On Claim Construction, Predictability, and Patent Law Consistency: The Federal Circuit Needs to Vote En Banc

“Despite the predominant role that claim construction plays in determining patent rights and cases, the Federal Circuit’s claim-construction precedents have proven wholly inconsistent—and its constructions unpredictable.”

https://depositphotos.com/40621857/stock-photo-scales-of-justice.htmlThe Federal Circuit needs to go en banc more often.

That is the unmistakable lesson not just in light of the Supreme Court’s recent denials of certiorari on the hot questions of patent law, such as Section 101 and its application to diagnostic testing, or to whether Section 101 involves underlying factual questions. It is also tied into the very reason that Congress created the court in 1982: to provide predictability, stability, and clarity for the U.S. patent laws and system. Without these attributes, the patent system suffers—who, after all, wants to invest in patents where the governing rules are unclear or unpredictable?

As the industry evidence again shows, the answer to this semi-rhetorical question is that unpredictable and inconsistent patent laws undercut R&D investment and the innovation that those laws would otherwise promote. Indeed, since the advent of a new Section 101 regime and the many (unpredictable) changes wrought by the Supreme Court’s Bilski-Mayo-Alice tests, pharmaceutical companies (for example) have reported significant decreases in R&D investment and innovation. See, e.g., Unpredictability in Patent Law and Its Effect on Pharmaceutical Innovation, by C. Holman, 76 Mo. L. Rev. 645, 663-64 (summer 2011).

But as highlighted below, other critical and even longstanding issues remain unresolved and unpredictable as well—issues as fundamental as claim construction and the proper method for interpreting a patent’s claim terms. For these issues too—the lack of clarity for which continues to diminish the U.S. patent system—the Federal Circuit needs to reduce panel-dependency and increase en banc resolutions.

Claim Construction: The Issue That Defines the Boundaries of One’s Patent Rights—and Affects Virtually Every Other Issue in Patent Law

Claim construction is a particularly vexing problem, to put it lightly. The issue, of course, arises in every case and affects virtually every other issue in patent law and litigation. One cannot assess infringement, anticipation, obviousness, written description, enablement, unenforceability, damages, or numerous other claims or defenses without first determining the scope and meaning of a patent claim—i.e., without first engaging in claim construction.

More generally, patent rights are akin to property rights, as Congress and the Supreme Court have long recognized. 35 U.S.C. § 261; Florida Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. U.S. 627 644 (1999) (patents “long … considered a species of property”). As such, the need for clear, predictable and stable rules is critical, and requires greater adherence to precedent—to stare decisis—than in other areas of law. E.g., Payne v. Tennessee, 501 U.S. 808, 828 (1991) (explaining that precedent and stare decisis are “at their acme” when they involve property rights and other “reliance” or investment-backed expectations).

That is particularly so for the law on claim construction. After all, by definition, the process of interpreting a claim is the process for determining the boundaries of the property right itself. See, e.g., Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 510 (1917). Thus, depending on the claim-construction methodology employed by a court, one’s patent rights could be either large and highly valuable under one set of interpretive principles—or small and less valuable or even invalid under another.

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The Federal Circuit’s Decades-Long Split on Core Claim Construction Canons

In any event, despite the predominant role that claim construction plays in determining patent rights and cases, the Federal Circuit’s claim-construction precedents have proven wholly inconsistent—and its constructions unpredictable. As recently highlighted in requests for en-banc and certiorari review (including Judge Michel’s own amicus), see generally Continental Circuits LLC v. Intel Corp., 915 F.3d 788 (Fed. Cir. 2019), cert. denied (Dec. 10, 2019), the inconsistency here has not been merely a recurrence of one Federal Circuit panel choosing to apply a particular canon of claim construction differently than another panel. Rather, over the course of some three decades, the Federal Circuit has developed two fundamentally divergent sets of claim-construction principles:

(a) One set of principles that accords a “heavy presumption” that a claim term carries its ordinary meaning, as understood by a person of ordinary skill in the art—and that permits the patent’s specification to affect that meaning “only” if it meets an “exacting” standard and demonstrates either (i) clear lexicography, i.e., a clear re-definition in the patent document itself for the claim term-at-issue; or (ii) a clear disavowal of claim scope. E.g., Hill-Rom Servs., Inc. v. Stryker Corp., 755 F.3d 1367, 1371 (Fed. Cir. 2014); Thorner v. Sony Computer Enter. Am., 669 F.3d 1362, 1365-66 (Fed. Cir. 2012); Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1325-28 (Fed. Cir. 2002); Johnson Worldwide Assocs., Inc. v. Zebco Corp., 175 F.3d 985, 989-90 (Fed. Cir. 1999).

versus

(b) Another set of principles that takes a more “holistic” approach toward claim construction—and allows the patent specification to limit a claim term’s scope even when it does not evince clear lexicography or a disclaimer. E.g., Kinetic Concepts v. Blue Sky Med. Grp., 554 F.3d 1010, 1017-19 (Fed. Cir. 2009); On Demand Machine Corp. v. Ingram Indus. Inc., 442 F.3d 1331, 1338-39 (Fed. Cir. 2006); Nystrom v. TREX Co., 424 F.3d 1136, 1142-44 (Fed. Cir. 2005); AquaTex Indus., Inc. v. Techniche Solutions, 419 F.3d 1374, 1380-83 (Fed. Cir. 2005); Wang Labs, Inc. v. Am. Online, Inc., 197 F.3d 1377, 1382-83 (Fed. Cir. 1999); O.I. Corp. v. Tekmar Co., Inc., 115 F.3d 1576, 1581 (Fed. Cir. 1997).

The court’s ongoing claim-construction rulings, split between these conflicting sets of principles, have only worsened the confusion among the patent system’s stakeholders—e.g., patent owners; potential infringers considering a “design-around” and other competitors looking to innovate or sell in the same field as the patent-at-issue; potential licensees or buyers of patents; and patent lawyers and litigants involved in patent prosecution or litigation.

Indeed, no stakeholder, regardless of how sophisticated they may be, can know with any confidence which of these inconsistent sets of judge-made claim-construction laws—whether the “heavy presumption” set or the “holistic” set—will even apply to the claims of the patent-in-suit. Or at least they cannot know until the tail-end of a costly and time-consuming litigation, when the Federal Circuit panel that was randomly assigned to the appeal finally issues its decision.

Given the imperatives for consistency, predictability, and public notice, that is far too late—and hardly an ideal way to run a legal system.

As with the enterprise of law generally, stakeholders and other interested members of the public should be able to apply clear, consistent and predictable laws of claim construction and, as a result, should have a reasonably correct understanding of a patent claim’s scope and meaning. And they should be able to make such accurate determinations about a patent’s boundaries at any time, and certainly before any litigation may arise.

Yet, contrary to Congress’s 1982 intent, the Federal Circuit has not provided clarity and predictability as to claim construction; its “feuding” precedents have instead created confusion as to what the controlling claim-construction principles even are, let alone how they apply. See, e.g., Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk, by J. Bessen and M. Meurer (2009 ed), at 8, 58, 60 (describing intra-court split on claim construction). And its members’ reluctance to resolve the critical debates over these claim-construction principles—by declining to go en banc on these issues—has weakened the U.S. patent system all the more.

Phillips Did Not Resolve These Claim-Construction Questions.

Some 15 years ago, in Phillips v. AWH Corp., the en-banc Federal Circuit looked as if it would answer these claim-construction questions, including what it had identified as the “primary” question about the specification’s role in interpreting a patent’s claims. See 415 F.3d 1331 (Fed. Cir. 2005) (en banc). But it didn’t.

The first evidence of that, of course, is the conflicting precedent that the Federal Circuit has continued to issue, post-Phillips, with panel decisions over the years that have continued to invoke either the “heavy presumption” and “exacting” set of claim-construction canons, or the “holistic” set. (See, for example, the precedents cited in (a) and (b) above, including those that issued after the 2005 Phillips opinion.) As a matter of fixing the court’s claim-construction case law, Phillips merely undid one recent flareup (from the 2002 Texas Digital case) about using a dictionary as the presumptive basis for a claim term’s ordinary meaning. 415 F.3d at 1319-24. The opinion itself, impressive as scholarship and useful as a roadmap, otherwise summarized the court’s existing case law on claim construction, without delving into its differences.

And so, as others have observed, Phillips offers “something for everyone” in the ongoing claim-construction debate. But it left unresolved many of the same questions that have continued to cloud claim construction and patent law and divided the court. These questions include, for example, whether courts must apply a “heavy presumption,” or any presumption at all, about a claim term carrying its ordinary meaning; whether the “only” two “exceptions” to this ordinary-meaning rule are lexicography and disclaimer, or if the specification can limit claim terms based on something less or different, as illustrated by the “holistic” cases; and whether these two exceptions require that a proponent meet an “exacting” standard.

The Broader Problem: The Federal Circuit’s Reluctance to Address Key Questions En Banc

All of which takes us back to the Federal Circuit’s more immediate problem: Its reticence to vote for and resolve core patent questions—such as those involving claim construction—with an en-banc decision by the court.

That reticence is particularly troublesome during these times, when a once-stable area of law, patent law, has more broadly undergone a major transformation over the past decade-plus. Indeed, based on the Supreme Court’s recent interventions alone, the patent laws have changed substantially: on Section 101 (per Mayo-Alice); on injunctive relief (per eBay); on willfulness and enhanced damages (Halo); attorney’s fees (Octane Fitness); indefiniteness (Nautilus); subsidiary fact questions underlying claim construction (Teva v. Sandoz); and damages, to name just a few. And that is all without identifying the transformational changes ushered in by the America Invents Act and the invalidity challenges now routinely brought to the Patent and Trademark Office via petitions for inter partes review (IPRs) and other such invalidity vehicles.

Whatever the issue, however, what is plain is that these changes in the patent law will naturally beget more difficult questions and inject more ambiguity into the patent laws—if the Federal Circuit lets that happen. But if these questions produce conflicts within the court’s own jurisprudence, or otherwise present important questions that require the full court’s attention, then the active members owe it to the very reason underlying the court’s existence, and to the patent laws that they are charged with fostering, to vote for and resolve appropriate cases en banc.

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The Author

Judge Paul Michel

Judge Paul Michel became a private citizen on June 1, 2010 for the first time since he graduated from law school at the University of Virginia in 1966. Upon graduating from law school he became an Assistant District Attorney in Philadelphia, thus embarking upon the career of a public servant from 1966 to his retirement from the United States Court of Appeals for the Federal Circuit in 2010. Michel served on the Federal Circuit, which is the main patent appeals court in the United States, from 1988 to 2010, serving as Chief Judge from 2004 to 2010.

Judge Paul Michel

John Battaglia s an accomplished first-chair trial lawyer, appellate lawyer, and former US Justice Department lawyer who has successfully tried to verdict a broad array of civil and criminal cases. While the subject matter of his cases over the past 22-plus years has ranged from immigration to intellectual property, from guns, drugs, and violence to advanced electrical engineering, pharmaceuticals, and ice-hockey equipment, Mr. Battaglia's area of particular interest and expertise is patent litigation. Mr. Battaglia has successfully argued cases before the U.S. Courts of Appeal for the Federal, Second, Sixth, Seventh, and Ninth Circuits. He argued and prevailed in In re Papst Licensing Digital Camera Patent Litig. (Fed. Cir. 2015), a case involving numerous adverse issues and the first Federal Circuit case to address the impact of the Supreme Court's decision in Teva v. Sandoz. For that victory, the legal press dubbed Mr. Battaglia and his team a "Legal Lion."

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 11 Comments comments.

  1. Pro Say February 3, 2020 7:42 pm

    When patent law is — as it is today — quicksand, everyone sinks.

    Including American innovation.

  2. Curious February 3, 2020 10:54 pm

    I made this observation about 15 years ago … and it still applies now.

    The claim construction standard a particular panel uses is based upon the result they want. If they want a claim to cover the prior art … they use the broader claim construction. If they want a narrower claim to avoid infringement … they use the narrower claim construction.

    Its even worse at the PTAB.

  3. Paul Cole February 4, 2020 3:47 am

    Willingness to take cases en banc is only helpful if the justices do a proper job.

    Athena was considered en banc. But the Federal Circuit judges attributed an exaggerated scope to Supreme Court jurisprudence, rolled over before the perceived juggernaut of Mayo and cried for help. What they should have done is identified the material facts with scientific correctness, analysed the relevant rules of law in the light of those material facts, and handed down opinions affirming validity under section 101.

    Unfortunately many of the CAFC judges are not very good at science. A precedential decision might be handed down as to the foreseeability of an aviation accident based on the proposition that the Earth is flat between New York and London so that events near London should be directly visible in New York. Such a decision would be obviously counter-factual and not appropriate as a basis for deciding future cases. The decision of Judge Reyna in Ariosa is equally counter-factual since the amplified genetic material from the maternal blood is qualitatively different from the natural DNA because it is a relatively short sequence enzymatically synthesized by the hand of man in a laboratory from the individual nucleotides and quantitatively different from anything occurring in nature because on the face of Judge Reyna’s own decision its abundance is 1,000 to 1,000,000 times that in nature. Those who believe that the amplified DNA is a product of nature stand on the same platform as those who believe that the Earth is flat or that the Sun revolves around the Earth.

    It does NOT follow that because one method of medical diagnosis was held ineligible by the Supreme Court in Mayo that ALL methods of medical diagnosis should be held ineligible. The Federal Circuit has been letting our profession and inventors down by gold plating Supreme Court jurisprudence (contrary to the caution in which those decisions were expressed) and disregarding long established principles of patent law. Since SCOTUS does not appear disposed to help and since Congressional action is uncertain, the only way forward is for the Federal Circuit judges to start doing their proper job with appropriate attention not just to legal detail (which they get wrong) but also to factual detail.

  4. Night Writer February 4, 2020 6:22 am

    The problem is that Obama appointed judges who had an intent to weaken the patent system and are judicial activists.

    There can’t possibly be rational jurisprudence when half the judges on the CAFC have little to no training in science and had publicly expressed a need to weaken patents before their appointment.

    The only solution is for Trump to disband the CAFC and reform it with qualified judges. If the R’s win the House, Senate, and Presidency, then this could be done. The jurisprudence going back to about 2008 should wiped to get rid of the outrageous opinions of judges selected by SV and appointed by Obama.

  5. Anon February 4, 2020 9:14 am

    Minor nit:

    Thus, depending on the claim-construction methodology employed by a court, one’s patent rights could be either large and highly valuable under one set of interpretive principles—or small and less valuable or even invalid under another.

    The “even invalid” not only applies in both directions (the quote seems to imply only in the lower scope interpretation), but may well be more often impactful when the construction is expansive.

  6. Anon February 4, 2020 9:29 am

    I would also reframe the question (a bit) by focusing front and center on this: “ the Federal Circuit needs to reduce panel-dependency and increase en banc resolutions.

    While certainly en banc decisions should ensure more consistency, I think that CAFC leadership should already be ensuring consistency without the en banc mechanism. This is to say that the CAFC leadership should already be actively involved and preventing the types of panel to panel large scale inconsistencies that reflect the Gordian Knot of (at least) 101 jurisprudence. A panel is supposed to respect a prior panels ‘rendition’ of the law, and we simply have nothing of the sort going on with CAFC (absence of) leadership.

    I will point out that past CAFC leadership was strong enough to even take on and brunt Supreme Court dicta that has deviated from how Congress wrote the statutory law.

  7. Model 101 February 4, 2020 1:49 pm

    Go Paul…sorry…Pope Paul. Only you can resurect the US patent system

  8. TFCFM February 5, 2020 10:28 am

    There’s certainly much to be said for judicial predictability. At the same time, there’s also much to be said in support of coupling at least some judicial variability with judicial and appellate selection.

    I view the evolution of the law (whether in patent cases or others) as akin to evolution of organisms — in nature, some pretty neat things arise when one couples semi-random variation with natural selection. Had the process been abbreviated early on, we’d all still be (presumably) single-celled organisms unconcerned with patents. Even halting the process later potentially leaves us with Neanderthal Patent Law (which might be amusing to compare to our current law, but unlikely ‘better’).

    Permitting appellate courts or panels to exhibit some variation leads, in my view, to new and fresh insights that, in the long run, tend to yield better patent law concepts when one or more of the competing variations are ‘selected’ by an en banc Federal Circuit or by the Supreme Court.

    Even looking to the two lines of cases J. Michel highlights (“heavy presumption” approach vs. “holistic” approach), I’m not convinced that either line of reasoning will be the One True Patent Law Principle Applicable To All Claim Constructions. One approach may well turn out to be more sensible for certain types of patent applications (e.g., thoroughly-understood technologies with a ‘twist’), while the other may be more sensible for other types (e.g., emerging technologies without a bog-standard vocabulary, for example).

    I question whether forced-selection of a Forevermore Thus standard will yield the ‘best’ law, and I expect that continuation of the process of variation+selection will continue the favorable evolution of patent laws that has occurred across the centuries.

  9. angry dude February 5, 2020 2:11 pm

    @TFCFM

    Dude,

    You keep polluting this blog with meaningless philosophical pro-infringer legally and scientifically incorrect comments…
    We are past the point of philosophical discussions now – US Patent System is literally DEAD and STINKING

    Can you just shut up ? Where is your paycheck coming from ?

  10. Anon February 5, 2020 5:21 pm

    Look in the mirror, my angry friend — as you have been (and continue to be) a mouthpiece of the Efficient Infringers with your “just quit” message that you seem never to tire of (no matter how plain it is made to you that such is exactly what the Efficient Infringers want).

    Maybe heed your own advice, as some of us continue to strive for a strong patent system (yes, against great odds and philosophical actors from both the Left and Right* – as I have elucidated upon many occasions).

    Lead, follow, or get out of the way. Your “style” of leadership is not better than TFCFM’s.

  11. Curious February 5, 2020 11:55 pm

    The only solution is for Trump to disband the CAFC and reform it with qualified judges. If the R’s win the House, Senate, and Presidency, then this could be done. The jurisprudence going back to about 2008 should wiped to get rid of the outrageous opinions of judges selected by SV and appointed by Obama.
    Why do you keep repeating this nonsense? Trump cannot disband the CAFC. Why you think he can is beyond a mystery. The Federal Circuit was created by Congress, and only they can disband it — See Article III of the US Constitution.

    As to the judges “appointed by Obama,” you’ve been spouting this conspiracy theory for years. If you compare how the Federal Circuit judges come out on 101 issues by the president who nominated them, an Obama judge is less likely to determine that the patent is invalid under 35 USC 101 than the others. Granted, none of the judges would be considered good (they are all just varying degrees of bad). However, relative to the other judges, Obama judges are the best. George W is a close second. The older the judges tend to be more anti-patent with the exception of Pauline Newman.

    Would you want a panel of Mayer, Prost, and Dyk or a panel of Chen, Stoll and O’Malley to hear your patent case? I’ll take the second panel any day of the week.