Note:  This article is a follow-up to a recent webinar presented by Dr. Schuchardt which laid out the issues presented by both parties in the Teva v. Sandoz Supreme Court case and speculated on what the Court would decide.  The slides and a recording of that webinar are available for download here and here, respectively. 

As the smoke begins to clear in the wake of the U.S. Supreme Court’s decision in Teva v. Sandoz, you may have grown weary from sifting case summaries and analysis, desperately seeking some golden nugget of wisdom. At this point, what could possibly be new? If this is you, skip to Section C, below. And I promise there will be something new there. But if you do, you may miss seeing something glitter among the ten implications summarized in Section B.

A. Holding: (7-2 decision, opinion by Justice Breyer): The Federal Circuit, when it reviews a district court’s resolution of subsidiary factual matters made in the course of patent claim construction, must apply a “clear error” rather than a de novo standard of review.

B. Ten Implications:

  1. If the Federal Circuit concludes that it need not look beyond the intrinsic evidence (the claims, specification, and file history) to determine the meaning of claim terms, it will reverse a district court’s claim construction without a need to find “clear error.” Consequently, there may be limited practical impact of the Supreme Court decision.
  2. Some patent drafters may err on the side of providing more complete disclosures with well-defined terms to minimize the risk that claim construction by a district court will devolve to a battle of experts. A clear disclosure maximizes the chance for reversal by the patent-savvy Federal Circuit.
  3. Other patent drafters may opt for ambiguous claim language that will invite expert testimony; ultimately, a district court’s claim construction may turn on extrinsic evidence and be harder to reverse on appeal.
  4. Parties preparing to litigate will strive to avoid expert testimony on claim meaning if they have a solid case based on the intrinsic evidence; otherwise, they may want an expert to testify.
  5. Patent challengers hoping to prevail in the district court (and avoid appellate review) have incentives to create factual disputes regarding claim language.
  6. Some district court judges may entertain more expert testimony about claim meaning and base decisions on consideration of extrinsic fact finding as a way to bullet-proof their decisions. Detailed reasoning behind a particular claim construction will be included.
  7. Both sides in litigation may treat the district court as a forum of “last resort” and expend more resources on Markman hearings. A loser below can no longer bet on reversal by the Federal Circuit.
  8. Parties may settle earlier following a Markman hearing, particularly if the district court relied on extrinsic evidence to construe claims.
  9. Disputes may arise regarding whether an expert testified about subsidiary facts (suggesting that deference to the district court’s findings is appropriate) or simply provided an alternative interpretation of the claim language (suggesting that de novo review is in order).
  10. Costs saved with fewer cases being appealed to the Federal Circuit will likely be dwarfed by the increased cost of protracted trial court proceedings with increased reliance on expert testimony.

C. Rhetorical analysis

In seventh grade, Mr. Blanche warned us that proper sentences do not begin with “and” or “but”; these “conjunctions” are used to connect phrases. And he condemned such atrocities as sentence fragments. But, as I learned later in life, the best writers break the rules. And they do so with intent and regularity, often with dramatic effect.

In Teva v. Sandoz, Justice Breyer starts thirteen sentences with “And” and six with “But.”   Justice Thomas, in the dissenting opinion, counters by starting thirteen sentences with “But” and four with “And.” What makes this rhetorical device so effective for each writer?

Short sentences hit hard. And Justice Breyer’s opinion brims with short statements (see, e.g., p. 1): “Today’s case involves claim construction with ‘evidentiary underpinnings.’ . . . And, it requires us to determine what standard the Court of Appeals should use when it reviews a trial judge’s resolution of an underlying factual dispute.” He could have stated the issue in one breath. He chose not to. By breaking longer sentences into two, Justice Breyer forces us to ask whether either statement can be challenged. Regarding Markman, he writes (p. 5): “The task primarily involves the construction of legal instruments

. . . And that task is better matched to a judge’s skills.” I can almost hear him ask, “True or False?” before each assertion.

The technique also allows the opinion writer to insert case citations that support each “mini-statement” (p. 6): “But sometimes . . . those words may give rise to a factual dispute. If so, extrinsic evidence may help to ‘establish a usage of trade or locality.’ Ibid. And in that circumstance, the ‘determination of the matter of fact’ will ‘preced[e]’ the ‘function of construction.’ Ibid. . . .”

Justice Breyer also uses “But” to signal a change in direction (p. 8): “And Sandoz, like the Federal Circuit itself, argues that it is simpler for that appellate court to review the entirety of the district court’s claim construction de novo rather than to apply two separate standards . . . But even were we free to ignore the Federal Rule (which we are not), we would not find this argument convincing.”

And what about Justice Thomas, he of the thirteen “But”s?

“I agree with the Court’s conclusion that there is no special exception to Federal Rule of Civil Procedure 52(a)(6) for claim construction. But that is not the question in this case” (p. 1).

“But” helps Justice Thomas distinguish the public nature of patents when compared with contracts (p. 8): “To be sure, we have occasionally characterized a patent as a ‘carefully crafted bargain’ between the inventor and the public . . . But, as our decisions have also recognized, the patent is perhaps better characterized as a reward for feats already accomplished—that is, innovation and public disclosure—than as a mutual exchange of executory promises.”

And, Justice Thomas distinguishes obviousness law (p. 12): “The majority also analogizes to the obviousness inquiry in patent law, which involves findings of fact subject to Rule 52(a)(6) . . . But this analogy is even further off the mark because obviousness turns on historical facts about the circumstances of the invention, rather than on the construction of a written instrument.”

Justice Thomas concludes (p. 15) with a couple of well-timed “But”s: “Perhaps the majority is correct that ‘subsidiary factfinding is unlikely to loom large in the universe of litigated claim construction. But I doubt it. . . . At best, today’s holding will spawn costly . . . collateral litigation over the line between law and fact. We generally avoid any rule of judicial administration that ‘results in a substantial expenditure of scarce judicial resources on difficult questions that have no effect on the outcome’ . . . But I fear worse: that today’s decision will result in fewer claim construction decisions receiving precedential effect, thereby injecting uncertainty into the world of invention and innovation.”

And I could go on. But you get the idea.

 

– Jon Schuchardt
Check out Jon’s bio page

 

This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws.  The opinions expressed in this article are those of the author only and are not necessarily shared by Dilworth IP, its other attorneys, agents, or staff, or its clients.