- Published: 23 September 2014 23 September 2014
- Last Updated: 30 September 2015 30 September 2015
By Stephen L. Grant, Sr. Atty, Standley Law Group LLP
On Feb. 21, the Federal Circuit handed down the awaited decision in Lighting Ballast Control,1 a case scheduled for en banc rehearing to determine the ongoing viability of the Cybor2 doctrine that all patent claim constructions are entitled to de novo review upon appeal. In a split 6-4 decision,3 Cybor lives on. From reading the three opinions,4 the concurrence by Judge Lourie may have the most lasting value. But first, let’s set up the case for you.
The questions posed by the Federal Circuit for briefing were:
- Should this Court overrule Cybor?
- Should this Court afford deference to any aspect of a district court’s claim construction?
- If so, which aspects should be afforded deference?
Judge Newman, writing the majority opinion, says that the briefs submitted can be divided into three general views.
The "discard Cybor" view
Lighting Ballast requested the en banc review, in order to restore its claims, which, although upheld by the district court, were declared invalid for indefiniteness.5 Their position was that interpretation of documents is primarily factual and that the trial court’s holding must be treated with deference. To get to this point, they argue that the Supreme Court decision in Markman II,6 ruling on judge-jury issues, did not change traditional distinctions between fact and law. In other words, Markman II did not address the standard of appellate review. While the decisions of fact should be made by the judge rather than the jury, the reviewing court should give deference to those findings as facts and not as statements of law.7
Although Judge Newman cites only Lighting Ballast as supporting this position, Judge O’Malley states that both parties and the Patent Office favor this position.8 O’Malley goes a bit further to also quote Judge Newman as having stated misgiving about the holding in Cybor at the time it was announced,9 as well as quoting Judge Newman as writing that it was "time to reopen" the Cybor issue in 2006.10
As described in the majority opinion, this proposed outcome would continue to accept that the ultimate construction of a patent claim is a legal conclusion subject to de novo review, but that an ambiguity could be resolved as a question of fact subject to deferential review. This view was espoused by the United States in its brief. Some of the amici proposed a separation of facts and law based on whether the construction was based solely on intrinsic evidence from the patent and its prosecution history, or if extrinsic evidence was presented at the claim construction stage.11 In the American Bar Association brief, this approach is likened to the appellate review of the legal issue of obviousness.
The "confirm Cybor" view
In this view, which is the majority position (and which is called the "stare decisis" view by Judge Newman), the Cybor holding remains untouched.
Judge O’Malley notes that, for the entire dispute within the Circuit over Cybor, the concept of stare decisis has not been raised, until this majority opinion. After that, she moves to summarizing the various arguments proposed by amici. Some of them are worth noting here.
Construing claims, for example, is often more fact specific than construing contracts.12 Patents are much less formulaic and contain much less commonly repeated language, once one moves beyond the basic transition words,13 which are almost never a cause for dispute. At a later point, O’Malley compares claim construction to statutory interpretation, noting that "the two are simply not of the same ilk."14
Long term effects of this decision? In my view, Markman may be the most important patent decision in several decades. The patent prosecution community (to the extent they differ from the patent litigation community) may not have understood the effect of Markman at first, but Phillips, KSR and other decisions have emphasized the importance of establishing a clear prosecution record. New post grant review procedures have added to this. As patents issued before the Phillips decision (in 2005) expire, the trial courts should have a clearer prosecution record to deal with and Cybor may cease to be an issue.
Many parties are concerned that overturning Cybor would require juries to get involved in claim construction. O’Malley notes that this is a "mistake," as Markman II determined that claim construction is not an issue entitled to Seventh Amendment protection anyway.15 However, O’Malley is also not without a mistake. She says that the Supreme Court, after Markman II, decided that some mixed determinations of law and fact should be reviewed under an "abuse of discretion" standard. Unfortunately, the cited case was decided five years before Markman II and not five years after.16
Is Cybor consistent with Federal Rule 52(a)(6)? The majority argues that it is; the minority that it is not. The minority (and probably Chief Judge Rader, whose dissent in Cybor is quoted)17 believes that it is a waste of judicial assets to have to retry factual jury decisions that were based on a faulty claim construction, particularly when there is a "high reversal rate" due to "panel dependent" decisions. However, the reversal rate seems to be a relative matter. In patent cases at the Federal Circuit, the reversal rate has apparently declined, but the rate is understood to be high when compared to "other areas of federal practice." This is hardly surprising, given the complexity of the issues in claim construction. O’Malley admits that the Federal Circuit "by function and design, is ill-equipped to engage in the evidentiary evaluations relevant to claim construction that are the staple of district court judges."18 These arguments, in my view, fail to address whether it is Cybor that causes this problem, or whether it is Markman, a case beyond the reach of this court?
O’Malley finally turns to the biggest issue between the sides—uniformity or predictability of outcome. O’Malley believes that most claim construction issues are fact and case specific. The majority (and particularly Judge Lourie) would agree with case specificity, but would probably disagree on the amount of factual decisions. Case specificity, however, should not pose a major problem, since the only party who will ever assert a patent claim in litigation is the patent owner, who would be collaterally estopped by a prior construction of the same claim.19
And so, to conclude the analysis, we can turn to Judge Lourie’s concurrence. He starts with the fact that Markman consigns construction of patent claims to the judge "notwithstanding its evidentiary underpinnings." He also calls immediate attention to the fact that the patenting process, and, by inference, the meaning of the claims, is largely determined long before any infringement occurs. Judge Lourie feels that a trial court should be "reluctant to go beyond the written record" to construe claims. He finds "dueling experts" of little value in many cases, a position he clearly makes in Phillips. The inference is also quite clear that the patent owner had the opportunity to get its understanding of the claims into the record during prosecution. He says that the reversals of trial court constructions are "primarily due to our court’s review of the claims in light of the specification, not the failure to judge the credibility of contending expert witnesses."20
The Cybor standard is not the only standard used by the Federal Circuit in assessing patent claims. In Dickinson v. Zurko,21 decided a year after the Cybor en banc decision, the Supreme Court instructed the Federal Circuit that decisions of the Patent Office must be overturned only on being determined to be "arbitrary, capricious, an abuse of discretion, or unsupported by substantial evidence" as is required by the Administrative Procedures Act.22 This reversed an en banc decision that the review standard should be "clearly erroneous,"23 which is, of course, the standard being denied to a trial court decision by Cybor. However, Lourie cites to the low level of reversals of Patent Office decisions, when they are fact-based.
And, in pulling together his summary, Lourie says that the real issue on appeal in this case involves whether the record in the patent shows the corresponding structures needed to support a reading of the phrase "voltage source means" as a "means plus function." This is a legal, not factual, matter.
Long term effects of this decision? In my view, Markman may be the most important patent decision in several decades. The patent prosecution community (to the extent they differ from the patent litigation community)24 may not have understood the effect of Markman at first, but Phillips, KSR and other decisions have emphasized the importance of establishing a clear prosecution record. New post grant review procedures have added to this. As patents issued before the Phillips decision (in 2005) expire,25 the trial courts should have a clearer prosecution record to deal with and Cybor may cease to be an issue. To quote Judge Lourie, "if determining whether an issue is fact or law would determine the degree of deference granted, the parties would be arguing over that question, as in appeals in veterans cases, rather than the real merits of claim construction."26
(Editor’s Note: March 31, 2014, the U.S. Supreme Court granted a writ of certiorari in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., in which the issue is what standard of review shall apply to a district court’s claim construction ruling.)
- 1 Lighting Ballast Control LLC v Philips Electronics North America Corporation, Case 2012-1014.
- 2 Cybor Corp. v FAS Technologies, Inc., 138 F3d 1448 (Fed Cir 1998)(en banc).
- 3 Judges Chen and Hughes did not participate in consideration or decision. On Judge Newman’s majority opinion were Judges Lourie, Dyk, Prost, Moore and Taranto. The dissent of Judge O’Malley was joined by Chief Judge Rader and Judges Reyna and Wallach. A concurrence was also penned by Judge Lourie.
- 4 In the slip opinion form, Newman’s opinion runs 30 pages (after the listing of the parties is removed), Judge O’Malley’s opinion runs 43 pages and Judge Lourie contributes 8 pages.
- 5 2010 WL 4946343 (ND Tex, Dec 2, 2010); 498 Fed App’x 986 (2013), withdrawn, 500 Fed App’x 951 (2013); The court held that the term "voltage source means" was a means plus function term (35 USC 112(f)) and were not supported by corresponding structure in the specification.
- 6 517 US 370 (1996). The Federal Circuit usually refers to this case as Markman II to distinguish it from their own en banc decision, which they refer to as Markman or Markman I.
- 7 This would, of course, require a "clearly erroneous" standard, under Rule 52(a)(6).
- 8 Dissent, slip opinion at 3-4.
- 9 Id., at 7. Of course, Judge O’Malley was not at the Federal Circuit in 1998, so Judge Newman has no opportunity for riposte.
- 10 Citing Amgen Inc. v Hoechst Marion Roussel, Inc., 469 F3d 1039, in a dissent from denial of en banc rehearing. Dissent, at 8.
- 11 While not expressly cited, this position is reminiscent of the opinion of Judge Lourie in Phillips v AWH, 415 F3d 1303 (Fed Cir 2005) (en banc). As pointed out by Judge O’Malley in the dissent, at 7-8, the Cybor standard was at issue there also. There, without any other explanation, the Court "decided not to address that issue at this time." Later, O’Malley argues that the Phillips majority acknowledges that the Fed. Cir. should assess factual determinations of the trial court with deference. Dissent, slip opinion at 19.
- 12 Dissent, slip opinion at 12.
- 13 These are the terms "comprising" (this means "having at least these elements"), "consisting of" and "consisting essentially of" (these both generally mean "having only these elements").
- 14 Dissent, slip opinion at 20.
- 15 Id. at fn 4.
- 16 The case cited is Cooter & Gell v Hartmarx Corp, 496 US 384 (1990), where the issue was determinations under Rule 11 of the Federal Rules of Civil Procedure.
- 17 Dissent, at 30.
- 18 Id. at 35.
- 19 This would be a different matter if we were talking about construing the content of a patent specification, as it could be used as prior art by many different parties in arguing validity (or patentability) of patent claims.
- 20 Concurrence, slip opinion at 7-8.
- 21 527 US 150 (1999).
- 22 5 USC 706.
- 23 In re Zurko, 142 F3d 1447 (1998).
- 24 A point that Judge Lourie would appear to agree with. Concurrence, slip opinion at 4.
- 25 The patent at issue in this case is US 5,436,529 to Bobel, issued 25 July 1995. Because it relied upon an application filed on 1 February 1993, it expired on 1 February 2013, that is, twenty years from the earliest effective filing date.
- 26 Id. at 7.
Cybor lives! by Stephen L. Grant is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.