Supreme Court Rules That The 'Clear Error' Standard Applies When Factual Determinations Underlying Claim Construction Are Reviewed On Appeal In Teva v. Sandoz

On January 20, 2015, the Supreme Court, in a 7-2 decision, held in Teva Pharms. USA, Inc. v. Sandoz, Inc., that an appellate court must apply a “clear error” standard of review when assessing a trial judge's resolution of underlying factual disputes in claim construction. Justices Thomas and Alito dissented, arguing that claim construction does not involve findings of fact and, as such, de novo review is proper.

Plaintiff Teva markets Copaxone®, a drug used in the treatment of multiple sclerosis. Copaxone® is a form of copolymer-1, a mixture of polypeptide molecules.

Teva sued Defendants for patent infringement under 35 U.S.C. § 271(e)(2)(A) after they submitted Abbreviated New Drug Applications seeking to market generic versions of Copaxone®. Teva asserted nine patents listed in the FDA Orange Book as covering Copaxone® against Defendants. The patents claim copolymer-1 of specific molecular weights or ranges (the active ingredient of Copaxone®), and methods of making copolymer-1.

The District Court construed the asserted claims and found them definite and infringed. On appeal, the Federal Circuit reviewed de novo the claim construction and definiteness of the asserted claims. In doing so, it rejected the District Court's factual findings related to conflicting expert testimony regarding interpretation of a patent figure and how one of ordinary skill would understand the claim term “molecular weight.” Based on this rejection, the Federal Circuit reversed the District Court's ruling and held that a number of the asserted patent claims are indefinite.

Teva appealed, arguing that the Federal Circuit erred in failing to review the District Court's findings of fact only for clear error as required by Fed. R. Civ. P. 52(a).

The majority of the Supreme Court sided with Teva, applying Federal Rule of Civil Procedure 52(a)(6), which instructs that a court of appeals must not set aside a district court's findings of fact unless they are clearly erroneous. Citing Pullman-Standard v. Swint, 456 U.S. 273, 287, (1982), the majority explained that Rule 52(a)(6) applies “to both subsidiary and ultimate facts” and explained why, even if the Rule permitted exceptions, no exception was warranted in the claim construction context.

The majority then proceeded to explain how the Supreme Court's decision in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), did not create an exception to Rule 52(a), but rather resolved a Seventh Amendment question -...