LEGAL
At the end of March, the Supreme Court agreed to review Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. The case is a patent infringement dispute between Teva, a pharmaceutical company that markets the multiple sclerosis drug Copaxone, and Sandoz, Inc. and Mylan Pharmaceuticals Inc., both of which market generic versions of Copaxone.
Although the substance of the case relates strictly to drug patents, the Supreme Court's decision in this case, which is likely to come down next term, will have a significant impact on patent litigation of all kinds.
The case began when Teva sued Sandoz and Msylan for patent infringement after each submitted its own Abbreviated New Drug Application (ANDA) for generic versions of Copaxone. The Copaxone patents all include claims reciting a product called copolymer-1 and claims reciting methods of making copolymer-1.
A sample of polymeric material such as copolymer-1 is generally composed of a combination of individual polymer molecules of varying molecular weights; there are different methods of describing the resulting distribution of molecular weight values, all of which produce different results. This is important to understand as the district court ruled in favor of Teva, whose patents did not distinguish between the different definitions of "molecular weight." That fact did not seem to bother the district court, which construed all references to "molecular weight" to one of the different possible measures.
Mylan and Sandoz appealed, and the U.S. Court of Appeals for the Federal Circuit reversed, at least in regards to one of the sets of patent claims, rendering those patents invalid because of the indefiniteness of their use of the term "molecular weight" – specifically, the claims do not indicate which average molecular weight measure is intended.
Admittedly, I glazed over quite a few details – partly because they are not entirely relevant to the Supreme Court's review of the case and partly because most of the technical science behind the patents is beyond the grasp of those without a degree in it.
And fortunately you don't really need to worry about how the different molecular weights are calculated to understand the case as it's being reviewed by the Supreme Court. The case is (thankfully) more about legal procedure than biochemistry.
The issue that the Supreme Court will be resolving is whether the Federal Circuit Court of Appeals is correct in reviewing de novo "a district court's factual finding in support of its construction of a patent claim term," which the Federal Circuit has done for three decades, or whether the Federal Circuit should be reviewing such factual findings only for clear error, as Federal Rules of Civil Procedure Rule 52(a) requires.
The practical difference between these two levels of appellate review (de novo and clear error) is one of deference. Specifically, de novo requires the appeals court to show the lower court far less deference to its findings than clear error, which allows a reviewing court to set aside a lower court's findings only upon a finding by the appeals court of "clear error" on the district court's part.
As mentioned above, the Federal Circuit, which handles all patent litigation, has been reviewing factual findings in support of its construction of a patent claim term under the less deferential de novo standard, which means that the appeals court looks at the issue on appeal with a blank slate (in other words, it re-decides the issue that the lower court did).
The Federal Circuit has conducted itself this way because it has regarded the construction of patent claims as a matter of law (for which the de novo standard is appropriate).
Conversely, the "clear error" standard is used to review questions of fact. Because construing patent claims often involves expert testimony and documentary evidence, Teva has argued that the "clear error" standard should apply.
As recently as February 21, 2014, the Federal Circuit reaffirmed its commitment to the former methodology in Lighting Ballast Control LLC v. Philips Electronics North America Corp. In that same case, another view on the proper level of review of construction of patent claims manifested itself, most notably by the U.S. government. That view is somewhat of a hybrid approach that still generally regards the determination of patent claim construction as a legal matter, but that also recognizes that there are significant questions of fact inherent in any such determination.
We'll get more insight into how the Supreme Court will rule next term when the Court holds oral arguments, but, as I stated earlier, the case could have a major impact on patent litigation of all kinds. If the Court decides to rule in favor of the "clear error" standard, there would be an instant and noticeable drop in patent appeals, since the chance of success of such appeals would take a corresponding nosedive under the new standard.
Even if the Court espouses the "hybrid" view advanced by the government, the ruling would still represent a significant shift in patent litigation procedure, and legal departments across the country would be scrambling to adapt.
For now, though, all we can do is wait until the Court's next term.
Jeremy Byellin is a practicing attorney in the state of Minnesota and a writer for the Westlaw Insider blog. His articles for the blog cover a wide range of legal topics, with a specific focus on major legal developments and cyberlaw.
-->
