March 5, 2014

By: Divided Federal Circuit Punts On Patent Claim Construction Review Standard

Despite a strong dissent and a number of amici briefs, the Federal Circuit, in a 6-4 en bancdecision, refused to overturn the de novo patent claim construction review standard.  In Lighting Ballast Control LLC v. Phillips Electronics North America Corporation, (Fed. Cir. February 21, 2014), the United States Court of Appeals for the Federal Circuit decided not to reverse its 1998 decision in Cybor Corp v. FAS Technologies, Inc., which held that patent claim construction receives de novo review on appeal.  In short, the standard remains that the district court’s decision is given no deference by the appellate court.

As the dissent argued, many in the legal community thought that Cybor was wrongly decided.  Further, the standard is inconsistent with the Federal Rules, which require a deferential review of district court decisions.  Finally, one of the driving reasons for Cybor has been marginalized, if not eliminated – reversal rate.  While there was a high rate of reversal in the early years of Cybor, as consistency evolved and experience grew, rates of reversal for patent claim construction came to match the norms on other grounds. Several groups advocated for a hybrid approach, where factual aspects of the claim construction are afforded a clearly erroneous standard, while the district court’s final conclusion is afforded de novo review.

The majority, however, rejected these arguments and based its decision on the doctrine of stare decisis, finding that there was no compelling reason to depart from the precedent set by Cybor.   The majority also found that it could not identify reasoning from the Supreme Court, Congress, or district courts that called Cybor into question. Finally, the court was unconvinced that a hybrid approach would serve as a workable replacement of Cybor.

The court’s decision does little to change the reality for litigants; claim construction will continue to be a battle at both the district court and federal circuit levels. However, the en banc split decision, with a vigorous dissent and numerous amici weighing in on the matter, may signal that the matter is ripe for Supreme Court review and guidance, especially since the Supreme Court would not be handcuffed by Cybor, and may examine the standard of review strictly on the merits to determine what it believes is the best way forward.