Friday, February 21, 2014

CAFC in Lighting Ballast: Cybor stays

The Cybor standard of de novo review of claim construction continues, by a 6-4 vote.

From Lighting Ballast v. Philips , in an opinion by Judge Newman:

For the reasons we shall discuss, we apply the principles of stare decisis, and confirm the Cybor standard of de novo review of claim construction, whereby the scope of the patent grant is reviewed as a matter of law. After fifteen years of experience with Cybor, we conclude that the court should retain plenary review of claim construc- tion, thereby providing national uniformity, consistency, and finality to the meaning and scope of patent claims. The totality of experience has confirmed that Cybor is an effective implementation of Markman II, and that the criteria for departure from stare decisis are not met.

Of stare decisis

The proponents of stare decisis point to the courts’ and patent community’s fifteen years of experience with Cybor, and argue that this experience supports retention of the Cybor principle. Emphasizing the potential multi- case and multi-forum litigation of patents on today’s technologies, they argue that it is particularly important that this court be able to resolve claim construction defin- itively as a matter of precedent, rather than allow differ- ing trial court constructions of the same patent, as may result from deferential review of close questions.
Stare decisis is of “fundamental importance to the rule of law.” Hilton v. S. Carolina Pub. Ry. Comm’n, 502 U.S. 197, 202 (1991) (quoting Welch v. Texas Dep’t of Highways & Pub. Transp., 483 U.S. 468, 494 (1987)). The doctrine of stare decisis enhances predictability and efficiency in dispute resolution and legal proceedings, by enabling and fostering reliance on prior rulings. CSX Transp. Inc. v. McBride, 131 S. Ct. 2630, 2641 (2011). By providing stability of law that has been decided, stare decisis is the foundation of a nation governed by law. The Supreme Court has said: “we will not depart from the doctrine of stare decisis without some compelling justification.” Hilton, 502 U.S. at 202 (citing Arizona v. Rumsey, 467 U.S. 203, 212 (1984)); see Dickerson v. United States, 530 U.S. 428, 443 (2000) (“special justification” is needed to overrule precedent).

Stability in procedural as well as substantive law, on which the public and the courts can rely, guards against the expenditure of time and resources on aspects that have been resolved. These values come to the fore when a court undertakes to reexamine its own precedent, for stare decisis implements the “prudential and pragmatic consid- erations designed to test the consistency of overruling a prior decision with the ideal of the rule of law, and to gauge the respective costs of reaffirming and overruling a prior case.” Planned Parenthood of S.E. Pa. v. Casey, 505 U.S. 833, 854 (1992). The principles and policies of stare decisis operate with full force where, as here, the en banc court is considering overturning its own en banc prece- dent.

The presumption that a court will adhere to its prior rulings has “‘special force’” for precedents that resolve non-constitutional issues, for “‘Congress remains free to alter what we have done.’” J.R. Sand & Gravel Co. v. United States, 552 U.S. 130, 139 (2008) (quoting Patterson v. McLean Credit Union, 491 U.S. 164, 172–73 (1989)). In Patterson the Court observed that the same issue had previously divided the Court and that “[s]ome Members of this Court believe that [the precedent] was decided incor- rectly”; the Court discussed the principles of stare decisis, and concluded that “no special justification has been shown for overruling” the prior decision, for neither “the growth of judicial doctrine or further action taken by Congress. . . . have removed or weakened the conceptual underpinnings from the prior decision.” 491 U.S. at 171-173. The Court observed that no “later law has rendered the decision irreconcilable with competing legal doctrines or policies.” Id. at 173.

Of experts

Similarly, experts in the science or technology may assist the court in understanding the meaning and usage of a claim term, but this does not morph the question into one of fact. Cf. United States v. Stone & Downer Co., 274 U.S. 225 (1927) (relying on expert testimony on the mean- ing of the tariff term “clothing wool” in the custom of the trade). The Court stated in Markman II:
in theory there could be a case in which a simple credibility judgment would suffice to choose be- tween experts whose testimony was equally con- sistent with a patent’s internal logic. But our own experience with document construction leaves us doubtful that trial courts will run into many cases like that. In the main, we expect, any credibility determinations will be subsumed within the nec- essarily sophisticated analysis of the whole docu- ment, required by the standard construction rule that a term can be defined only in a way that comports with the instrument as a whole.
517 U.S. at 389.

Of the opinion of the legal community

Our colleagues in dissent offer a few arguments that warrant response. First, referring to “the materials submitted to the court,” the dissent states that “a sub- stantial proportion of the legal community” believes that Cybor was “wrongly decided.” Diss. at 6. The materials tell a different tale.
Contrary to the dissent’s statements, all of the technology industries that offered advice to the court, urge retention of Cybor’s standard.
The dissent appears unconcerned that the major in- dustrial amici urge retention of the Cybor standard, and instead announces that “no one in the legal community— except perhaps the members of the majority—has come to believe that either the wisdom or vitality of Cybor is settled,” Diss. at 6. This conclusion is curious. For exam- ple, the amicus brief of Google, Amazon, Hewlett-Packard, Red Hat and Yahoo! states that departing from Cybor would “make worse” the uncertainty of claim construction:

[T]he root causes of uncertainty in claim con- struction are vaguely drafted claims and contra- dictory claim-construction methodologies, not appellate review. Deference would not ameliorate those causes of uncertainty; it would make them worse.
** *
[T]reating claim construction as a factual question subject to clear-error review would only aggravate the uncertainty and cost issues plagu- ing our patent-litigation system.

Of horizontal and vertical uncertainty:

Clear scope is important to all potential mar- ket entrants. This kind of horizontal certainty is important to the entire industry. By contrast, the concern that de novo review increases the “dura- tion” of a single patent litigation until a final deci- sion is reached in that particular case (Cybor, 138 F.3d at 1476 (Rader, J., dissenting))—what might be called vertical uncertainty—matters only in the small fraction of cases that reach an appeal. Ver- tical uncertainty is more visible than horizontal uncertainty, but, as often is the case, here it is the unseen effects that are greater. Cf. Frédéric Bas- tiat, What Is Seen and What Is Not Seen (1848), available at Bastiat/basEss1.html.

For this reason, it is not merely the overarch- ing principles of claim construction, but their ap- plication, that must be consistent. In claim construction as elsewhere, “the relevant legal principle can be given meaning only through its application to the particular circumstances of a case.” Miller, 474 U.S. at 114.
Brief of Amicus Curiae Cisco et al. at 19.

Of golden words of the past

While it is comforting to know that our golden words of the past are not forgotten, those of us with the majority today who have questioned aspects of Cybor in the past, now decide this case on the record of the present and with an eye to the future. The dissent would discard the experience of the past fifteen years. However, the court is not now deciding whether to adopt a de novo standard in 1998. Today we decide whether to cast aside the standard that has been in place for fifteen years.

Work by Peter Menell is dismissed as relating to obsolete data:

Our colleagues in dissent, citing the obsolete data, argue that the de novo standard “adds considerable uncer- tainty and expense to patent litigation,” Diss. at 4, stating that this standard increases appeals, discourages settle- ment, and increases the length and cost of litigation. No evidence of this effect is offered, and all of the amici curiae who are frequent litigants state the contrary position. The data published by the Administrative Office of the United States Courts point the other way.


We conclude that the criteria are not met for overruling or modifying the Cybor standard of de novo review of claim construction as a matter of law.


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