One of the vexing problems in patent enforcement is the high uncertainty in litigation caused in part by a particular legal principles in the U.S. dating back to a 1996 court case, Cybor Corp. v. FAS Technologies, Inc., in which the Federal Circuit concluded that claim interpretation–the critically important step of determining what the clams in a patent actually mean– was a purely legal issue subject to de novo review on appeal, meaning that all the work and analysis conducted in a trial to determine the scope and meaning of the claims is pretty much tossed out the window as the appellate court stats over scratch, often coming up with completely different results. This is believed to be an important factor contributing the painfully high 50% reversal rate for patent cases when appealed. The Federal Circuit has a chance to repair the damage and may do so, if we are lucky, in a new case they are deciding. See “The Single Most Important Event In Patent Litigation: Will the Federal Circuit View It Differently?” from the law firm Allen and Overy. The case is Lighting Ballast Control v. Phillips Electronics.
The writer at Allen and Overy offers these benefits to reversing de novo review of claim construction:
The potential impact of the Federal Circuit’s ultimate ruling is significant. In particular, should the court overrule Cybor even partially (by holding that claim interpretation is a mixed question of law and fact, for example), parties may be more likely to settle cases after a district court decision, as the possibility of reversing the decision with a Federal Circuit appeal will have decreased. Also, any district courts that may have been reluctant to engage in fulsome Markman hearings, complete with witnesses, could be motivated to conduct such hearings, as the district courts’ ultimate rulings would be less likely to be overturned. Finally, with a partial or complete reversal of Cybor, the cost in both time and money of patent litigation could decrease, with fewer appeals of claim interpretation rulings, and fewer remands to the district court in view of those reversed rulings.