“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.”
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.
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).
(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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