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One night six years ago, just after the U.S. Supreme Courthad handed down its ruling in Markman v. Westview Instruments, JeffreyLewis was having dinner with a group of IP lawyers. “Most everyonecheered,” recalls Lewis, a partner at New York’s Patterson, Belknap, Webb& Tyler. Not Lewis. “I told them, ‘you will rue the day.’ “ Today, they are ruing, but Lewis isn’t happy he was right.By most accounts, the Markman decision has added uncertainty, costs, anddelay to a system that already had plenty of all three. In Markman, theCourt ruled that judges — not jurors — are “better suited” tointerpret patent claims, an act known as claims construction. Before thedecision, jurors struggled with the technical and scientific complexities ofclaims construction. Markman was supposed to make patent cases morepredictable and encourage settlements. Instead, district judges, new to thetask of interpreting claims, are now reversed by the U.S. Court of Appeals forthe Federal Circuit one out of every two times they try. Rather than settle, parties continue to fight in court,knowing that a district judge’s interpretation of a patent is something like a”Don’t Walk” sign in New York City — a suggestion that may or maynot be followed. Inventor Herbert Markman received a patent for hiscomputerized inventory control system in 1985. When he tried to enforce the patent,a jury found that the defendant’s product infringed the patent’s claims, as thejury understood them. But on appeal, the Federal Circuit said that there was noinfringement, and that the jury had misinterpreted the claim. Ultimately, the Supreme Court ruled that the jury shouldn’teven be dealing with the reach of patent claims, that those are a matter oflaw, for the judge to decide. Judges now decide what a patent claim covers duringso-called Markman hearings. The hearing typically takes place early on in acase, without the jury. The judge hears a range of scientific and technicaltestimony and then rules on the patent’s claims. But judges aren’t faring much better at claims constructionthan juries once did. Two recent studies released in January show that theFederal Circuit at least partially reverses 50 percent of all claimsconstructions by judges. Christian Chu, a clerk in the Southern District ofCalifornia, surveyed all 502 of the patent decisions made by the FederalCircuit between January 1998 and April 2000. He discovered a 47.3 percentreversal rate. Professor Mark Lemley, who teaches patent law to judges at theBerkeley Center for Law and Technology at the University of California, Berkeley’s Boalt Hall School of Law, says that Chu’s study is the “definitive data” on reversals.The study appeared in the Berkeley Technology Law Journal. A study published in Harvard’s Journal of Law andTechnology found a lower reversal rate — 33 percent — for the five-yearperiod after the Markman decision. But the author, professor Kimberly Moore ofGeorge Mason University School of Law, included summary affirmances in herresearch. When those quickies are removed, the reversal rate rises to close to50 percent. “It costs the public, parties, and judges a lot of timeand money waiting for the reversals,” says Moore, a former Federal Circuitclerk. Most district judges are reluctant to publicly criticize thejudges that critique their work. One district judge says that other judges are”muttering and grumbling” about reversals, and that the FederalCircuit judges are “quite defensive” about these complaints when theymeet with trial judges. Judge Samuel Kent of the Eastern District of Texas is a bitmore outspoken on the matter. A year ago he told The National Law Journal, IP Worldwide‘s sibling publication, that the Federal Circuit is full of”little green men who don’t know Tuesday from Philadelphia.” In a summary judgment hearing in a 1996 patent case, O.I.Corp. v. Tekmar Co., Kent said, “Frankly, I don’t know why I’m soexcited about trying to bring this [patent case] to closure. It goes to theFederal Circuit afterwards. You know, it’s hard to deal with things that areultimately resolved by people wearing propeller hats.” (The propellerheads upheld him.) Judge Kent was not available to discuss his comments. Federal Judge Sam Sparks of Austin, Texas says that it’s a”pain in the butt” to oversee patent cases and manage his othercases, too. In early February, Sparks had a case come before him involving fivepatents and about 400 claims and warring parties. “So I just said to them’when y’all get competent, let me know. Until then, you’re off my docket,’” Sparks says. Judge Thomas Griesa, the former chief judge for the SouthernDistrict of New York, is less critical. When the Federal Circuit reverses hisdecisions, he says, he tries to learn from the opinion. He’s even talked to bargroups about bringing their patent litigation into his district. Patent cases may provide an intellectual challenge to somejudges by breaking the routine of drug cases and more typical commercialdisputes that occupy federal dockets. But many other judges “do not oftenfeel equipped to do what Markman obliges them to do,” says RonaldMyrick, chief intellectual property counsel for the General Electric Company ofFairfield, Conn. Myrick, who is president-elect of the American IntellectualProperty Law Association, says that judges are concerned with the”sometimes critical tone of the reversals.” For example, in the Federal Circuit’s November 2000 rulingin Interactive Gift Express v. CompuServe Inc., it reversed U.S.district judge Barbara Jones of the Southern District of New York, telling herthat she had “impermissibly read limitations” into her claimsconstruction determination. Judge Jones was appointed to the bench in January 1996, andthis case came before her almost immediately. The patent described a method ofdistributing music, software, video, and other digital content throughfreestanding kiosks. It was issued in the early 1980s — before thecommercialization of the Internet — and did not mention the Web. But it wasn’tuntil the mid-1990s that the patent’s owner, Interactive Gift Express, decidedto enforce it. The company tried to get 75,000 organizations, including manyleading Internet companies, to take a license. When its licensing effortsfailed, Interactive Gift filed suit. Judge Jones held a Markman hearing and exhibited care in herclaim construction. She found that it was “abundantly clear” that thepatent did not support the owner’s broad interpretation. The Federal Circuit wasn’t impressed. In its opinion, thecourt wrote: “We disagree with most of the district court’sfindings.” Jones was not available for comment for this story. At presstime, Interactive Gift had settled with four of ten defendants in the case. Thepatent is set to expire in 2003. It’s not just the reversals that frustrate judges, but theirtiming. The circuit court rarely hears interlocutory appeals of Markmanhearings. So unless a judge makes a dispositive ruling — issues a preliminaryinjunction or summary judgment order — the trial judge does not discover untilafter a trial that a claim construction was off base. The Federal Circuit added further to the district judges’discouragement in Cyber Corp. v. FAS Technologies, Inc. (1998), when itruled that claims construction is subject to de novo review on appeal. In otherwords, the Federal Circuit does not have to defer to the district judges’determinations — even in cases where those determinations are based on thecredibility of witnesses. Even so, some practitioners say that they suspect that theFederal Circuit is more likely to give deference to Markman determinations madeby well-known judges in districts where a large number of patent cases aretried. “If a case comes from Delaware, it’s more likely to be affirmedthan if it’s from South Podunk,” says professor Paul Janicke of theUniversity of Houston Law Center, who tracks Federal Circuit decisions for hisWeb site, patstats.org. In his study, Chu found a similar trend: Those districtsthat handle more patent cases have lower reversal rates than those that don’t.Ironically, the District of Delaware, where judges are well versed in patentlaw, has a high reversal rate. Chu speculates that a smaller percentage ofcases in that district are appealed, skewering the reversal rate. Some lawyers also say that the Federal Circuit has favoritejudges. Donald Dunner, a name partner at Washington, D.C.’s Finnegan,Henderson, Farabow, Garrett & Dunner, says that the court appears to favorjudges Ronald Whyte of the Northern District of California, T.S. Ellis III ofthe Eastern District of Virginia, and Roderick McKelvie, who is retiring in Mayfrom the Delaware court. “They are sufficiently well known and respected.The court will pay attention to what they do,” Dunner says. Judge Paul Michel has sat on the Federal Circuit since 1988.”I think it’s almost insulting to suggest that we just look for thejudge’s name and if it’s a ‘frequent flyer,’ we go ahead and confirm,” thejudge says. “If it’s true, for example, that Judge McKelvie is affirmedmore often than others, I would maintain it’s because of his experience and hiseffort.” Although they complain about delay and uncertainty, somelawyers simply like things as they were in the old days, when they could taketheir cases more easily to the jury. Jurors “take that experience veryseriously, if you treat them seriously,” says Patterson, Belknap’s Lewis. Presenting claims construction to judges can lead to “atendency [toward the] hyper-technical,” says Richard DeLucia, a partner atNew York’s Kenyon & Kenyon. The invention and its contribution to thepublic can get trampled by technological, scientific, and legal language, heexplains. The patent becomes a “dead fish.” Not everyone is unhappy. William Lee, IP litigator andmanaging partner at Boston’s Hale & Dorr, says that as a result of Markman,”the procedural framework [of a patent case] is now clear.” In decisions handed down post- Markman, the FederalCircuit has said it was okay for trial judges to ask for help in interpretingclaims. In one of those cases, Judge Randall Rader wrote that “the processof claims construction at the trial court level will often benefit from experttestimony which may supply a proper technological context to understand theclaims.” Each year the Federal Judicial Center and Berkeley’s Centerfor Law and Technology gives members of the federal bench seminars aimed atsharpening their understanding of both patent law and science and technology. In other words, claims construction is a learning process.

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