Alert: “GROUND-BREAKING” Patent Case Breaks Little New Ground
August 01, 2005
With great anticipation, the patent bar awaited the decision by an en banc panel of the Federal Circuit in the case of Phillips v. AWH Corporation. The decision would, it was hoped, bring some order to the relative chaos that marked claim construction proceedings at both the district court level and in the Federal Circuit. Many in the bar believed the situation to be chaotic because of the high reversal rate of district court claim construction rulings by the Federal Circuit and perceived inconsistencies among various Federal Circuit panels in their approach to claim construction, both of which resulted in uncertainty among lawyers and clients as to the finality of proceedings in the district court and higher litigation costs.
After the build-up leading to the Phillips decision – which included the filing of more than 30 amicus briefs – the Federal Circuit’s en banc opinion fell short of providing the clarity practitioners had hoped for. While the majority thoroughly articulated the elements to be considered in construing patent claims and the relative significance to be given each element, they expressly declined to endorse a review standard that would have given more weight to trial court claim construction holdings and, presumably, led to fewer reversals. In a stinging dissent, Judge Mayer, joined by Judge Newman, upbraided the majority for dodging the standard-of-review issue and not attempting to ameliorate the unsettled situation caused by the Federal Circuit’s de novo approach to reviewing claim construction rulings. Phillips v. AWH Corp., 2005 WL 1620331 (Fed. Cir. July 12, 2005). The bottom line is that the Federal Circuit did very little to alter the status quo, and patent litigation will proceed much as it had before.
Background
In the beginning, there was nothing about the Phillips case that hinted it might become a seminal decision in patent law. The claim term at the center of the controversy was “baffle.” Relying in large part on the patent specification, the district court concluded that the “baffle” described in the patent extended from shell walls at an angle other than 90 degrees. Because the defendant’s product did not meet that limitation, the court granted summary judgment of noninfringement.
En Banc Ruling
An en banc panel agreed to review the decision and requested the parties to brief seven questions, most of which related to the type of evidence that can be considered in claim construction proceedings. In its opinion, the en banc majority distilled the questions on which it received briefs into a single issue: “the extent to which we should resort to and rely on a patent’s specification in seeking to ascertain the proper scope of its claims.” 2005 WL 1620331 at *4. The court then provided a detailed summary of a number of its prior decisions to support the conclusion that in construing patent claims courts should look first and foremost at the language of the patent claims themselves, the specification (which the court called “the primary basis for construing the claims”) and the patent’s prosecution history. Id. at *6-9. The goal in relying in the first instance on this so-called “intrinsic evidence” should be to ascertain “how a person of ordinary skill in the art understands a claim term,” recognizing that such a person would presumably “read the claim term . . . in the context of the entire patent.” Id. at *5.
With regard to “extrinsic evidence,” such as dictionaries and expert testimony, the majority noted that such evidence “can shed useful light on the relevant art, . . . [but] it is less significant than the intrinsic record in determining the legally operative meaning of claim language.” Id. at *10. The court also commented that though perhaps helpful to a court, extrinsic evidence “is unlikely to result in a reliable interpretation of patent claim scope unless considered in the context of the intrinsic evidence.” Id. at *11. Accordingly, the majority endorsed the use of extrinsic evidence “to help educate the court regarding the field of the invention and [to] help the court determine what a person of ordinary skill in the art would understand claim terms to mean,” but not as a primary source for construing claims. Id.
In reaching its decision, the court disapproved the holding of the three-judge panel in Texas Digital Systems, Inc. v. Telegenix, Inc., 308 F.3d 1193 (Fed. Cir. 2002) that a court construing patent claims should look first to the “plain meaning” of the terms as contained in a general use dictionary and should consult the specification and prosecution history only to determine if the patentee had intended to use particular terms in some way other than their ordinary meaning. While the Phillips court agreed with the motive for the approach taken by the court in Texas Digital – to prevent the reading of a limitation from the written description into the claims – it concluded that relying on dictionaries as the primary resource “improperly restricts the role of the specification in claim construction.” Phillips, 2005 WL 1620331 at *13.
The court then applied the rules it had discussed to the claims of the Phillips patent. In doing so, it concluded that the district court and the majority of the original three-judge panel had improperly read the specification to limit the claims to “baffles” that extend at an angle of other than 90 degrees. It then remanded the matter to the district court for further proceedings. Id. at *19.
Finally, in a short statement at the end of its opinion, the majority acknowledged that it had asked the parties to comment in their briefs on the question of whether “this court [should] accord any deference to any aspect of the trial court claim construction rulings” and, if so, “to what extent.” Nevertheless, the court decided to dodge the question, stating simply that “we have decided not to address that issue at this time.” Id. at *20.
Concurring in Part Opinion
Judge Lourie, joined by Judge Newman, wrote a short opinion which concurred with the majority’s holding regarding the procedures to be employed in claim construction. However, Judge Lourie dissented from the reversal of the trial court’s decision of noninfringement. According to Judge Lourie, by affirming the claim construction standard applied in the original Federal Circuit decision involving the Phillips patent, which was the issue the en banc panel elected to review, it was improper for the en banc majority to second guess the original majority’s conclusions. Id. at *20.
Judge Mayer’s Dissent
Perhaps the most interesting aspect of the Phillips case is the dissenting opinion of Judge Mayer, who was also joined by Judge Newman, not the least because of the colorful language employed by Judge Mayer to express his displeasure with the majority’s refusal to deal with the elephant in the room – the standard of review issue. Judge Mayer’s frustration was evident in his opening sentence: “Now more than ever I am convinced of the futility, indeed the absurdity, of this court’s persistence in adhering to the falsehood that claim construction is a matter of law devoid of any factual component.” Id. at *22. He then stated what many practitioners have reluctantly suspected: “[W]e will decide cases according to whatever mode or method results in the outcome we desire, or at least allows us a seemingly plausible way out of the case.” Id.
Judge Mayer proceeded for several pages to bemoan the Federal Circuit’s continued insistence on treating claim construction as a matter of law subject to de novo review when it is beyond serious dispute that the construction of a patent claim involves many issues of fact. Accordingly, Judge Mayer argued passionately that trial judges’ conclusions regarding claim construction should only be reversed upon a finding of clear error. Id. at *25. Saving his most biting comments for last, Judge Mayer concluded: “The court’s opinion today is akin to rearranging the deck chairs on the Titanic – the orchestra is playing as if nothing is amiss, but the ship is still heading for Davey Jones’ locker.” Id. at *26.
What Does the Future Hold?
Notwithstanding his apparent passion, Judge Mayer could only persuade one of the 11 other judges on the panel that the Federal Circuit should give greater deference to district judges with respect to claim construction and should reverse district judges’ rulings only on a finding of clear error. Therefore, it seems unlikely that a majority of Federal Circuit judges will be prepared to move to the clear error standard for claim construction in the foreseeable future. As a result, we can expect to continue to see a high rate of reversals of district court decisions construing patent claims, uncertainty as to the finality of claim construction proceedings in district courts and, consequently, increasingly costly patent litigation.
On the positive side, the court advanced a definitive statement on the role of both intrinsic evidence and extrinsic evidence in claim construction, thus presumably giving litigants and courts some guidance on the procedure for construing claims. However, in view of the potential for greater certainty that the court could have provided, many in the patent bar consider the decision something of a letdown.
For more information about this or other intellectual property-related matters, please contact Robert Sloss or any other members of the Farella Braun + Martel Intellectual Property and Technology Group.