Teva Pharmaceuticals, Inc. v. Sandoz, Inc.
574 U.S. 318, 135 S. Ct. 45 (2015)
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Rule of Law:
An appellate court must apply a 'clear error' standard of review to a district court's resolutions of subsidiary factual matters made in the course of construing a patent claim. The appellate court reviews the district court's ultimate construction of the patent claim de novo.
Facts:
- Teva Pharmaceuticals (Teva) owns a patent covering a manufacturing method for Copaxone, a drug used to treat multiple sclerosis.
- The patent's claim describes the drug's active ingredient as having 'a molecular weight of 5 to 9 kilodaltons.'
- The term 'molecular weight' can be calculated using at least three different scientific methods, and the patent did not specify which method to use.
- Sandoz, Inc. (Sandoz) attempted to market a generic version of Copaxone.
- A dispute arose as to whether the term 'molecular weight' was fatally indefinite under patent law because its calculation method was not specified.
- At trial, Teva and Sandoz presented conflicting expert testimony regarding how a person skilled in the relevant scientific field would understand the term 'molecular weight' in the context of the patent.
Procedural Posture:
- Teva Pharmaceuticals USA, Inc. sued Sandoz, Inc. in the U.S. District Court for the Southern District of New York for patent infringement.
- Sandoz asserted as a defense that Teva's patent was invalid due to indefiniteness.
- After a bench trial with conflicting expert evidence, the District Court found the patent was not indefinite and was therefore valid.
- Sandoz, as appellant, appealed the decision to the U.S. Court of Appeals for the Federal Circuit.
- The Federal Circuit, applying a de novo standard of review to all aspects of the claim construction, reversed the District Court, holding that the patent was invalid for indefiniteness.
- Teva, as petitioner, was granted a writ of certiorari by the U.S. Supreme Court.
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Issue:
Does Federal Rule of Civil Procedure 52(a)(6)'s 'clear error' standard apply to an appellate court's review of a district court's factual findings that are subsidiary to its construction of a patent claim?
Opinions:
Majority - Justice Breyer
Yes. Federal Rule of Civil Procedure 52(a)(6) requires an appellate court to review a district court's findings of fact under the 'clearly erroneous' standard, and this rule applies to subsidiary factual findings made during patent claim construction. The ultimate question of claim construction is a legal conclusion reviewed de novo, but any underlying factual disputes resolved by the district court based on extrinsic evidence, such as conflicting expert testimony, are subject to clear error review. The Court reasoned that Rule 52(a) is a 'clear command' without exceptions for patent cases. While Markman v. Westview Instruments, Inc. established that claim construction is a question of law for the judge, it also recognized that it has 'evidentiary underpinnings' which may require resolving factual disputes. Practical considerations also favor this approach, as district court judges are better positioned than appellate judges to assess evidence and witness credibility after presiding over an entire proceeding.
Dissenting - Justice Thomas
No. The 'clear error' standard of review is inapplicable because claim construction, including its subsidiary determinations, does not involve 'findings of fact' within the meaning of Rule 52(a)(6), but rather conclusions of law. The dissent argues that patents are governmental dispositions analogous to statutes, not private contracts, and their construction should be a pure question of law to ensure uniformity. The inquiry into how a 'person of ordinary skill in the art' would understand a term is a legal fiction, not a historical fact. Applying a deferential standard to these determinations undermines the appellate courts' role in creating uniform and predictable patent law, which was a key objective recognized in Markman.
Analysis:
This decision significantly altered patent litigation by rejecting the Federal Circuit's longstanding practice of reviewing all aspects of claim construction de novo. By mandating a hybrid standard of review—clear error for subsidiary facts and de novo for the ultimate legal conclusion—the ruling elevates the importance of the trial court proceedings. This gives more deference and finality to district court judges' findings, particularly in cases hinging on extrinsic evidence like conflicting expert testimony. The decision will likely result in fewer claim construction rulings being overturned on appeal and shifts litigants' strategic focus to prevailing on factual disputes at the trial level.
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