Lighting Ballast Control, LLC v. Philips. Elect.: Cybor Survives en banc Review, Claim Construction Standard of Review Remains de novo

Category: Civil Procedure
By: Jesus Hernandez, Blog Editor/Contributor  
TitleLighting Ballast Control, LLC v. Philips. Elect. N. Amer., Corp., No. 2012-1014 (Fed. Cir. Feb. 21, 2014) (en banc).
IssueThe court en banc granted the petition filed by patentee Lighting Ballast Control, in order to reconsider the holding in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc) establishing the standard of appellate review of district court decisions concerning the meaning and scope of patent claims—called “claim construction.” Implementing the Supreme Court’s decision in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) (Markman II) [...], this court in Cybor held that patent claim construction receives de novo determination on appeal, that is, review for correctness as a matter of law.
Lighting Ballast Control, LLC at *6.
Holding[W]e apply the principles of stare decisis, and confirm the Cybor standard of de novo review of claim construction, whereby the scope of the patent grant is reviewed as a matter of law. After fifteen years of experience with Cybor, we conclude that the court should retain plenary review of claim construction [...]. The totality of experience has confirmed that Cybor is an effective implementation of Markman II, and that the criteria for departure from stare decisis are not met.
Id. at *7.
Editor Note
For further insight, check out the Audio Brief of Lighting Ballast Control v. Philips, which condenses oral arguments before the en banc CAFC into 10 minutes.
Procedural HistoryIn the case now before us, a panel of this court followed the Cybor standard and revised the district court’s claim construction, applying de novo the statutory requirements of 35 U.S.C. §112 ¶6 and §112 ¶2.1 Briefly, the panel held that the claim term “voltage source means” is a means-plus-function term requiring corresponding structure in the specification. On this claim construction, the panel reversed the district court and held the claims invalid for indefiniteness. The patentee requests rehearing, stating that on deferential appellate review the district court would not or should not have been reversed. This court undertook rehearing en banc for the purpose of reconsidering the standard of appellate review of claim construction.
Lighting Ballast Control, LLC at 7.
Legal Reasoning (Newman, Lourie, Dyk, Prost, Moore, Taranto)
Legal Standard: Stare Decisis
Stare decisis is of “fundamental importance to the rule of law.” […] The doctrine of stare decisis enhances predictability and efficiency in dispute resolution and legal proceedings, by enabling and fostering reliance on prior rulings. […] By providing stability of law that has been decided, stare decisis is the foundation of a nation governed by law. The Supreme Court has said: “we will not depart from the doctrine of stare decisis without some compelling justification.” […].
Lighting Ballast Control, LLC at *17 (internal citations omitted).
Stability in procedural as well as substantive law, on which the public and the courts can rely, guards against the expenditure of time and resources on aspects that have been resolved. These values come to the fore when a court undertakes to reexamine its own precedent, for stare decisis implements the “prudential and pragmatic considerations designed to test the consistency of overruling a prior decision with the ideal of the rule of law, and to gauge the respective costs of reaffirming and overruling a prior case.” […] The principles and policies of stare decisis operate with full force where, as here, the en banc court is considering overturning its own en banc precedent. The presumption that a court will adhere to its prior rulings has “‘special force’” for precedents that resolve non-constitutional issues, for “‘Congress remains free to alter what we have done.’”
Id. at *17-18 (internal citations omitted).
Competing Views of Cybor Presented Before CAFC
View #1: Overturn Cybor“The view favored by Lighting Ballast is that the Cybor decision is incorrect and should be entirely discarded.” Lighting Ballast Control, LLC at *9. “[T]hat although the Court stated that “the interpretation of a so- called patent claim . . . is a matter of law reserved entirely for the court,” [...], the Court did not strip claim construction of its essentially factual nature.” Id. at *10.
View #2: Modify CyborThe second approach, favored by some amici curiae including the United States, may be viewed as a fusion or hybrid of de novo review and deferential review. These proponents acknowledge that the Court in Markman II described patents as “legal instruments” and stated that interpretation of patent claims is a “purely legal” matter, 517 U.S. at 391, but argue that the correct appellate approach is for the factual aspects of claim construction to be reviewed on the clearly erroneous standard, while the final conclusion receives review as a matter of law.
Id. at *11.
View #3: Uphold Cybor“The third view, supported by some amici curiae, is that Cybor is both reasonable and correct in view of the Court’s rulings in Markman II.” Id. at 12. “[T]hese proponents argue that the Cybor standard of review of claim construction reasonably and appropriately implements the Court’s ruling in Markman II, and urge this court to stand by Cybor and its fifteen years of experience. Proponents of stability through the principles of stare decisis stress that consistency of legal analysis and reliability of judicial process are foundations of not only legal systems generally, but also of the technological advance and industrial commitment that are goals of the patent system.
Id. at *15.
No Stare Decisis Grounds to Depart from Cybor
Regarding View #1: No Controlling Authority (SCOTUS, Congress, CAFC) undermining Cybor and Rule not "unworkable"
[W]e have reviewed the arguments for changing the Cybor procedure of de novo review of claim construction. First, we have looked for post-Cybor developments, whether from the Supreme Court, from Congress, or from this court, that may have undermined the reasoning of Cybor. None has been found, or brought to our attention. There has been no legislative adjustment of the Cybor procedure, despite extensive patent-related legislative activity during the entire period of Cybor’s existence.
Lighting Ballast Control, LLC at *20.
We have looked for some demonstration that Cybor has proved unworkable. No proponent of change has shown that de novo review of claim construction is unworkable—nor could they, after fifteen years of experience of ready workability. Nor has anyone shown that Cybor has increased the burdens on the courts or litigants conducting claim construction.
Id. at *20-21.
Regarding View #2: Modifying Cybor Would Add Unnecessary Complexity Disentangling arguably factual aspects, some in dispute and some not, some the subject of expert or other testimony and some not, some elaborated by documentary evidence and some not, some construed by the district court and some not, some related to issues to be decided by a jury and some not—and further disentangling factual aspects from the application of law to fact—is a task ripe for lengthy peripheral litigation. We are not persuaded that we ought to overturn the en banc Cybor decision and replace its clear de novo standard with an amorphous standard that places a new, cumbersome, and costly process at the gate, to engender threshold litigation over whether there was or was not a fact at issue. The principles of stare decisis counsel against such an unnecessary change.
Id. at *21-22.
Agreement with View #3: Upholding Cybor more Tenable
Claim construction is a legal statement of the scope of the patent right; it does not turn on witness credibility, but on the content of the patent documents. The court may indeed benefit from explanation of the technology and the instruction of treatises, but the elaboration of experts or tutorial explanation of technical subject matter does not convert patent claim construction into a question of fact. The type of evidence that may assist a lay judge in determining what a technical term meant to one of skill in the art does not transform that meaning from a question of law into a question of fact. Reference to technical understanding and usage at the time of enactment does not convert statutory interpretation from law to fact.
Id. at *22.
Courts routinely look to dictionaries and treatises to determine the meaning of a statute at the time it was written. […] Similarly, experts in the science or technology may assist the court in understanding the meaning and usage of a claim term, but this does not morph the question into one of fact.
Id. at *22-23 (internal citations omitted).
Response to Dissent
Major Tech. Companies Request Cybor to be Maintained
The dissent appears unconcerned that the major industrial amici urge retention of the Cybor standard, and instead announces that “no one in the legal community— except perhaps the members of the majority—has come to believe that either the wisdom or vitality of Cybor is settled,” Diss. at 6. This conclusion is curious. For example, the amicus brief of Google, Amazon, Hewlett-Packard, Red Hat and Yahoo! states that departing from Cybor would “make worse” the uncertainty of claim construction: [T]he root causes of uncertainty in claim construction are vaguely drafted claims and contradictory claim-construction methodologies, not appellate review. Deference would not ameliorate those causes of uncertainty; it would make them worse.
Lighting Ballast Control, LLC at *27.
In the brief filed by Cisco, Dell, EMC, Intel, SAP, and the SAS Institute, these amici curiae suggest that the proponents of overturning Cybor incorrectly conflate concepts of uncertainty with appellate reversal rates. These amici explain that any possible uncertainty of affirmance on appeal is not the issue in claim construc- tion; rather, the issue is how to generate accuracy and uniformity in claim construction, that is, how to construe claims correctly and predictably.
Id. at *27-28.
Issue with Dissent’s Embrace of “historical facts” approachThe dissent seems to embrace (then expand upon) the “historical fact” notion proposed by Appellant, who states that the meaning a person of ordinary skill in the art would give a term at the time of the filing of the patent application ought to be treated as a question of fact. […] Under the dissent’s approach, and even under the “historical fact” approach, deference would become of central significance in controlling the determination of claim construction, and hence of patent scope. The consequence would be heightened forum-shopping and the inability of the judicial system to arrive at a uniform, settled meaning for a patent’s scope. Those problems are grave ones given the increasingly common situation of multiple cases involving the same patent.
Id. at *32.
Issue With Dissent Creating Nexus between Claim Construction and FRCP 52(a)(6).The major thrust of the dissent is that Federal Rule 52(a)(6) requires deferential review of district court decisions. But Rule 52(a) does not answer the question here. Rule 52(a) prescribes the standard of review of questions of fact, but courts must look outside the Rule to decide if a question is properly characterized as one of fact. As the Court stated in Pullman-Standard, 456 U.S. at 288, “Rule 52(a) does not furnish particular guidance with respect to distinguishing law from fact. Nor do we yet know of any other rule or principle that will unerringly distinguish a factual finding from a legal conclusion.” The dissent’s theory that Rule 52(a) demands abandonment of de novo review of claim construction is a simplistic disregard of the Markman II guidance that “treating interpretive issues as purely legal will promote (though it will not guarantee) intrajurisdictional certainty.” 517 U.S. at 391.
Id. at *34.
We conclude that the criteria are not met for overruling or modifying the Cybor standard of de novo review of claim construction as a matter of law. PANEL DECISION REINSTATED
Lighting Ballast Control, LLC at *37.
LOURIE, Circuit Judge, concurring. Lighting Ballast Control, LLC, Lourie Op., at *1.
Historical Facts Not Usually DeterminativeBy our deferring to [district court] determinations, conceding our full review of the meaning of a claim term, which should be based on the patent’s written description and prosecution history, not the witnesses, hampers our ability to interpret claims with full authority and hence to ensure uniformity. Furthermore, claim construction is not a process that normally involves historical facts. It primarily involves reading the patent’s written description as well as the prosecution history of the patent, and this court is quite as able to do that as any district court, sometimes better. It is true that there may be questions concerning what a particular claim term meant to one skilled in the art at a particular time, but, in my view, when the trial judge is subjected to dueling experts selected for their views, choosing which of them to credit hardly amounts to historical fact-finding.
Lighting Ballast Control, LLC, Lourie Op., at *3 (text added).
Case at Hand did not deal with historical facts, but 112, para. 6.This case did not involve subsidiary findings resolving disputes of historical fact. What was involved was whether there was corresponding structure to support “voltage source means” for “providing a constant or variable magnitude DC voltage between the DC input terminals”. The panel found the means clause in the claim lacked sufficient structure, and the specification similarly was lacking, so it reversed the district court on the ground that the claims were indefinite. Historical fact-finding was not involved; reading the claims and written description was. The en banc court should arrive at the same conclusion, as the district court did not rely on any subsidiary findings of fact. How a means plus function term is construed under § 112, ¶ 6 is not fact, but claim construction, i.e., law.
Id. at *8.
O’MALLEY, Circuit Judge, dissenting, with whom RADER, Chief Judge, REYNA and WALLACH, Circuit Judges, join. Lighting Ballast Control, LLC, O’Malley Op., at *1.
General Grounds for Dissent
The majority opinion is surprising because it refuses to acknowledge what experience has shown us and what even a cursory reading of the Supreme Court’s decision in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), confirms: construing the claims of a patent at times requires district courts to resolve questions of fact. And, it puts itself at odds with binding congressional and Supreme Court authority when it refuses to abide by the requirements of Rule 52(a)(6) of the Federal Rules of Civil Procedure, which expressly instructs that, on appeal, all “findings of fact . . . must not be set aside unless clearly erroneous.” It is also surprising because, having, for the third time, invited a broad swath of the intellectual property community to express opinions regarding the merits of Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), we now premise our refusal to change its holding on principles of stare decisis—that, and a professed inability to come up with a workable alternative to de novo review.
Lighting Ballast Control, LLC, O’Malley Op., at *2.
Stare Decisis Not Sufficient Grounds to Uphold Cybor
Stare Decisis Not a Bar Against Overturning Prior en banc decisions
Consistent with this Supreme Court guidance, we have explained that stare decisis does not stand in the way of abrogating our case law—even entire bodies of it— in at least three circumstances: when we conclude our case law (1) was wrongly decided […]; (2) is at odds with congressional directives […]; or (3) has had negative consequences […] With these principles in mind, this court has not hesitated to revisit its own precedent. […] Indeed, we have said that it is “‘[t]he province and obligation of the en banc court . . . to review the current validity of challenged prior decisions.’” […]. And, we have made clear that this includes overturning precedent set by this court en banc when appropriate. […].
Lighting Ballast Control, LLC, O’Malley Op., at *5-6 (internal citations omitted).
The fact that we have been engaging in a flawed practice for too long does not, alone, create the type of settled expectations stare decisis is meant to protect. Because settled expectations will not be disrupted and no substantive rights will be reordered, stare decisis simply does not stand in the way of this court addressing the merits of Cybor and acknowledging that the rule of law pronounced therein is an incorrect one.
Id. at *13-14.
Premise of Cybor Wrong, not Consistent with SCOTUS Markman OpinionCybor misapprehends the Supreme Court’s decision in Markman, ignoring numerous instances where the Court acknowledged that claim construction can present factual questions. The Supreme Court did not base its conclusion on the fact that a patent is a legal instrument whose construction presents a pure question of law. If it had, there would have been no need for the Court to conduct such a thorough analysis of whether the Seventh Amendment required a jury to resolve issues of claim construction. That question would have needed no discussion if claim construction were purely an issue of law because juries have never been tasked with resolving purely legal questions.
Id. at *14.
Cybor and Claim Construction
Cybor Cannot be Reconciled with Claim Construction StandardsCybor also ignores the realities of the claim construction process. As our en banc court in Phillips observed: [B]ecause extrinsic evidence can help educate the court regarding the field of the invention and can help the court determine what a person of ordinary skill in the art would understand claim terms to mean, it is permissible for the district court in its sound discretion to admit and use such evidence. In exercising that discretion, and in weighing all the evidence bearing on claim construction, the court should keep in mind the flaws inherent in each type of evidence and assess that evidence accordingly. 415 F.3d at 1319 (emphases added). Cybor cannot be squared with this court’s own well-respected description of the very claim construction process to which it purports to apply.
Lighting Ballast Control, LLC, O’Malley Op., at *19.
Claim Construction Not analogous to Statutory ConstructionThe majority justifies these conclusions by analogizing the claim construction process to the interpretation of statutes, where courts routinely consider contemporaneous dictionaries or even the testimony of historians to help determine the meaning of words and phrases therein. [...] The analogy is not a sound one, however. Statutes are duly enacted laws of broad applicability. Their interpretation by an appellate court is binding on all who would be impacted by that statute in that circuit, whether parties to the original action or not. They are drafted by those with congressional authority to enact such laws and are to be given a meaning common to all. Patents are drafted ex parte, are revised in a closed-door examination process, their terms are, as noted before, unique to the invention at issue, and are assertable only against individual infringers in private actions. The two are simply not of the same ilk.
Id. at *20.
Relationship with FRCP 52(a)Stare decisis also must give way because, by refusing to acknowledge the factual component of claim construction, Cybor contravenes the clear directives of Federal Rule of Civil Procedure 52(a)(6). When a district court makes findings of fact—as claim construction sometimes requires—Rule 52(a)(6) provides clear instructions to this court: “Findings of fact, whether based on oral or other evidence, must not be set aside unless clearly erroneous . . . .” The rule is clear on its face, and decisions interpreting it show that it makes no exception with regard to fact-finding in the claim construction context. As the Supreme Court has observed, “Rule 52(a) broadly requires that findings of fact not be set aside unless clearly erroneous. It does not make exceptions or purport to exclude certain categories of factual findings from the obligation of a court of appeals to accept a district court’s findings unless clearly erroneous.” […] Thus, there is direct conflict between Cybor—which expressly calls for de novo review of “any allegedly fact-based questions relating to claim construction,” 138 F.3d at 1456—and Rule 52(a)(6)—which requires deference to all fact-findings that are not clearly erroneous.
Id. at *23-24 (internal citations omitted).
Policy Considerations
A. Greater StabilityDeparting from Cybor and reviewing claim construction findings for clear error would introduce greater stability and less expense, and would afford the appropriate respect for district courts’ factual determinations—respect that Rule 52(a)(6) demands. As a consequence, this case presents an instance where overturning this court’s precedent will lead to greater stability and predictability, not less.
Lighting Ballast Control, LLC, O’Malley Op., at *31.
B. District Courts have Better Tools Construct ClaimsDistrict court judges are provided training in all aspects of their duties, including claim construction in patent litigation under Phillips. They then employ that training repeatedly over the years, analyzing patents, their written descriptions, and prosecution histories, receiving testimony from inventors and experts, listening to tutorials on the relevant science, and probing counsel during hearings that sometimes last days. In this case, the trial court conducted a three-day evidentiary hearing. Because Cybor allows us to ignore these fact-intensive inquiries by its insistence on de novo review, it not only undermines the authority of district judges, it compromises the decision-making process on appeal. Our court is given free rein to interpret claim terms, but lacks the resources to do it right.
Id. at *35.
C. Cybor discourages SettlementsCybor also creates greater incentives for losing parties to appeal, thus discouraging settlements and increasing the length and cost of litigation. As Judge Rader observed in dissenting from the court’s pronouncements on claim interpretation in Cybor, “unfettered review authority” undercuts certainty and discourages settlement.
Id. at *35.
D. Cybor does not Promote UniformityContrary to the majority’s claim, moreover, Cybor does not unqualifiedly promote uniformity or predictability of outcome in the patent system. As noted previously, the claim construction issues presented in patent cases are mostly fact and case specific. A claim construction decision in a given case will provide little guidance on the words used in different patents. Their resolution will do no more than declare the boundaries of a patent as between the parties in suit. […] And, there is no guarantee that panels of this court will construe like claims in a like manner, even when in the same patent.
Id. at *37 (internal citations omitted).
Circumstances to Allow Deference
While we agree that the ultimate question of claim meaning should remain subject to de novo review, claim construction often requires district courts to resolve underlying issues of disputed fact. These include, among others: whether a claim term had a specialized meaning among those skilled in the art at the time; what texts, including treatises and dictionaries, demonstrate about how a person of skill in the art would interpret a claim term, and which contemporaneous tests are most relevant; whether to credit one expert’s testimony over another’s regarding issues bearing on claim construction; who qualifies as a person of ordinary skill in the art; what is the relevant field of invention; what prior art is relevant; what a person of skill in the art would glean from that prior art; and what inferences can be fairly drawn from the prosecution history, including whether a disclaimer of claim scope has occurred. When a district court makes fact-findings needed to resolve claim construction disputes, Rule 52(a) requires us to defer to those findings unless they are clearly erroneous.
Lighting Ballast Control, LLC, O’Malley Op., at *43.
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