Earlier today the United States Court of Appeals for the Federal Circuit issued an incredibly important en banc decision in Apple Inc. v. Samsung Electronics Co. This decision reestablishes what should always have been the case; namely that the Federal Circuit is an appellate court that does not consider evidence outside the record or engage in fact finding on their own.
This case arose form a patent infringement suit and countersuit between Apple and Samsung where the district court granted summary judgment that Samsung’s accused devices infringed. The jury found the infringed claims were not invalid. Thereafter, the district court denied Samsung’s request for judgment as a matter of law (JMOL). Samsung appealed the district court’s grant of summary judgment and the denial of JMOL.
Initially in a panel decision the Federal Circuit reversed the detail of JMOL, which prompted Apple to request rehearing en banc. The decision today was the en banc resolution, which was a stinging rebuke of the panel. The majority of the Federal Circuit — Judges Moore, Newman, Lourie, O’Malley, Wallach, Chen, and Stoll — wrote a decision that will hopefully once and for all put an end to the Federal Circuit acting as judge, jury and appellate tribunal. In a majority decision authored by Judge Moore the Court explained that the Federal Circuit is an appellate court and as such it is not supposed to consider evidence outside the record or engage in fact finding. While that statement should sound funny for those familiar with the law and unfamiliar with the Federal Circuit, this is a huge moment in the modern history of the Federal Circuit. The Federal Circuit has been increasingly out of control for years, acting as a trial court and jury rather than an appellate court. Hopefully that will end today.
Perhaps the best summary of today’s decision is from the section of the majority opinion labeled The Decision to Grant En Banc Review. In this section Judge Moore wrote:
On February 26, 2016, a panel of this court reversed the denial of JMOL with regard to the jury verdict of infringement as to the ’647 patent and non-obviousness as to the ’721 and ’172 patents. Apple filed a petition for rehearing en banc. Apple’s petition argued that the panel reversed the jury’s finding of infringement of the ’647 patent by relying on extra-record evidence “none of which was of record and that the panel appears to have located only through independent research.” Apple Pet. 2. Apple argued that this extra-record extrinsic evidence was used to modify the agreed to and unappealed claim construction. See, e.g., id. at 8 (“The panel looked to [this extra- record evidence] to create its own plain meaning of ‘server’ as requiring a ‘stand alone’ program.”). Apple also argued that this extra-record evidence was used in “considering the factual question whether Samsung’s phones met the ‘analyzer server’ limitation.” See id. at 6, 8 (“The panel also relied on dictionary and encyclopedia entries to inform its understanding of how the shared library code in Samsung’s phones work.” (emphasis in original)). Apple also argued that the case should be taken en banc because “in an unprecedented decision,” the panel reversed nearly every fact finding by the jury which favored Apple. Id. at 1.
We granted Apple’s en banc petition to affirm our understanding of the appellate function as limited to deciding the issues raised on appeal by the parties, deciding these issues only on the basis of the record made below, and as requiring appropriate deference be applied to the review of fact findings. There was no need to solicit additional briefing or argument on the question of whether an appellate panel can look to extra-record extrinsic evidence to construe a patent claim term. “The Supreme Court made clear that the factual components [of claim construction] include ‘the background science or the meaning of a term in the relevant art during the relevant time period.’” Teva Pharms., Inc. v. Sandoz, Inc., 789 F.3d 1335, 1342 (Fed. Cir. 2015) (quoting Teva Pharms., Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015)). After Teva, such fact findings are indisputably the province of the district court. We did not need to solicit additional briefing or argument to conclude that the appellate court cannot rely on extra-record extrinsic evidence in the first instance or make factual findings about what such extrinsic evidence suggests about the plain meaning of a claim term in the art at the relevant time or how such extra record evidence may inform our understanding of how the accused device operates. We likewise did not need additional briefing or argument to determine that the appellate court is not permitted to reverse fact findings that were not appealed or that the appellate court is required to review jury fact findings when they are appealed for substantial evidence. The panel reversed nearly a dozen jury fact findings including infringement, motivation to combine, the teachings of prior art references, commercial success, industry praise, copying, and long-felt need across three different patents. It did so despite the fact that some of these findings were not appealed and with- out ever mentioning the applicable substantial evidence standard of review. And with regard to objective indicia, it did so in ways that departed from existing law.
The dissents, and Judge Dyk’s dissent in particular, raise big questions about how aspects of the obviousness doctrine ought to operate. But no party—at the panel or the petition for rehearing en banc stage—invited this court to consider changing the existing law of obviousness. We did not take this case en banc to decide important legal questions about the inner workings of the law of obviousness. We have applied existing obviousness law to the facts of this case. We took this case en banc to affirm our understanding of our appellate function, to apply the governing law, and to maintain our fidelity to the Supreme Court’s Teva decision.
Ultimately, the Federal Circuit affirmed the district court’s judgment and concluded that the jury’s verdict was supported by substantial evidence in the record. Further, the Federal Circuit determined the district court did not err in denying Samsung’s requests for JMOL. Thus, the panel opinion was vacated and the district court was affirmed.
In addition to separate dissents filed by Judge Dyk and Chief Just Prost, Judge Reyna also filed a separate dissent.