The Federal Circuit has issued its long-awaited opinion in Lightning Ballast Control LLC v. Phillips Electronics N.A. Corp. By a 6-4 decision, the en banc court held that claim construction should remain a matter of law with no deference accorded to the district court judge’s findings on appeal.
Judge Newman wrote the opinion for the court and relied extensively on uniformity and finality as reasons to retain the current system. She argued that different cases involving the same patent may result in different conclusions as to the meaning of claim terms if the Federal Circuit had to decide the cases with deference to the rulings of the trial court judges. This would result in increased uncertainty, costs, and litigation. The public needs to know definitively what a patent claim means. Thus, the Federal Circuit should rule on the issue for all the world and not just the parties at hand.
Judge Newman’s opinion relies extensively on stare decisis, the principle that courts should adhere to their previous decisions and not overrule them unless absolutely necessary. She goes on to state that there is no real impetus to overrule the previous case holding that claim construction is a matter of law to be reviewed de novo on appeal and nobody has provided a workable solution if such an impetus did exist.
Finally, Judge Newman spends a great deal of time attempting to rebut the arguments raised by the dissent that the de novo rule is extremely unpopular and leads to tremendous uncertainty in claim construction appeals. This seems to be a serious factual dispute between the judges in the majority and those in dissent.
Judge Lourie filed a concurring opinion where he made several interesting arguments. First, he said that there are really not factual disputes with respect to claim construction. Although there are a number of actors involved in the patent process, such as hired experts that really don’t know what was meant by the patent terms anyway. Hired scientific experts do not lie, so the judge’s determination of a witness’s credibility is irrelevant.
Next, he argues that, yes, claim construction rulings are considered on appeal de novo, they aren’t really. The Federal Circuit provides informal deference to the district court judge’s ruling. The Federal Circuit will affirm the district court when appropriate and reverse when appropriate. These points are somewhat baffling to me.
Judge O’Malley (a former district court judge) wrote at great length and rather scathingly for the four dissenting judges. She argued that a cursory review of the history of de novo review of claim construction demonstrates its error. There are clearly determinations of underlying factual issues that are entitled to deference on appeal.
When a case is wrongly decided, as the case that dictated de novo review on appeal was, stare decisis does not require the court to adhere to the erroneous decision. Indeed, en banc review is precisely for overruling such decisions.
The judges in these opinions seem to have gotten a bit personal. Judge Newman emphasizes that the rule upheld in this case has been settled for 15 years, while Judge O’Malley indicates that it has been a short time. Judge O’Malley cites Judge Newman’s views from the earlier decision where Judge Newman criticized the de novo review as ignoring the underlying factual issues involved in claim construction. Judge O’Malley seems shocked that several members of the majority in today’s opinion, including Judge Newman, were among the harshest critics of the de novo review rule.
The result in this case is indeed shocking. The overwhelming majority of the patent community recognizes that it makes little sense for judges that are far afield on appeal get to determine whether the trial court correctly determined underlying factual issues related to claim construction.
It is likely that this case is headed to the Supreme Court.