Federal Circuit Case Addresses
Patent Interpretation

On July 12, 2005, the Federal Circuit Court of Appeals issued a decision in a case that has had patent attorneys holding their collective
breath. In Phillips v. AWH Corp., the Federal Circuit attempted to clear up years of confusion and inconsistent rulings, explaining how the operative language in patents is to be interpreted. The Court also spoke to the standard to be used on appeal, when deciding whether trial courts have interpreted “patent claim” language correctly.

While the topic seems to be one only an inventor or his lawyer could love, viewed in context, the Phillips decision represents an
important milestone in a ten year journey that has transformed patent jurisprudence. The journey started in 1995, with the Federal
Circuit Court‘s decision in Markman v. Westview Instruments, Inc. The Federal Circuit concluded in that case that the scope of a patent should not depend on facts and circumstances particular to the inventor, but rather, it should be divined exclusively from the official patent documents themselves and from objective references, such as treatises and dictionaries. Divorcing patent claim interpretation from traditional factual inquiry meant two things. First, it meant that judges, not juries, were responsible for deciding what the terminology used in a patent claim actually meant. Second, it meant that a court hearing an appeal of that determination (i.e., the Federal Circuit) need not
give any deference to the trial court’s conclusions. The appeals court was to reach its own conclusions de novo – a Latin term essentially meaning “from scratch.”

Because this “claim construction” process is often the pivotal inquiry in a patent case, losing parties have every incentive to appeal
unfavorable Markman rulings. And since such a ruling is accorded no deference by the appeals court, decisions are reversed far more often than in typical civil litigation. By some accounts, the Federal Circuit reverses Markman decisions brought before it more often than it affirms them.

Incredibly, the situation got even worse in 2002, when the Federal Circuit decided, in a case called Texas Digital Systems, Inc. v. Telegenix, Inc., that even patent-related documents such as the patent prosecution history and the explanatory section of a patent called the "specification” should take a back seat to “objective” resources, such as dictionaries. In short, when the Court encountered an ambiguous term in the patent claims defining an invention, it was supposed to resort first and foremost to dictionaries – not to the other sections of the patent itself or to documents filed with the Patent and Trademark Office that approved the patent – to determine the meaning of that term. Subsequent cases followed the Texas Digital lead to varying degrees, leaving patent lawyers flummoxed as to how patent language would be construed in any particular case.

Acknowledging this legal morass, the Federal Circuit stepped up by taking the Phillips case en banc. That is, instead of relegating the case to a three-judge panel, it was heard by the entire Federal Circuit bench. Among the questions before the Court were: (1) to which sources should the trial court refer when construing patent claims; and (2) should the trial court‘s own determination be given any deference by the appeals court?

Those expecting a dramatic shift, or even a dramatic clarification of the claim construction process, were disappointed. Reasonably, the Court acknowledged the importance of referring to the patent specification and to the patent prosecution history in assigning meaning to the language in the claims section of the patent. Resources, such as dictionaries, were accorded some significance, but not to the extent suggested in Texas Digital. But the Phillips decision left unclear precisely what role those resources would play, and when. Indeed, some members of the en banc panel applied the “new” Phillips standard to reverse the trial court, while other members of the panel would have applied the same standard to affirm it.

While only time will tell for sure, it would seem that the same “dictionary versus patent specification and prosecution history” arguments that existed prior to the Phillips decision will persist, although those relying most heavily on help from Noah Webster may have a more difficult time with the trial judge. Indeed, there are those who believe that Phillips is part of a bigger trend, in which Courts have been less inclined to afford patent-holders extraordinarily broad readings of their patents.

But the real disappointment came in the Court‘s refusal to reconsider the standard by which the Federal Circuit reviews Markman claim construction rulings. By leaving the current de novo standard intact, and failing to formulate a precise claim construction standard that can be applied fairly and predictably, the Phillips Court has greatly diminished the role of the Federal District Courts in many patent cases. That makes patent litigation longer, more expensive, and less predictable than it should be.