Supreme Court Alters Claim Construction Standard of Review

January 20, 2015

Before today’s Supreme Court decision in Teva Pharmaceuticals USA, Inc., v. Sandoz, Inc., 574 U.S. ____ (2015), the U.S. Court of Appeals for the Federal Circuit reviewed all district court claim construction rulings—and any underlying factual findings—under a de novo standard of review. Today’s Supreme Court decision held that this approach was contrary to the requirements of Federal Rule of Civil Procedure 52, which requires that all “findings of fact” be reviewed under a “clear error” standard of review. Id.

The Supreme Court explained that the Federal Circuit will “still review the district court’s ultimate construction of the claim de novo” but that any underlying factual findings can be overturned only for “clear error.” Id. The Supreme Court did recognize, however, that claim construction “ often requires the judge only to examine and to construe the document’s words without requiring the judge to resolve any underlying factual disputes.” Id. (emphasis added) (“[S]ubsidiary fact finding is unlikely to loom large in the universe of litigated claim construction.”)

The Supreme Court explained that “when the district court reviews only evidence intrinsic to the patent (the patent claims and specifications, along with the patent’s prosecution history), the judge’s determination will amount solely to a determination of law, and the Court of Appeals will review that construction de novo.” Id. “In some cases, however, the district court will need to look beyond the patent’s intrinsic evidence and to consult extrinsic evidence in order to understand, for example, the background science or the meaning of a term in the relevant art during the relevant time period.” Id.

The Supreme Court further explained, “In some instances, a factual finding will play only a small role in a judge’s ultimate legal conclusion about the meaning of the patent term.” Id. “But in some instances, a factual finding may be close to dispositive of the ultimate legal question of the proper meaning of the term in the context of the patent.” Id. (“Nonetheless, the ultimate question of construction will remain a legal question.”)

In short, the ability to overturn an unfavorable district court claim construction ruling at the Federal Circuit has now been made more difficult in cases where the claim construction ruling depends on underlying factual findings.