Federal Circuit Patent Appeals

The United States Court of Appeals for the Federal Circuit (CAFC or Federal Circuit) has exclusive appellate jurisdiction over patent cases: STATUTORY BASIS: 28 U.S.C. § 1295 gives the Federal Circuit exclusive jurisdiction over appeals from: (a) any district court case in which the jurisdiction was based, in whole or in part, on § 1338 (patent jurisdiction); (b) PTAB decisions on inter partes reviews (§ 319), post-grant reviews (§ 329), ex parte reexaminations, and appeals of final rejections from examiners; (c) the U.S. Court of International Trade (CIT) in cases involving patents; (d) the International Trade Commission (ITC) in Section 337 investigations; (e) the U.S. Claims Court in patent compensation cases; EXCLUSIVE JURISDICTION SIGNIFICANCE: before the Federal Circuit was created in 1982, patent appeals went to the regional circuit courts (First through Eleventh Circuits); this created inconsistent patent law across the country; Congress created the Federal Circuit specifically to bring uniformity to patent law; NO REGIONAL CIRCUIT FOR PATENT: if a patent case is filed in California, the appeal does NOT go to the Ninth Circuit (even though all other cases from California go there); it goes exclusively to the Federal Circuit; EXCEPTION — ANTITRUST AND OTHER CLAIMS: if a patent case is decided at the district court level and the judgment rests on both patent and non-patent grounds, the Federal Circuit hears the patent portion; the Supreme Court has clarified that the Federal Circuit's jurisdiction is claim-by-claim: if the appeal raises only non-patent issues (like contract interpretation of a license), the regional circuit may have jurisdiction; APPEAL FROM ITC: Section 337 unfair import investigations at the ITC involving patent infringement are appealed to the Federal Circuit; this is an important alternative forum for patent enforcement (faster than district court; no damages, but exclusion orders); FROM PTAB: after a final PTAB decision in an IPR or PGR, either party may appeal to the Federal Circuit under 35 U.S.C. § 319 (IPR) or § 329 (PGR).

The Federal Circuit applies different standards of review depending on the type of decision being appealed from a district court: CLAIM CONSTRUCTION (DE NOVO REVIEW): claim construction is a question of law — the court reviews the district court's interpretation of claim terms with NO deference; from Markman v. Westview Instruments (S.Ct. 1996), claim construction is a matter for the judge, not the jury; from Teva Pharm. v. Sandoz (S.Ct. 2015), the Federal Circuit clarified: INTRINSIC EVIDENCE (spec, prosecution history): legal determination → DE NOVO review; UNDERLYING FACTUAL FINDINGS (extrinsic evidence like expert testimony on POSITA understanding): factual determination → CLEAR ERROR standard; practical effect: most claim construction disputes are reviewed de novo because they rest on intrinsic evidence; FACTUAL FINDINGS — CLEAR ERROR: under Federal Rule of Civil Procedure 52(a)(6), the Federal Circuit reviews a district court's factual findings for CLEAR ERROR; 'A finding is clearly erroneous when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed'; factual findings in patent cases include: what the prior art actually discloses; secondary considerations (commercial success, long-felt need — these are factual); infringement under the doctrine of equivalents (factual); JMOL (JUDGMENT AS A MATTER OF LAW) — DE NOVO: when the district court grants or denies JMOL (Fed. R. Civ. P. 50), the Federal Circuit reviews the decision de novo; this means: 'the same standard the district court applied'; would a reasonable jury have a legally sufficient evidentiary basis for its verdict?; JURY VERDICTS — SUBSTANTIAL EVIDENCE: when reviewing a jury verdict (as opposed to a bench trial finding), the Federal Circuit applies the SUBSTANTIAL EVIDENCE standard; the verdict is upheld if supported by substantial evidence in the record; obviousness CONCLUSION is reviewed de novo (legal question); but the underlying factual findings by the jury are reviewed for substantial evidence; INJUNCTIONS — ABUSE OF DISCRETION: permanent and preliminary injunctions are reviewed for abuse of discretion; the four-factor eBay test applies to permanent injunctions; PATENT ELIGIBILITY (§ 101): reviewed de novo (legal question); underlying factual issues (what does a claim element mean?) may have factual components reviewed for clear error.

When the Federal Circuit reviews PTAB decisions in IPR, PGR, and other proceedings, it applies the APA review standard: APA REVIEW FRAMEWORK: appeals from the USPTO (including PTAB) are governed by the Administrative Procedure Act (APA), specifically 5 U.S.C. § 706; the Federal Circuit will set aside agency action that is: arbitrary, capricious, an abuse of discretion; contrary to statute; unsupported by substantial evidence on the record; SUBSTANTIAL EVIDENCE STANDARD FOR PTAB FACTUAL FINDINGS: factual findings by the PTAB are reviewed under the SUBSTANTIAL EVIDENCE standard (same as in other APA contexts); PTAB factual findings in patent cases include: what a prior art reference teaches (its disclosure); the level of ordinary skill in the art (POSITA definition); the content of expert testimony and its credibility; motivation to combine prior art references; secondary considerations (objective indicia of non-obviousness); what the patent specification discloses; CRITICAL DIFFERENCE FROM DISTRICT COURT: in district court, factual findings are reviewed for CLEAR ERROR (more deferential than substantial evidence review in many ways); at PTAB, the substantial evidence standard is technically less deferential than clear error; in practice, both standards result in significant deference to the finder of fact; DE NOVO REVIEW FOR PTAB LEGAL CONCLUSIONS: CLAIM CONSTRUCTION (Post-2019 Philips Standard): the PTAB now applies the Philips standard (same as district courts); claim construction is reviewed de novo; previously, PTAB applied the broadest reasonable interpretation (BRI) standard, and the Federal Circuit reviewed BRI questions less stringently; LEGAL CONCLUSIONS FROM PTAB: ultimate obviousness conclusion: de novo; statutory interpretation (what does § 102 require?): de novo; whether IPR was properly instituted: the Supreme Court held in Cuozzo Speed Technologies v. Lee (S.Ct. 2016) that PTAB's institution decisions are generally unreviewable by the Federal Circuit; SAS Institute v. Iancu (S.Ct. 2018): PTAB must address ALL challenged claims in the FWD if it institutes — partial institution is not permitted.

En banc review at the Federal Circuit is significant because it can overturn prior panel decisions and create binding precedent on major patent law issues: WHAT EN BANC MEANS: a regular Federal Circuit panel consists of THREE judges; an en banc hearing involves ALL active judges of the Federal Circuit (currently 12 active judges, plus senior judges who participated in the original decision); HOW EN BANC IS INITIATED: PETITION FOR EN BANC REHEARING: after a panel decision, either party may petition for rehearing en banc; the petition must identify a conflict with prior Federal Circuit or Supreme Court precedent, or show the case involves a question of exceptional importance; COURT-INITIATED EN BANC: the Federal Circuit can also take a case en banc on its own initiative (sua sponte); STANDARDS FOR GRANTING EN BANC: en banc petitions are RARELY granted; the court is highly selective; en banc is typically granted to: resolve a circuit split; overrule an outdated or incorrect prior panel decision; clarify a major legal question in patent law; LANDMARK EN BANC DECISIONS IN PATENT LAW: Ariad Pharmaceuticals v. Eli Lilly (Fed. Cir. 2010): confirmed written description is a separate requirement from enablement; Therasense v. Becton (Fed. Cir. 2011): heightened standard for inequitable conduct (requires 'but for' materiality + specific intent); Kilopass Tech v. Sidense Corp (Fed. Cir. 2014): standards for patent attorneys' fees under § 285; Alice Corp. v. CLS Bank: the Federal Circuit initially sat en banc but produced no majority opinion; the Supreme Court then resolved the issue in Alice Corp v. CLS Bank (S.Ct. 2014); Bilski v. Kappos: Federal Circuit en banc tried to define patentable processes; overruled in part by Supreme Court; EFFECT ON LOWER COURTS: en banc decisions bind all district courts and PTAB on questions of patent law; panel decisions can be overruled only by a subsequent en banc decision or Supreme Court decision; the Federal Circuit has 'precedential,' 'non-precedential,' and 'errata' opinion designations — only precedential opinions create binding precedent.

Most Federal Circuit patent appeals are from final judgments, but several interlocutory routes exist: FINAL JUDGMENT RULE: generally, appellate courts (including the Federal Circuit) can only hear appeals from FINAL JUDGMENTS; a final judgment is one that ends the litigation on the merits for all claims and all parties; 28 U.S.C. § 1291; EXCEPTIONS — INTERLOCUTORY APPEALS IN PATENT CASES: (1) § 1292(b) — INTERLOCUTORY CERTIFICATION: a district court can certify an order for interlocutory appeal under 28 U.S.C. § 1292(b) if: the order involves a controlling question of law; there is substantial ground for difference of opinion on the question; immediate appeal may materially advance the ultimate termination of the litigation; BOTH the district court AND the Federal Circuit must agree to hear the appeal; used rarely in patent cases; (2) INJUNCTIONS (§ 1292(a)(1)): appeals from orders granting or refusing preliminary injunctions are AUTOMATIC interlocutory appeals (no certification needed); important in patent cases because: preliminary injunctions in patent cases require a showing of likelihood of success on infringement AND validity; early Federal Circuit review of these issues can shape the rest of the case; (3) MANDAMUS: the Federal Circuit can issue writs of mandamus in extraordinary circumstances; used to correct: clearly erroneous rulings on claim construction; improper transfer of venue decisions (the Federal Circuit has been active on venue in patent cases under In re TC Heartland); blatant errors that would cause irreparable harm if not corrected immediately; (4) RULE 54(b) CERTIFICATION: when there are multiple claims in a case, a district court can certify a judgment on fewer than all claims as final under Fed. R. Civ. P. 54(b); allows appeal of one patent claim while others are pending; CLAIM CONSTRUCTION INTERLOCUTORY APPEAL: note that an unfavorable Markman ruling is NOT automatically appealable; patent owners often must proceed to trial and lose before appealing a claim construction ruling; some courts enter consent judgments to facilitate interlocutory appeal of claim construction.