New Study On Claim Construction Reversal Rates

"Learn from the mistakes of others - you can never live long enough to make them all yourself"

- John Luther

With all the talk of claim construction and CAFC reversal rates, Professor David Schwartz from the John Marshall Law School set out to see if there was any empirical data that could signal a possible solution to the courts and the claim construction conundrum (the "Safire-esque" sound to this phrase is purely coincidental). Specifically, a core premise of the U.S. legal system is that legal doctrine is taught by the higher courts, and applied by the lower courts (i.e., the "teacher-learning theory"). Applying this theory to the CAFC, the court would presumably teach district courts how to construe claims, and they would apply CAFC tautology to a given set of facts to achieve a relatively predictable result.

However, this is clearly not happening, especially on issues of claim construction. Professor Schwartz poked at some statistics to see if he could uncover why. A few of his findings follow.

Active Judicial Districts

Theory: Jurisdictions that appear the most before the CAFC on claim construction issues would absorb the most institutional knowledge and, thus, have the more accurate take on claim interpretation during litigation.

Finding: Not really. In fact, the second busiest district (C.D. Cal.) had the highest reversal rate of claim construction (43.5%). The most active judicial districts, appearances at the CAFC on claim construction, and % of claim construction appeals reversed or vacated because of claim construction error are:

(1) N.D. Cal. - 84 (28.6% reversed or vacated)
(2) C.D. Cal. - 69 (43.5% reversed or vacated)
(3) N.D. Ill. - 65 (26.2% reversed or vacated)
(4) D. Del. - 54 (22.2% reversed or vacated)
(5) S.D.N.Y. - 45 (28.9% reversed or vacated)
(6) D. Mass. - 42 (26.2% reversed or vacated)
(7) D. Minn. - 33 (36.4% reversed or vacated)
(8) E.D. Mich. - 29 (31.0% reversed or vacated)
(9) D.N.J. - 28 (32.1% reversed or vacated)
(10) E.D. Va. - 27 (22.2% reversed or vacated)
(11) N.D. Tex. - 21 (42.9% reversed or vacated)
(11) S.D. Tex. - 21 (23.8% reversed or vacated)
(13) W.D. Wisc. - 19 (21.1% reversed or vacated)
(14) W.D. Wash. - 18 (38.9% reversed or vacated)
(14) D. Col. - 18 (27.8% reversed or vacated)

Thus the average % of cases reversed or vacated among the top 15 is about 30.12%, and 4 out of the top 10 exceed this amount. Since Markman, 32.4% of overall claim terms were "wrongly" construed by the lower court, and 38.2% of cases had at least one term wrongly construed. Moreover, 30% of cases overall had to be reversed, vacated or remanded because of an erroneous claim construction. As a point of reference, the CAFC's overall reversal rate of district court judges' judgments in patent cases was 13% for each of the years 2004-06.

Number of Previous Appeals

Theory: A district court judge with more prior CAFC feedback should have a lower reversal rate than a judge with less experience.

Finding: "There does not appear to be a clear trend that the reversal rate decreases when a district court judge appears multiple times before the Federal Circuit on claim construction."

Looking at judges having 1, 2, 3, 4, or "5 or more" previous appeals, the reversal rates appear to be the same throughout, with the exception of judges that had exactly four prior claim construction appeals. In this case, the chances of an erroneous claim constructions upticks to 56.7%, and the chance of a case being reversed or vacated jumps to 50%.

Prior Reversals

Theory: When a particular district court judge has been reversed, vacated or remanded at least once due to an erroneous claim construction, the judge will "learn the lesson" and perform better on subsequent constructions.

Finding: "The first reversal does not have a substantive or statistically significant effect on future performance . . . It does not appear that district court judges improve their claim construction accuracy after their first reversal from the Federal Circuit."

Judges With Experience

The paper also looked at Judges with the most patent experience, and overall judicial experience. While a slight decrease was detected for judges with the most overall experience, no substantive effects were detected.

Age of Judges

Interestingly, the trend in reversal rates generally decrease until the district court judge is 70 years old. Thereafter, the reversal rate spikes to nearly 35-40%. One possible explanation for this is that judges seventy or older are more likely to have taken senior status, and that senior status affects claim construction accuracy.

The study concludes:

As to the specific problem in patent law, the article points to three possible explanations for the lack of improvement: (1) an indeterminate nature of claim construction; (2) a failure of the Federal Circuit to teach properly how to construe claims; and (3) a failure of district court judges to learn claim construction. The data suggests that quasi-specialized patent trial judges, as proposed in pending legislation, will not automatically reduce the reversal rate . . . Further, with regard to the court system more broadly, the data leads one to consider whether the teaching-learning hypothesis should be revisited. Further empirical studies should be considered to see if what is happening in the patent context, namely a failure to learn or teach, occurs in other areas of law. If trial courts do not learn from appellate courts, a different model of understanding the entire court system, not just as applied to patent law, may be necessary.

Download a draft copy of Professor Schwartz's paper here (70 pages).