Monday, November 27, 2006

Decision to Revisit Cybor Denied Amidst Divided Court

Amgen v. Hoechst Marion Roussel (05-1157 ) - November 22, 2006
(Petition for en banc rehearing denied)

Since the Federal Circuit decided in Cybor Corp v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) that the construction of patent claim language is a question of law that is reviewed de novo, what originally seemed like a moderately reasonable post-Markman ruling has snowballed into a veritable nightmare for the patent bar. Since appeals on claim construction issues give little to no deference to lower court findings, appeals have practically become crapshoots for litigants. The oft-quoted statistic of 50% reversal rates have made it extremely difficult for litigants to understand their true positions until after the CAFC has spoken.

In Amgen, the appeal surrounded the construction of the term “therapeutically effective amount” of erythropoietin, where the CAFC panel reversed the lower court’s construction based on its interpretation of the specification.

HMR requested for a rehearing en banc but was denied by a fractured CAFC, which issued six separate dissenting and concurring opinions. While Cybor was spared this time around, it is clear the the CAFC has some changes in mind on the issue of claim construction. This case also appears to have the "maiden opinion" of Judge Kimberly Moore (what a way to start off your CAFC career!), who does not appear to be a big fan of Cybor:

Opinions Supporting Denial of En Banc Rehearing:

LOURIE - I concur in the decision of the court not to rehear this case en banc. I do so, even though I agree that the panel erred in construing the claim limitation "a therapeutically effective amount." However, this issue is enbancable only on the uniformity or exceptional importance grounds. In this case, the interpretation of "a therapeutically effective amount" with respect to this particular patent specification seems to me to be case-specific, and it does not therefore raise a question of uniformity of decision or exceptional importance.

GAJARSA, LINN and DYK - We concur in the denial of rehearing en banc. Our concurrence should not be read as an endorsement of Cybor . In an appropriate case we would be willing to reconsider limited aspects of the Cybor decision. In our view an appropriate case would be the atypical case in which the language of the claims, the written description, and the prosecution history on their face did not resolve the question of claim interpretation, and the district court found it necessary to resolve conflicting expert evidence to interpret particular claim terms in the field of the art. This is not such a case.

Opinions Opposing Denial of En Banc Rehearing:

MICHEL and RADER - Four practical problems have emerged under the Markman-Cybor regime: (1) a steadily high reversal rate; (2) a lack of predictability about appellate outcomes, which may confound trial judges and discourage settlements; (3) loss of the comparative advantage often enjoyed by the district judges who heard or read all of the evidence and may have spent more time on the claim constructions than we ever could on appeal; and (4) inundation of our court with the minutia of construing numerous disputed claim terms (in multiple claims and patents) in nearly every patent case . . . I believe the time has come for us to re-examine Cybor's no deference rule. I hope that we will do so at our next opportunity, and I expect we will.

NEWMAN - I do not share the view, expressed here by some colleagues, that this court should not intrude upon panel decisions when major errors of claim construction are pointed out on petition for rehearing en banc. The Federal Circuit has a special obligation to provide predictability and consistency in patent adjudication, for our panel decisions are of nationwide effect; indeed, this obligation was a justification for the court's holding, a decade ago, that the district court's claim construction receives non-deferential review on appeal. This appellate position imposes on us the obligation to state the correct law, even on rehearing en banc. If the meaning of "therapeutically effective amount" is treated as a question of law, its correct definition as well as the methodology by which it is defined are squarely within the criteria for rehearing en banc. And if the meaning is recognized as a case-specific finding of fact, appellate review warrants deference to the trier of fact, a deference here lacking.

RADER - I urge this court to accord deference to the factual components of the lower court’s claim construction. As is often the case, the district court was better positioned than this court to reach the proper construction. Indeed, in this case, the trial court held a nine-day trial, including testimony of artisans informed of the meaning of "therapeutically effective amount" at the time of invention. The trial court, while noting that it did not rely on expert testimony to construe the claim, specifically noted that such testimony offered during the trial fully supported the district court's claim construction. Given this court’s rule toward limited reliance on extrinsic evidence in claim construction, district court judges have learned to disclaim any reliance on expert testimony. Yet, in this case the trial court took testimony for nine days – hardly necessary if the judge was merely reading and relying upon the intrinsic patent document alone.

MOORE - I dissent because I believe this court should have taken this case en banc to reconsider its position on deference to district court claim construction articulated in Cybor. Five judges of this court have written opinions in this case expressing disagreement with the two judge panel majority’s claim construction even under the de novo standard of review. I commend the district court for its thorough, detailed, thoughtful, and competent efforts in construing this claim limitation. The district court did everything we have asked it to do, and in my opinion, did it correctly. While this may not be a basis for taking the case en banc, reconsideration of the deference accorded to the district court in this case would have been. Therefore, I would grant en banc review.

Is Supreme Court review likely? It seems the answer is yes - with eight of the twelve judges expressing some willingness to tweak Cybor amidst this fractured decision, it is all but certain that a frenzy of petitioning will soon follow to support certiorari (Dennis Crouch at Patently-O has labeled this case and the Tamoxifen antitrust cases as "the two most likely to be granted certiorari in 2007").

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