Federal Circuit Hears Arguments En Banc On De Novo Review of Claim Construction

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By Tamlin H. Bason  

Sept. 13 --The lack of deference given to federal district court claim construction in patent cases was debated at a Sept. 13 oral argument held by the U.S. Court of Appeals for the Federal Circuit sitting en banc (Lighting Ballast Control LLC v. Philips Elecs. North Am. Corp., Fed. Cir., No. 12-1014, oral argument 9/13/13).

There was little support among the attorneys who argued the case for continued strict adherence to a 1998 decision that has resulted in all district court claim construction rulings being subjected to de novo appellate review. And indeed a number of the judges seemed to be searching for a way to modify the court's jurisprudence so that certain lower court claim construction could be subject to only clearly erroneous review.

There was no apparent consensus, however, with respect to how to create a clean distinction that subjects some factual claim construction rulings to the clearly erroneous standard of review while leaving in place de novo review for the ultimate question of whether a claim is valid.

No Deference, No Consistency

Deference to district court judgments effectively ended with Cybor Corp. v. FAS Techs. Inc., 138 F.3d 1448, 46 U.S.P.Q.2d 1169 (Fed. Cir. 1998) (en banc), which interpreted the Supreme Court's decision in Markman v. Westview Instruments, Inc., 116 S.Ct. 1384, 38 U.S.P.Q.2d 1461 (1996).

In Markman, the Supreme Court noted that giving the Federal Circuit domain over all claim construction issues would result in uniformity. “It was just for the sake of such desirable uniformity that Congress created the Court of Appeals for the Federal Circuit as an exclusive appellate courts for patent cases,” Markmansaid.

The Cybor court said that Markman “fully supports our conclusion that claim construction, as a purely legal issue, is subject to de novo review on appeal.”

Chief Judge Randall R. Rader and Judges Kimberly A. Moore and Kathleen M. O'Malley have expressly called on their colleagues to reconsider their de novo review of lower court claim construction judgments. In general, they have argued either that questions of fact underlying claim construction are best decided by the district court, or, from a policy perspective, that the appeals court's reversal rate results in litigation inefficiencies and precludes parties' reliance on district court outcomes.

Deference would not offer definitive answers on interpreting claims. It would, however, give more weight to trial judges' assessment of expert witnesses' and inventors' testimony, replacing arguably ambiguous legal standards for claim term interpretation in light of the patent specification.

In the last 12 months alone, the appeals court issued six precedential decisions that split on that question, including just three weeks earlier. SkinMedica, Inc. v. Histogen, Inc., No. 2012-1560 (Fed. Cir. Aug. 23, 2013). In a decision in April, there was a split on each of two contested claim terms, but the two-judge majority had different members in each. Saffran v. Johnson & Johnson, 712 F.3d 549, 2013 BL 92083, 106 U.S.P.Q.2d 1274 (Fed. Cir. 2013).

Prior attempts to bring the issue to the en banc court have failed, such as in Retractable Techs. Inc. v. Becton, Dickinson & Co., 659 F.3d 1369, 2011 BL 279175, 100 U.S.P.Q.2d 1714 (Fed. Cir. 2011).

In her dissent to the denial of en banc review, O'Malley said, “Five active judges of this court have already expressed a desire to revisit Cybor.” But at the time, the court needed six votes. That changed when the petition in the instant case came up for vote.

In Instant Case, Panel Overturned District Court

Lighting Ballast holds a patent (U.S. Patent No. 5,436,529) relating to control and protection circuits for electronic lighting ballasts commonly used in fluorescent lighting. It brought a patent infringement claim against Universal Lighting Technologies Inc. in the U.S. District Court for the Northern District of Texas.

In a nonprecedential decision, the Federal Circuit panel was unanimous in reversing the lower court's judgment that “voltage source means” did not implicate means-plus-function analysis under 35 U.S.C. §112, para. 6. Lighting Ballast Control LLC v. Philips Elecs. North Am. Corp., 498 Fed. App'x 986, 2013 BL 129 (Fed. Cir. 2013).

Treating the term as functional, the court concluded that the specification lacked corresponding structure and thus, the asserted claims were invalid for indefiniteness. Lighting Ballast then petitioned for rehearing en banc.

The court's decision to grant the petition on March 15 took advantage of the fact that only nine judges were eligible to vote. At that time, Judges Richard G. Taranto and Raymond T. Chen were not yet members of the current 11-active-judge court. Thus, five votes were sufficient to force this en banc review. Taranto sat with the en banc court for the Sept. 13 argument; Chen, however, did not, meaning that a 5-5 deadlock is conceivable.

Three Questions Presented

The court's order vacated the panel opinion and asked the parties to file new briefs addressing three issues:

(a) Should this court overrule Cybor?

(b) Should this court afford deference to any aspect of a district court's claim construction?

(c) If so, which aspects should be afforded deference?


Briefing by friends of the court was heavy, with 21 briefs filed, including one by former Chief Judge Paul R. Michel. “This Court followed Markman in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), and that decision should not be completely overruled,” he said, summarizing the position of the court until recently. “However, this Court should afford deference to findings of fact by a judge hearing live testimony relevant to claim construction review for clear error as to that finding of fact. Other aspects of claim construction should continue to be subject to de novo review.”

Of the Federal Circuit judges at the time Cybor was decided, though, only Rader and Judges Pauline Newman and Alan D. Lourie are still active members, and even at that, Rader dissented and Newman filed “additional views” that indicated dissent.

Notably, the U.S. government filed a brief, as did the Patent and Trademark Office. The government opposed Supreme Court review of Rectractable, and the high court denied a petition for writ of certiorari in that case.

The PTO had raised concerns about deference in that earlier response to the Supreme Court's call for the government's views, however, and it echoed those concerns again here:

In most cases, a district court may determine the proper construction of a disputed claim term without venturing beyond the four corners of the patent, informed as necessary by the patent's prosecution history. In such cases, no reason justifies modifying or departing from the Cybor rule that claim construction is subject to de novo review on appeal.  


In a subset of cases, however, the ultimate legal issue of a patent claim's construction may depend in part on the resolution of subsidiary questions of fact. Factual controversies will typically focus on evidence, such as expert testimony or documentary materials, that bears on the meaning of claim terms to a skilled artisan at the time of the invention. Parties may dispute, for example, the prevailing meaning of a specialized term of art in a particular industry at a particular time. As the Supreme Court has recognized in the context of obviousness, resolving such a question is a “basic factual inquir[y].” Graham v. John Deere Co., 383 U.S. 1, 17[, 148 U.S.P.Q. 459] (1966). And the same question is no less factual in nature when it relates to the meaning of a disputed claim term rather than the validity of the claim.  

Does CyborConflict With Rule 52(a)?

The notion that Cybor should be modified to allow for plain error review of determinations of certain factual controversies was taken up during oral argument both by Nathan K. Kelley, deputy solicitor at the PTO, Alexandria, Va., and by Universal Lighting's attorney, Steven J. Routh of Orrick, Herrington & Sutcliffe LLP, Washington, D.C.

Routh, whose party benefited from the panel's de novo review, said a slight adjustment to Cybor may be required in order to conform with Fed. R. Civ. P. 52(a), which requires that questions of fact be reviewed only for clear error. Accordingly, when a district court construes a claim based on extrinsic evidence then that specific determination should be subject only to plain error review, Routh said. However, a determination on the ultimate question of whether a claim is invalid should still be subject to de novo review, Routh said.

During an early exchange, Routh was asked by Judge Lourie what effect changing the standard of review for a district court determination on what Routh referred to as a “historic fact” would have on uniformity. For instance, Lourie said, what if two separate district courts construe the same claim differently and both determinations are then only subject to plain error review. He asked, “Where is the uniformity in that?”

“I think that Cybor in a positive way meets the goals of uniformity,” Routh said. “But it does so at the expense of consistency with other federal court proceedings where Rule 52 governs.” In instances where there is a finding of fact based on the extrinsic record, then those findings should only be reviewed for plain error, Routh said.

Kelley, during his allotted time, responded to Lourie's concerns by noting that collateral estoppel for the most part would guard against the likelihood of the Federal Circuit facing dueling district court constructions of the same patent claim. For instance, collateral estoppel will prevent a patentee from reviving a claim in one action if the claim has already been struck down by a different court, Kelley said,

'Aren't We Playing Games?'

Lourie, Moore and O'Malley all pressed Routh to articulate precisely when a district court's claim construction would and would not be subject to de novo review.

“If the ultimate question before this court is one of law, isn't it a sham for us to give deference on this so called 'underlying fact question'?” Lourie asked. “Aren't we playing games?”

Routh said “a narrowly cabined exception” would avoid many of Lourie's concerns. The norm of de novo review for a district court's claim construction, Routh said, should only be disturbed when the determination is based on a historical fact that the district court ascertained by referencing extrinsic material outside of the patent documents.

Moore asked Routh if the ultimate question of what one skilled in the art thought the term meant when the patent issued was a question of material fact. Routh said it was not, and moreover he said that most of the time what people skilled in the art thought a word meant is not in dispute.

“Really?” Moore said. “Because in seven years on the bench, that seems to be all you all dispute about.”

When Would Clear Error Standard Apply?

O'Malley asked Routh to clarify his distinction between the ultimate question, which he said was subject to de novo review, and what one skilled in the art understood a term to mean, which he said could be subject to plain error review in some circumstances. If extrinsic evidence, such as an expert's testimony, is used to determine that a term had a specialized meaning at the time the patent was issued, then how should the Federal Circuit review the lower court's decision, O'Malley asked.

“You defer to the factual finding that there was a specialized meaning,” Routh said. “But you then review whether the finding that comes with that specialized meaning in fact results in the proper interpretation.”

Kelley, who advocated for a “very small change to Cybor,“ put it another way. “Logically, there are findings of fact in claim construction” he said. “When those occur, you should not overturn them unless they are clearly erroneous.”

Claim Construction a Mixture of Law and Fact

Andrew J. Dhuey of Berkeley, Calif., arguing on behalf of Lighting Ballast, advocated for the court to explicitly overrule Cybor.

Specifically, Dhuey asked the court to recognize that all claim constructions are necessarily a mixture of questions of law and fact. When a district court makes a ruling depending on a mixture of questions of law and fact, the exercise of appellate deference, Dhuey argued, depends upon the two factors articulated by the Supreme Court in Salve Regina College v. Russell, 499 U.S. 225 (1991). Under Salve, deference is given so long as the district court was in a better position to decide the issue than the appellate court, and additional appellate scrutiny will not clarify a legal doctrine.


'Thin Deference' and Parole Evidence

Dhuey at one point compared claim construction to a court's interpretation of contract provisions. Under such an analogy, only the claims in the patent itself are akin to what appears on the four corners of the contract, Dhuey said. “Everything else is like parole evidence.”

Lourie rejected the comparison “That is an extraordinary comment that what is in the written description is analogous to parole evidence,” he said.

James D. Crowne, AIPLA's director of legal affairs, told Bloomberg BNA that Dhuey may have “overreached” when he compared a specification to parole evidence. In any event, “I think that the attempt to reconcile this process with statutory interpretation and contract interpretation is not productive,” Crowne said.

Judge Jimmie V. Reyna was concerned that Dhuey was advocating for the court to overrule not only Cybor, but also to overturn Phillips v. AWH Corp., 415 F.3d 1303, 75 U.S.P.Q.2d 1321 (Fed. Cir. 2005) (en banc). In that case, which also involved claim construction, the Federal Circuit established the hierarchy of what order materials should be considered in claim construction. Specifically, the court said that a patent's claim language, written description and prosecution history should serve as the primary sources of claim interpretation.

Dhuey, however, said that the hierarchy established in Phillips would remain good law, but the Federal Circuit could then choose the level of deference to accord to the district court's various determinations. Some determinations, Dhuey said, may be entitled only to “thin deference.”

Reyna, Lourie and O'Malley probed Dhuey to expand on his concept of thin deference. Under Bose Corp. v. Consumers Union of United States, 466 U.S. 485, (1984), the presumption of correctness can depend on a number of factors, Dhuey said.

Can Clear Line Be Drawn?

Paul V. Rivard of Banner & Witcoff, Washington, D.C., authored an amicus brief for the ABA, which supports narrowing Cybor so that underlying factual issues related to a claim construction are subject only to clear error review.

Rivard told Bloomberg BNA that many of the judges at first seemed skeptical that a narrow exception to Cybor could be carved out. “But that point got refined throughout the argument,” he said.

But though the point was refined, Rivard said that the entire tone of the argument gave him cause for concern.

“I am hopeful that we will get some clarity, but I am a little skeptical after sitting through the arguments today that the underlying holding of Cybor will be overruled,” Rivard said.

Crowne was more optimistic.

“There seems to be some consensus on the Federal Circuit that there should be some measure of deference to the fact finders,” Crowne said. “To the extent that they need to make that decision, and if that is far as they go in overturning Cybor, then I would expect a reasonable majority on that proposition,” Crowne said.

However, such a narrow holding “is not enough to spell out a rule of practice, and they need to drill down further to identify what kinds of materials they will defer to and what kind of material they will not,” he said.

Based on the argument, Crowne said it is apparent that “the court is struggling over where that line is between” what decisions it will review de novo, and what aspect's of a district court's decision it will defer to.

Lighting Ballast is also represented by Jonathan T. Suder of Friedman, Suder & Cooke, Fort Worth, Texas.


To contact the reporter on this story: Tamlin Bason in Washington at tbason@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com

Petition for en banc review is available at http://www.bloomberglaw.com/public/document/Lighting_Ballast_Control_LLC_v_Philips_Electronics_North_Amer_Doc/1.

Response is available at http://www.bloomberglaw.com/public/document/Lighting_Ballast_Control_LLC_v_Philips_Electronics_North_Amer_Doc.

Oral argument is available by searching for case number 2012-1014 at http://www.cafc.uscourts.gov/oral-argument-recordings/search/audio.html.

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