ALM Properties, Inc.
Page printed from: The Recorder
Select 'Print' in your browser menu to print this document.
Scholar Joins Scrum on Claims Construction StandardAndrew Dhuey's campaign to get the Federal Circuit to junk its Cybor precedent is getting an assist from Peter Menell, whose work was cited by the other side.
2013-07-02 05:16:37 PM
When Berkeley attorney Andrew Dhuey sought to drum up amicus curiae support for overturning a key Federal Circuit ruling on claim construction, his opponent accused him of making a frivolous argument.
Asking the full court to review Lighting Ballast Control v. Philips Electronics, a nonprecedential decision, was likely to get Dhuey sanctioned, Orrick, Herrington & Sutcliffe partner Steven Routh told the American Intellectual Property Law Association in January.
Routh was wrong. Not only was it not frivolous, the U.S. Court of Appeals for the Federal Circuit granted the motion earlier this year and set a hearing for September, setting off an intense debate among IP lawyers, technology companies and the solicitor general over how much deference trial judges deserve when deciding what a patent means.
Overruling its 1998 decision in Cybor v. FAS Technologies will make patent litigation even more expensive and unpredictable than it already is, companies like Google Inc., Cisco Systems Inc. and Microsoft Corp. argue. Orrick's Routh, who represents defendant Universal Lighting Technologies, points to the scholarly work of Berkeley law professor Peter Menell that shows more claim construction decisions being upheld on appeal in recent years. Google and Amazon.com Inc. cite Menell too.
But on Monday, Menell — co-author of a patent case management guide for judges and leader of an annual patent law symposium at the Federal Judicial Center — filed his own brief taking the side of Dhuey and client Lighting Ballast Control, which is part of the patent house Acacia Research Group.
Cybor, Menell wrote in Monday's filing, has "undermined the transparency of the claim construction process" and "produced alarming levels of appellate reversals." Rather than fostering predictability, the Cybor dynamic has "discouraged settlements following claim construction and trial, delayed resolution of patent disputes, and run up the overall costs of patent litigation."
Menell's voice is only his own — he didn't ask any other professors to sign onto his brief. Dhuey says it nevertheless gave him a Marshall McLuhan moment."ULT and the tech giants cited professor Menell's work as though it supports their embrace of the de novo status quo," he said. "Well, we happen to have professor Menell right here. He's our amicus, arguing for a thorough overruling of Cybor."
DECIDING WHAT A PATENT MEANS
Cybor held that the Federal Circuit should review all aspects of claims construction — findings of fact and conclusions of law — de novo. The theory is that interpreting what a patent means is a purely legal matter, and that having one court, the Federal Circuit, make that determination independently ensures that patents will be interpreted uniformly. Deferring to trial judges on factual findings "would encourage greater forum shopping and undermine the predictability of claim construction rulings," Routh writes in his brief to the Federal Circuit.
Cybor's detractors argue that trial judges often need expert witnesses to help them understand what a patent would mean to a person skilled in the art. Like any other appellate court, they say, the Federal Circuit should defer to trial judges on factual determinations like the credibility of expert witnesses, absent clear error.
Google, Amazon, Hewlett-Packard Co., Yahoo Inc., Cisco, Dell Inc. and Microsoft have joined amicus briefsurging the Federal Circuit to stick with Cybor. The American Bar Association, the Federal Circuit Bar Association and the American Intellectual Property Law Association argue for overruling it. The solicitor general would overrule Cybor, but limit somewhat the universe of "facts" that are owed deference.
Cybor, which itself was decided en banc, was always controversial within the Federal Circuit. It generated three separate concurrences, plus a dissent from Randall Rader, who is now the court's chief judge. In March of this year, when the 12-judge court had three vacancies and just hours before Judge Richard Taranto was sworn in, the court voted to reconsider the Cybor decision.
"It's complicated," said Stanford Law School IP expert Mark Lemley. De novo review leads to a high rate of reversal, often after the parties have invested huge amounts of time and expense in a trial. But deferring more to trial judges might encourage them to drag out the Markman claim construction hearings with multiple expert witnesses, to help bulletproof their rulings. With Menell's research showing the reversal rate declining, "you could reach the conclusion that the system is working itself out already," Lemley said.
Although Acacia Research can be considered a patent troll, Lemley doesn't see the issue breaking down along troll/anti-troll lines. Depending on how any given claim is construed, "it could be plaintiff or defendant who's happy with what the district court did."
$3 MILLION VERDICT
Up until this year, Dhuey's case, which he's working on with lawyers from Friedman, Suder & Cooke and Flachsbart & Greenspoon, seemed fairly routine. Lighting Ballast sued Philips, Universal Lighting Technologies and others for allegedly infringing Lighting Ballast's '529 patent, a device for controlling electrical current in fluorescent lights. The patent refers to a "voltage source means," which Universal says is vague but which Lighting Ballast's expert witness said would be understood by electricians to mean a rectifier — a device that converts AC current to DC.
The case was filed in the Wichita Falls division of the Northern District of Texas and assigned to Judge Reed O'Connor, who'd never before presided over a patent trial, Orrick's Routh notes in his brief for Universal Lighting. On motions for summary judgment, O'Connor originally ruled that "voltage source means" is an indefinite "means plus function," and invalidated the patent. But on reconsideration he agreed electricians would understand it to mean a rectifier, and proceeded with a jury trial. Lighting Ballast won a $3 million verdict, plus another $1.5 million in pre-judgment interest.
Exercising de novo review, the Federal Circuit ruled that Lighting Ballast's expert was not persuasive and invalidated the patent, wiping out the $4.5 million judgment.
Universal and Routh, who did not respond to a request for comment Tuesday, allow that some tinkering with Cybor may be in order. But "we urge caution lest such a change be perceived as opening the door to every claim construction being portrayed as a disputed factual issue that invites a battle of experts," Routh writes in his brief for en banc review.
The problem of the high reversal rate has been "mitigated or altogether ameliorated" by a more recent Federal Circuit decision, Routh writes, citing a paper co-authored by Menell and Jonas Anderson that shows the rate dropping from as high as 38 percent in the early 2000s to 17 percent in 2011.
On Monday, Menell wrote that Cybor wrongly applied Supreme Court precedent, and that the Federal Circuit should be deferring to the factual findings at claims construction hearings, while exercising de novo review only on the legal conclusion.
"We do not share [Universal Lighting]'s interpretation of our research," Menell writes. "Although we document a significant drop in the claim construction reversal rate since the Phillips decision, there still remains a high reversal rate compared to other areas of federal practice. These effects continue to cast doubt on the predictability of patent litigation, discourage settlements following claim construction and trial, delay resolution of patent disputes, and run up the overall costs of patent litigation."
Menell said in an email Tuesday that he's filed amicus curiae briefs in a handful of Supreme Court and appellate cases over the years on issues where he believes he has an informed perspective. He prefers to write for himself — "the ideas and analysis should carry the day," as opposed to the number of signatories.
"I have been working closely with the Federal Judicial Center over the past 16 years educating judges about the IP system and IP case management," Menell says. "Claim construction and the standard of appellate review are among the most important issues affecting patent litigation."
Contact the reporter at firstname.lastname@example.org.