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U.S. Supreme Court

'Clear error' standard of review in factual disputes applies in patent claims, SCOTUS says

The U.S. Supreme Court has ruled for a drug company fighting generic competitors in a decision on the proper standard of review in patent infringement cases involving factual issues.

In a 7-2 decision (PDF), the Supreme Court held that factual conclusions by trial judges in claim construction cases should be reviewed using a “clear error” standard, rather than de novo review. Justice Stephen G. Breyer wrote the majority opinion overturning the U.S. Court of Appeals for the Federal Circuit.

The decision was a victory for Teva Pharmaceutical Industries, report Reuters and the Associated Press. Teva is fighting competitors that want to offer a generic version of its multiple sclerosis drug Copaxone.

Teva had sued generic makers of the drug for alleged patent infringement; the generic companies had claimed the patent was invalid because Teva’s reference to “molecular weight” in its patent claim could have various meanings. A district court had ruled for Teva on the issue, but the Federal Circuit reversed using the de novo standard of review.

Breyer said the appeals court has to defer to the federal district court absent “clear error.” The Federal Rules of Civil Procedure establish the “clearly erroneous” standard for review of a district judge’s findings of fact, and there is no reason to create an exception for factual underpinnings in patent cases, Breyer said.

The ABA had filed an amicus brief backing the “clearly erroneous” standard for review of factual issues, according to this ABA press release. The ABA asserted that the Federal Circuit’s de novo standard for review of factual issues had created increased uncertainty, inefficiency and expense in patent litigation.

Skadden counsel Stacey Cohen co-authored the amicus brief on behalf of the ABA. In a statement, she said the ruling “makes clear that factual determinations in patent cases should not be treated differently than those in other areas of civil litigation.”

“Today’s ruling will provide more certainty in instances where a lower court’s claim construction is based, in part, on extrinsic evidence, and also will likely affect the strategy of litigants at the trial court level when deciding when, and if, to argue that claim construction requires the court to consider extrinsic evidence,” Cohen said.

The case is Teva Pharmaceuticals v. Sandoz.

Updated at 1:15 p.m. to include Cohen’s statement. Updated on Feb. 3 to fix typo in fourth paragraph.