Teva Pharms USA, Inc. v. Sandoz, Inc.

When claim construction is at issue, the Federal Circuit is to review intrinsic evidence de novo and factual finding associated with extrinsic evidence for clear error.

Spring 2015

GENERICally Speaking

Case Name: Teva Pharms USA, Inc. v. Sandoz, Inc., No. 10-13-854, 135 S. Ct. 831 (Mar. 20, 2012) (Breyer, J. delivered opinion of the Court, in which Roberts, C.J., and Scalia, Kennedy, Ginsburg, Sotomayor, and Kagan, JJ., joined; Thomas, J., filed a dissenting opinion, in which Alito, J., joined), on cert. from the Federal Circuit, 723 F.3d 1363.

Drug Product and Patent(s)-in-Suit: Copaxone (glatiramer acetate injection); U.S. Pat. No. 5,800,808 (“the ’808 patent”) 

Nature of the Case and Issue(s) Presented:  The issue here concerns the meaning of the words “molecular weight.” Teva’s patent covers a manufacturing method for Copaxone, the active ingredient of which, called “copolymer-1,” is made up of molecules of varying sizes. The relevant claim describes that ingredient as having “a molecular weight of 5 to 9 kilodaltons.” Sandoz argued that the patent was invalid as indefinite because the term “molecular weight” might mean any one of three different things: (i) molecular weight as calculated by the weight of the molecule that is most prevalent in the mix that makes up copolymer-1, or “peak average molecular weight;”; (ii) molecular weight as calculated by taking all the different-sized molecules in the mix that makes up copolymer-1 and calculating the average weight, or “number average molecular weight;” or (iii) molecular weight as calculated by taking all the different-sized molecules in the mix that makes up copolymer-1 and calculating their average weight while giving heavier molecules a weight-related bonus when doing so, or “weight average molecular weight.” In Sandoz’ view, Teva’s patent did not say which method of calculation should be used, and it was therefore indefinite.

The district court, after taking evidence from experts, concluded that the patent claim was sufficiently definite and found that a skilled artisan would understand that the term “molecular weight” referred to peak average molecular weight. On appeal, the Federal Circuit reversed, finding that the term “molecular weight” was indefinite. In reaching this conclusion, the Federal Circuit reviewed de novo all aspects of the District Court’s claim construction, including the District Court’s determination of subsidiary facts. The Supreme Court held that the Federal Circuit’s standard of review was improper and vacated and remanded.

Why Teva Prevailed:  The Court first addressed Fed. R. Civ. P. 52 and the standard that it sets forth for a court of appeals to review claim-construction decisions. Fed. R. Civ. P. 52(a)(6) states that a court of appeals “must not…set aside” a district court’s “[f ]indings of fact” unless they are “clearly erroneous.” This rule and the standard it sets forth must apply to a district court’s resolution of subsidiary factual matters made in the course construing a patent claim. Markman neither created, nor argued for, an exception to Rule 52(a). In Markman, the Court recognized that sometimes courts may have to make “credibility judgments” about witnesses to resolve subsidiary factual disputes. And the Rule requires appellate courts to review all such subsidiary factual findings under the “clearly erroneous” standard. These subsidiary factual findings are the same as those relating to other patent-law inquiries, including obviousness. Practical considerations also favor clear-error review, which is particularly important where patent law is at issue, because patent law is “a field where so much depends upon familiarity with specific scientific problems and principles not usually contained in the general storehouse of knowledge and experience.” Finally, neither the Federal Circuit nor Sandoz had shown that (or explained why) divergent claim construction stemming from divergent findings of fact (on subsidiary matters) should occur more than occasionally. After all, the Federal Circuit will continue to review de novo the district court’s ultimate interpretation of the patent claims.

The Court next addressed application of the Rule 52(a) standard. When the district court reviews only evidence intrinsic to the patent, the judge’s determination will amount solely to a determination of law, and the Court of Appeals will review that construction de novo. But in cases where subsidiary facts are in dispute, courts will need to make subsidiary factual findings about that extrinsic evidence. These are the “evidentiary underpinnings” of claim construction that we discussed in Markman, and this subsidiary fact-finding must be reviewed for clear error on appeal. The Court reiterated that claim construction is ultimately a legal interpretation. The appellate court can still review the district court’s ultimate construction of the claim de novo. But, to overturn the judge’s resolution of an underlying factual dispute, the court of appeals must find that the judge, in respect to those factual findings, has made a clear error.

Here, the district court did not accept Sandoz’ argument. Teva’s expert testified that a skilled artisan would understand that converting data from a chromatogram to molecular weight distribution curves would cause the peak on each curve to shift slightly; this could explain the difference between the value indicated by the peak of the curve (about 6.8) and the value in the figure’s legend (7.7). Sandoz’ expert testified that no such shift would occur. The district court credited Teva’s expert’s account, thereby rejecting Sandoz’ expert’s explanation. The district court’s finding was a factual finding, but the Federal Circuit did not accept Teva’s expert’s explanation as to how a skilled artisan would expect the peaks of the curves to shift. And it failed to accept that explanation without finding that the district court’s contrary determination was “clearly erroneous.” In failing to do so, the Federal Circuit was wrong.

In dissent, Justice Thomas writes that claim construction is purely a legal issue that does not involve findings of fact. As such, Rule 52(a)(6) is inapplicable, and the Federal Circuit was right to apply a de novo review. Patents are written instruments, so other written instruments supply the logical analogy. And the construction of written instruments is generally a question of law. Justice Thomas likened construing the claims of a patent to construing a statute. Because they are governmental dispositions and provide rules that bind the public at large, patent claims resemble statutes. The scope of a patent holder’s monopoly right is defined by claims legally actualized through the procedures established by Congress pursuant to its patent power. Thus, a patent holder’s actual intentions have effect only to the extent that they are expressed in the public record. Moreover, because the ultimate meaning of a patent claim, like the ultimate meaning of a statute, binds the public at large, it should not depend on the specific evidence presented in a particular infringement case. “[P]atents are authoritative governmental dispositions. Thus, when a judge construes a patent, he[sic] is, in a very real sense, saying what the law is” (internal citations omitted).

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