April 14, 2010

Federal Circuit Confirms District Courts Can Modify Claim Construction at Trial

In a recent decision, Pressure Products Medical Supplies, Inc. v. Greatbatch LTD., No. 2008-1602 (Fed.

Cir. Mar. 24, 2010), the Federal Circuit vacated the U.S. District Court for the Eastern District of

Texas’s finding of infringement and remanded the case for further proceedings. In its decision, the

Federal Circuit confirmed that district courts may engage in rolling claim construction and provided

guidance on motions for leave to plead inequitable conduct.

During the underlying litigation, the magistrate judge held a claim construction hearing on August 15,

2007 and entered a claim construction order on March 19, 2008, about three months before trial. During

trial, the court, sua sponte, amended the claim construction in response to the defendant’s crossexamination

of various witnesses. On appeal, the Federal Circuit concluded that it was proper for the

district court to supplement the claim construction, even during trial. The Federal Circuit, however, held

that the court’s construction of a means-plus-function term in its amendment of the claim construction

was incorrect because the construction included corresponding structures from prior art references that

did not appear in, and were not incorporated by reference in, the specification. Because the court used

structures from the prior art references listed in the patent to define structures not expressly disclosed in

the specification, the Federal Circuit held the claim construction was in error and remanded the case for

further proceedings.

The defendant also appealed the district court’s denial of its motion for leave to amend its answer to

plead inequitable conduct. The inequitable conduct allegation was based on a declaration filed during

prosecution in which the declarant stated that he did not recall signing two previous declarations.

Further, the defendant failed to conduct any discovery on the declaration. In affirming the district court’s

action, the Federal Circuit pointed to its recent opinions requiring “specific and demanding showings of

evidence before a party may assert the defense of inequitable conduct.” Pressure Products, No. 2008-

1602 at 18 (citing Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 535 F.3d 1357 (Fed. Cir. 2008), and

Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009)). Based on these cases, the

Federal Circuit concluded that the amended pleading would likely not satisfy these higher standards of

proof necessary to plead inequitable conduct, further supporting the lower courts decision.

The Pressure Products decision is an important reminder for litigants on two fronts. First, while the

district court is not likely to amend its claim construction opinions, new evidence, even evidence

submitted during trial, may place the court in a better position to interpret the claims as its understanding

of the technology evolves. Thus, in appropriate situations, litigants should consider moving the court to

supplement its claim construction. Second, defendants must be diligent in investigating inequitable

conduct allegations. Failure to diligently investigate and plead inequitable conduct may result in waiver

of the defense. But even with diligence, pleading inequitable conduct requires specific and demanding

showings of evidence; without such showings, a court may strike the pleading or deny a motion for

leave to amend.