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On appeal, the Federal Circuit disagreed with the district court's claim construction analysis, finding that the extrinsic evidence of universal acceptance of the 10% error was contrary to the intrinsic evidence of the claims and specification. Specifically, the court pointed to the fact that the phrase '400 'm or less' was not qualified by 'about' in the claims, and where 'about' was used in the specification, it was never used in such a way as to suggest that the claimed granules could be larger than 400 'm. The court also pointed out that the specification made clear that the claimed 'fine' granules were smaller than conventional granules, which were defined as having a diameter of 400 'm or more. Slip op.at 6. Having determined that the claims did not extend beyond 400 'm, the court ruled that Zydus' product, which Takeda had measured at 412 'm, did not literally infringe. Id. at 9'10.

Turning to invalidity, the Federal Circuit ruled that the virtual dissection required by the district court was not required, and in fact was counter to the purpose of the patent, because aggregates larger than 400 'm would produce the rough feeling that the patent sought to avoid. Id. at 17'18. Because virtual dissection was not required by the claims, the Federal Circuit found that the claims survived Zydus' enablement challenge. The opinion notes, however, that had virtual dissection been required, the claims would have been invalid, because the lone methodology disclosed in the specification for determining granule size was incapable of virtual dissection. Id. The Federal Circuit went on to affirm the district courts findings that the patent was not invalid for indefiniteness or for lacking written description.

Federal Circuit: Routine Mental Steps Carried Out By Computer Outside the Scope of Section 101

On Jan. 24, 2014, a unanimous Federal Circuit Panel of Judges Lourie, Dyk and Taranto, issued an opinion, authored by Judge Taranto, in SmartGene, Inc. v. Advanced Biological Labs., SA., Case No. 2013-1186. In it, the Federal Circuit affirmed the district court's ruling that Advanced Biological Laboratories' (ABL's) patents were invalid as drawn to unpatentable subject matter under 35 U.S.C. '101.

SmartGene brought a declaratory judgment action against ABL, seeking a declaration that two of ABL's patents, drawn to systems and methods for selecting a treatment regimen for known diseases, were invalid. The claims involve use of a computer with a database of treatment regimens for known diseases, a database of rules for evaluating and selecting treatment regimens, and a third database of advisory information. A medical condition would be entered into the computer, and the machine would return a list of treatment regimens and advisory information. See, e.g., U.S. Patent No. 6,081,786, col. 17, l. 49' col. 18, l. 4. In its motion for summary judgment, SmartGene argued that claim 1 of one of the patents, a method claim, was representative of all claims of both patents, and ABL did not refute this assertion in its briefing. For this reason, the trial court limited its analysis to claim 1, and found that the patents were invalid as drawn to unpatentable subject matter, specifically abstract mental processes. ABL appealed.

On appeal, the Federal Circuit affirmed the district court's grant of summary judgment of invalidity. The court cited CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed.Cir.2011), for the proposition that section 101 does not embrace 'a process defined simply as using a computer to perform a series of mental steps that people, aware of each step, can and regularly do perform in their heads. Slip op. at 4. According to the court, claim 1 merely calls for a computer with the capability of comparing stored and input data and rules, and generating a list, all of which is accomplished regularly in the minds of doctors. Id. The Federal Circuit further agreed with the district court that because ABL had failed to brief or sufficiently argue that other claims of either patent should be analyzed differently for purposes of '101 analysis, there was no need to consider other claims further. Id. at 3.

Federal Circuit Retains De Novo Review of Claim Construction

On Feb. 21, 2014, an en banc panel of the Federal Circuit issued opinions in Lighting Ballast Control LLC v. Philips Electronics North America Corporation, et al., Case No. 2012-1014. The majority opinion was authored by Judge Newman, and joined by Judges Lourie, Dyk, Prost, Moore, and Taranto. Judge Lourie authored a concurring opinion. Judge O'Malley authored a dissent, which was joined by Chief Judge Rader, and Judges Reyna and Wallach. Judges Chen and Hughes did not take part in the decision. At issue was whether the court would revisit the standard of appellate review of district court claim construction decisions articulated in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc).

In its opinion, the majority relied primarily on the principle of stare decisis to confirm the standard of de novo review for claim construction rulings set out in Cybor, whereby the scope of the patent grant is reviewed as a matter of law. Slip op. at 7. The majority's argument rests primarily on four propositions. First, the majority relied on the judiciaries 15 year experience with Cybor, and the fact that congress and the Supreme Court have left the ruling intact. Id. at 20'21. Second, the majority asserted that de novo review was in accord with the Federal Circuit's purpose, which was to provide uniformity in the treatment of patents and discourage forum shopping, while deference could require, on a close question, that an appellate panel affirm two conflicting district court claim constructions. Id. at 25. Third, the majority questioned whether more deferential treatment was appropriate, stating that, while expert testimony and other evidence may be helpful, 'expert testimony on the meaning of a claim term does not transform the question from one of law to one of fact.' Id. at 23. According to the majority 'the questions of claim construction are not questions of weight of evidence or credibility of witnesses, but of the claim scope as set forth in the patent documents.' Id. at 24. Finally, the majority stated that neither the dissent, nor any party or amici had put forward a better, more workable alternative to the Cybor standard. According to the majority, overruling Cybor 'has a high potential to diminish workability and increase burdens by adding a new and uncertain inquiry, not only on appeal but also in the trial tribunal.' Id. at 21. Specifically, the majority feared that whether an issue is one of fact or law would be subject to lengthy peripheral litigation. Id.

In response to the dissent, the majority relied primarily on two points. First, that the dissent's proposal, to treat the meaning of a person of ordinary skill in the art as a question of fact, would require deferring to the trial court on the controlling issue in nearly every claim construction ruling. Id. at 32. This, in the majority's view, would be detrimental to the consistency of interpretation that is the purpose of the Federal Circuit. Second, the majority cited an amicus brief and article by Professor Peter Manell, for the proposition that claim construction appeals have been declining in recent years, and thus the ostensible problems of Cybor is not being born out.

In his concurrence, Judge Lourie stated his belief that 'when the trial judge is subjected to dueling experts selected for their views, choosing which of them to credit hardly amounts to historical fact-finding.' Concurrence at 3. Judge Lourie went on to point out that appellate panels give informal deference to lower court decisions that are factually intensive. Id. at 4'5. However, he warned if deference were required, 'intensive appellate review would fade away ' and so will uniformity.' Id. at 7.

The dissent rests its arguments on three propositions. First, that Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), mandates only that claim construction be performed by the court, rather than the jury, and not that de novo review is required. Dissent at 14'23. To the contrary, the dissent asserts that Fed. R. Civ. P. 52(a)(6) requires deference for findings of fact made by the trial court. Deference under Rule 52(a)(6) is not limited to findings that turn on witness credibility, but must be given to all findings of fact. Id. at 33'34. Second, while the principal of stare decisis might, on its face, counsel in favor of retaining Cybor, the interests furthered by stare decisis ' stability of law and protecting the public's ability to rely on judicial decisions ' are better served by overturning the decision. Id. at 29. This is, according to the dissent, because if deference were accorded to trial judge's claim constructions, parties could more readily rely on the district court's decision. Dissent at 29'30. The dissent also noted that 'claim construction appeals are 'panel dependent' which leads to frustrating and unpredictable results for both the litigants and the trial court.' Id. at 30 (quoting Retractable Techs., Inc., v. Becton, Dickinson and Co., 659 F.3d 1369 1370). The panel dependence of claim construction outcomes, combined with the panel's de novo review, incents the party who lost at trial to roll the dice on appeal, thereby discouraging settlement and increasing the length and cost of litigation. Id. at 35.

Jeffrey S. Ginsberg'is a Partner and Wyatt Delfino is an Associate in the New York office of Kenyon & Kenyon LLP.

Federal Circuit: 'Universal Acceptance' of a Principal Does Not Overcome Language of Claims and Specification

On Feb. 20 2014, a unanimous Federal Circuit Panel of Judges Prost, Plager, and Chen, issued an opinion, authored by Judge Prost, in Takada Pharm. v. Zydus Pharm. USA, Case No. 2013-1406. In it, the panel reversed the district court's claim construction and infringement rulings, but affirmed the lower court's validity findings.

The patent at issue, U.S. Patent No. 6,328,994 (the '994 patent) covers tablets including granules of lansoparazole, a proton pump inhibitor used to treat acid reflux. A patient allows the tablet to disintegrate in his or her mouth, and then swallows the granules, which release the drug in the patient's stomach. The stated objective of the '994 patent is for a formulation containing granules small enough that they do not feel rough in the patient's mouth. To that end, the claims require, inter alia, 'fine granules having an average particle diameter of 400 'm or less,' '994 patent, col. 37 ll. 44'45. During claim construction, the district court agreed with Takada, that the term '400 'm or less' should be construed to include a deviation of '10%, because a 10% error rate was 'universally accepted' for particle size measurement. Takeda Pharm. Co. v. Zydus Pharms. USA Inc., No. 10-1723, 2011 WL 4736306, at *3'4 (D.N.J. 2011). The district court also agreed with Takeda that, when the granules were measured, aggregates of granules (those stuck together) should be virtually dissected, such that the diameter of each granule within the aggregate is separately measured. Takeda, No. 10-1723, slip op. at 12'13. Based on these holdings, the district court found that Zydus' product infringed; the court further found that Zydus had failed to prove that the '994 patent was invalid. Id. at 25'42. Zydus appealed.

On appeal, the Federal Circuit disagreed with the district court's claim construction analysis, finding that the extrinsic evidence of universal acceptance of the 10% error was contrary to the intrinsic evidence of the claims and specification. Specifically, the court pointed to the fact that the phrase '400 'm or less' was not qualified by 'about' in the claims, and where 'about' was used in the specification, it was never used in such a way as to suggest that the claimed granules could be larger than 400 'm. The court also pointed out that the specification made clear that the claimed 'fine' granules were smaller than conventional granules, which were defined as having a diameter of 400 'm or more. Slip op.at 6. Having determined that the claims did not extend beyond 400 'm, the court ruled that Zydus' product, which Takeda had measured at 412 'm, did not literally infringe. Id. at 9'10.

Turning to invalidity, the Federal Circuit ruled that the virtual dissection required by the district court was not required, and in fact was counter to the purpose of the patent, because aggregates larger than 400 'm would produce the rough feeling that the patent sought to avoid. Id. at 17'18. Because virtual dissection was not required by the claims, the Federal Circuit found that the claims survived Zydus' enablement challenge. The opinion notes, however, that had virtual dissection been required, the claims would have been invalid, because the lone methodology disclosed in the specification for determining granule size was incapable of virtual dissection. Id. The Federal Circuit went on to affirm the district courts findings that the patent was not invalid for indefiniteness or for lacking written description.

Federal Circuit: Routine Mental Steps Carried Out By Computer Outside the Scope of Section 101

On Jan. 24, 2014, a unanimous Federal Circuit Panel of Judges Lourie, Dyk and Taranto, issued an opinion, authored by Judge Taranto, in SmartGene, Inc. v. Advanced Biological Labs., SA., Case No. 2013-1186. In it, the Federal Circuit affirmed the district court's ruling that Advanced Biological Laboratories' (ABL's) patents were invalid as drawn to unpatentable subject matter under 35 U.S.C. '101.

SmartGene brought a declaratory judgment action against ABL, seeking a declaration that two of ABL's patents, drawn to systems and methods for selecting a treatment regimen for known diseases, were invalid. The claims involve use of a computer with a database of treatment regimens for known diseases, a database of rules for evaluating and selecting treatment regimens, and a third database of advisory information. A medical condition would be entered into the computer, and the machine would return a list of treatment regimens and advisory information. See, e.g., U.S. Patent No. 6,081,786, col. 17, l. 49' col. 18, l. 4. In its motion for summary judgment, SmartGene argued that claim 1 of one of the patents, a method claim, was representative of all claims of both patents, and ABL did not refute this assertion in its briefing. For this reason, the trial court limited its analysis to claim 1, and found that the patents were invalid as drawn to unpatentable subject matter, specifically abstract mental processes. ABL appealed.

On appeal, the Federal Circuit affirmed the district court's grant of summary judgment of invalidity. The court cited CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed.Cir.2011), for the proposition that section 101 does not embrace 'a process defined simply as using a computer to perform a series of mental steps that people, aware of each step, can and regularly do perform in their heads. Slip op. at 4. According to the court, claim 1 merely calls for a computer with the capability of comparing stored and input data and rules, and generating a list, all of which is accomplished regularly in the minds of doctors. Id. The Federal Circuit further agreed with the district court that because ABL had failed to brief or sufficiently argue that other claims of either patent should be analyzed differently for purposes of '101 analysis, there was no need to consider other claims further. Id. at 3.

Federal Circuit Retains De Novo Review of Claim Construction

On Feb. 21, 2014, an en banc panel of the Federal Circuit issued opinions in Lighting Ballast Control LLC v. Philips Electronics North America Corporation, et al., Case No. 2012-1014. The majority opinion was authored by Judge Newman, and joined by Judges Lourie, Dyk, Prost, Moore, and Taranto. Judge Lourie authored a concurring opinion. Judge O'Malley authored a dissent, which was joined by Chief Judge Rader, and Judges Reyna and Wallach. Judges Chen and Hughes did not take part in the decision. At issue was whether the court would revisit the standard of appellate review of district court claim construction decisions articulated in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc).

In its opinion, the majority relied primarily on the principle of stare decisis to confirm the standard of de novo review for claim construction rulings set out in Cybor, whereby the scope of the patent grant is reviewed as a matter of law. Slip op. at 7. The majority's argument rests primarily on four propositions. First, the majority relied on the judiciaries 15 year experience with Cybor, and the fact that congress and the Supreme Court have left the ruling intact. Id. at 20'21. Second, the majority asserted that de novo review was in accord with the Federal Circuit's purpose, which was to provide uniformity in the treatment of patents and discourage forum shopping, while deference could require, on a close question, that an appellate panel affirm two conflicting district court claim constructions. Id. at 25. Third, the majority questioned whether more deferential treatment was appropriate, stating that, while expert testimony and other evidence may be helpful, 'expert testimony on the meaning of a claim term does not transform the question from one of law to one of fact.' Id. at 23. According to the majority 'the questions of claim construction are not questions of weight of evidence or credibility of witnesses, but of the claim scope as set forth in the patent documents.' Id. at 24. Finally, the majority stated that neither the dissent, nor any party or amici had put forward a better, more workable alternative to the Cybor standard. According to the majority, overruling Cybor 'has a high potential to diminish workability and increase burdens by adding a new and uncertain inquiry, not only on appeal but also in the trial tribunal.' Id. at 21. Specifically, the majority feared that whether an issue is one of fact or law would be subject to lengthy peripheral litigation. Id.

In response to the dissent, the majority relied primarily on two points. First, that the dissent's proposal, to treat the meaning of a person of ordinary skill in the art as a question of fact, would require deferring to the trial court on the controlling issue in nearly every claim construction ruling. Id. at 32. This, in the majority's view, would be detrimental to the consistency of interpretation that is the purpose of the Federal Circuit. Second, the majority cited an amicus brief and article by Professor Peter Manell, for the proposition that claim construction appeals have been declining in recent years, and thus the ostensible problems of Cybor is not being born out.

In his concurrence, Judge Lourie stated his belief that 'when the trial judge is subjected to dueling experts selected for their views, choosing which of them to credit hardly amounts to historical fact-finding.' Concurrence at 3. Judge Lourie went on to point out that appellate panels give informal deference to lower court decisions that are factually intensive. Id. at 4'5. However, he warned if deference were required, 'intensive appellate review would fade away ' and so will uniformity.' Id. at 7.

The dissent rests its arguments on three propositions. First, that Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), mandates only that claim construction be performed by the court, rather than the jury, and not that de novo review is required. Dissent at 14'23. To the contrary, the dissent asserts that Fed. R. Civ. P. 52(a)(6) requires deference for findings of fact made by the trial court. Deference under Rule 52(a)(6) is not limited to findings that turn on witness credibility, but must be given to all findings of fact. Id. at 33'34. Second, while the principal of stare decisis might, on its face, counsel in favor of retaining Cybor, the interests furthered by stare decisis ' stability of law and protecting the public's ability to rely on judicial decisions ' are better served by overturning the decision. Id. at 29. This is, according to the dissent, because if deference were accorded to trial judge's claim constructions, parties could more readily rely on the district court's decision. Dissent at 29'30. The dissent also noted that 'claim construction appeals are 'panel dependent' which leads to frustrating and unpredictable results for both the litigants and the trial court.' Id. at 30 (quoting Retractable Techs., Inc., v. Becton, Dickinson and Co., 659 F.3d 1369 1370). The panel dependence of claim construction outcomes, combined with the panel's de novo review, incents the party who lost at trial to roll the dice on appeal, thereby discouraging settlement and increasing the length and cost of litigation. Id. at 35.

Jeffrey S. Ginsberg'is a Partner and Wyatt Delfino is an Associate in the New York office of Kenyon & Kenyon LLP.