The 'Almighty' Federal Circuit? Evolving Patent Policy & Jurisprudence
Reprinted with permission.
BullsEye: January 2013
The 'Almighty' Federal Circuit? Evolving Patent Policy & Jurisprudence
Posted by Maggie Tamburro on 2013/01/22
Has the importance of the patent system on the U.S. economy propelled the Federal Circuit to be, de facto, the most powerful court of the land?
The Federal Circuit, with its fifteen learned judges, by virtue of the fact that it has exclusive appellate jurisdiction for U.S. patent law appeals, has been catapulted to superstar and perhaps unprecedented legal status, holding within its grasp the authority to profoundly affect a growing area of law which serves as a primary driver of U.S. innovation and economic growth.
Consider the following:
Citing a portion of the above-referenced U.S. Commerce Department’s report, Kappos concluded, “So it is in this context that we are seeing multi-billion dollar acquisitions of patent portfolios and a number of high profile patent lawsuits, involving some of the most innovative companies on the planet, who are producing some of the most popular technologies ever created.”
The ‘Almighty’ Federal Circuit – Why So Powerful?
As many readers know, the U.S. Court of Appeals for the Federal Circuit, established in 1982 under Article III of the U.S. Constitution, has exclusive subject matter jurisdiction for U.S. patent law appeals originating under 28 U.S.C. §1295. Generally speaking, the Federal Circuit has jurisdiction over patent-related appeals involving (1) final decisions of U.S. district courts in any civil action arising under any Act of Congress relating to patents, (2) the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office (USPTO) under title 35 of the U.S.C., and (3) appeals from final determinations made by the U. S. International Trade Commission (ITC) under 19 U.S.C. § 1337.
Although the Federal Circuit’s subject matter jurisdiction extends to subject matters beyond patent law, the bulk of its appeals and breadth of legal influence relates to patents. According to information published by the Federal Circuit, almost half of all appeals filed in the Federal Circuit in 2012 were related to patents. (Of the 45% of patent-related appeals filed in 2012, 35% of those originated from the District Courts, 8% originated from the USPTO, and 2% originated from the ITC.)
This growing trend shows no signs of slowing, as, according to data published by the Federal Circuit, the number of patent infringement appeals is on the rise. In 2012, 471 patent infringement appeals were filed in the Federal Circuit from the U.S. District Courts, up from 399 in 2010. The fact that almost 500 patent infringement appeals were made to the Federal Circuit last year means that the Federal Circuit holds enormous judicial opportunity, if measured in numbers of patent appeals alone, to render decisions which influence patent law, public policy, and the economy.
Case in Point: InterDigital Communications, LLC v. Intern’l Trade Comm’n and Nokia Inc.
A recent case demonstrating the power of the Federal Circuit to influence the economy in the midst of a changing patent landscape is its January 10, 2013 decision in InterDigital Communications, LLC v. Intern’l Trade Comm’n and Nokia Inc. At issue was whether InterDigital’s patent licensing activities fell under the “domestic industry” requirement of section 337, allowing for a ban on the importation of allegedly infringing products.
The Federal Circuit held,
"[S]ection 337 makes relief available to a party that has a substantial investment in exploitation of a patent through either engineering, research and development, or licensing (emphasis added). It is not necessary that the party manufacture the product that is protected by the patent, and it is not necessary that any other domestic party manufacture the protected article."
Thus, the Federal Circuit’s decision has paved the way for an entity engaged in the licensing of patents, but not necessarily the manufacture of the goods involved, to seek exclusion of the allegedly infringing products under section 337. In its decision, which sided with the licensing entity, the Federal Circuit’s decision speaks (even if not directly) to the larger and (often stickier) issues of U.S. trade policy and public policy issues involving the activities of NPEs.
U.S. Supreme Court’s Role
Although Federal Circuit decisions are appealable to the U.S. Supreme Court, aside from a few notable 2012 Federal Circuit reversals, (including Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk and Mayo Collaborative Services v. Prometheus Laboratories, Inc.), the U.S. Supreme Court seems hesitant to step on the authority of the Federal Circuit, or otherwise usurp the patent law subject matter jurisdictional authority granted to it. Rather, the U.S. Supreme Court seems to jump in only when necessary to determine matters, whether involving critical statutory construction (as in Caraco) or more broader fundamental questions, such as the patentability of laws of nature (as in Mayo), it deems essential to the very underpinnings and construction of patent law.
The U.S. Supreme Court seems to prefer leaving the bulk of the decision making to the Federal Circuit when such opportunity allows. For example, shortly after issuing its decision in Mayo, the high court sent another high profile patent case regarding the patentability of certain genes, Ass’n for Molecular Pathology v. Myriad Genetics, back to the Federal Circuit for further consideration in light of the Mayo decision. Most recently, in January of this year the U.S. Supreme Court denied a petition for certiorari seeking review of a 2011 Federal Circuit decision issued in Classen Immunotherapies, Inc. v. Biogen IDEC.
Patent Law and Policy Experiencing Unprecedented Change
Evolving public policy, increasing trends in business practices which monetize and enforce patents, and sweeping changes to patent law have resulted in some of the most aggressive changes to the patent system than perhaps in any other time in recent U.S. history. The very fabric of our patent system is under undergoing legal redesign as well as redefinition in the public eye. Consider a few notable developments:
Meanwhile, patent filings continue to grow globally – a recent article in Patent Docs reported that the World Intellectual Property Organization (WIPO) concluded patent filings increased by almost 8% in 2011, marking the second year in a row that growth has exceeded 7%.
In an evolving patent landscape, has the power of the Federal Circuit gone too far, eclipsing even the U.S. Supreme Court in ability to wield economic influence – with unprecedented power to impact the U.S. economy? Or do you think the patent appeal system operates as envisioned when the Federal Circuit was created some three decades ago?
Tamburro is an attorney, legal writer and commentator who holds a B.A. from The University
of Texas and a J.D. from The John Marshall Law School. Maggie graduated 5th in her class from
John Marshall, served as Law Review Associate Editor, and was awarded the Dean's Scholarship Award
for three consecutive years. Maggie holds the position of Senior Copywriter at IMS ExpertServices,
where she handles the creation and optimization of webpage copy, print material language, and
plays an active role in the company’s online social media strategy. Maggie was admitted to the
Illinois Bar in 1994 and Florida Bar in 1999 and has significant experience in legal research,
editing, and writing. From drafting complex commercial transactional documents to journalistic
reporting, Maggie brings a unique blend of background, experience, and perspective to IMS in both
the area of law and writing.
IMS Expert Services is the premier expert witness and litigation consultant search firm in the legal industry. IMS is focused exclusively on providing custom expert witness search services. We are proud to be the choice of over 95 of the AmLaw Top 100. Call us at 877-838-8464.
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