Wednesday, January 28, 2015

"Clear error" review under Rule 52; thinking back to KSR

With the discussion about "clear error" review of extrinsic evidence in fact-finding underlying claim construction, one recalls an aspect of KSR v. Teleflex.
From the 2009 IPBiz post KSR v. Teleflex: story-telling is nice, but...   

IPBiz agrees that there was a lot going on in KSR that most people do not discuss. First, it was a non-precedential case of the CAFC, not the sort of thing that the Supreme Court typically reviews. Second, the substantive issue of obviousness was not even at issue in the case; the CAFC did not hold that the claims were, or were not, obvious. Third, there was a lot of discussion of expert testimony, with the CAFC believing more in patent applicant's expert and the Supreme Court going more with the other side's expert. The facts were pretty clear. Story telling was the issue.

Separately, first formed opinions are tough to break. The Supreme Court went into KSR with some strong beliefs (eg gobbleygook) that may, or may not, have existed by the end of the case. Along this line, compare Justice Scalia's discussion of text in the Hatch-Waxman Act in Merck v. Integra to Justice Scalia's earlier opinion.


Separately, from a comment by Mr. Lynch at PatentlylO

 Adding some number of cents to Lawrence Ebert’s very early comments on the Teva case, I would like to carry forward Mr. Ebert’s observation that the district court opinion did not call out the “finding of fact” that SCOTUS said was entitled to the “clearly erroneous” protections of Rule 52(a)(6).
The Supremes focused on the provisions of Rule 52(a)(6) which establishes that findings of fact by the District Court must not be set aside unless clearly erroneous. True enough, but what is the character of the findings that obtain this “clear error” insulation on appeal? Rule 52(a)(1) says that these are findings that the District Court must make specially “in an action tried on the facts without a jury.” So findings of fact entitled to the clear error insulation of Rule 52(a)(6) are findings made after a case has been “tried.” In the Teva case, it seems the expert testimony that the district court credited was adduced at a non-jury trial, not in any Markman proceeding.
District court judges are seemingly not fond of the entire Markman procedure (at least in part because of the perception that the Federal Circuit’s de novo review rule denigrated the difficult and time consuming efforts that the lower court was required to expend). As partial result, Markman claim construction procedures have not been uniform, and have often been involved a pretrial proceeding involving submission of briefs (with declarations) and argument. Such procedures hardly qualify a “trial” needed to support any fact findings essential to claim construction that are not based on intrinsic evidence.
Messrs. Rich and Williams noted that the Teva decision “encourages parties to submit extrinsic evidence.” But can such evidence to support claim construction can be submitted in a proceeding other than a trial now that such factual underpinnings must march to the cadence of Rule 52. In jury cases, this suggests a preliminary non-jury trial to resolve such contested facts, or alternatively a series of sessions during trial outside the presence of the jury. (Let us pass the issue of whether the factual determination of “the underpinnings of claim construction” ventures into the province of the jury. For the moment, we shall assume that such factual determinations are exclusively for the judge, like factual determinations made, for example, in assessing the admissibility of evidence. This is another fertile area for litigators to plow.) In non-jury cases, judges would be hard-pressed to yield to the demand for two trials, so the claim construction might not be established in advance of the liability trial.
This could yield procedural environment where the claim construction exercise is increasingly not undertaken until trial, and the parties do not have a firm understanding of the district court’s view of what the claim means until deep into the trial or as late as delivery of the jury charge. Some judges have adopted this latter practice.
My personal belief has always been “evidence trumps experts,” and opportunistic counsel will look for extrinsic evidence beyond precooked expert opinions to affect claim construction. So I wonder if the Teva lawyers ever inquired how Sandoz scientists manifested an understanding of “molecular weight” in their everyday work involving compounds like Copaxone or looked for other extrinsic evidence as to what was the accepted mode of calculating molecular weight of that material. These observations support a conclusion that a trial within a trial could be increasingly brewing in future Markman procedures.
I agree with Prof. Ghosh’s comment that the Teva decision will “open the floodgates for experimentation by advocates and judges.” My take is that advocates will be seeking advantage and judges striving to uncomplicate an already taxing Markman process. In the interim, the Federal Circuit, which does not always demonstrate a masterly command of the rules and consequences of evidence, is going to be feel a bit strait-jacketed in its review of Markman rulings


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