Claim Construction Strategies for Trial and Appeal in Pharma Litigation
By Vincent Capuano and Kristina Caggiano
August 15, 2012
Corporate Counsel Magazine
Claim construction is the single most important event in the course of a patent litigation. It defines the scope of the property right being enforced, and is often the difference between infringement and non-infringement, or validity and invalidity.
–Circuit Judge Kimberly Moore (dissenting from the denial of a petition for rehearing en banc of Retractable Technologies v. Becton, Dickinson and Co., No. 2010-1402, 2011 WL 2652448 (Fed. Cir. 2011).
The importance of claim construction to patent litigation results in a tremendous amount of time, effort, and resources devoted to obtaining a favorable claim construction at the district court level. The Markman (claim construction) hearing is a pivotal—and often dispositive—event in the progress of a patent infringement case. Despite the time and effort spent by litigators, experts, and judges in construing claims at the district court level, claim constructions are also the most likely aspects of a case to be reversed on appeal. See Jeffrey A. Lefstin, The Measure of the Doubt: Dissent, Indeterminacy, and Interpretation at the Federal Circuit, 58 HASTINGS L.J. 1025, 1026 (2007). The high reversal rate is due in part to inconsistencies in the law (and application of the law) governing claim construction, as well as to the de novo standard under which claim constructions are reviewed on appeal. See Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc).
Nowhere is the paradoxical relationship between the effort expended at trial on claim construction and the certainty of the result on appeal more dramatic than in the pharmaceutical and biotechnology fields. There are two main reasons why the paradox is so keenly felt in the life sciences. First, patent claims in the life sciences tend to use sophisticated and art-specific nomenclature that has no plain meaning to a layman, and that requires extensive tutorial and background information for the district court to make sense of the terms disputed. Second, claims terms are to be construed according to the understanding of one of ordinary skill in the art, and the level of ordinary skill in the life sciences tends to be higher than in most other industries.
For instance, the level of ordinary skill in the pharmaceutical or biotechnology arts may require a Ph.D. in organic chemistry, molecular biology, or immunology, with experience in drug design, antibody technology, or other highly skilled disciplines. The same analysis in other mechanical or Internet technologies may only require a bachelor's degree and experience in the relevant field. The higher the level of ordinary skill in the field, the more background knowledge is necessary for the district court to appreciate how one of ordinary skill would understand the claim language. The higher level of ordinary skill also makes reliance on expert testimony and other extrinsic evidence more likely and more important to a proper interpretation of the claim language.
Courts generally embrace the potential value of scientific testimony during claim construction hearings: Where the claims or specification "contain technical terms or terms of art the court may hear the testimony of scientific witnesses to aid the court in coming to a correct conclusion." AFG Indus., Inc. v. Cardinal IG Co., 239 F.3d 1239, 1249 (Fed. Cir. 2001). Some district courts even appoint technical advisers under Fed. R. Evid. 706 to obtain background and education in the technology from an independent source. See, e.g., MediaCom Corp. v. Rates Tech., Inc., 34 F. Supp. 2d 76, 78 n.1 (D. Mass. 1998).
The protracted and fact-intensive Markman hearings in life science patent cases go from being a reality of trial to a paradox on appeal. There are no live witness testimony or walk-through tutorials at the Federal Circuit level. Although parties may (and should) submit to the Federal Circuit the relevant portions of the Markman transcript and any tutorial materials presented, the appellate claim construction process is simply not the same. No deference is given to the countless hours spent educating the trial judge and putting the words of the claim into the context of the art.
While Markman hearings are held before infringement and validity are determined at the trial court, claim constructions are reviewed on appeal after a final decision in the case. Thus, while the dispositive nature of a particular construction may not be fully appreciated by the district court at the time of a Markman hearing, the connection between a disputed term and the outcome of the case cannot be denied on appeal. Although the Federal Circuit proclaims that it does not construe claims with the object of causing a claim to be infringed or invalid, it is impossible to truly unring the bell once the consequences of the competing constructions are made plain. Thus, on appeal, less attention may be given to accurately understanding the scientific vocabulary and context of use in a given patent claim, and more given to how the claim construction dispute fits into the larger picture of what is happening in the case.
Therein lies the paradox. The more background knowledge and education is needed to support the claim construction at trial, the more effort will be put into the Markman hearing, and the more likely that such effort will be unhelpful on appeal. This paradox has been identified by the Federal Circuit itself on many occasions, and was most recently lamented in the dissents from the en banc court's denial of the petition for rehearing filed in Retractable Technologies v. Becton, Dickinson and Co., No. 2010-1402, 2011 WL 2652448 (Fed. Cir. 2011).
In her dissent from the denial of rehearing in Retractable Techs, Circuit Judge Kathleen O’Malley expressed the increasingly popular sentiment that deference should be given to the factual aspects of the district court’s claim construction, explaining that:
Post-Markman, district judges have been trained to—and do—engage in detailed and thoughtful analysis of the claim construction issues presented to them. They conduct live hearings with argument and testimony, sometimes covering several days, and certainly always extending beyond the mere minutes that courts of appeals have to devote to live exchanges with counsel. Simply, the trial court has tools to acquire and evaluate evidence that this court lacks.
Retractable Techs, No. 2010-1402 (O’Malley dissenting) (internal quotes omitted).
Indeed, the U.S. Supreme Court has called claim construction a "mongrel practice," Markman v.Westview Instruments, Inc., 517 U.S. 370, 378 (1996), indicating that it involves a mixed question of law and fact. Mixed questions of law and fact typically demand a more deferential standard of review "when it appears that the district court is 'better positioned' than the appellate court to decide the issue in question . . . " Salve Regina College v. Russell, 499 U.S. 225, 233 (1991) (quoting Miller v. Fenton, 474 U.S. 104, 114 ). See also First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 948 (1995) ("The reviewing attitude that a court of appeals takes toward a district court decision should depend upon ‘the respective institutional advantages of trial and appellate courts . . . .' "[quoting Salve Regina College, 499 U.S. at 233]).
The Federal Circuit rule, however, remains that claim construction is reviewed de novo. Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998). The rationale behind this rule is that a patent is like a contract, wherein certain disclosure is given in exchange for delineated exclusive rights. Claim construction thus becomes a form of contract interpretation, an activity traditionally reserved for judges and reviewed without deference. See Markman, 517 U.S. at 388.
Regardless of one's views on whether the Federal Circuit ought to change its de novo approach for reviewing claim construction, the denial of rehearing in Retractable Techs indicates that the law, though controversial, is not changing any time soon. Patent owners and accused infringers are thus left with the challenge of navigating the strategic paradox: Attorneys must find a way to obtain a favorable claim construction in a protracted, live-testimony, fact-intensive Markman hearing at the district court, and then defend that construction—de novo—in a concise, post-verdict, rule-intensive appellate brief.
In the pharmaceutical and biotechnology fields, there are several important strategies for successfully navigating this paradox. These include:
- Present expert testimony directed towards how one of ordinary skill in the art would understand the term the way it is used in the claims, rather than expert testimony defining what the term means from the point of view of the expert.
- Present information at the Markman hearing in slides that can be reprinted in the body of an appellate brief. Avoid the use of animation unless necessary to show a mechanism of action. Animation must be submitted to the appellate court on a separate DVD, which may not get as much attention as the brief.
- Elicit expert testimony on the actual words used in the claim, as well as the understanding that one of skill would have as to the nature and scope of the inventive contribution of the patent in a more holistic sense. This covers your bases regardless of whether the appellate panel has a more formal or a more holistic approach to claim construction.
- Determine whether to characterize a disputed term as one defined by the specification, or by a well-known term in the art, depending on which characterization more strongly favors your position. Elicit expert testimony accordingly, keeping in mind that the Federal Circuit will not look kindly on changing positions on appeal.
Whether deference will ever officially be applied to district court claim constructions has yet to be determined. In the meantime, for practitioners in life sciences patent litigation, these strategies may help to walk the line between a scientifically focused Markman hearing and a legally focused de novo appeal.Vincent Capuano is a partner in the intellectual property group of Duane Morris's Boston office, and the national chair of the firm's Hatch-Waxman practice group. He holds a Ph.D. in organic chemistry. Kristina Caggiano is an associate in the intellectual property group of Duane Morris's Washington, D.C. office. Her practice focuses on trial and appellate level patent litigation. She clerked for the Honorable Sharon Prost at the Court of Appeals for the Federal Circuit in 2009 and 2010.