By Jason Rantanen
Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. (2015) Download Opinion
Breyer (author), joined by Roberts, Scalia, Kennedy, Ginsburg, Sotomayor, and Kagan; Thomas (dissenting) joined by Alito.
One (or both) of us will certainly write more on this very important opinion. The Court holds that subsidiary factual issues are reviewed for clear error while legal determinations continue to be reviewed de novo. From the Court’s syllabus:
Held: 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. Pp. 4–16.
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(c) This leaves the question of how the clear error standard should be applied when reviewing subsidiary factfinding in patent claim construction. When the district court reviews only evidence intrinsic to the patent, the judge’s determination is solely a determination of law, and the court of appeals will review that construction de novo. However, where the district court needs to consult extrinsic evidence in order to understand, for example, the background science or the meaning of a term in the relevant art during the relevant time period, and where those subsidiary facts are in dispute, courts will need to make subsidiary factual findings about the extrinsic evidence. The district judge, after deciding the factual dispute, will then interpret the patent claim in light of the facts as he has found them. The ultimate construction of the claim is a legal conclusion that the appellate court can review de novo. But to overturn the judge’s resolution of an underlying factual dispute, the appellate court must find that the judge, in respect to those factual findings, has made a clear error. Pp. 11–14.
(d) Here, for example, the District Court made a factual finding, crediting Teva’s expert’s account, and thereby rejecting Sandoz’s expert’s contrary explanation, about how a skilled artisan would understand the way in which a curve created from chromatogram data reflects molecular weights. Based on that factual finding, the District Court reached the legal conclusion that figure 1 did not undermine Teva’s argument that molecular weight referred to the first method of calculating molecular weight. When the Federal Circuit reviewed the District Court’s decision, it did not accept Teva’s expert’s explanation, and it failed to accept that explanation without finding that the District Court’s contrary determination was “clearly erroneous.” The Federal Circuit erred in failing to review this factual finding only for clear error. Teva asserts that there are two additional instances in which the Federal Circuit rejected the District Court’s factual findings without concluding that they were clearly erroneous; those matters are left for the Federal Circuit to consider on remand. Pp. 14– 16.
The Court provides a few examples of how this new standard is to be applied:
In some cases, however, the district court will need to look beyond the patent’s intrinsic evidence and to consult extrinsic evidence in order to understand, for example, the background science or the meaning of a term in the relevant art during the relevant time period. See, e.g., Seymour v. Osborne, 11 Wall. 516, 546 (1871) (a patent may be “so interspersed with technical terms and terms of art that the testimony of scientific witnesses is indispensable to a correct understanding of its meaning”). In cases where those subsidiary facts are in dispute, courts will need to make subsidiary factual findings about that extrinsic evidence. These are the “evidentiary underpinnings” of claim construction that we discussed in Mark-man, and this subsidiary factfinding must be reviewed for clear error on appeal.
For example, if a district court resolves a dispute between experts and makes a factual finding that, in general, a certain term of art had a particular meaning to a person of ordinary skill in the art at the time of the invention, the district court must then conduct a legal analysis: whether a skilled artisan would ascribe that same meaning to that term in the context of the specific patent claim under review. That is because “[e]xperts may be examined to explain terms of art, and the state of the art, at any given time,” but they cannot be used to prove “the proper or legal construction of any instrument of writing.” Winans v. New York & Erie R. Co., 21 How. 88, 100–101 (1859); see also Markman, supra, at 388 (“‘Where technical terms are used, or where the qualities of substances . . . or any similar data necessary to the comprehension of the language of the patent are unknown to the judge, the testimony of witnesses may be received upon these subjects, and any other means of information be employed. But in the actual interpretation of the patent the court proceeds upon its own responsibility, as an arbiter of the law, giving to the patent its true and final character and force’” (quoting 2 W. Robinson, Law of Patents §732, pp. 482–483 (1890); emphasis in original)).
Accordingly, the question we have answered here concerns review of the district court’s resolution of a subsidiary factual dispute that helps that court determine the proper interpretation of the written patent claim. The district judge, after deciding the factual dispute, will then interpret the patent claim in light of the facts as he has found them. This ultimate interpretation is a legal conclusion. The appellate court can still review the district court’s ultimate construction of the claim de novo. But, to overturn the judge’s resolution of an underlying factual dispute, the Court of Appeals must find that the judge, in respect to those factual findings, has made a clear error. Fed. Rule Civ. Proc. 52(a)(6).
The full discussion of the Teva example makes a similar point, finding that the Federal Circuit erred because it should have determined whether the district court’s acceptance of Teva’s expert’s explanation of figure 1 in the patent was “clearly erroneous.”
On remand, it will be interesting to find out how prosecution history estoppel will be (re)applied.
On appeal, the Federal Circuit noted conflicting statements about the common wording that were made in the prosecution history of different patents in the family. These statements were found to weight against the definiteness of the wording.
The Federal Circuit position in e.digital v. futurewei was that collateral estoppel should be applied with caution when patent claims, even claims from related patents, use the same wording. While prosecution history estoppel and collateral estoppel are not the same thing, I am not sure what justifies caution in one case and brushing the issue under the rug in the other case.
[…] Teva v. Sandoz: Deferential Review on Factual Issues; de novo review of final question of constructi… […]
It’ll be interesting to see how the decision “plays out.”
The idea that “to overturn the judge’s resolution of an underlying factual dispute, the Court of Appeals must find that the judge, in respect to those factual findings, has made a clear error” doesn’t seem terrifically controversial on its face. On the contrary, it seems that the majority is once again just telling the Federal Circuit to “do its job.”
The appellate court can still review the district court’s ultimate construction of the claim de novo.
As it should be.
I was impressed by the astute observations of Alito and Thomas in the dissent:
Like the royal prerogatives that were their historical antecedents, patents have a regulatory effect: They “restrain others from manufacturing, using or selling…”
…And because the regulatory scope of a patent is determined by the claims in the patent, the subsidiary findingsthat a court makes during claim construction contribute torules that limit conduct by the public at large. Because they are governmental dispositions and provide rules that bind the public at large, patent claims resemble statutes.
Indeed. Except these “statutes” are written almost entirely by wealthy private entities trying to grab as much for themselves as possible, enabled by an agency invariably managed by an industry representative, with little or no regard for the public who will bound by these “statutes.”
2The Anglo-American legal tradition has long distinguished between“core” private rights—including the traditional property rights represented by deeds—and other types of rights. …These other rights fall into two categories: “ ‘public rights belonging to the people at large,’ ” and “privileges” or “franchises,” “which public authorities ha[ve] created purely for reasons of public policy and which ha[ve]no counterpart in the Lockean state of nature.”…. The distinction between “core” private rights, on the one hand, and public rights and government-created privileges, on the other, has traditionally had significant implications for the way in which rights are adjudicated…. Thus, no matter how closely a franchise resembles some“core” private right, it does not follow that it must be subject to the same rules of judicial interpretation as its counterpart
Take it to the bank.
I predict that we’ll see that second one quoted in several cases down the road. It makes the “patents are just like land” arguments seem hopelessly naïve, doesn’t it?
Yes let’s just keep those quotes from the dissent coming….
C’mon, Night, it’s quite often the case that you get some important observations in a dissent, whether or not the dissent is right in that particular case.
It is even more often though DanH that the dissent is simply wrong.
Just because one can quote from a dissent gives NO impetus to the view that such a quote purports to uphold.
Just because one can quote from a dissent gives NO impetus to the view that such a quote purports to uphold.
I don’t know what that means.
But I think the quote, as a stand-alone proposition, is pretty compelling. I’m not asking you to agree.
Just because one can quote from a dissent gives NO impetus to the view that such a quote purports to uphold.
Whatever that means, I’m quite certain that nobody has argued the contrary.
Keep pounding straw.
In this case, there are four solid votes (Breyer, Sotomayor, Ginsburg, Kagan) against any proposition that regulatory takings should be compensated or considered by the court.
Of the five votes that might consider such takings constitutionally problematic, two have now declared that patents are not a form of property right at all.
That makes six (more likely nine) solid votes against any of the various suggestions that changes in 35 USC or judicial applications would ever be blocked by any existing property right in patents. Since we see those suggestions pretty often from the patent bar and around here, it’s interesting that they are now definitively put to bed.
Not sure hat version of math or logic you are using Owen, but I just don’t see how you are getting to those numbers.
That said, the instant case is a bit peculiar in that the clerk for Thomas clearly forgot to remind him of the very words of Congress (which happen to control) from 35 USC 261.
Of your othe listed “solids,” would it surprise you that Ex-President Clinton’s papers labeled three of them as judicial activitists that merited watching? And that two of the three are two of the oldest members on the bench?
On an issue of such seminal importance to patent disputes as claim construction, how much does it matter, that the Group of 7 was unable to get Thomas and Alito to sign up?
If they cannot persuade their fellow judges, why should we be persuaded?
Ought they not to have gone on talking till they could lay down a text that everybody could sign up to?
I know. It doesn’t matter because what the Group of 7 says is now “The Law”. End of story.
Or is it just the beginning? Is the Dissent a gift to the jurisprudence, in that it will facilitate and enlighten further discussion as to where the boundary falls, between fact and law?
How much does it matter?
Not at all. Thanks. You are trying way too hard to read way too much into the dissent here. A gift of jurisprudence? No.
Well, we know one thing, Max. Patent construction is like the construction of a deed rather than like the construction of a statute.
Thomas would have held patents to be public rights. The majority think differently.
Thank you Ned. I guess that’s important and valuable. I guess it is a point on which the dissenters felt strongly and so were unable to back down.
I haven’t read the judgement yet. When I do, later today, I will keep your point in mind.
Well, it looks like we will have a new collateral issue argued on appeal, whether a district court made a determination of fact when deciding a question of law. Good luck.
Number one with a bullet.
Bears repeating: I nailed it.
Congrats.
Who predicted it would go the other way?
There are at least four previous threads with hundreds of comments (with the usual ones speaking against me), but this one is probably a succulent sample: patentlyo.com/patent/2014/06/construction-evidentiary-character.html
this one is probably a succulent sample: patentlyo.com/patent/2014/06/construction-evidentiary-character.html
Hmm. Didn’t seem particularly “succulent” to me. I didn’t see anyone there taking a position contrary to the Teva outcome there.
In fact, the authors of the guest post said:
Factual determinations underlying claim construction rulings should be subject to the “clearly erroneous” standard of review, while the Federal Circuit should retain de novo review over the ultimate claim construction decision.
To which you posted the somewhat inscrutable comment:
To be colloquial, the authors are stuffing sunshine with the view that Markman II would have been appreciably different. It would not have been. The end review of a mongrel is STILL de novo …
I don’t see either where exactly you “nailed it” or where the “usual ones” took a contrary view. Can you be more specific?
Sorry DanH, but several completely straight forward answers and discussions have been censored, for no apparent objective reason – including the answer here.
You will have to just enjoy the archives.
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