Virginia IP Law : Virginia Intellectual Property Lawyer & Attorney : Troutman Sanders Law Firm : Technology & Patent Litigation

As Judge Conrad notes in DE Techs., Inc. v. IShopUSA, No. 7:11CV183, 2011 U.S. Dist. LEXIS 137894 (W.D.Va. Dec. 1, 2011), found here, “there is an ongoing debate as to the preclusive effects of a Markman ruling.” IShopUSA was the second patent case brought by DE that was assigned to Judge Conrad. In the first case, DE Techs., Inc. v. Dell, Inc., No. 7:04CV00628 (W.D.Va.), the parties settled after Judge Conrad issued his claim construction ruling. Neither DE or Dell asked that to have the court’s rulings withdrawn as part of the settlement, but the dismissal order noted that the claim construction ruling was not final and was subject to further revision at any time prior to entry of final judgment.

IShopUSA argued that collateral estoppel barred DE from relitigating the Court’s claim construction ruling. Judge Conrad noted that the Federal Circuit had not provided any guidance on whether a prior Markman ruling should have preclusive effect and the District Courts were split on the issue, especially where the first litigation settled before final judgment. 

Judge Conrad declined to apply collateral estoppel to his earlier claim construction ruling, but held that the prior ruling would be given “deferential treatment unless clearly erroneous.” “Absent a showing by DE that the court’s original construction of a disputed term was incorrect as a matter of law, the court will apply its prior Markman rulings.” That result, the Court held, balanced “fairness to all litigants” with “consistency in the construction of patent claims.” On the one hand, it is only reasonable to expect the prior rulings would carry some precedential value, but the court “should not be so intransigent as to ignore persuasive arguments” showing clear error in the earlier ruling.

Judge Conrad’s approach is clearly correct. In the absence of final judgment, a finding of collateral estoppel is probably subject to reversal. By refusing to apply collateral estoppel but imposing the high burden of showing “clear error” on DE, Judge Conrad left himself the opportunity to reach a different ruling without sacrificing consistency.

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There are many patents awarded for inventions that may well be “new” but it is debatable whether they are “useful.” A recent Eastern District of Virginia case dealt with one such invention – a device that combined exercise equipment with a gambling device – which presumably allows a user to lose pounds and money at the same time. Fitness Gaming Corp. v. ICON Health & Fitness, Inc., 2011 U.S. Dist. LEXIS 90605 (E.D. Va. Aug. 12, 2011) (Hilton, J.), found here.

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As the third in our series of posts following up on our article on litigating patent infringement cases in the Eastern District of Virginia (earlier posts can be found here and here), we want to make a few brief points about one of the key events in any patent case – claim construction and the Markman process. Claim construction is especially important in the EDVA because the seven to nine month schedule of the typical patent case makes the timing of a Markman hearing crucial.

The short summary of how the EDVA handles claim construction is that each judge does it differently. There are, however, similarities among the practices of the judges in each of the three divisions of the Court.

In the Alexandria Division, most of the district judges prefer to delay consideration of claim construction until the summary judgment stage. This practice is consistent with other civil cases in Alexandria, where non-dispositive motions are handled by a magistrate judge, and so the district judges tend to have little contact with cases until later in the litigation process. The prevailing view appears to be that claim construction issues are more ripe for determination later in the case, after the parties have conducted discovery and after the parties have had more time to consider settlement.

Some litigants prefer the approach in Alexandria, but in the EDVA, it creates a great deal of uncertainty because the deadline for summary judgment motions is less than two months before trial. The lack of a claim construction until the eve of trial not only makes settlement more difficult, but experts must prepare reports using alternative claim constructions, and trial strategy cannot be set until a decision is rendered, which can be within a week or two of trial.

In Richmond, the district judges are more involved in patent cases from the beginning. Unlike Alexandria, the district judges oversee the initial pre-trial conference and hear non-dispositive motions, including discovery motions. District judges are also more closely involved in the claim construction process. As a result, in Richmond, whether to hold a Markman hearing is typically addressed at the initial pre-trial conference, and Markman hearings usually occur three to four months after responsive pleadings are filed, before expert reports are filed and well before trial. While the Court does not always issue a claim construction before opening expert disclosures are due, that often occurs, simplifying expert reports and summary judgment motions, and allowing the parties more time to prepare trial strategies.

In Norfolk, like Alexandria, the district judges have less contact with patent cases until later in the litigation process. The clerk handles the initial pre-trial conference, and magistrate judges handle most non-dispositive motions. Markman hearings are not scheduled unless the parties request one by motion. In Norfolk, the time between the initial pre-trial conference and trial tends to be the shortest of the three divisions, often less than seven months. Thus, if a party wants the court to schedule an early Markman hearing, they are advised to request one as early as possible. Even then, it may be some time before they receive a ruling on their request. Unlike Alexandria, however, the district judges in Norfolk do not have as strong a preference for combining claim construction with the summary judgment process. As a result, the timing of Markman hearings in Norfolk cases vary from relatively early in the litigation process to as late as a few weeks before trial.

One thing the divisions share is the format for Markman hearings. Live testimony is rarely offered in civil hearings in the EDVA, and the same is true for Markman hearings. Thus, in most cases, Markman hearings last less than a day and resemble an appellate argument, supplemented by exhibits and perhaps PowerPoint presentations. Further, the EDVA judges all have experience with Markman hearings and are familiar with the standards for claim construction, and so litigants can expect judges to be well prepared and capable of understanding patent law concepts.

Lastly, parties should remember that while the EDVA judges all have tendencies and standard practices for handling claim construction, they all make exceptions in particular cases. While parties need to be alert to a judge’s practices, if requested early enough and supported by sound reasoning, all of the judges are open to suggestion about different approaches to Markman hearings.

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In Abbott Labs. v. Sandoz, Ins. (“Abbott”), an en banc Court of Appeals for the Federal Circuit has clarified its own previously issued inconsistent holdings on determining infringement of product-by-process claims. 

Historically, product-by-process claims have been limited to claims in chemical patents and were originally used to claim products that could not be analyzed to determine their precise chemical composition. The inventor knows how he made it and what it does, but not exactly what it is.  If a chemical product cannot be precisely defined except by the process that produces it, a claim to such a product defined by its method of preparation is proper. Manual of Patent Examining Procedure § 706.03(e). The so-called "product-by-process" format utilizes process limitations to define the composition. Despite the process limitations, the claim has always been considered a “product” or “composition of matter” claim by the USPTO and not a “process” claim. The USPTO defines a product-by-process claim as a product claim in which the product is defined, in whole or in part, by the process used to make the product. 

The applicability of the product-by-process claim with modern laboratory analytics is limited, but still may be appropriate in some cases.  However, patent practitioners still often include a product-by-process claim in a case with other structurally defined product claims. This use of the product-by-process claims is outside the original intent of the claim format.  There should be an either/or situation, either you can define the product structurally or you can only define it by the process used to make it, not both. However, practitioners feel adding a product-by-process claim to in addition to the structurally defined claim may broaden patent protection and more easily capture infringers.

In Abbott, the CAFC clarified the test for infringement of product-by-process claims. There was uncertainty due to previous CAFC holdings; in Atlantic Thermoplastics, the CAFC held that to infringe a product-by-process claim the accused infringer must have performed all the process steps defined in the claim, however, in Scripps the CAFC stated that the process steps were not important in determining infringement, the court should only consider whether the accused product infringed the claim regardless of the process steps performed to prepare the product. Reasonable minds can disagree, but when the reasonable minds are the decision makers, uncertainty results. 

The en banc panel in Abbott held that to infringe a product-by-process claim, you must infringe the process steps and the product is irrelevant to the infringement analysis. Therefore, while determining infringement is based upon the process limitations, the USPTO continues to determine patentability of product-by-process claims based upon the product.

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What does it mean to you?

A few years ago, every patent attorney was on pins and needles awaiting the decision from the Court of Appeals for the Federal Circuit (“CAFC”) in AWH v. Phillips describing the method  courts should use to determine the scope of a claim of a patent. Controversy had been dividing the judges of the CAFC, blogs blossomed discussing the issue, water cooler arguments were frequent, more paper was consumed by amicus briefs than all the stimulus bills, attorneys argued for the proper balance of intrinsic and extrinsic evidence, patent attorneys with engineering degrees happily drew complex flow charts describing claim construction, those were days. 

Four years later, we all know how to properly construe a claim according to the CAFC. We don’t talk about it anymore; patentable subject matter, obviousness, licensing, and the authority of the USPTO occupy our time and energy. 

We were taught to understand (or construe) a claim, initially -

Intrinsic evidence is used:

• The language of the claims themselves is construed directly; and

• This construction may be modified based upon:

  • The description of the invention and the definition of claim terms in the specification; and statements and arguments in the prosecution history of the patent.

Then, if necessary, extrinsic evidence may be used:

• Unbiased extrinsic evidence such as dictionaries; and

• Potentially biased extrinsic evidence such as expert testimony may be used last to complete our understanding. 

Of course, this method still allows for significant creativity, argument and other fun in construing the claims for litigation and opinion work. 

One significant part of the analysis is often overlooked. Though claim construction is a matter of law, the goal of claims construction is to determine the meaning of a claim as understood by a person of ordinary skill in the art at the time of filing. 

This cannot be emphasized enough; claims are to be interpreted as understood by one skilled in the art. Too often, I encounter inventors or patent owners that do not focus on an understanding of the claims – they leave it to their attorneys. Attorneys all too often accept this responsibility. A proper claim construction determines the value and the validity of a patent. Though understanding a claim can be difficult, patent holders and attorneys should carefully review all the claims together to confirm that come to a proper understanding of how the claims may be understood by one skilled in the art. It is important that clients and attorneys have a meeting of the minds over claim meanings or the claims should be amended.

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