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Justin E. Gray

IP Litigation Attorney at Foley & Lardner LLP

Former Adjunct Professor at Northwestern University School of Law

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Federal Circuit Distinguishes Teva v. Sandoz

Shire Development, LLC v. Watson Pharmaceuticals, Inc. (Fed. Cir. June 3, 2015)

In this case, the Federal Circuit had previously reversed the district court's construction of two claim terms in a 2014 decision.  After the U.S. Supreme Court issued its Teva v. Sandoz decision clarifying the standard of review of claim construction on appeal, the U.S. Supreme Court vacated and remanded the Federal Circuit's 2014 decision in this case for further consideration under the revised standard of review.  The Federal Circuit subsequently held that "[b]ecause this case does not involve factual findings to which we owe deference under Teva, we again reverse the district court's claim constructions of the disputed claim terms and subsequent findings of infringement, and remand for further proceedings."

Shire had argued that because the district court "heard" testimony from expert witnesses during both a Markman hearing and at trial, the Federal Circuit must defer to the district court's claim constructions at issue on appeal under Teva.  The Federal Circuit disagreed, stating:

The Supreme Court held that we "should review for clear error those factual findings that underlie a district court's claim construction."  Teva, 135 S. Ct. at 842.  The Court did not hold that a deferential standard of review is triggered any time a district court hears or receives extrinsic evidence.  See id.  Here, there is no indication that the district court made any factual findings that underlie its constructions of "inner lipophilic matrix" and "outer hydrophilic matrix."  See J.A. 4566-67.

It will be interesting to see whether, in light of Teva v. Sandoz, district court judges will be more explicit in their Markman Orders on whether they made any factual findings so such orders are in a better position to trigger the Teva clear error standard of review.