claim construction. On the one hand, construction is supposed to be independent from infringement/invalidity analysis, i.e., the court should not consider that its construction may be dispositive of those issues. This favors an early Markman hearing, and some judges are big proponents.

    On the other hand, the court shouldn’t be giving advisory opinions on terms that really won’t have an impact on the case, and which are being presented by two ships passing in the night. This favors a late Markman hearing, if any. Many judges bypass Markman and roll claim construction into summary judgment for this reason.

    “They” say Judge Crabb historically had been in the first camp (whereas her Madison colleague, Judge Shabaz, may have been more in the second camp). Her position in this case appears to be a new kind of hybrid approach. Seems reasonable.

    EM

  17. DC,

    There doesn’t appear to be any “disputed terms” for O2 Micro to apply. Apparently, the parties are not providing the court with dispute claims. As such, is there any need for a Markman order, and can the parties proceed directly to summary judgement using the un-construed language of the claim?

  18. I fail to see the tension with 02 Micro as well, and if O2 Micro means that courts must construe claim terms so long as parties say there is a “dispute” over them (but not a “dispute” that would affect the validity of the patent or infringement in the context of the case) then 02 Micro conflicts with that thing we call the Constitution and Article III prohibition against advisory opinions. And if 02 Micro stands for the proposition that courts must have claim construction proceedings separate from trial, summary judgment or anything else (which it does not stand for), then it violates the Federal Rules of Civil Procedure which do not mandate anything of the sort. The CAFC does not have jurisdiction to tell the district courts how to run their dockets (though they seem to think they do sometimes), and even they would not have the arrogance to mandate a particular type of proceeding.

  19. This may also mark a shift of sorts for Judge Crabb, if memory serves.

    But there won’t be any tension with O2 Micro if the parties press their claim construction issues during summary judgment briefing and she rules on them then. I don’t think 02 Micro says that the claims must be construed in the specific context of a Markman hearing; just that they must be construed. Crabb’s pretty clear here that the parties will get that opportunity.

    EM

Comments are closed.