The most difficult issue in many patent cases is claim construction, that is, the court's interpretation and articulation of what exactly the claims of the patent mean. Interpreting patent claims is hard work. It usually involves consideration of technical jargon that, especially when significant time has passed since the patent was filed, may be obsolete or just plain awkward. As a result, courts don't always get claim construction right the first time. Indeed, a substantial percentage--depending on whom you ask, the anecdotal figure is around 50 percent--of trial court claim constructions are successfully challenged on appeal.
The high reversal rate for claim construction is especially problematic because most claim construction decisions cannot be immediately appealed. Interpreting the claims is only the first step in the infringement analysis. After they're interpreted, that construction has to be applied to the accused product or process. Most often that's something the jury is supposed to decide, which means you may have to go through a long and costly trial before a judgment is entered. That judgment--either that the patent claims are infringed or they are not--is what the U.S. Court of Appeals for the Federal Circuit (the "Federal Circuit") ultimately reviews.
However, if the claim construction was wrong in the first place, the jury's verdict on infringement is usually wrong, too. That means a second trial will likely be necessary, which results in more work for the courts, more time lost in litigation, and more money spent on lawyers. The rub, argue critics, is that much of this additional expense and inefficiency could be avoided if claim construction opinions could be appealed prior to a final judgment on infringement.
Of course, the idea of an intermediate or "interlocutory" appeal is not unique to patent law. Federal law expressly allows for the immediate appeal of a non-final, interlocutory decision. However, such appeals are supposed to be the exception, rather than the rule. By statute, an interlocutory decision can be certified for immediate appeal if it "involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. 1292(b) The appellate court then gets to choose whether or not to hear the appeal or send it back.
Traditionally, the Federal Circuit has refused to hear all interlocutory appeals of claim construction decisions. That tradition, however, may be changing.
The Federal Circuit decided it would hear that appeal. It explained its rationale as follows:
"This is not an ordinary case of claim construction in which, for example, a district court has decided a claim construction issue and one party asserts error. Here, the same district court has revisited the claim construction issue that is before this court. Indeed, were we not to grant the petition, the merits panel in the pending appeals would be reviewing the district court's first order based upon the limited record before the district court when it considered the motion for a preliminary injunction, even though the district court itself has not revisited the issue based upon a more complete record. Because the matters in the recent order are thus intertwined with the issues in the pending appeals, we determine that granting the petition (to hear the interlocutory appeal) in these unusual circumstances is warranted."
Put simply, the Federal Circuit recognized that under these "unusual circumstances" it made a lot of sense to hear both appeals at once--so it did it.
The Federal Circuit's decision to finally hear an interlocutory claim construction appeal received relatively little fanfare at the time. Likely, this is because lawyers viewed it as limited to its somewhat unusual set of facts, that is, where there was already a pending appeal between the same parties on the same patents. But the Regents case is significant because it may signal a change in the Federal Circuit's approach to interlocutory appeals of claim construction opinions.
In his remarks at the 23rd Annual Intellectual Property Law Conference of the American Bar Association, Judge Michel, the chief judge of the Federal Circuit, cautioned that lawyers should not automatically assume that the Federal Circuit will refuse to hear every interlocutory appeal of a claim construction opinion. He acknowledged that the Federal Circuit has heard only one such appeal to date. But Michel suggested that, given the right set of facts, the court may be willing to hear more.
The question is, what are the right facts to justify an interlocutory appeal? Allowing for an interlocutory claim construction appeal in every case would arguably overwhelm the Federal Circuit and could literally add years to the life of the average patent litigation. As such, the Federal Circuit is extremely unlikely, of its own accord, to throw open the gates to these types of appeals. That said, the Federal Circuit has cracked open the door. Time will tell if more interlocutory appeals of claim construction opinions are allowed through.