The Supreme Court just issued its decision in Teva Pharmaceuticals v. Sandoz. At issue was an arcane point of procedure, with a big impact on outcome and strategy: what is the standard of review of a trial court’s Markman rulings?
Some preliminary stuff for the beginner: Every patent claim is loaded with terms that are subject to more than one interpretation, and infringement depends on how those claims are interpreted. A broad construction makes it more likely that the infringement case will succeed (although it also correspondingly makes it more likely that there is invalidating prior art). Typically, a trial court (not the jury) will be asked to construe a half dozen such terms in what is called a “Markman” hearing, after the Supreme Court’s decision in Markman v. Westview Instruments, Inc., 517 U. S. 370 (1996).
So what happens when the losing party appeals the case to the Federal Circuit? Can that court review the Markman rulings de novo, i.e., a complete do over? Or, does the appellate court have to give some deference to the trial court? Well, it depends.
Hey, wake up! This is important. The Supreme Court ruled 7-2 (Thomas and Alito dissenting) that an appellate court must take Markman rulings on subsidiary factual issues as correct “unless clearly erroneous.” Strategically you need to make sure that the trial court gets the facts right.
But wait, there is more! “[W]hen the district court reviews only evidence intrinsic to the patent (the patent claims and specifications along with the patent’s prosecution history), the judge’s determination will amount solely to a determination of law, and the Court of Appeals will review that construction de novo. If the district court resolves a subsidiary factual dispute (e.g., between two experts) which helps that court determine the proper interpretation of the written patent claim that finding will be reviewed only for clear error. The district judge, however, after deciding the factual dispute, will then interpret the patent claim in light of the facts as he has found them. This ultimate interpretation is a legal conclusion, which will be reviewed de novo.