November, 15th, 2018

By Patrick D. Duplessis

In a petition filed this month with the U.S. Supreme Court, patent owner Cave Consulting Group (CCGroup) draws attention to a persistent split at the Federal Circuit concerning foundational claim construction issues.

CCGroup asks the nation’s highest court to review whether a court may construe a patent claim in a way that contradicts its plain and ordinary meaning by relying on statements in the specification, even when such statements do not constitute lexicography (i.e., intentionally giving a special definition to a claim term) or disavowal (i.e., intentionally excluding subject matter from the scope of a claim).

The claims of CCGroup’s U.S. Patent No. 7,739,126 are directed to a method and related computer software for determining physician efficiency.  The independent claims require, among other things, calculating a weighted episode of care statistics.  Some dependent claims (e.g., cl. 23) specify that the calculation involves use of a statistical technique called “indirect standardization,” whereas other dependent claims (e.g., cl. 26) require use of a known “direct standardization” technique.

CCGroup sued Optum for infringement of the ‘126 patent.  Optum’s method for determining physician efficiency uses the known “direct standardization” technique” recited in some of the dependent claims, but not the “indirect standardization” recited in other dependent claims.

At the trial court, CCGroup argued that Optum infringed independent claims (e.g., cl. 22) that are generic with respect to “indirect standardization” or “direct standardization.”  The jury agreed and awarded CCGroup damages of $12,325,000.

The Federal Circuit reversed the jury verdict, finding that the independent claims implicitly exclude “direct standardization.”  This reasoning, which effectively ignored the dependent claims that explicitly recite “direct standardization,” relied on the precedent in Retractable Techs., Inc. v. Becton, Dickinson & Co., 653 F.3d 1296 (Fed. Cir. 2011).  There, the Federal Circuit stated that claims should be construed to “tether the claims to what the specifications indicate the inventor actually invented.”  Id. at 1305.

It its petition to the U.S. Supreme Court, CCGroup argues that the appellate panel’s  holding exemplifies the views of a now-sizable faction of judges at the Federal Circuit, which is that the specification may be used to narrow the scope of a claim term’s plain and ordinary meaning based on what the court views as the “actual invention” described in the specification – regardless of whether the statements in the specification meet the stringent requirements of the lexicography or disavowal exceptions.

According to CCGroup, it is the other faction of judges at the Federal Circuit who are properly construing claims in accordance with Supreme Court precedent.  That faction refuses to limit the plain meaning of the claims based on the specification absent one of the two exceptions established by longstanding case law: lexicography or disavowal.

CCGroup argues that flawed and arbitrary results occur when courts attempt to “tether” a claim to the specification like the Federal Circuit did here.  Even so, CCGroup acknowledges that the split at the Federal Circuit likely stems from practical motivations.

On this point, CCGroup quotes Judge Mayer’s dissent in the Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005). Many consider Phillips a landmark case on claim construction, but Judge Mayer characterized the case as follows: “after proposing no fewer than seven questions, receiving more than thirty amici curiae briefs, and whipping the bar into a frenzy of expectation, we say nothing new, but merely restate what has become the practice over the last ten years – that we will decide cases according to whatever mode or method results in the outcome we desire, or at least allows us a seemingly plausible way out of the case.”  Phillips, 415 F.3d at 1330 (emphasis added).

Practice Point:

It will be several months before we know whether the Supreme Court will agree to review the question presented by CCGroup.  Absent resolution by the Supreme Court, patent draftsmen and litigators should continue to use the split to their advantage—emphasizing or disregarding the specification to achieve whatever claim interpretation outcome they or their clients desire.

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