Supreme Court Reverses Federal Circuit With Respect to Deference Owed To District Court Claim Construction Opinions

Today, in Teva v. Sandoz (opinion available here), the Supreme Court reversed the Federal Circuit’s longstanding rule that all claim construction issues, including the District Court’s determination of subsidiary facts, are reviewed de novo on appeal. The Supreme Court held:

Federal Rule of Civil Procedure 52(a)(6) states that a court of appeals “must not . . . set aside” a district court’s “[f]indings of fact” unless they are “clearly erroneous.” In our view, this rule and the standard it sets forth must apply when a court of appeals reviews a district court’s resolution of subsidiary factual matters made in the course of its construction of a patent claim. . . . [T]he Federal Circuit will continue to review de novo the district court’s ultimate interpretation of the patent claims. . . .

[W]hen the district court reviews only evidence intrinsic to the patent (the patent claims and specifications, along with the patent’s prosecution history), the judge’s determination will amount solely to a determination of law, and the Court of Appeals will review that construction de novo.

In some cases, however, the district court will need to look beyond the patent’s intrinsic evidence and to consult extrinsic evidence in order to understand, for example, the background science or the meaning of a term in the relevant art during the relevant time period. In cases where those subsidiary facts are in dispute, courts will need to make subsidiary factual findings about that extrinsic evidence. These are the “evidentiary underpinnings” of claim construction that we discussed in Markman, and this subsidiary factfinding must be reviewed for clear error on appeal. . . .

The district judge, after deciding the factual dispute, will then interpret the patent claim in light of the facts as he has found them. This ultimate interpretation is a legal conclusion. The appellate court can still review the district court’s ultimate construction of the claim de novo. But, to overturn the judge’s resolution of an underlying factual dispute, the Court of Appeals must find that the judge, in respect to those factual findings, has made a clear error. Fed. Rule Civ. Proc. 52(a)(6).

The end result of this decision should be that more District Court claim construction decisions will be upheld on appeal.

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Bankruptcy Judge Vacancy – Fort Worth

The Northern District of Texas has relayed the following regarding a vacant bankruptcy judge position in Fort Worth: “The U.S. Court of Appeals for the Fifth Circuit seeks applications from all highly qualified candidates for a 14-year appointment as a United States Bankruptcy Judge for the Northern District of Texas at Fort Worth. Those interested in applying should write to Paul Benjamin Anderson, Jr., Circuit Executive, U.S. Court of Appeals, Fifth Circuit, 600 Camp Street, Room 100, New Orleans, Louisiana 70130, for the qualification standards and an application form. Alternatively, these materials are available at www.ca5.uscourts.gov. The deadline for filing completed applications is February 20, 2015.”

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FBA to Host Annual Federal Civil Practice Seminar on January 26, 2015 at the Belo

Each year, the Federal Bar Association hosts an annual Federal Civil Practice Seminar, an event that is definitely worth attending. This year’s seminar will be held on Monday, January 26, 2015, at the Belo. Speakers will include Judge Lindsay and Magistrate Judges Horan and Ramirez. The program will provide 5 hours of MCLE credit (including 2 hours of ethics). More details can be found here.

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Judge Godbey Issues Order on Errata Sheets

On December 9, 2014, Judge Godbey issued an Order in Minka Lighting v. Craftmade International (available here) addressing a motion to strike the errata sheet for a deposition. The errata sheet at issue contained 32 corrections to the deposition testimony, 22 of which were at issue with the motion to strike. Judge Godbey first noted that Federal Rule of Civil Procedure 30(e) permits errata sheets. Judge Godbey then summarized the law on errata sheets as follows:

“The Fifth Circuit has not addressed the scope of permissible substantive corrections to a deposition under Rule 30(e). Other circuit courts and federal district courts, including courts within the Fifth Circuit, have varied in their approaches to allowing deposition corrections pursuant to Rule 30(e).” Poole v. Gorthon Lines AB, 908 F. Supp. 2d 778, 785 (W.D. La. 2012). “Under the majority approach, a witness is free to make changes of ‘substance,’ not only changing but even contradicting the transcript. Under this approach, ‘[i]t is not necessary for the court to examine the sufficiency, reasonableness, or legitimacy of the reasons.’” E.E.O.C. v. J.H. Walker, Inc., 2007 WL 172626, at *11 (S.D. Tex. 2007)(quoting Foutz v. Town of Vinton, Virginia, 211 F.R.D. 293, 296 (W.D. Va. 2002)). District courts in the Fifth Circuit have generally adopted the majority “broad interpretation” of Rule 30(e). See, e.g., Poole, 908 F. Supp. 2d at 787 (“This court will apply a broad interpretation of Rule 30(e).”); Betts v. Gen. Motors Corp., 2008 WL 2789524, at *2 (N.D. Miss. 2008) (“The court is persuaded by the fact that the majority of federal courts addressing this Rule 30(e) issue have interpreted the language of the rules of federal civil procedure as literally as possible and have allowed any form of change to a deposition.”); Reilly v. TXU Corp., 230 F.R.D. 486, 490 (N.D. Tex. 2005) (Ramirez, M.J.) (“After thorough consideration of the different approaches courts have used in considering motions to strike substantive deposition changes, the Court is persuaded by the reasoning of the cases applying a broad interpretation of Rule 30(e).”) (cited with approval by Atlin v. Mendes, 2009 WL 306173, at *2 (N.D. Tex. 2009)).

Given this authority, Judge Godbey determined not to strike the errata sheet at issue, noting that it is the trier of fact, not the Court, that determines the credibility and the weight of the evidence. Nor would the Court characterize the errata sheet as a sham affidavit.

As an alternative, the moving party requested that the deposition be reopened. This request was also denied: “The Court finds the use of the original deposition testimony as impeachment evidence a sufficient remedy on these facts, and denies the request.”

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Judge Lynn’s Transfer Decision in iLife Technologies

Judge Lynn issued a transfer decision (available here) in three iLife Technologies cases. Two of the defendants moved to transfer to the Northern District of California, while the third defendant sought transfer to the Western District of Pennsylvania. Of particular interest is Judge Lynn’s discussion of judicial economy:

iLife argues that the gains in judicial economy to be delivered by this Court adjudicating each action concerning the Patents-in-Suit suggests that this factor weighs against transfer, while BodyMedia maintains that, if the Court finds that transfer to its preferred venue is unwarranted, it would consent to transfer of its case to the Northern District of California to vindicate such efficiency interests. First, if BodyMedia had not clearly shown the more convenient forum for suit against it would be the Western District of Pennsylvania, where BodyMedia is headquartered and where its executives and the developers of its accused products are purportedly located, then the Court would be unlikely to find that the Northern District of California, for which BodyMedia has shown, at best, a minimal local interest or quantity of evidence or witnesses, and which is located on the opposite coast of its headquarters, would be clearly more convenient than this forum. Second, the America Invents Act mandates that Courts adjudicate patent suits against separate defendants separately, 35 U.S.C. § 299 (2011), so the parties’ arguments concerning efficiency are unavailing. See GeoTag, Inc. v. Starbucks Corp., 2:10-CV-572, 2013 WL 890484, at *6 (E.D. Tex. Jan. 14, 2013) (holding that under the America Invents Act, related patent cases were not relevant to the transfer analysis, even where such cases were in their infancy). Accordingly, the Court finds that this factor is neutral.

Having found that defendants met their transfer burden, the cases were transferred to the Northern District of California and the Western District of Pennsylvania.

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Northern District of Texas’ United States Attorney, Sarah Saldana, Becomes Assistant Secretary of Homeland Security

On December 23, 2014, Sarah R. Saldaña resigned as United States Attorney for the Northern District of Texas. President Obama had nominated her to be Assistant Secretary of the U.S. Department of Homeland Security on August 28, 2014, and the Senate confirmed her nomination on December 16, 2014. (News release available here.)

John R. Parker,  First Assistant United States Attorney, will serve as Acting United States Attorney until the selection of a new United States Attorney.

 

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NorthPark Sued For Patent Infringement in Northern District of Texas

On January 2, 2015, Peschke Map sued NorthPark Partners, LP for patent infringement in the Northern District of Texas. (The Complaint is available here.) The asserted patent is U.S. Patent No. 6,397,143, titled “Layout Based Method for Map Navigation.”

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The Appropriateness of Form Objections During Depositions

I recently came across an interesting Order (available here) from the Northern District of Iowa imposing sanctions against an attorney for conduct that occurred in depositions in Security National Bank v. Abbott Laboratories. The Court ultimately ordered the attorney to produce a training video that “provides specific steps lawyers must take to comply with” the Court’s Order. The Order is worth a read, as it details some of the abuses that occur in discovery in federal litigation. (On a related note, Steve Susman and Tom Melsheimer filed an amicus brief in support of the Court’s decision on appeal (available here), which is also worth a read.)

While there were many problematic areas of conduct identified by the Court, I would like to focus on the Court taking issue with the practice of making “form” objections. The Court wrote:

In defending depositions related to this case, Counsel proliferated hundreds of unnecessary objections and interruptions during the examiner’s questioning. Most of these objections completely lacked merit and often ended up influencing how the witnesses responded to questions. In particular, Counsel engaged in three broad categories of improper conduct. First, Counsel interposed an astounding number of “form” objections, many of which stated no recognized basis for objection. Second, Counsel repeatedly objected and interjected in ways that coached the witness to give a particular answer or to unnecessarily quibble with the examiner. Finally, Counsel excessively interrupted the depositions that Counsel defended, frustrating and delaying the fair examination of witnesses. (emphasis added)

The Court faulted counsel for “simply object[ing] to ‘form,’ requiring the reader (and, presumably, the examiner) to guess as to the objection’s basis.” The Court further stated:

In my view, objecting to “form” is like objecting to “improper”—it does no more than vaguely suggest that the objector takes issue with the question. It is not itself a ground for objection, nor does it preserve any objection. Instead, “form” objections refer to a category of objections, which includes objections to leading questions, lack of foundation, assuming facts not in evidence, mischaracterization or misleading question, non-responsive answer, lack of personal knowledge, testimony by counsel, speculation, asked and answered, argumentative question, and witness’ answers that were beyond the scope of the question. . . . [This Court would find that] lawyers are required, not just permitted, to state the basis for their objections. (citation and quotations omitted).

The Court did note, however, that “that not all courts share my views regarding ‘form’ objections. In fact, some courts explicitly require lawyers to state nothing more than unspecified ‘form’ objections during depositions.” Because there was authority supporting “form” objections, the Court declined to grant sanctions on this ground. The Court instead issued the following warning to lawyers: “Although I do not impose sanctions based on Counsel’s ‘form’ objections in this case, lawyers should consider themselves warned: Unspecified ‘form’ objections are improper and will invite sanctions if lawyers choose to use them in the future.”

I found this discussion interesting, as Texas lawyers routinely object to deposition questions based on “form” alone. In fact, doing so is required under the Texas Rules of Civil Procedure:

Objections to questions during the oral deposition are limited to “Objection, leading” and “Objection, form.” Objections to testimony during the oral deposition are limited to “Objection, nonresponsive.” These objections are waived if not stated as phrased during the oral deposition. All other objections need not be made or recorded during the oral deposition to be later raised with the court. The objecting party must give a clear and concise explanation of an objection if requested by the party taking the oral deposition, or the objection is waived. Argumentative or suggestive objections or explanations waive objection and may be grounds for terminating the oral deposition or assessing costs or other sanctions.

Tex. R. Civ. P. 199.5(e) (emphases added).

The Eastern District of Texas has a similar local rule:

Objections to questions during the oral deposition are limited to “Objection, leading” and “Objection, form.” Objections to testimony during the oral deposition are limited to “Objection, nonresponsive.” These objections are waived if not stated as phrased during the oral deposition. All other objections need not be made or recorded during the oral deposition to be later raised with the court. The objecting party must give a clear and concise explanation of an objection if requested by the party taking the oral deposition, or the objection is waived.

E.D. Tex. Local Rule CV-30 (emphases added).

The Northern District of Texas does not have a Local Rule on point, but the general practice, at least in my experience, is to follow the Texas Rules and the Eastern District of Texas Rules when objecting. (Federal Rule of Civil Procedure 30(c)(2) simply states: “[a]n objection must be stated concisely in a nonargumentative and nonsuggestive manner.”).

From my experience, the Texas practice is preferable to the practice contemplated (or rather, required) by the Court in Security National Bank, as the “objection, form” route makes depositions go quicker and cannot be used to “coach” the witness (or at least cannot be used to coach the witness as easily as stating the “basis” for the objection (e.g., “calls for speculation,” “hearsay,” etc.)). With respect to the Security National Bank court’s concern that “form” objections make it difficult for the Court to rule on objections, this may be true, but with over 95% of cases settling before trial, and the vast majority of depositions not being used at those trials that do go forward, I don’t view the potential benefit as outweighing the downsides.

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Judge O’Connor Issues Joinder Decision Under America Invents Act

On December 19, 2014, Judge O’Connor issued an Order (available here) in NewCo Enterprises v. Super Heaters granting plaintiffs’ motion to amend their complaint and add claims for direct and induced patent infringement against two third parties. Judge O’Connor found that the joinder motion satisfied the requirements of the America Invents Act, 35 U.S.C. § 299(a), as the action “arises from the same patents and involves the same infringing acts.”

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Judge Lynn Grants Preliminary Injunction In Wheel Pros Case

On December 22, 2014, Judge Lynn issued a Preliminary Injunction Order (available here), which granted Wheel Pros’ motion for preliminary injunction against Wheels Outlet. The Order enjoined the defendant from infringing plaintiff’s patents and trademarks.

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