Guest Post by Paul R. Gugliuzza
Professor Rochelle Dreyfuss, probably the keenest academic observer of the Federal Circuit, memorably called the court “a continuing experiment in specialization.” She was writing in 2004, shortly after the twentieth anniversary of the court’s founding. With the court’s fortieth anniversary approaching in 2022, can we finally answer the question: has the Federal Circuit experiment succeeded?
I think we can. And I’m pretty sure the answer is: no.
Congress created the Federal Circuit, the conventional story goes, to achieve uniformity in patent law. But that goal has been elusive: the Supreme Court frequently upends Federal Circuit doctrine, and the Federal Circuit’s own judges disagree about fundamental issues ranging from the scope of patentable subject matter, to the frameworks for conducting claim construction and assessing nonobviousness, to the roles of the judge and jury in patent disputes, among many others. Today, the Federal Circuit can’t even ensure uniformity in the treatment of any given patent: because post-issuance proceedings at the PTAB often proceed in parallel with infringement litigation in court, it is not unusual for a court to uphold a patent’s validity only for the PTAB to later strike it down, or vice versa.
Another not-so-secret hope among the architects of the Federal Circuit was that a semi-specialized patent court would “strengthen” patent rights. But the court hasn’t done that either, at least not unflinchingly. The Federal Circuit, to be sure, has tried to expand patentability in various ways, most notably in the areas of patentable subject matter, nonobviousness, and the field of design patents. But the Supreme Court has pushed back against some of those expansions, and the Federal Circuit itself has constricted patentability in other realms by, for example, reconfirming (and strengthening) the written description requirement and limiting the validity of means-plus-function claims. Likewise, the data suggest that, on the issue of infringement, doctrine and outcomes at the Federal Circuit are relatively balanced between patentees and accused infringers.
So, if the Federal Circuit has neither provided uniformity nor strengthened patent rights, what has it done? I think one crucial effect of the Federal Circuit’s creation is that the court has made the patent system and, by implication, the court itself, exceptionally important. Since Congress created the Federal Circuit, the number of patents issued annually has grown by over 500%. Patents and patent cases are now front page news and a crucial component of the Supreme Court’s limited docket. The amount of patent litigation filed in the district courts has also grown substantially. The practice of patent law is no longer a niche area for specialist lawyers with backgrounds in the hard sciences; it’s a primary moneymaker at large, general practice law firms. Practically every law school in the United States now has at least one—and often more than one—full-time faculty member specializing in patent law.
All the while, we remain frustratingly uncertain whether patents encourage more inventions than we would get without them—to say nothing of the patent system’s overall impact on social welfare. The best we can say is that the relationship between patents and innovation seems to depend on the industry. Patents may be worth the cost in pharmaceuticals and biotechnology, but maybe not in areas like computers and communication technology.
Given the uncertainty about the desirability of patents themselves, law reform efforts should probably focus not on “strengthening” or “weakening” patent rights but on reducing the social cost of (seemingly inevitable) patent litigation by making it quicker and cheaper without sacrificing accuracy in outcomes. It’s when we assess the Federal Circuit’s performance in light of that cost/accuracy tradeoff that it becomes clear the Federal Circuit experiment has failed.
A common worry about specialized government bodies, such as the Federal Circuit, is that they will be captured by the entities they regulate and shape the law to favor those entities, not the public interest. But Federal Circuit doctrine and outcomes, overall relatively balanced between patentees and accused infringers, suggest that the court has avoided capture by the litigants who frequently appear before it. A capture analysis that focuses exclusively on litigating parties, however, obscures how the court has been captured by an interest group that has little interest in reducing patent litigation’s social cost or making outcomes more predictable: patent lawyers.
By expanding the categories of patentable inventions—or, at least trying to do so—Federal Circuit patent law has encouraged companies to obtain and acquire patents. At the same time, the Federal Circuit has created immunity doctrines that encourage patent owners to assert patents with little fear of repercussion under tort law for dubious claims. And Federal Circuit law on the question of patent infringement remains relatively balanced (or, a cynic might say, unpredictable), meaning that vigorously defending against most infringement claims is a viable strategy. All of this stirs both the patent-prosecution and patent-litigation pots—creating lots of work for patent lawyers.
In turn, patent law has become a more prominent and mainstream area of law practice than it was in the early 1980s when the Federal Circuit began operating. The world’s largest law firms have developed patent-focused and even Federal Circuit-focused practice groups. The most famous lawyers in the country now frequently appear before the Federal Circuit to argue highly technical patent cases. These developments have brought attention and notoriety to the Federal Circuit and its judges. (See, e.g., this blog!) The court’s judges regularly participate in Federal Circuit-focused conferences in desirable locations. (Recent and upcoming locations of the Federal Circuit Bench and Bar Conference include: Coeur d’Alene, Idaho; San Diego, California; Colorado Springs, Colorado; and Sea Island, Georgia.) And they are invited for speaking engagements all over the country—indeed, all over the world. To Article III judges who receive fixed salaries and have life tenure on a court with relatively narrow subject matter jurisdiction, these nonpecuniary rewards of prestige, attention, and popularity with the bar matter. And so, consciously or not, we get a patent law that, by and large, generates more and more work for patent lawyers but that doesn’t necessarily serve the public interest.
What could be done to cure the distorting effects of capture? Many commentators have offered thoughtful ideas for tweaking court’s jurisdiction, allowing a few additional circuits to hear patent cases, for example. In prior work, I suggested tweaking the court’s non-patent jurisdiction, to counter the Federal Circuit’s self-identification as the patent court. But, increasingly, I think it would be simpler (and more realistic) to declare the court a failed experiment and abolish it altogether.
There’s obviously a lot to think through here, and I’m working on a full-length paper (perhaps more than one!) that will do just that. Two obvious complications would involve reassigning life-tenured Article III judges to other courts and finding an appropriate appellate forum for non-patent litigants, particularly military veterans, who reap some unexpected benefits from the Federal Circuit model. But I think any objections are surmountable, and that the time for the Federal Circuit experiment to end may be near.