Supreme Court Changes Standard of Appellate Review for Claim Construction

On January 20, 2015, the United States Supreme Court decided the case of Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., which presented the question of the proper standard of review for factual findings by district courts during patent claim construction. The CAFC has long held that claim construction rulings, including underlying factual findings, are reviewed de novo (that is, without deference to the district court). The Supreme Court has now partly upended that rule, holding that determinations of fact made by district courts must be reviewed for abuse of discretion, which is more deferential to the district court. The Court left alone, however, the existing de novo standard of review for the ultimate legal determination of patent claims' meanings.

While the Court noted that "[i]n some instances, a factual finding will play only a small role in a judge's ultimate legal conclusion about the meaning of [a term in a patent claim]," in other cases "a factual finding may be close to dispositive of the ultimate legal question of the proper meaning of the term in the context of the patent." In either case, "the ultimate question of construction will remain a legal question."

Because the case before it presented a potentially dispositive factual dispute regarding the meaning of a particular term to persons skilled in the art, and because the CAFC overturned the district court's determination of that dispute under the de novo standard, the Court has remanded the case back to the CAFC with the instruction to apply the less stringent abuse of discretion standard to the district court's factual findings. Thus, while the Court was careful to note that "subsidiary fact finding is unlikely to loom large in the universe of litigated claim construction," there are sure to be litigants, like those in Teva Pharmaceuticals, who will be affected by this decision.

Click here to read the Supreme Court’s decision.

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