Deanne Maynard, head of appellate practice at Morrison & Foerster. June 16, 2009. Photo by Diego M. Radzinschi/NATIONAL LAW JOURNAL.
Deanne Maynard, Morrison & Foerster partner (Diego M. Radzinschi/NATIONAL LAW JOURNAL)

SAN FRANCISCO — On the same day the U.S. Supreme Court heard the fourth of its record six patent cases this term, the high court announced its first of 2014-15.

And it could be a big one.

The court will decide the standard of review the Federal Circuit should apply on claims construction, an issue that has sharply divided the U.S. Court of Appeals for the Federal Circuit and the IP bar. Teva Pharmaceuticals v. Sandoz will resolve whether factual findings should be reviewed de novo or under the more deferential clear-error standard.

Though esoteric, the standard of review often can mean the difference been winning and losing on appeal. That’s what happened in this case, argues Teva. The company had sued Sandoz Inc. and several other generic drug manufacturers for allegedly infringing its patent on Copaxone, a treatment for multiple sclerosis. Sandoz argued that Teva’s patents were invalid for indefiniteness because they referred to the “molecular weight” of polypeptide chains constituting a copolymer.

“Molecular weight” is a fuzzy term that can refer to peak average, number average weight or weight average. In fact, Sandoz argued, Teva had told patent examiners it meant two different things during the prosecution of two of the patents at issue in the case. But U.S. District Judge Barbara Jones credited testimony from Teva’s expert that a person skilled in the art would have understood “molecular weight” to refer to peak average weight in this context, and that Teva had simply erred in one of its communications.

On de novo review, Judge Kimberly Moore wrote for a unanimous Federal Circuit panel that additional scientific calculation showed that Teva’s expert was mistaken, that molecular weight could have had multiple meanings, and that the claims were therefore indefinite.

Teva argues that Jones did not clearly err, and the Federal Circuit should have deferred to her findings under Federal Rule 52(a). “The Federal Circuit’s disregard of the Federal Rules goes to a truly foundational question of patent litigation,” Goodwin Procter partner William Jay wrote in Teva’s petition for certiorari. “No matter how much scientific evidence the district court hears, and no matter how fact-based its findings, the Federal Circuit will pay them no deference.”

The Federal Circuit just hashed over the issue en banc in January in Lighting Ballast Control v. Philips Electronics, ultimately ruling 6-4 that the court should stick with the de novo rule it set out in 1998′s Cybor v. FAS Technologies.

Berkeley attorney Andrew Dhuey, who argued for greater deference on behalf of Lighting Ballast, said he found it notable the Supreme Court took a case involving the intrinsic record—correspondence between the inventor and the patent examiner.

“Some of those who argued for overruling Cybor would say that’s not fact-finding, and no deference is due for it,” he said. “The Supreme Court’s selection of Teva to take up the issue suggests to me much sympathy for our position that all claim constructions are due deference on appeal.”

Perkins Coie partner Eric Miller and Morrison & Foerster partner Deanne Maynard, who represent Sandoz, Mylan and two other pharmaceutical companies, argued to the Supreme Court that Lighting Ballast was the better vehicle for confronting the standard of review. “Deference would be particularly unwarranted here because Teva’s expert simply labeled the patent documents mistaken wherever they did not support Teva’s litigation position,” they wrote. “Regardless of the standard of review, a reviewing court in a patent case should read the legal documents in the patent record for itself and disregard extrinsic evidence contrary to that record.”

The Federal Circuit has been under criticism for being out of step with the Supreme Court, but Weil, Gotshal & Manges partner Edward Reines said the debate over standard of review arises from unclear guidance from the U.S. Supreme Court in Markman v. Westview Instruments.

“In Markman, the Supreme Court spilled a lot of ink, but never answered the question clearly as to whether there is a factual component to claim construction warranting deferential review,” he said. “That issue was clearly teed up by the Federal Circuit in Markman en banc.” The result has been four subsequent en banc decisions by the Federal Circuit without resolving the issue to the Supreme Court’s apparent satisfaction.

Monday’s oral arguments addressed another hotly contested patent issue that’s followed a similar track, bouncing between the Supreme Court and the Federal Circuit.

Justice Stephen Breyer acknowledged the court’s broadly written decisions on subject-matter eligibility in Bilski v. Kappos and Mayo Collaborative Services v. Prometheus Laboratories may have left the lower court grasping for a bright-line rule.

“What I suspect, in my opinion, Mayo did and Bilski and the other cases is sketch an outer shell of the content,” Breyer said, “hoping that the experts—you and other lawyers and the circuit court—could fill in a little better than we had done the content of that shell.”

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