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The Impact of Teva Pharmaceuticals v. Sandoz on Patent Claim Construction in the District Courts

February 27, 2015

On January 20, 2015, in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., the Supreme Court announced a new standard for appellate review of patent claim construction. While the Court reaffirmed its holding in Markman that claim construction is a matter for the court, it overturned the Federal Circuit’s holding in Cybor that all aspects of claim construction are subject to de novo review. Noting that under Federal Rule of Civil Procedure 52(a)(6) appellate courts “must not . . . set aside” a district court’s “[f]indings of fact” unless they are “clearly erroneous,” the Court concluded that Rule 52(a)(6) applies to subsidiary facts found by a district court in patent claim construction. Thus, where the intrinsic evidence (the patent document and its file history) does not resolve the claim construction dispute and the parties disagree as to the meaning of a term to a person of ordinary skill in the art, the district court’s factual determinations with respect to that dispute control unless they are clearly erroneous. The Teva decision presents several immediate questions for district judges. How likely is it that parties will request formal evidentiary hearings as part of the claim construction process? How might district judges determine before such hearings are held whether factual determinations with respect to extrinsic evidence are necessary? How should district judges articulate such determinations so that they may receive appropriate deference on appeal? How can courts manage the process most efficiently to develop an adequate factual record? How should district courts write claim construction rulings in light of the Teva decision? Does this new, at least somewhat more deferential, standard of review affect the incentives for settlement of patent cases in the district court? These and other questions will be the subject of this special Federal Judicial Center webcast.