The U.S. Supreme Court rebuffed an appeal from Amgen, which tried to have the Supreme Court review the Federal Circuit’s practice of drawing its own conclusions about patent claims rather than relying solely on findings made by the trial court. See Amgen Inc. v. Hoechst Marion Roussel Inc. and Transkaryotic Therapies Inc., 06-1291.

Earlier, the Court of Appeals for the Federal Circuit affirmed a District Court’s decision that Transkaryotic Therapies Inc. (TKT) and Aventis Pharmaceuticals Inc. infringe Amgen’s erythropoietin (EPO) patents. The court’s decision upheld the validity of two of Amgen’s EPO patents and the infringement by TKT of three patents and 12 claims, including a patent that does not expire until 2015.

The issue remains over the District Court’s findings on the infringement and validity of two patents with claims to the production of erythropoietin, the infringement of one product patent under the doctrine of equivalents, and the validity of one product patent. The Federal Circuit found the production patents valid and infringed (U.S. Patent Nos. 5,618,698 and 5,756,349). The court reversed the District Court’s determination that TKT infringed Amgen’s U.S. Patent No. 5,621,080 under the doctrine of equivalents, and remanded to the District Court for further consideration of the remaining validity issue on one of the other product patents (U.S. Patent No. 5,955,422).

The Federal Circuit has ruled that appeals courts can do their own examination of facts surrounding a patent claim. Appeals courts generally review the interpretation of laws rather than the particular facts of a case, but the Federal Circuit has determined that a lower court’s patent analysis can be called into question.

Amgen contends that Federal Circuit’s willingness to reconsider the factual aspects of the case “produces incorrect results and causes litigants and district courts to waste tremendous resources”

The final outcome in a patent lawsuit depends on whether a patent claim covers “the alleged infringer’s product or process,” which requires a determination of “what the words in the claim mean.” The issue here is what is the proper standard of review of factual findings underlying patent claim construction. See Markman v. Westview Instruments Inc., 517 U.S. 370 (1996).

The Supreme Court’s ruling in Markman set out that the trial court must decide the proper meaning of claim construction but the Federal Circuit has wrestled with the standard of review for fact findings underlying claim construction, and further, the extent to which the trial court may base its claim construction on extrinsic evidence.

However, an en banc panel of the Federal Circuit held that all aspects of claim construction are reviewed de novo. See Cybor Corp. v. FAS Techs. Inc. The factual findings involved in claim construction include the level of ordinary skill in the art at the time of filing, the background of the technology and the customary meaning of technical claim terms to one of ordinary skill in the art.

The Federal Circuit held that Markman did not compel deferential appellate review of factual findings underlying claim interpretations, concluding instead that “[n]othing in the Supreme Court’s opinion supports the view . . . that claim construction may involve subsidiary or underlying questions of fact.”

In the present case, the district court heard testimony on the background of the technology and the customary meaning of technical claim terms to assist in the court’s interpretation of terms such as “therapeutically effective amount.” The question then remains “How does a court decipher the plain and customary meaning of a term as understood by one skilled in the art without resorting to extrinsic evidence about how one skilled in the art would construe the term?”

Many argue that the District Court should find the facts necessary for claim construction, including the definition for one of ordinary skill in the art and the customary meaning of claim terms. They also argue that a determination of whether a patentee has successfully rebutted the presumption of prosecution history estoppel is based on factual underpinnings that should be subject to deference on appellate review.

The Federal Circuit has held that the issue of whether a patentee has successfully rebutted a Festo presumption of surrender of equivalents is a question of law to be reviewed de novo.

In the petition for rehearing at the Federal Circuit, Judge Michel and Judge Rader dissented stating:

In my view, four practical problems have emerged under the Markman-Cybor regime: (1) a steadily high reversal rate; (2) a lack of predictability about appellate outcomes, which may confound trial judges and discourage settlements; (3) loss of the comparative advantage often enjoyed by the district judges who heard or read all of the evidence and may have spent more time on the claim constructions than we ever could on appeal; and (4) inundation of our court with the minutia of construing numerous disputed claim terms (in multiple claims and patents) in nearly every patent case.

On its face, a review of claim construction seems to be a factual decision within the discretion of the trial judge and only reversible for clear error. Since each dispute raises unique factual situations and unique experimental evidence, the trial judge is best situated to guide the inquiry and determine the result. Therefore, appellate courts should only reverse if the trial judge exceeded discretion in determining reliability and fit of various experts’ evidence.

However, a decision to admit or exclude expert testimony is one that depends on an interpretation of the rules of evidence and so it could be argued to be a matter of law reviewable de novo by the appellate court. While most courts seem to follow the “abuse of discretion” standard of review, by letting this ruling stand the Supreme Court seems to agree with the majority to look at claim construction de novo.


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