A Refined Standard for Appellate Review of Patent Claim Construction: “de novo” on Ultimate Claim Construction with “Clear Error” on Subsidiary Factfindings
John M. Wang | March 10, 2015
Teva Pharmaceuticals USA, Inc., Et Al. v. Sandoz, Inc., et al.
January 20, 2015
Justice Breyer delivered the majority opinion; Justices Thomas and Alito dissented.
The Supreme Court of the United States held that 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.
Sandoz submitted Abbreviated New Drug Applications (ANDAs) to the Food and Drug Administration (FDA) seeking approval to market generic versions of Copaxone®, a Teva’s drug used in treating multiple sclerosis. Teva sued Sandoz for infringing Teva’s nine patents related to the Copaxone® drug. The District Court held for Teva. Sandoz appealed and the Federal Circuit reversed. Teva appealed to the Supreme Court of the United States.
A representative claim 1 of the disputed patents is shown as follows:
Claim 1: Copolymer-1 having a molecular weight of about 5 to 9 kilodaltons, made by a process comprising the steps of:
reacting protected copolymer-1 . . .; and
purifying said copolymer-1, to result in copolymer-1 having a molecular weight of about 5 to 9 kilodaltons.
The main issue here is the meaning of the words “molecular weight” as recited in claim 1. Technically, the term “molecular weight” might mean any one of three different things, depending on different calculation methods: peak average molecular weight (Mp), number average molecular weight (Mn), and weight average molecular weight (Mw). Sandoz argued that since claim 1 does not specify which method of calculation should be used, the claim’s phrase “molecular weight” is indefinite and the patent is invalid.
Teva countered that the prosecution history of the disputed patents clarifies that “molecular weight” should be construed as Mp. However, as the Federal Circuit pointed out, the prosecution history of the disputed patents provides conflicting evidence. For example, in response to the indefiniteness rejection by the Examiner on one of the nine patents, Teva argued that the “molecular weight” means Mp. However, in response to the indefiniteness rejection by another Examiner on another one of the nine patents, Teva argued that the “molecular weight” means Mw.
Furthermore, Teva contended that the specification of the disputed patents resolves any ambiguity in the meaning of “molecular weight.” The specific evidence of the specification is Figure 1, as shown below:
Figure 1 shows how the weights of a sample’s molecules are distributed in three different samples. Teva argued that only Mp could be directly read from Figure 1, and Mn and Mw need further calculations. Since the specification does not disclose how to calculate, the “molecular weight” in claim 1 must mean Mp only. However, Sandoz countered that Teva could not be right because the peaks of the curves in Figure 1 do not correspond exactly to the value in the figure’s legend, 7.7 kDa. Actually, the 7.7 kDa value is closer to the Mw than to the Mp. Therefore, the “molecular weight” in claim 1 must mean something else.
In deciding whether the slight shift of the peaks in Figure 1 is normal, the District Court took the experts’ testimonies from both sides on how one of ordinary skill in the art would understand and read Figure 1. Teva’ experts testified that one of ordinary skill in the art would understand that a slight shift of the peaks occurs when data is converted from a chromatograph to molecular weight distribution curves like those in Figure 1. By contrast, Sandoz’s experts testified that no such shift would occur. The District Court adopted Teva’s experts’ opinion, but Federal Circuit reviewed de novo and reversed the District Court’s holding, including the District Court’s determination of the experts’ opinion.
In determining what standard of review the Federal Circuit should use, the Supreme Court starts with Federal Rule of Civil Procedure 52(a)(6), which sets forth that a court of appeals must not set aside a district court’s findings of fact unless they are clearly erroneous. The Supreme Court held that Rule 52(a)(6) should apply to patent claim construction, and there is no convincing ground for creating an exception here. Furthermore, the Supreme Court distinguishes the case from Markman wherein the Court held that the ultimate question of claim construction is treated as a question of law and reviewed by appellate courts de novo. Markman did not imply or argue for an exception to Rule 52(a)(6) for underlying factual dispute. To further support its position, the Supreme Court compares patent claims to the written contract or deed wherein appellate courts review the subsidiary factfindings by “clear error.”
The Supreme Court then further explains how the rule must be applied to patent claim construction. Specifically, when the district court reviews only evidence intrinsic to the patent (the patent claims, specification, and prosecution history) in claim construction, the appellate court should review that construction de novo. However, when the district court reviews extrinsic evidence in claim construction, and need to make subsidiary factual findings about the extrinsic evidence, the appellate court must review the subsidiary factual findings by the “clear error” standard, even though the ultimate construction of claims is still reviewed de novo. For example, in this case, the Federal Circuit should review the District Court’s factfindings on the experts’ testimonies about the slight shift of the peaks in Figure 1 by a clear error standard, rather than a de novo standard. However, the District Court’s conclusion that Figure 1 did not undermine Teva’s argument that “molecular weight” in claim 1 refers to Mp is a question of law and should be reviewed by the Federal Circuit de novo.
The Supreme Court then vacates the Federal Circuit’s judgment and remands the case for further proceeding because the Federal Circuit fails to use the right standard of review.
Justice Thomas’s main argument is that patent claims are more akin to a statute than a contract or deed. Therefore, just like construing statutes, construing claims does not involve subsidiary findings of fact, and should be reviewed de novo as a question of law.
A patent drafter should clearly and consistently define technical terms in the specification. In terms of litigation, the new appellate standard of review may give litigants opportunities in gaming the system by intentionally introducing or limiting the use of extrinsic evidence before the district court in an effort to dictate the level of review they will receive before the Federal Circuit.