Guest Post by Laura G. Pedraza-Fariña
When the 97th Congress passed The Federal Courts Improvement Act establishing the Federal Circuit as a centralized patent appeals court, Congress was predominantly concerned with addressing the wildly divergent set of patent rules developed by different circuit courts.1 Patent uniformity—and therefore certainty and notice to the nation’s innovators—drove much of the debate around the need for a centralized patent appeals court.2
Our modern technological and legal environment, however, could not be more different from the pre-genetic engineering, pre-Internet 1980s society. The late 1980s and 1990s ushered the modern age of genetic engineering and, with it, the possibility of patenting genes, gene editing technology, and diagnostic methods based largely on genetic sequencing.3 The emergence of the internet, and therefore of internet-based business models and software business patents, has also profoundly changed the types of patents that now dominate the Patent and Trademark Office (PTO) and the Federal Circuit’s dockets.4
These two paradigm-changing technological revolutions are reshaping the very organization of our society and its underlying relationships: witness successful efforts to edit genes to cure once-incurable diseases5 and the proliferation and success of online marketplaces. Perhaps reacting to the rising centrality of patent law to our social lives, the past twenty years have also witnessed the return of the Supreme Court to the field of patent law.6
What does this changed technological and legal landscape require of judicial decision-making in patent law? If patentable technologies are reshaping society, getting patent law doctrine “right” will require prioritizing a richer set of values other than doctrinal uniformity and predictability. Doctrinal creativity, flexibility, and the ability to tailor patent doctrine to the different (and often rapidly changing) economic and sociological realities underlying innovation in different industries, should emerge as equally pressing doctrinal priorities.
The Federal Circuit has taken a rule-based approach to patent doctrine, an approach that in many ways overlooks innovation needs other than certainty and notice.7 The Supreme Court appears to implicitly agree with this assessment: one way to read the Supreme Court’s renewed interest in patent law is as reflecting a profound disagreement with the Federal Circuit’s methodological approach to patent cases.8 We can see it in eBay v Merc Exchange when the Federal Circuit clings to a bright-line rule granting near-automatic injunctions in patent cases.9 In reversing the Federal Circuit, Justice Kennedy’s frequently cited concurring opinion emphasizes the need for patent law to reflect the evolving economic and sociological realities of our innovation landscape.10 Similarly, in KSR v. Teleflex, the Supreme Court explicitly rejected the Federal Circuit’s “rigid” and rule-based approach to non-obviousness—an inquiry that, at its core, requires engagement with the economic and sociological forces that shape innovation incentives.11 In its stead, the Court urged the Federal Circuit to analyze the impact of “design incentives and other market forces” on the amount and direction of innovation.12 More recent decisions follow the same pattern. In contrast to the Federal Circuit’s approach, the Court has called for a case-by-case analysis, grounded in the realities of technological innovation.13 Whether we think the Supreme Court’s standard in each one of these cases strikes the right balance between certainty and flexibility, it is nevertheless perplexing that the Supreme Court has engaged with the economics, sociology and architecture of innovation much more enthusiastically than the Federal Circuit—a court with deeper expertise in patent law and technology—has been willing to.14
It is worth exploring why the Federal Circuit had, and continues to have, a preference for bright line rules and what at times appears to be a deep ambivalence about engaging with the economic or sociological facts of innovation on the ground. In previous writing15, I have argued that this preference is tied to two features. First, a strong preference for uniformity and certainty based on the original justification for a centralized court.16 Second, the Federal Circuit’s role as an expert community that seeks to simultaneously provide clear guidance to non-expert District Courts, while preserving for itself epistemic control over substantive patent law.17
Expertise in patent law can be disaggregated into at least three different subtypes. First, expertise in patent cases can be “learned by doing.” Federal Circuit judges, no matter their background, are bound to develop expertise about patent law simply by working through a large number of patent cases. Second, judges may develop expertise in patent law through prior experience in patent litigation or prosecution, which is the case for several current Federal Circuit judges.18 A third type of expertise is expertise in the underlying technology. Federal Circuit judges do not uniformly have a technological background.19 And even if technological expertise were required of every judicial appointment, it would be impossible to fairly cover every single technological area. Technological specialization in a judicial body may in fact prove detrimental if it leads judges who are non-experts in a particular technology to become overly deferential to the technological expertise of a single member who may end up driving judicial decisions in his or her area of expertise. Keeping all of this in mind, the Federal Circuit does have a modicum of technological specialization, however, drawing upon the technological expertise of some of its judges and through hiring technologically knowledgeable clerks.20
The Federal Circuit’s status as an expert community can take us some way towards explaining its focus on uniform and clear rules. In expert communities more broadly, rules are ways to train novices and constrain their discretion.21 Rules are also mechanisms to constrain and control the action of other expert communities that may seek to compete for epistemic control.22 Viewed through this lens, the Federal Circuit’s preference for rules serves a way to constrain the discretion of District Courts, reflecting a certain distrust in the ability of District Court judges to get things right.23 Rule formalism also serves as a mechanism to constrain and control the impact of the Patent and Trademark Office (PTO)—a “competitor” expert community.24 And yet, reliance on rules to constrain discretion and preserve epistemic control comes at a very high cost.25 Tailoring and adapting patent doctrine to the different and changing economic and sociological realities underlying innovation in different industries demands a willingness to engage with economic and sociological types of evidence on a case-by-case basis. It also requires the ability to rapidly change course when novel technologies create new societal quandaries.
Patent law scholars have proposed a myriad solutions to balance the need for certainty with flexibility and adaptability to changing technologies, such as promoting competition among multiple circuit courts, locating expertise at the level of the District Court, or increasing deference to the PTO.26 In the final analysis, courts, and the Federal Circuit in particular, may not be the best institutional actors to fully incorporate on-the-ground economic and sociological considerations into the design of patent law. This is particularly the case given our rapidly changing technological and social environment. One attractive solution is to increase the power of the Patent and Trademark Office by applying Chevron deference to interpretations of substantive patent law advanced by the PTO.27 The PTO has already shown its ability to incorporate economic knowledge into patent policy. It has created the Office of the Chief economist, an office that has carried out research into leading-edge technological and policy challenges in patent law, such as the role of artificial intelligence in innovation and on documenting and understanding the gender gap in patent applications.28
Ending what others have called “patent law exceptionalism”29 in administrative law would go a long way towards also ensuring patent law policies adequately balance innovators’ need for certainty and notice with the public’s interest in policies that are responsive to changing background social and economic environments. Admittedly, granting wholesale Chevron deference to the PTO on all substantive patent matters (including over original patent denials) would be a radical shift from our current system and would require Congressional action. A small step in this direction, however, can begin with Chevron deference in the more circumscribed area of the trial-like post-grant review proceedings under the America Invents Act (AIA)—an area for which there are good arguments favoring Chevron deference.30 This deferential move should be coupled with an increased focus on capacity and expertise-building at the PTO. Ultimately, the larger project of making patent law responsive to contextual technological changes requires the type of nuanced on-the-ground engagement with economics and sociology that is simply unavailable to an appeals court.
[1] H.R. Rep. No. 97-312, at 22–23 (1981).
[2] Id.
[3] See, e.g.,Michael Morange, The Black Box of Biology: A History of the Molecular Revolution (2020).
[4] See, e.g., Philip J. Weiser, The Internet, Innovation, and Intellectual Property Policy, 103 Colum. L. Rev. 534 (2003).
[5] See, e.g., Mazhar Adli, The CRISPR Tool Kit for Genome Editing and Beyond, 9 Nat Commc’ns 1911 (2018).
[6] Timothy R. Holbrook, The Return of the Supreme Court to Patent Law, 1 Akron Intell. Prop. J. 1, 2 (2007); John F. Duffy, The Festo Decision and the Return of the Supreme Court to the Bar of Patents, Wm. & Mary L. Rev. 273, 278–79 (2003).
[7] See, e.g., John R. Thomas, Formalism at the Federal Circuit, 52 Am. U. L. Rev. 771, 777 (2003).
[8] See Richard Linn, Changing Times: Changing Demands, 15 SMU Sci. & Tech. L. Rev. 1, 7 (2011); Laura G. Pedraza-Fariña, Understanding the Federal Circuit: An Expert Community Approach, 30 Berkeley Tech. L. J. 89, 92 (2015).
[9] eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393–94 (2006).
[10] eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 396 (2006) (Kennedy, J., concurring) (“In cases now arising trial courts should bear in mind that in many instances the nature of the patent being enforced and the economic function of the patent holder present considerations quite unlike earlier cases.”).
[11] KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 407, 415 (2007).
[12] Id. at 417.
[13] See David O. Taylor, Formalism and Antiformalism in Patent Law Adjudication: Rules and Standards, 46 Conn. L. Rev. 415, 486 (2013).
[14] See Rochelle Cooper Dreyfuss, In Search of Institutional Identity: The Federal Circuit Comes of Age, 23 Berkeley Tech. L. J. 787, 806 (2008) (arguing for a shift of focus at the Federal Circuit from “meeting Congress’s short-term uniformity and predictability objectives to assuming its role as the near-final authority in patent jurisprudence, responsible for crafting law that is responsive to the needs of the creative community and the users of knowledge products”); Peter Lee, Antiformalism at the Federal Circuit: The Jurisprudence of Chief Judge Rader, 7 Wash. J. L. Tech. & Arts 405 (2012) (reviewing the Federal Circuit’s general antipathy towards contextual rules, and highlighting Judge Rader’s approach as an outlier alternative).
[15] Pedraza-Fariña, supra note 8.
[16] Id. at 93
[17] Id. at 121.
[18] See Kimberly A. Moore, Are District Court Judges Equipped to Resolve Patent Cases?, 15 Harv. J.L. & Tech. 1, 11, 11 n.97 (2001) (finding that seven of the nineteen Federal Circuit judges who participated in claim construction appeals had previous patent experience).
[19] Dunstan H. Barnes, Technically Speaking, Does it Matter? An Empirical Study Linking the Federal Circuit Judges’ Technical Backgrounds to How They Analyze the Section 112 Enablement and Written Description Requirements, 88 Chi.-Kent. L. Rev. 971, 983 (2013) (finding that seven judges on the Federal Circuit had technical backgrounds while twenty-three judges had nontechnical backgrounds from 1997-2011).
[20] See Moore, supra note 18, at 18 (citing Jonathan Ringel, Federal Circuit’s Scientific Method: Coveted Judicial Clerkships Draw Pool of Candidates with Technical Backgrounds to Match the Court’s Docket, LEGAL TIMES, Nov. 6, 2000, at 10.
[21] See, e.g., Harry Collins & Robert Evans, Rethinking Expertise (2007); Elizabeth H. Gorman & Rebecca L. Sandefur, “Golden Age,” Quiescence, and Revival: How the Sociology of Professions Became the Study of Knowledge-Based Work, 38 Work & Occupations 275 (2011).
[22] See generally Andrew Abbott, The System of Professions: An Essay on the Division of Expert Labor (1988).
[23] Pedraza-Fariña, supra note 8 (exploring in depth the consequences of thinking of the Federal Circuit as an expert community) .
[24] Id. at 151.
[25] Id. at 135.
[26] See, e.g., Arti K. Rai, Engaging Facts and Policy: A Multi- Institutional Approach to Patent System Reform, 103 Colum. L. Rev. 1035 (2003); Paul R. Gugliuzza, Rethinking Federal Circuit Jurisdiction, 100 Geo. L.J. 1437, 1498 (2012); Rochelle Cooper Dreyfuss, Percolation, Uniformity, and Coherent Adjudication, 66 SMU L. Rev. 505 (2013); Melissa F. Wasserman, The Changing Guard of Patent Law: Chevron Deference for the PTO, 54 Wm. & Mary L. Rev. 1959 (2013).
[27] Other legal scholars have also pressed for this solution. See, e.g., Wasserman, supra note 24; Stuart Minor Benjamin & Arti K. Rai, Administrative Power in the Era of Patent Stare Decisis, 65 Duke L.J. 1563 (2016); Christopher J. Walker, Chevron Deference and Patent Exceptionalism, 65 Duke L.J. Online (May 2016).
[28] Office of the Chief Economist, United States Patent and Trademark Office,https://www.uspto.gov/about-us/organizational-offices/office-policy-and-international-affairs/office-chief-economist.
[29] Walker, supra note 25.
[30] Wasserman, supra note 24; Rai & Benjamin, supra note 25.