Supreme Court Decision on Teva Pharmaceuticals v. Sandoz

In Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., the Supreme Court settled the issue of the level of deference the Federal Circuit must give to District Court determinations during claim construction. The case specifically addressed whether subsidiary findings of fact relating to extrinsic evidence, made by a judge during claim construction, are entitled to the “clearly erroneous” standard of review rather than the de novo standard historically used by the Federal Circuit.

At the District Court, Sandoz asserted that the claims were indefinite under 35 U.S.C. § 112, ¶ 2 because the term “molecular weight” was ambiguous. Teva argued that the term meant “peak average molecular weight,” which it said was clear in light of the specification. Sandoz asserted that Figure 1 of the patent showed that this interpretation was not reasonable and discussed that Teva asserted different definitions of “molecular weight” during the prosecution of familial patents using the term. The District Court considered expert testimony from both sides to assist his determination of the meaning of the term “molecular weight.” The District Court accepted Teva’s expert’s testimony as more credible and held that the claims were not indefinite because the meaning of “molecular weight” is “peak average molecular weight” in light of the specification.

The Federal Circuit reversed and remanded stating that the prosecution history showed that Teva asserted different definitions of “molecular weight” during prosecution of familial patents, which contributed to the ambiguity of the term. The Federal Circuit also did not accept Teva’s expert’s explanation of Figure 1 as being consistent with “molecular weight” meaning only “peak average molecular weight.” In doing so, the Federal Circuit applied the de novo standard of review and did not provide reasoning about why it did not accept the District Court’s finding.

The Supreme Court vacated the judgment of the Federal Circuit holding that while the overall question of claim construction remains a question of law, the Federal Circuit must apply the “clearly erroneous” standard of review when overturning factual findings by the District Court. In doing so, the Supreme Court stated that Markman v. Westview Instruments, Inc. did not create an exception to Rule 52(a) of the Federal Rules of Civil Procedure for claim construction. In holding that the Federal Circuit must apply the “clearly erroneous” standard of review, the Supreme Court analogized the interpretation of a patent to the interpretation of a deed or contract, which includes subsidiary fact finding. Also, the subsidiary factual fact findings of claim construction were analogized to those made in obviousness determinations, which are reviewed for clear error on appeal. The Supreme Court stated that practical considerations support using the “clearly erroneous” standard as well because the District Court has a greater level of familiarity with the case and is in a better position to evaluate the evidence.

Summary By: Kyle Helgemoe, associate attorney at Fogg & Powers LLC; Posted: January 21, 2015

The information contained herein is not intended as legal advice but merely conveys general information about law and/or court decision(s).  This information should not be relied upon or used as a substitute for consultation with a licensed professional.  Please consult a licensed professional to obtain advice with respect to any particular legal issue or problem.