12 May 2012

Federal Court Conducts Markman-Style Hearing in Hot Tub

Britax Childcare Pty Ltd v Infa-Secure Pty Ltd [2012] FCA 467 (9 May 2012)

Claim construction – role of expert evidence – practice and procedure – concurrent testimony

Hot TubJustice Middleton has issued a 413 paragraph (104 pages, not including Annexures) decision in a patent case involving child safety seats.  Not that there is anything unusual about lengthy decisions issuing from the Federal Court of Australia – this one is a minnow compared to the 1619 paragraphs penned by Justice French in the case of University of Western Australia v Gray (No 20) [2008] FCA 498.  Furthermore, the actual findings in this case will most likely be of interest only to those actually involved in the proceedings.

However, two things are notable about Justice Middleton’s decision.  Firstly, it addresses only one preliminary issue, namely ‘claim construction’, i.e. the question of how the patent claims asserted by the patent owner Britax Childcare should properly be interpreted.  Secondly, the hearing involved a rare instance of ‘hot-tubbing’ expert witnesses – which sounds entirely inappropriate, but actually is not, although it is a practice not without its critics.

CLAIM CONSTRUCTION HEARINGS

Holding separate hearings, and issuing preliminary decisions, on claim construction is commonplace in the United States, where the process is named for the Supreme Court ruling, in Markman v Westview Instruments, Inc. 517 U.S. 370 (1996), that the proper interpretation of patent claims is a matter of law which is for a judge to decide.

A ‘Markman hearing’ is thus a pretrial hearing at which all claim construction issues and disputes over meaning, scope and interpretation are decided prior to the commencement of the main trial, which is normally conducted before a jury.  (The wisdom of having complex patent cases heard by juries is not a topic for this article.  Suffice to say that the right to trial before a jury of one’s peers is guaranteed by the US Constitution, and this is therefore an unavoidable fact of life for US litigants.)

Judges decide questions of law, while the role of a jury is to decide questions of fact.  The claim construction arising from a Markman hearing is thus presented to the jury at trial as a fait accompli, i.e. the jurors have no choice in how the patent claims are to be interpreted, and must follow the ruling of the court.

In Australia, we do not try civil cases in before a jury.  Nonetheless, the courts continue to recognise that the issues to be decided in most cases can be divided into questions of law and questions of fact.  Both are decided by the judge, although the term ‘jury question’ is still sometimes used in acknowledgement of the traditional role (ongoing in the case of criminal trials) of the jury in deciding factual matters.

Since the judge decides all issues of law and fact, it is generally considered more efficient to have all matters aired at trial, and for a single decision to issue answering all questions of law and fact.  However, there is no reason why a case cannot be broken down into a number of separate stages, although we cannot recall any other instance of an Australian court issuing an initial decision purely on questions of claim construction.

The reason for Justice Middleton to do this in the Britax case appears to be the relatively large number of closely-related patents and alleged infringements involved.  In all, Britax has alleged infringement of 40 claims, across 10 patents, by up to 16 Infa-Secure products!  Nine of the patents are divisional innovation patents, derived ultimately from a single parent, and it seems that the claims of a number of these patents were specifically crafted to target efforts by Infa-Secure to modify its products to avoid the claims in the parent application (see decision at [27]).

As in many patent cases, the questions of whether infringement has occurred, and whether the patents are valid, are likely to turn on how the claims are interpreted, and each party brought forward its own expert to ‘assist’ the court in understanding what a person skilled in the art of child safety-seat manufacturing and/or installation would get out of reading the specifications and claims.  Unsurprisingly, each side’s expert held differing views on claim construction, such that an ultimate finding of infringement or validity would depend largely on which interpretation prevails.

In other words, the final outcome depends largely on whose expert the court decides to believe.

Since claim construction is a question of law, for the judge to decide, expert evidence is not essential.  As Justice Middleton put it (at [225]):

A court may be in the position to construe a patent without the aid of any expert evidence, if it is clear that the patent is to be read according to its ordinary meaning and no special meaning is to be given to any word or phrase, and the court does not need assistance in understanding the context of the patent in suit.

However, a patent specification should be read through the eyes of the person to whom it is directed, i.e. a person skilled in the relevant field of technology.  This is just as well, otherwise every patent specification written in relation to, say, a mechanical device would need to commence with a discussion of all of the most fundamental principles of mechanical engineering so that the proper way of making and using the device could be understood by anyone! 

The role of experts in the process of claim construction is thus not to tell the court what the claims ‘mean’, but to assist the court to place itself ‘in the position of some person acquainted with the surrounding circumstances as to the state of [the] art and manufacture at the time’ (at [228], quoting the High Court in Kimberly-Clark Australia Pty Ltd v Arico Trading [2001] HCA 8).

In this case, Justice Middleton appears to have been determined to make up his own mind, and not simply accept the view of one or other of the experts.  This seems to have been the cause of the preliminary decision on claim construction, as explained at [14]:

… the parties had approached infringement and revocation on the basis that one or other of the expert witnesses as to construction would be accepted by the Court. From that approach, certain consequences as to infringement and revocation followed. However, as I have not accepted completely either expert witness on construction, the approach adopted by the parties causes it own difficulties in the circumstances of this proceeding, having regard to the different combinations and permutations that may result from findings on construction.

In other words, given a new claim construction determined by the court, both parties would need to revisit their evidence and arguments in relation to infringement and invalidity.  We imagine that Justice Middleton is hoping that this will remove a number of the patents and products from contention, significantly simplifying the further issues to be resolved in a subsequent stage of the proceedings.

The parties have thus been given some time to consider the decision, and will return to court for a Directions hearing on the further conduct of the case on 12 June 2012.

INTO THE HOT TUB!

In theory, the role of expert witnesses is to provide independent assistance to the court in understanding and resolving technical issues in which judges generally lack expertise.  In patent cases, they are usually experienced workers in the particular field of technology addressed by the patent.

In practice, some legitimate degree of variation exists in the views of different experts in any field, and in our adversarial system each party will generally expend some effort in finding experts whose views are more favourable to their own case.  It is therefore almost inevitable that the expert opinions will be contradictory on almost any issue that is ultimately critical to the outcome of the case, potentially placing the judge in the position of having to prefer the views of one expert over another, for perhaps no good reason other than the general impression formed of the individuals during cross-examination in court.

The practice of having experts give ‘concurrent evidence’, also known as ‘hot-tubbing’, is one which appears to be gaining some popularity in Australia. 

Federal Court judge, Justice Steven Rares, has recently written a paper on the subject, Using the “hot tub” – How concurrent expert evidence aids understanding issues.  The paper outlines some of the concerns about conventional expert testimony, including the following disturbing survey results:

In 1999, an empirical study of Australian judges found that 35% considered bias as the most serious problem with expert evidence. And another 35% considered that the presentation or testing of the expert was the most serious problem. This was manifested in their differing concerns about poor examination in chief (14%), poor cross-examination (11%) and the experts' difficult use of language (10%).

‘Bias’ may be too harsh a term, but having been selected for their particular (genuinely-held) opinions, experts do have a natural tendency to wish to be of assistance to the party by whom they are called.  Experts must certainly feel some pressure not to express views which might be detrimental to ‘their side’ of the case.

The ‘hot tubbing’ process employed by Justice Middleton in the Britax case appears to have been conducted just as described by Justice Rares at paragraphs [22] to [29] of his paper.

Justice Rares explains in his paper that concurrent evidence generally works by having each expert first prepare an independent report.  A pre-trial order is made for them to meet, without lawyers, and prepare a joint report setting out the points on which they have common and conflicting/differing opinions.

In court, at an appropriate point in the trial, the experts are called to give evidence together.  The court room is set up so that the experts can all sit together.  A single microphone is provided, and the one rule is that ‘the expert who has the microphone has the floor’.

Each expert is first asked to identify and explain the principal issues, as they see them, in their own words.  They each then have an opportunity to comment of the others’ views, and ask questions of each other.  Topics for cross-examination are declared, and the experts again have an opportunity to comment on these topics.  Cross-examination by counsel then commences, with the benefit that counsel can turn to their own expert for comment or clarification if necessary.

According to Justice Rares:

This has two benefits. First, it reduces the chance of the first expert obfuscating in an answer. Secondly, it stops counsel going after red herrings because of a suspicion that his or her own lack of understanding is due to the expert fudging. In other words, because each expert knows his or her colleague can expose any inappropriate answer immediately, and also can reinforce an appropriate one, the evidence generally proceeds directly to the critical, and genuinely held, points of difference. Sometimes these differences will be profound and, at other times, the experts will agree that they are disagreeing about their emphasis but the point is not relevant to resolving their real dispute.

The practice of ‘hot-tubbing’ appears to have originated in the Trade Practices Tribunal, and was first used in a courtroom in the Supreme Court of New South Wales in 1985 (in the case of Spika Trading Pty Ltd v Royal Insurance Australia Ltd).  It is also used in the Land and Environment Court of New South Wales, and the Administrative Appeals Tribunal.

It has not, however, been widely adopted in patent trials.  Justice Rares himself expresses some doubt as to its appropriateness, suggesting that it ‘may be that in patent cases, where the whole case revolves around conflicts within fields of expertise, concurrent evidence is not likely to assist a judge.’  However, section 217 of the Patents Act 1990 provides for a court to appoint an assessor to assist at trial, and Justice Heerey used this provision to have an expert sit with him (at the joint expense of the parties) at the trial in Genetic Institute Inc v Kirin-Amgen Inc (No 2) [1997] FCA 1058.

Concurrent evidence is not without its critics, and a number of valid criticisms are set out in paragraphs [38] to [44] of Justice Rares’ paper.  One major concern is that some experts are likely to perform better in the ‘hot-tub’ (in court, as in life, perhaps), which may lead to personality, rather than expertise, winning the day.  However, similar concerns exist for conventional cross-examination.

CONCLUSION

The approach of conducting a phased trial, with claim construction preceding other issues, is an interesting one which may have some benefits in this case.

One possible downside is that the claim construction decision is itself independently appealable to the Full Court.  And since it deals with matters which are agreed to be questions of law, not fact, every individual conclusion reached by the primary judge is subject to reconsideration on appeal! 

It will therefore be interesting to see whether the proposed Directions hearing indeed goes ahead on 12 June 2012, or if the decision is appealed by one, or both, parties in the meantime.

It will also be interesting to see whether ‘hot-tubbing’ of experts becomes more popular with judges in patent cases.  Perhaps Justice Bennett could adopt it for the coming hearings between Apple and Samsung!

3 comments:

j h said...

Interesting to Rares J apply it in this field. As a maritime engineer now studying law (partly inspired by his judgement in Strong Wise), the hot tubbing approach definitely seemed to be a progressive and positive approach to getting to the critical issues.

Patentology (Mark Summerfield) said...

Given that the role of experts is to assist the court, and not the particular party that engaged them, the hot-tubbing approach certainly has advantages in achieving this objective.

I suspect, however, that it may not be popular with the lawyers on either side of a dispute.  It must be difficult to run a case without having 'control' of your expert witness!

b c said...

Practitioners dislike hot tubbing enormously.  The reality is that so much depends on expert evidence in cases (not just patent cases) that for every witness in the hot tub, then there is another expert witness briefed to critique the methodology and opinion.  A naive view is that hot tubbing works, but it makes our system even more expensive.  Let's hope the system remains like the title of the 2010 Hollywood failure "Hot Tub Time Machine"

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