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New CAFC Standard Elevates Importance of Sound Claims

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umbrella_lightbulb-421163-editedThe importance of sound claims in a patent application is well understood, but a recent U.S. Supreme Court ruling in a patent infringement case underscores the need to ensure that a patent’s claims are in final, defensible condition at the time of the initial application.

In Teva Pharma. USA, Inc. v. Sandoz, Inc., the Supreme Court ruled that the Court of Appeals for the Federal Circuit (CAFC) must apply a standard of “clear error” in overturning any judicial determinations of fact involving claim construction from a lower court. CAFC now must defer to those federal district rulings that do not rise to the level of being a clear error, a deference that it typically has observed in non-patent cases.

Until the Supreme Court’s ruling, CAFC had handled patent cases differently from most others, applying a de novo standard of review that set aside all previous judicial determinations of fact and re-examined the evidence. Just after the ruling, three high profile patent cases which the Supreme Court previously had agreed to hear were immediately sent back to CAFC for further proceedings, Reuters reported.

The implementation of the clear error standard does not, however, mean that patent claims that survived challenges before PTAB or federal district courts will be safe from renewed scrutiny if they are appealed to CAFC. As IP attorney Paul Hughes pointed out on the Washington Post’s “Volokh Conspiracy” blog, the Court’s ruling included a suggestion for a possible “bright line rule” for CAFC’s handling of patent appeals: factual determinations from intrinsic evidence, such as patent claims, would remain subject to de novo review. A lower court’s determinations from extrinsic evidence, though, such as underlying scientific principles or the precise definitions of technical terms from a particular field, would receive deference from CAFC unless they committed a clear error as described by the Supreme Court ruling in Teva v. Sandoz.

Hughes speculated that the Teva ruling may “signal an implicit endorsement of … extrinsic evidence.” This could, perhaps, prompt patent applicants to begin packing their claims with language that could be buttressed by third-party expert testimony in the event of a challenge.

A safer course of action is to prepare claims from the outset for defense not only against a USPTO patent examiner but for the multiple forums of appeal that may lie beyond. Even after Teva v. Sandoz, those forums retain the potential to ignore a patent’s earlier victories and bring a fresh perspective to bear upon its claims.



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