Federal Circuit Decides To Retain De Novo Review Of Claim Construction

On February 21, 2014, the en banc U.S. Court of Appeals for the Federal Circuit decided not to overrule its prior decision in Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), which had established a de novo standard of review for district court decisions concerning the meaning and scope of patent claims,i.e., “claim construction.” Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., No. 2012-1014 (Fed. Cir. Feb. 21, 2014) (en banc).

Background

Prior to the Federal Circuit’s agreeing to hear the Lighting Ballast case en banc, a panel of the court had followed Cybor and applied a de novo standard of review to a claim construction issued by the U.S. District Court for the Northern District of Texas. On de novo review, the Federal Circuit panel had reversed the district court’s construction of the claim term “voltage source means,” which had then led to a holding that the claims at issue were invalid for indefiniteness. The patentee (Lighting Ballast Control LLC) then requested rehearing, stating that on deferential appellate review, the district court’s claim construction would not or should not have been reversed. The Federal Circuit agreed to rehear the case en banc to reconsider the standard of appellate review of claim construction.

The Federal Circuit’s Decision

On en banc review, the Federal Circuit ultimately ruled 6-4 in favor of keeping de novo review of claim construction and not overruling Cybor. Judge Newman authored the majority opinion, joined by Judges Lourie, Dyk, Prost, Moore, and Taranto. Judge Lourie also authored a concurring opinion. Judge O’Malley authored the four-judge dissent, joined by Chief Judge Rader and Judges Reyna and Wallach. Thirty-eight entities participated in the case as amici curiae in twenty-one briefs—a strong reflection of the case’s importance to the patent system.

In her majority opinion, Judge Newman focused heavily on the doctrine of stare decisis, i.e., the legal principle to “stand by things decided.” As the court states, “[t]he question now before this en banc court is not the same question that was before the en banc court in 1998 when Cybor was decided. The question now is not whether to adopt a de novo standard of review of claim construction, but whether to change that standard adopted fifteen years ago and applied in many hundreds of decisions.” Slip Op. at 16. With that as the starting point, the majority opinion then found that there was insufficient justification for departing from the principle ofstare decisis: “We have been offered no argument of public policy, or changed circumstances, or unworkability or intolerability, or any other justification for changing the Cybor methodology and abandoning de novo review of claim construction.” Slip Op. at 26.

The majority also found that proposals to overrule or modify Cybor to provide for deferential review of subsidiary factual questions in the claim construction context would be impractical. The court noted that “[d]isentagling arguably factual aspects, some in dispute and some not, some the subject of expert or other testimony and some not, some elaborated by documentary evidence and some not, some construed by the district court and some not, some related to issues to be decided by a jury and some not—and further disentagling factual aspects from the application of law to fact—is a task ripe for lengthy peripheral litigation.” Slip Op. at 21. “We are not persuaded that we ought to overturn the en banc Cybor decision and replace its clear de novo standard with an amorphous standard that places a new, cumbersome, and costly process at the gate, to engender threshold litigation over whether there was or was not a fact at issue.” Slip Op. at 21-22.

Judge Lourie joined the majority but also authored a concurring opinion to provide additional reasons for upholding Cybor and maintaining de novo review of claim construction. Judge Lourie argued that giving deference to district court decisions on subsidiary factual questions relating to claim construction would amount to a “partial[] retreat” from the Supreme Court’s decision in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), which had found that claim construction should be decided by the judge rather than the jury. Concurrence at 2. Judge Lourie also argued that de novo review of claim construction is important because it promotes uniformity and consistency. The judge noted that in light of the America Invents Act’s (AIA) new limits on the ability of patentees to join multiple defendants in a single lawsuit, deferential review could lead to the Federal Circuit’s confirming conflicting claim constructions based on different evidentiary records in different cases on the same patent. Judge Lourie also noted his belief that while de novo review on its face implies that the Federal Circuit gives “no deference” to district court decisions on claim construction, in reality the appellate court gives a sort of “informal deference” to the lower courts, and that therefore changing to a formal deferential standard would not have much of a practical effect.

Judge O’Malley—herself a former district court judge—issued a strongly-worded 43-page dissent joined by Chief Judge Rader and Judges Reyna and Wallach. The dissent discusses Federal Rule of Civil Procedure 52(a), which states that “[f]indings of fact … must not be set aside unless clearly erroneous.” According to the dissent, it is undeniable that construing claims sometimes requires a district court to resolve questions of fact. Thus, according to the dissent, Rule 52(a) mandates that the Federal Circuit overturn Cybor and give deference to a district court’s factual determinations made in connection with claim construction. The dissent draws a comparison to the Federal Circuit’s method of reviewing a district court’s obviousness determinations. In particular, the dissent discusses how the Federal Circuit applies Rule 52(a) in the obviousness context to give deference on subsidiary factual questions, but retains de novo review of the ultimate obviousness determination. According to the dissent, claim construction should be treated the same way and not as a purely legal issue subject to total de novo review.

The dissent also disputes the propriety of relying on stare decisis to uphold Cybor. In particular, the dissent states that “[t]he fact that we have been engaging in a flawed practice for too long does not, alone, create the type of settled expectations stare decisis is meant to protect. Because settled expectations will not be disrupted and no substantive rights will be reordered, stare decisis simply does not stand in the way of this court addressing the merits of Cybor and acknowledging that the rule of law pronounced therein is an incorrect one.” Dissent at 13-14. The dissent also draws attention to past statements by members of the majority that criticized Cybor, noting that “it appears that some members of today’s 6-4 majority believe the pull of stare decisis is so strong that it prevents them from acting on their long-term convictions that Cybor was wrongly decided.” Dissent at 2-3.

Conclusion

The Federal Circuit’s decision in Lighting Ballast maintains the status quo of de novo appellate review of all claim construction decisions issued by U.S. district courts and the U.S. International Trade Commission.

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