United States: The Federal Circuit’s long-awaited en banc decision in Phillips v. AWH Corp.

On July 12, 2005, the Federal Circuit issued its much-anticipated en banc decision in Phillips v. AWH Corporation. The decision directly addressed the frequently debated and controversial role of dictionaries in patent claim construction, and clarified "the extent to which [courts] should resort to and rely on a patent’s specification in seeking to ascertain the proper scope of [a patent’s] claims." Phillips v. AWH Corp., No. 03-1269, -1286, available at http://www.fedcir.gov/dailylog.html, at *7. The Phillips court concluded that intrinsic evidence, such as the claims, specification, and prosecution history, is the most reliable evidence by which a court can construe claim terms, whereas extrinsic evidence, including dictionaries, is less reliable and should be used for limited purposes.

The Federal Circuit did not address the deference, if any, that the Court should give district court claim construction decisions, even though the en banc court had requested briefing on the issue.

Phillips sought to provide uniformity in claim construction and resolve the dispute regarding the role of dictionaries in claim construction

Patent claim terms are to be given their "ordinary and customary meaning," which is defined as "the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention." Phillips at *9. Courts often look to other sources to shed light on what an ordinary person in the art would understand the term to mean, including "the words of the claims themselves, the remainder of the specification, the prosecution history, and extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art." Id. at *11 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004)).

Prior to Phillips, the claim construction approach varied greatly in court opinions, even within the Federal Circuit. For instance, in Texas Digital Systems, Inc. v. Telegenix, Inc., 308 F.3d 1193 (Fed. Cir. 2002), Judge Linn’s opinion emphasized the use of dictionary definitions for claim construction, assigning the specification and the prosecution history a less prominent role. See Phillips at *21. Other cases relied heavily on the treatment of terms in the specification to construe the claims. See, e.g., Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996); Irdeto Access, Inc. v. Echostar Satellite Corp., 383 F.3d 1295, 1300 (Fed. Cir. 2004).

Phillips sought to provide uniformity to how a court should approach claim construction, by placing the emphasis on intrinsic evidence, such as the claims themselves and the rest of the specification, and de-emphasizing extrinsic evidence, such as expert testimony and dictionaries.

The majority reiterated the significance of intrinsic evidence, beginning with the claims themselves. In Phillips, for instance, "the claim … refers to ‘steel baffles,’ which strongly implies that the term ‘baffles’ does not inherently mean objects made of steel." Id. at *12. Alternatively, other claims may show how a particular term should be construed. "For example, the presence of a dependent claim that adds a particular limitation gives rise to a presumption that the limitation in question is not present in the independent claim." Id. at *13.

In addition, the court reiterated several reasons why the "claims must be read in view of the specification." Id. (internal citations and quotations omitted). First, because claims are part of the specification and a specification must describe the invention in "full, clear, concise, and exact terms," 35 U.S.C. § 112, the "specification necessarily informs the proper construction of the claims." Phillips at *13-15. Second, "the specification may reveal a special definition given to a claim term by the patentee that differs from the meaning it would otherwise possess. In such cases, the inventor’s lexicography governs." Id. at *16. Last, the Patent and Trademark Office ("PTO") determines the scope of a patent application "in light of the specification as it would be interpreted by one of ordinary skill in the art." Id. (quoting In re Am. Acad. of Sci. Tech. Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004)). Since the PTO must find support for the meaning of the terms in the specification, the court reasoned that its reliance on the specification to define the terms during litigation is entirely appropriate.

The court also reemphasized that the patent’s prosecution history should be consulted, if in evidence, for many of the same reasons that the specification should be consulted. The prosecution history can give insight into how the PTO and the inventor understood the patent. Also, the prosecution history was created by the patentee. "Yet because the prosecution history represents an ongoing negotiation between the PTO and the applicant, rather than a final product of that negotiation, it often lacks the clarity of the specification and thus is less useful for claim construction purposes." Phillips at *17.

The Court confirmed that extrinsic evidence, including expert and inventor testimony, dictionaries, and learned treatises, "can shed useful light on the relevant art," but noted that such evidence is "less significant" than intrinsic evidence for construing claims. Id. at *18 (quoting C.R. Bard, Inc. v. U.S. Surgical Corp., 388 F.3d 858, 862 (Fed. Cir. 2004)). The Court reiterated that extrinsic evidence is less significant because:

• "[It] is not part of the patent and does not have the specification’s virtue of being created at the time of the patent prosecution for the purpose of explaining the patent’s scope and meaning;"

• "[It] may not be written by or for skilled artisans and therefore may not reflect the understanding of a skilled artisan in the field of the patent;"

• It may be biased, as it is created at the time of and for the purpose of litigation;

• There is a "virtually unbounded universe" of extrinsic evidence available to the parties, which places too high a burden on the court to filter "the useful extrinsic evidence from the fluff;" and

• Extrinsic evidence undermines the public notice function of patents because it is outside the public record created by the claims, specification, and prosecution history.

Phillips at *20.

By focusing on intrinsic evidence, the majority decision in Phillips rejected the formalistic reasoning of the Texas Digital line of cases, which emphasized the use of dictionary definitions and created considerable controversy. The Court acknowledged that "the distinction between using the specification to interpret the meaning of a claim and importing limitations from the specification into the claim can be a difficult one to apply in practice," but concluded that the courts would manage the risk on a case-by-case basis. Id. at *28.

Finally, the Phillips majority emphasized that it was not creating a "magic formula or catechism for conducting claim construction." Id. at *30. The Court stated that trial courts are not now "barred from considering any particular sources or required to analyze sources in any specific sequence, as long as those sources are not used to contradict claim meaning that is unambiguous in light of the intrinsic evidence." Id. at *30-31. In other words, Phillips should not be read to "provide a rigid algorithm for claim construction," but as an attempt to "explain why, in general, certain types of evidence are more valuable than others." Id. at *31.

After granting the request for en banc review, the Federal Circuit invited briefing regarding whether appellate courts should defer to any aspect of a district court’s claim construction rulings. However, after reviewing the briefs the Federal Circuit decided to leave the question for another day, and declined to address the issue, leaving the current de novo review standard intact. Id. at *38.

Judge Lourie concurred and dissented, agreeing with the majority’s claim construction framework, but disagreeing with majority’s application of the claim construction analysis to the Phillips patent. Judge Lourie’s dissent highlights that the Phillips framework will not always lead to a predictable result, as reasonable minds may differ in a given case.

Judge Mayer also dissented, arguing that claim construction should be an issue of fact, reviewable only for clear error. "Claim construction is, or should be, made in context: a claim should be interpreted both from the perspective of one of ordinary skill in the art and in view of the state of the art at the time of invention." Id. at *4 (Mayer, J., dissenting). Judge Mayer contended that claim construction questions are inherently factual, based on testimony and documentary evidence, not on case law, and argued that "the determination of the meaning of a particular term in one patent will not necessarily bear on the interpretation of the same term in a subsequent patent …." Id. at *6 (Mayer, J., dissenting). Echoing previous dissent by Judge Rader in Cybor Corp. v. FAS Tech., 138 F.3d 1448 (Fed. Cir. 1998), Judge Mayer contended that de novo review has not clarified the law, but only caused "confusion among the district courts and bar." Phillips at *6

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