Federal Circuit Ponders Abandoning De Novo Review – If Yes, Pressure on for Experts

By Maggie Tamburro

The Federal Circuit stands at the ready to render a decision that could spell big changes in the use and importance of experts in patent infringement litigation.

Sitting en banc on September 13, the Court heard oral argument in a rehearing that could result in a decision reshaping the standard of review for appeal of a federal district court’s claim construction, giving more deference to a district court’s findings – the likes of which could impact the use of expert evidence.

On rehearing in the case Lighting Ballast Control LLC v. Universal Lighting Technologies, Inc., the Court asked parties to tackle the following question:  Should the Court give deference to any aspect of a federal district court’s claim construction, and if so, which?

At first blush the question may seem like a modest one, but make no mistake:  If the Court answers in the affirmative – which many watching this case believe the Court just might do – that answer has the power to alter the way claims constructions are litigated in the district courts, resulting in increased development of the record with regard to expert testimony and other evidence.  A decision to afford more deference to a district court’s claim construction would likely cause more emphasis to be placed on expert testimony and could thereby expand the role, use, and importance of experts at that level.

An affirmative answer would also likely require the Court to overrule, or at a minimum clarify, its 1998 decision in Cybor Corp. v. FAS Technologies Inc., which concluded that claims construction is a question of law subject to de novo review on appeal.

Many stakeholders have weighed in – amicus briefs have been filed by the American Bar Association, the American Intellectual Property Association, Google, Amazon, Dell and others – raising the ante on the hotly debated issue of whether the de novo standard of review for claims construction judgments is finally ready for official change by the Court.

Inherent in finding a workable solution is answering questions which don’t always have clear cut answers (particularly depending upon which stakeholder or appellate circuit you ask) – such as whether patent claim construction shouldalways be considered a purely legal issue  - an all-or-nothing approach proposed by the appellee in the case Lighting Ballast Control LLC, or whether only certain underlying claims construction issues involving subsidiary fact questions or mixed questions of law and fact are best left to the deference of a district court.

Lighting Ballast Control LLC, the original plaintiff in the action, argued on rehearing for just such an all-or-nothing kind of approach – asserting that the standard of review should be one of clear error for all aspects of a district court’s claim construction – in other words, that a district court’s claim construction determination should be given deference on appeal unless it is clearly erroneous.

Defendant Universal Lighting Technologies, Inc. opposes the clear error standard of review for all aspects, contending that claim construction is ultimately a legal issue and that well-settled case precedent establishing de novo review on appeal should not be disturbed, notwithstanding claim construction can involve mixed questions of law and fact or subsidiary facts – although seemingly acknowledging that subsidiary aspects involving historical issues of fact should receive deference.   

A New Standard of Review – Questions to Ponder

Does the Court’s question on rehearing – and its willingness to consider officially giving district courts’ claim construction rulings more deference – reflect many of the policy changes that seem to be behind the larger tide of sweeping patent reform measures such as those ushered in by enactment of the AIA?

If so, is it an indirect way to inject policy considerations into the claims construction process, by turning a lower court’s claim construction decision into one that would be more difficult to overturn, thereby reducing patent appeals and impinging on a party’s ability to fairly appeal a lower court’s ruling?

Will it result in overly-zealous attempts to bolster the evidentiary record in the district court with expert and other testimony in order to better preserve issues on appeal?  Will it result in lengthy district court expert testimony battles, or instead create a more efficient trial process that defers to determinations that district courts are best designed to employ?  Does greater finality at the lower court level serve the purposes of claim construction at a time when highly valuable and monetized intellectual property changes at lightning speed?

Some proponents of overturning the de novo review standard assert that the current standard contributes to the goal of uniformity – which should perhaps be a less important judicial purpose than that of finality. Implementation of a standard of review that gives more deference to the district court’s ruling – for example reversing a district court’s final ruling only upon a showing of clear error – would allegedly result in fewer appeals, reduce appellate backlog, and lead to fewer reversals, which some claim undermine public confidence in the trial courts – so the argument goes.

The argument that federal district courts should be afforded more deference in claim construction determinations on appeal rests in part on the premise that trial courts are by their nature better positioned than the appellate court to make factual determinations and weigh certain evidence, and possess both the tools and the time for thorough development of the record, which would likely include both oral and non-oral extrinsic evidence and include expert, inventor, and/or historical testimony.

Perhaps the Court should develop its own hybrid – as many are guessing the panel might do here – and hold that certain questions of fact best left to the purview of a trial court should be reviewed for clear error, but questions of law should be reviewed de novo.  If the Court takes this route, it may now face the unenviable task of sorting out and dissecting sometimes intertwined questions of law and fact in order to determine the proper standard to be applied on review, and just how much deference, if any, should be given to the district court’s determination.

Regardless, the Court seems at the precipice of making some change to the de novo standard of review, and its willingness to give any aspects of a district court’s ruling more deference in a claim construction appeal will likely cause a ripple effect in the lower tribunal that will require patent litigators to rethink their strategy, give greater attention to development of certain evidentiary issues at the trial level, and could significantly change the way experts are used and the way the record is developed at the claim construction phase of patent infringement cases, increasing the use and role of experts.

Would changing the standard on appeal from one of de novo review to one of “clear error” result in more uniformity, reduce backlog, and improve efficiency and trust in the judicial system? Or is it a measure that, essentially already taking place in part in some jurisdictions, is long overdue?

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Maggie Tamburro

Maggie Tamburro is an attorney and writer who holds a Juris Doctor from The John Marshall Law School and a Bachelor of Arts from the University of Texas. She was admitted to the Illinois Bar in 1994 and Florida Bar in 1999 and has significant experience in legal research, editing, and writing. Maggie is active her in local community, holding various publicly appointed civic board positions.

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