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Federal Circuit Holds That Issues of Claim Construction Must Be Reviewed Without Deference on Appeal, Without Regard to Legal or Factual Distinctions

Update
02.21.2014

Since 1998, when the Federal Circuit issued its en banc opinion in Cybor Corp. v. FAS Technologies, Inc., claim construction issues have been subject to de novo review on appeal. Under this standard of review, no formal deference is given to findings of the district court. Litigants dissatisfied with the district court’s claim construction have thus enjoyed, at least in theory, an entirely new opportunity to make their case on appeal.

Today, by a six-to-four majority,[1] the Federal Circuit upheld the Cybor standard in its entirety.

Factual and Procedural Background

Patentee Lighting Ballast Control LLC (“Lighting Ballast”) sued Universal Lighting Technologies, Inc. (“ULT”), alleging that ULT infringed U.S. Pat. No. 5,436,529 (“the ’529 patent”). The ’529 patent relates to circuits for electronic ballasts, which are current-limiting devices commonly used in fluorescent lighting.   

Claim 1 of the ’529 patent recites an energy conversion device comprising a “voltage source means.” During claim construction, ULT argued that “voltage source means” was a means-plus-function limitation and that claim 1 was indefinite because the ’529 patent failed to disclose a structure for performing the recited function. The district court agreed and held claim 1 invalid for indefiniteness in an initial claim construction order.

Lighting Ballast moved for reconsideration, pointing to testimony showing that a person of ordinary skill would understand “voltage source means” to correspond to a particular structure. Relying on this testimony, the court vacated its earlier order and held that “voltage source means” was not a means-plus-function limitation. The court instead construed the term to comprise a class of structures including rectifiers and batteries. The case was ultimately tried to a jury, which found claim 1 and its asserted dependent claims infringed and not invalid.

ULT appealed, and the Federal Circuit reversed in a nonprecedential opinion. The panel first observed that the key issue on appeal—whether “voltage source means” was a means-plus-function limitation—was a matter of claim construction that was to be reviewed de novo under Cybor. Next, the panel noted that use of the term “means” created a rebuttable presumption that the limitation was written in the means-plus-function format. The panel determined that the limitation failed to provide any structure for performing the recited function and that the testimony of record failed to show that the term “voltage source means” indicated a defined class of structures at the time of the invention. Because the specification also did not describe any structure corresponding to the claimed “voltage source means,” the panel held the asserted claims of the ’529 patent invalid for indefiniteness and reversed the district court’s judgment.

Lighting Ballast petitioned for rehearing, and the Federal Circuit granted the petition. The Federal Circuit asked the parties to address three issues in the briefing: (1) whether the Federal Circuit should overrule Cybor; (2) whether the Federal Circuit should defer to any aspect of a district court’s claim construction; and (3) if deference was appropriate, which aspects of the claim construction should be given deference.

Holding of the En Banc Court

Applying the principles of stare decisis, a six-judge majority confirmed the Cybor standard, concluding that no special justification for departing from the established standard had been shown. Four judges dissented, contending that while the ultimate question of claim meaning should be reviewed de novo, underlying factual issues should be reviewed with deference.

The majority, in an opinion authored by Judge Newman and joined by Judges Lourie, Dyk, Prost, Moore and Taranto, began its analysis by noting that the relevant question was not whether to adopt a de novo standard of review for claim construction. Instead, it was whether to change the established de novo standard that had been in place for fifteen years and applied in hundreds of decisions. The majority acknowledged that sound reasons could exist to depart from its precedent—for example, intervening precedent, contrary legislation or unworkability of the standard—but emphasized the fundamental importance of stare decisis as a means of assuring predictability in procedural and substantive law.

The majority observed that there had been no developments in Federal Circuit or U.S. Supreme Court case law that undermined Cybor’s reasoning. There had also been no legislative developments inconsistent with Cybor, despite significant patent-related legislative activity. Additionally, the majority stated, none of the parties or amici had shown that the Cybor standard was unworkable or that there was a clearly better alternative. There had also been no suggestion that deferential appellate review was more likely to result in a correct claim construction. Thus, the majority concluded that those urging modification of the Cybor standard had not shown that it would be appropriate to depart from stare decisis.

The majority also emphasized that, under any standard of review consistent with the Supreme Court’s decision in Markman v. Westview Instruments, Inc. (“Markman II”), most issues of claim construction are indisputably matters of law that would receive de novo review. The majority explained that claim construction is a legal statement of the scope of a patent right, which turns on the content of patent documents, not on witness credibility. To the extent extrinsic evidence—through testimony or documents—may inform a district court regarding the proper meaning of a claim term, such information does not convert claim construction into a question of fact.

The majority also discussed practical repercussions of modifying the Cybor standard. Fashioning a distinction between issues of fact and law would inject uncertainty into the claim construction process and spawn lengthy peripheral litigation on the line between such issues. Additionally, the majority cautioned, under deferential appellate review, inconsistent claim construction rulings from different courts could each warrant affirmance—thus promoting the very type of forum shopping the Federal Circuit was meant to avoid. Ultimately, the majority observed, none of the parties, amici or dissent had provided a workable delineation between factual and legal issues or explained how different levels of deference should be applied on appeal.

Given that there had been no showing of contrary precedent or legislation, of an unworkable standard or of a clearly better alternative, the majority concluded that the criteria were not met for modifying the Cybor standard. The majority therefore reinstated the panel decision.

Judge Lourie’s Concurrence

Judge Lourie wrote separately to identify additional reasons for upholding Cybor. First, he noted that the Markman II Court had held claim construction to be a question for a court, not a jury, and had stated that construction of terms of art should be resolved by a judge regardless of “evidentiary underpinnings.” Treating certain aspects of claim construction as issues of fact to be given deference on appeal would be, in his view, a retreat from the Court’s reasoning.

Additionally, Judge Lourie noted that claim construction does not normally involve determination of historical facts. Rather, it involves analyzing a patent’s written description and prosecution history, an inquiry that the Federal Circuit is just as qualified to perform as a district court. Judge Lourie also emphasized that distinguishing between issues of fact and law would harm uniformity in the patent law by eroding meaningful appellate review: if the degree of deference depended on whether an issue was factual or legal, parties would dispute that question on appeal rather than the merits. Finally, Judge Lourie noted that “informal deference” would continue to be applied in reviewing district court claim construction determinations, with appellate review to be conducted using “sensible reliance” on the trial court’s analysis.

Dissenting Opinion

The dissenting opinion, authored by Judge O’Malley and joined by Chief Judge Rader and Judges Reyna and Wallach, argued that principles of stare decisis did not justify adhering to the Cybor standard. The dissent argued that Cybor was based on the flawed premise that claim construction is a purely legal inquiry. Markman II acknowledged that claim construction could involve factual questions, and for the Supreme Court to characterize claim construction as a question more appropriately resolved by a judge was not the same as to say that the question was a matter of law. Thus, according to the dissent, this error alone justified departure from stare decisis.

The dissent also argued that Cybor ignored the realities of the claim construction process, which relies on the district court to use its discretion in admitting and weighing extrinsic evidence. This was typified by the present case, where expert testimony dealt with the issue of what the term “voltage source means” signified to a person of ordinary skill. The dissent claimed that resolution of such fact-intensive issues was best left to the expertise of the district court, with appropriate deference to be afforded on appeal. The dissent also argued that Cybor opposed the clear directive of Fed. R. Civ. P. 52(a)(6), which requires deferential “clear error” review of district court findings of fact.

Finally, the dissent argued that Cybor’s standard introduced adverse practical consequences. Affording no deference to district court claim constructions encourages a losing party who receives an adverse claim construction to appeal. This discourages settlements, increases the costs and length of litigation, and ties up judicial resources. In this way, the dissent argued, stability and predictability are actually disserved by refusing to defer to district court fact finding. 


[1] Judges Chen and Hughes did not participate in the consideration or decision of the case.

© 2014 Perkins Coie LLP