In 6-4 en banc decision, Federal Circuit maintains no-deference review of District Courts’ claim constructions

Nicolas Seckel | March 11, 2014

Lighting Ballast v. Philips Electronics (en banc, Precedential)

Decided February 21, 2014

Before NEWMAN, LOURIE, O’MALLEY.  Opinion by NEWMAN, Concurrence by LOURIE, Dissent by O’MALLEY.

Summary:

In a patent dispute involving the interpretation of a “means-plus-function” term, a three-judge panel of the Federal Circuit revised the District Court’s claim construction on appeal and held the patent claim invalid for indefiniteness, in the absence of any structure in the description corresponding to the “means” recited in the claim.

The Federal Circuit granted rehearing of the panel decision by the full Court (“en banc”), for the purpose of revisiting its practice of reviewing claim construction without giving any deference to the District Court.  In a 6-4 decision, the Federal Circuit en banc maintains the plenary review (“de novo”) rule established by its 1998 decision Cybor Corp. v. FAS Technologies, Inc.

Details:

Lighting Ballast sued Philips Electronics for patent infringement.  Lighting Ballast won in the District Court and Philips Electronics appealed.  A three-judge panel of the Federal Circuit reversed the District Court’s holding of infringement and held the patent invalid for indefiniteness.

Lightning Ballast’s claim recites “voltage source means,” which the Appeals Court’s panel held to be a means-plus function term.  In the absence of corresponding structure in the specification, the claim was held invalid as indefinite under 35 U.S.C. 112, paragraphs 2 and 6.

Lightning Ballast requested rehearing by the full Appeals Court (“en banc”), arguing that the Federal Circuit should have given deference to the District Court judge’s factual determinations on which the District Court’s interpretation of the claim term was based.  This required en banc review because deference is prohibited by Federal Circuit precedent Cybor Corp. v. FAS Technologies, Inc. (1998, en banc).  The Cybor decision established the rule that claim construction receives plenary review (“de novo”) on appeal.

In its 1996 Markman decision, the Supreme Court held that claim construction belongs to the judge and not to the jury.  Even though the Supreme Court described claim construction as a “mongrel practice” of law and fact with “evidentiary underpinnings,” it qualified patents as “legal instruments” and patent claims as “purely legal,” from which the Federal Circuit deduced in Cybor that claim interpretation is a matter of law, not fact, and thus, is reviewed without deference on appeal.

In Lightning Ballast, the en banc Appeals Court explores the alternative options of giving appropriate deference to the entirety, or only a portion, of the District Court’s claim construction.  For example, the Federal Circuit could give deference to a District Court judge’s credibility and reliability findings when “extrinsic evidence” is presented, i.e., evidence other than the patent itself and the USPTO prosecution records (such as expert testimony), while maintaining full review of conclusions of law.  However, an advantage of the current rule is that it avoids complex inquiries to determine boundaries between fact and law, and it provides consistency to patent law by increasing uniformity of claim interpretation among different District Courts.

In addition, the Appeals Court is not convinced that de novo review is a source of instability by increasing reversal rates.  On the contrary, the Court considers that the Cybor rule has proved workable, and points to recent statistics showing a sharp decline in overall reversal rates (Fig. 1) and in rates of cases proceeding to trial (Fig. 2), which it interprets as a sign that current claim construction rules promote early resolution and do not unduly clog the appeals process:

Fig. 1     2014.03.11 Fig. 1 NES blog   

Fig. 2     2014.03.11 Fig. 2 NES blog

Ultimately, the Court does not find sufficient reasons to depart from the rule of following precedent (“stare decisis”), and decides to keep the Cybor rule. 

Judge Lourie writes a concurring opinion in which he comments that some level of “informal deference” is inherent in the reviewing role of an Appeals Court, and he explains his view that keeping de novo review avoids giving excessive importance to experts hired by the parties.

Judge O’Malley writes the four-judge dissent.  For the dissenters, the Cybor rule is widely criticized from all sides of the patent community.  The dissenters would not find it difficult to defer to the District Court for factual findings (such as the expert opinions on “voltage source means” in the case at issue), while fully reviewing the legal conclusion on claim interpretation.  The dissenters attribute the apparent decline in reversal rates to other factors, such as increased experience of District Court judges with patent litigation.

Takeaway:

1) Unless the Supreme Court takes on this topic, the en banc pronouncement of the Lightning Ballast decision solidifies the Federal Circuit’s Cybor rule that claim construction receives review without deference on appeal.  This may reduce “vertical” uniformity by making an appeal more attractive to the losing party, but it increases “horizontal” uniformity among District Courts by strengthening the precedential value of claim construction. 2) If you use “means-plus-function” language in the claims, always list the corresponding structures in the description!

 

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