Congress created the Federal Circuit in 1982 at least in part to promote uniformity in patent law. At that time, patent law was in disarray, the result of different interpretations of patent law by the various federal appellate courts. The problem that the creation of the Federal Circuit attempted to solve was the fact that the Supreme Court was not resolving these circuit splits in U.S. patent law. But the Supreme Court’s failure to resolve circuit splits regarding differing interpretations of patent law was not always the problem highlighted by advocates for a national patent court, and this particular problem might not even exist today in the absence of the Federal Circuit given the Supreme Court’s recent, renewed interest in deciding patent cases. So, what have been the historical justifications for a national patent court, and what justification might exist today for the Federal Circuit?
Prior to 1891 – Long Delays
Until 1891, the Supreme Court heard and decided numerous patent cases each year. This was because, until that year, Congress had defined the Supreme Court’s jurisdiction as appellate jurisdiction; in other words, the Court was required to review cases appealed to it. As a result, there were not circuit splits. But, in 1891, Congress both created the intermediate appellate courts as we know them today and gave the Supreme Court petition jurisdiction over patent cases decided by these intermediate appellate courts. In other words, Congress granted the Supreme Court the power to use its own discretion to decide whether to review appellate decisions in patent cases. One of the main reasons Congress did this was because the Supreme Court was overburdened—it had too many cases and, as a result, there were long delays in deciding cases.
Interestingly, it was around this same time that groups began calling for the creation of a specialized, national patent court. In this regard, I recommend to you Professor Paul Janicke’s excellent 2002 article “To Be or Not to Be: The Long Gestation of the U.S. Court of Appeals for the Federal Circuit (1887-1982).” There he notes that bills in Congress to create a national patent court began to appear in 1887. Before 1891, again, as I noted, the Supreme Court had appellate jurisdiction over patent cases. And so, the problem then was not circuit splits regarding interpretations of patent law. As I have mentioned, it was long delays in deciding cases. As explained by Margaret Conway in a document she prepared for the U.S. Senate Committee on the Judiciary in 1959, the problem prior to 1891 was that the Supreme Court was taking too long to decide appeals in patent cases. As she explained, “the average lapse of time became 10 years” and, “[m]easured against the 17-year life of the patent, the time spent in litigation took up more than half of the exploitable life of the grant.”
1891-1971 – Circuit Splits Regarding Validity
But even after 1891, when the Supreme Court received authority to choose cases it would review, as explained by Conway, “this arrangement merely resulted, to a considerable extent, in there being nine different courts of last resort.” And this generated another problem that caused Congressmen, despite the change in 1891 to the Supreme Court’s jurisdiction, to continue to file bills to create a national patent court. These bills were filed by members of Congress every term between 1887 and 1921. In 1906, one of these bills was debated. And in 1906 the justification for a national patent court shifted from the long time to decide cases to a type of circuit split that was different than the type I have already discussed. In the words of T.S. Fisher, who testified in favor of a national patent court in 1906, “the main reason for this bill is to have a single patent court of final jurisdiction, and if we could just in every case get one decision which should extend all over the country and be binding on every circuit, in 99 out of 100 cases that would be all that was needed.” In other words, he wanted a single patent court to have its decisions regarding patent infringement and validity to apply nationwide.
One explanation might be that courts at that time had not discovered the concept of a nationwide injunction, a controversial concept used by some district judges today. Moreover, at that time the Supreme Court had not yet determined, as it finally did in 1971 in the case of Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, that non-mutual defensive collateral estoppel applied in patent cases. That is, since 1971 a determination of invalidity of a patent in a final and unappealable judgment rendered by any intermediate appellate court is binding on the patent owner even in other cases against other accused infringers. By similar reasoning, a determination of no invalidity of a patent in a final and unappealable judgment rendered by any intermediate appellate court against an accused infringer ought to be binding on the accused infringer even in other cases brought by the patent owner. That was not always the case.
A particularly grotesque example of the need for this latter collateral estoppel doctrine is the set of cases that gave rise to the Supreme Court’s determination that clear and convincing evidence is necessary to render patent claims invalid. In Microsoft v. i4i in 2011, the Supreme Court held that the statutory presumption of validity dictates that clear and convincing evidence is needed to prove patent claims invalid. Notably, however, the primary support for the Court’s conclusion was an older Supreme Court opinion, Radio Corp. v. Radio Engineering Laboratories, Inc. In that case, the same invalidity issue was being raised for the fourth time. As I have noted in my prior work, the facts addressed by the Court in Radio Corp. concerned a matter litigated repeatedly in various courts, between the rival claimants, and using the same evidence. It is no wonder that when the Supreme Court considered that the same evidence had not proven invalidity in three prior cases, it decided that clear and convincing evidence would be required to prove invalidity in the fourth case. Regardless, after the Supreme Court’s recognition of the doctrine of non-mutual defensive collateral estoppel in 1971, there were not cries for the creation of a national patent court based on inconsistent determinations of validity of patents between intermediate appellate courts.
1971-1982 – Circuit Splits Regarding Patent Law
After 1971, what was the justification for the creation of a national patent court? That brings us back to where I started: the need to eliminate forum shopping based on unresolved circuit splits regarding patent law (not with respect to the validity of patents, but with respect to the interpretation of patent law). Indeed, as I have explained, that was the basis for the creation of the Federal Circuit in 1982. And while some reject the notion that the Federal Circuit is the country’s national patent court, it is the only intermediate appellate court with jurisdiction over patent infringement and validity disputes.
Today – What is the Justification for the Federal Circuit?
So, what does this brief historical overview of calls for a national patent court teach us? It teaches us that over time the justification for a national patent court changed from (1) the delay in resolving appeals in patent cases, to (2) circuit splits regarding the validity of patents, to (3) circuit splits regarding patent law. In short, there have been three justifications for a national patent court.
Importantly, however, today we arguably have none of those three problems. We don’t have a problem with delays in resolving appeals in patent cases. The Supreme Court’s 1971 decision regarding non-mutual defensive collateral estoppel eliminated circuit splits regarding the validity of patents. And, given the Supreme Court’s recent interest in deciding disputes over patent law, there is reason to think that, even without the Federal Circuit, we might not have too many unresolved circuit splits over patent law.
So, I come to an important question: why then have a Federal Circuit with exclusive intermediate appellate jurisdiction over appeals in patent cases?
In response to this question, I highlight a fourth historical problem with the Supreme Court’s treatment of patent law: it often gets patent law wrong.
Consider first the wrongheaded, policy-oriented decision making of the Supreme Court in patent cases in the middle of the 20th Century. Obviously, I’m taking a normative position and some, no doubt, may disagree on the merits. But, at least in my view, there are some particularly egregious examples of the Supreme Court’s view of the relevant policies underlying patent law. Such examples include two cases related to the so-called “invention” requirement applied by the Supreme Court. First, consider Justice Douglas’s “flash of genius” requirement articulated by him in Cuno Engineering v. Automatic Devices. He effectively said that to get a patent a flash of genius is required. In other words, he seemed to say that only geniuses get patents, and only when they come up with their ideas in a short amount of time. The Supreme Court would later say that this language in Cuno represented merely a “a rhetorical embellishment” of prior case law, but in Cuno the Supreme Court seemed to say a normal person’s hard work and trial and error did not merit any reward of patent rights, no matter the uniqueness or utility of the invention created. But shouldn’t the law encourage such expensive pursuits as a matter of policy? As another example, consider the Supreme Court’s pronouncement in Great Atlantic and Pacific Tea Co. v. Supermarket Equipment Corp. that “[a] patent for a combination” of old elements must somehow change the elements’ “respective functions.” In this way the Supreme Court seemed to create a test that, by its terms, is impossible to satisfy. Notably, in both respects Congress had to pass the 1952 Patent Act to reverse the Supreme Court’s misguided understanding of the inventive process and replace the old “invention” requirement with the new, statutory non-obviousness requirement.
More recently, John Golden has explained how the Supreme Court has made mistakes even attempting to apply general principles of law in patent cases. He notes as a particularly egregious example eBay v. MercExchange, where the Court’s opinion in not just one but two respects clearly indicated a lack of understanding of the law of permanent injunctions. Even more recently, Jeff Lefstin and Peter Menell have demonstrated in amicus briefs filed with the Supreme Court how badly the Court misunderstood its own precedent in the area of patent eligibility when it decided in Mayo Collaborative Services v. Prometheus Laboratories in 2012 to re-insert into patent law the invention requirement. Indeed, the Court did not learn from Congress’s elimination of the “invention” requirement in 1952; in Mayo it re-inserted into patent law this failed concept when it created the search for an “inventive concept”—something more than just identifying a practical use of a newly discovered physical phenomenon or natural law. And so we are waiting on Congress again to overrule the Supreme Court.
Based on the Supreme Court’s errors deciding patent cases, rather than framing any debate over the Federal Circuit as simply whether to eliminate the Federal Circuit’s exclusive intermediate appellate jurisdiction over appeals in patent cases, any debate (at least provocatively) might ask whether to eliminate the Supreme Court’s petition jurisdiction in patent cases. More realistically, any debate over the Federal Circuit’s role in the patent system ought to include how the Federal Circuit might be used to ensure the Supreme Court accurately decides patent cases. And, in this regard, one benefit a national patent court—perhaps the Federal Circuit—might bring to the table is expertise. That is, expertise is one potential justification for the continued existence of the Federal Circuit.
Ironically, the existence of the Federal Circuit and its exclusive jurisdiction over patent cases has bled the Supreme Court of expertise in patent cases. The Supreme Court has brilliant people on it, but those people now have almost no experience in patent law until they get to the Supreme Court. Justice Stevens was the last Justice to hear patent cases as a regional judge (he served on the Seventh Circuit) prior to the formation of the Federal Circuit. Since Justice Stevens joined the court, the judges (primarily from the D.C. Circuit) who have joined the Court have not had any experience in hearing appeals in patent cases. So, today, there is a lack of expertise on the Supreme Court with respect to patent law.
Even once they arrive at the Supreme Court, moreover, the Justices will hear perhaps three to four cases in a busy term on particular topics in patent law. (This term the Court has not granted review in any patent cases.) The Justices consider more than that number of cases when evaluating petitions, of course, but petitions present opportunities for only cursory review of cases. And, anyway, patent cases make up a small portion of the Supreme Court’s work, whether in terms of granted cases or petitions.
It is true that the Supreme Court—to the extent that it has heard more and more patent cases in recent years—is developing more of an expertise in patent law. Its expertise is more now than twenty years ago, when the Court almost never granted review in a patent case.
By contrast, even though there is no requirement that Federal Circuit judges have a technical background or experience in patent law, some of its judges do. Others have at least some exposure to patent law before they join the court. Regardless, all of the judges develop expertise through their experience on the court. The Federal Circuit hears so many patent cases that its judges necessarily develop expertise over time. Thus, even in its current framework, the Federal Circuit provides for expertise despite no requirement of its judges to have a technical background or experience in patent law.
In short, whoever decides cases is going to make errors, but one might prefer to use and trust experts in the relevant field. And, relatively speaking, it is not close: the Federal Circuit is the court with the expertise. Taking this preference for expertise to the extreme, one might contend the Federal Circuit judges or at least some portion of them ought to be required to have an engineering, science, or patent law background. Of course there are countervailing factors, and there may be significant problems, associated with having a court of experts overseen by a Supreme Court made up of justices without relevant expertise. But there would be benefits too, and so it would entail a cost-benefit analysis. In this regard, however, I will note for the record the obvious: we don’t have art historians performing brain surgery or brain surgeons teaching art history.
One criticism of the Federal Circuit and, more broadly, the argument that we should prioritize expertise in judicial decision making in patent cases, is a criticism of what is called “patent law exceptionalism.” This criticism is based on the idea that patent law is not so unique that it should be treated differently than other areas of the law. In this context, for example, one might argue that there is no need for expertise in patent law to decide patent cases. The Supreme Court, after all, holds jurisdiction over all types of cases. Why should patent law be decided by experts when no other area of the law is decided by experts?
It is certainly true that the Supreme Court’s petition jurisdiction is unlimited. But many countries around the world have gone in the direction of creating specialized patent appellate courts, even specialized courts of last resort, or at least specialized judges within courts of last resort, for patent cases. For example, the Federal Court of Justice in Germany includes seperate judges to hear appeals in patent cases, South Korea has a patent court that hears intermediate appeals of patent cases, Singapore includes specialist patent judges in its highest court, India has a semi-specialized appellate court to hear appeals in patent cases, China recently created a specialized patent court in its Supreme People’s Court, and Europe has been working towards a court of last resort for patent cases not involving constitutional matters. In short, it seems that the rest of the world is converging around the idea of specialized patent appellate courts. Are there unique concerns for specialization in the United States that other countries do not have? Have we seen the problems that comes with specialization having performed the experiment other countries are just starting? Or do these countries have innovations that we might adopt to modify the Federal Circuit experiment?
Another argument against the Federal Circuit and, again more broadly, the idea of expertise in judicial decisionmaking in patent cases, relates to “capture”—the concern that those with interest in the subject matter gain control of the institution governing that subject matter, i.e., the regulated “capture” the regulating body. At least in part due to concern with capture, some have advocated modifying the makeup of the Federal Circuit or its jurisdiction in an attempt to eliminate the possibility of capture. But let us just recognize that this approach in large part formalizes the absence of expertise.
Ultimately, of course, it is up to policymakers to decide whether the benefits of the Federal Circuit—or a national patent court—exceed its costs. As I have shown, the justifications for such a court have certainly changed over time. And, given the Supreme Court’s renewed interest in patent cases, it may be time for a new justification—and a new role—for the continued existence of the Federal Circuit. Perhaps that justification and role is the application of expertise to decide patent cases.