TAIWAN
July 14
Specialized Adjudication: 30 Years of Development of the CAFC – A Critique
100 minutes
I’d like to thank the sponsors of this conference, and particularly Chen Chi-Shing. This is my first visit here and I’m so pleased to be invited and to be asked to talk about specialized adjudication, an issue that has interested me for some time.
In 1982, when the Federal Circuit was established, I was a law clerk to Warren Burger, then the Chief Justice of the US Supreme Court. Burger was very involved in judicial administration and was a good friend of Howard Markey, who was scheduled to be the first Chief Judge of the new court.
The two of them decided that since I had been a chemist before law school and was interested in patent law, I should be Markey’s first clerk.
Unfortunately, the Federal Circuit (like the Supreme Court) sits in Washington, DC. My home is in New York. I had spent a year in Washington as Burger’s clerk, and had to go home with my husband children.
Instead, I joined the faculty at NYU. I started to teach patent law, and at the 5th anniversary of the Federal Circuit’s existence (my 5th year of teaching), I wrote an article on how well I thought the court was doing.
Since then, at every major anniversary – most recently, the 25th, I’m asked to consider the court again.
I’ve also been asked whether its successes can be generalized to other areas of the law or—for this speech—to other jurisdictions. So at the end of the day, I’ve thought about specialization quite a bit.
I’d like to do four things this evening: ●
i. Provide you with background information on how the Federal Circuit fits into the US judicial system. That’s important because it will help you understand what is special about this court and it will also make it easier to see why it remains quite controversial.
ii. Next, I’ll give you a sense of that controversy, of the debate that surrounded the creation of this unique court
iii. Third I’ll describe my perspective on how the court is doing
iv. Finally, I’ll suggest some ways in which the adjudication of patent law might be improved: perhaps, as you reconsider your court system, you can learn from our mistakes
I. Judicial System (please bear with me if you already know all this) ●
There are actually 51 different court systems in the United States.
Fifty of them are the courts of the individual US states. With some exceptions, state courts have plenary jurisdiction – the legislatures of the states can permit their courts to hear almost any kind of dispute, so long as their procedures comport with the due process requirements of the US Constitution.
The 51st system is the federal judiciary. Federal courts can hear cases only in the specific areas where Congress has, pursuant to the constitution, established jurisdiction. The main areas are:
- cases involving federal law (“arising under” jurisdiction)
- arising under federal law (concurrent with the states)
- arising under pat, ©, trademark law (for pat, ©, exclusive of states)
- cases involving citizens from two different states or a state and a foreign country
(“diversity” jurisdiction)
As I said, there are a few areas where federal authority is EXCLUSIVE of state authority. As it happens, Congress has deemed patent law to be one such area (patents and copyrights)
Federal trial courts exist in every state in the US
In other words, every state has both a state court system and a federal trial court.
State courts have plenary jurisdiction (patents, and copyright are exceptions). In some states, the judges hear only particular kinds of issues (eg only criminal cases), so they are specialized. In some states, one court hears kinds of cases, so they are generalists
Federal jurisdiction is somewhat more limited, but because diversity cases can raise any issue—contract, tort, labor law, etc.—and because the traditional rule is that federal courts hear all the cases within federal authority, federal judges are, in practice, generalists.
That’s TRIALS. What about appeals? ● In the early history of the US, federal trial court decisions were appealed directly to the US Supreme Court
Over time, the federal docket grew and grew. By the 1890’s, there were so many appeals lodged in the Supreme Court, Congress created the courts of appeal ●
- these are regional courts. Trial court cases are appealed to the circuit court within a specific region, no matter what the issues. (e.g. NY to the Second Circuit) The result is that these regional appellate judges are also generalists.
Their decisions create binding precedents, but only for courts within the region. The Second Circuit, for example, writes decisions that courts in New York, Connecticut, and Vermont must follow. But the Second Circuit does not control the law in, say, California (which is in the Ninth Circuit).
- of course, courts in other regions of the country may read the decision of the Second Circuit and find it so brilliantly reasoned, so persuasive, that they follow it. But they aren’t required to do so.
- concept = PERCOLATION: competitive decisionmaking
Result = only the Supreme Court can bind the whole country, so it’s review was still essential.
In other words, the creation of the regional circuits did not cause the Supreme Court to lose authority. ●
Originally, there was a right to have review in S.Ct.
1925: began a period of ending rights to review. NOW: can petition for review, but S.Ct. decides what to hear
IE: it gets to pick and choose which cases it wants to review (“certiorari jurisdiction”).
What kinds of cases does it review? For sure, really important federal issues (Bush v. Gore), but it’s main business is dealing with “circuit splits” – situations where the law in different regions is so different that it causes problems for people and firms that have interests across the whol country.
SO: that’s general background. What about patent cases? ●
In early US history, there was not very much federal law at the time (so little for a dispute to “arise under”), and no one traveled very much (so not too many few diversity cases either).
As a result, patent law cases were a big part of the docket at both the trial and Supreme Court levels.
The patent law was very short; most of the law was judge-made.
Once the courts of appeal were founded, that changed. By the middle of the 20th century, the system was as follows:
Patent litigation (infringement litigation), like all litigation, started in a regional court
- appeal to regional circuit
- cert to Supreme Court
Of course, in patent cases, there’s a whole other issue which I haven’t discussed = patents issued by an administrative agency, the PTO. And there’s a right of appeal from that too. How was that handled?
PTO: has its own administrative review at Board of Patent Appeals and Interferences
= handle applicants disappointed by rejection
ALSO: because we are a first to invent system, there are also losers in interferences who want to appeal
Dissatisfied “customer” then had a choice:
- could appeal from BPAI: to a special court = Court of Customs and Patent Appeals (CCPA)warding it to a different inventor) are a different matter:
- could instead sue the Comm’r of Patents in the district court for the District of Columbia (where new evidence could be introduced), and then appeal to the DC Circuit
That was a stable system for a while, but by the 1970’s, the federal docket had again become unreasonably large. A special commission (“Hruska Comm’n”) was created to decide what to do about it.
- at the trial level, it was easy to add more judges
- for appeals, though, the issue was not so straight forward. If the Commission added new regions (divided the country more), circuit splits would increase.
If it maintained the same number of regions but added new judges to each circuit, there would be disagreements among the judges of the circuit, and that’s even worse—then there’s no predictable law in any region.
So the Commission had a different idea: it would take specific areas of law and make special courts for those areas. Which areas?
- what made the most sense was to choose areas where there was so much complexity, it would be useful to have specialist, rather than generalist judges
PATENT LAW was the obvious choice to be the first EXPERIMENT (and I emphasize, it was consciously set up as an experiment because that fact will become important later.
(Should add: there have been, still are other specialized courts
- Commerce Court – early 20th C
- TECA – world wars
- DC Circuit
- Foreign Intelligence Surveillance Court
II. The Controversy ●
Now, the Commission issued its report in 1975. The Federal Circuit wasn’t created until 1982. What happened in the interim? A great deal of concern about taking patent law out of the hands of generalist judges and putting it into the hands of specialists:
On the one hand:
Patent law is highly technical. The law is still a complex mixture of statutory law and case law and it’s quite abstruse (what’s considered inventive is hardly straightforward, and then there’s claim construction, the doctrine of equivalents, double patenting issues, etc.). Moreover, the law applies highly advanced technological facts
- a judge with facility in science, with a taste for learning about cutting edge research would be a real asset
- even if a judge didn’t start out knowing much about patents, the concentration of cases would be very instructive
Channeling the cases to one forum would also be useful is other ways too.
First, As S.Ct. stated in 1966 case, Graham v. John Deere, there were “notorious differences” between the standards applied by the PTO and the courts, so patents that were issued by PTO often invalidated in litigation
- not surprising this would be so as the regional circuits had virtually no control over what the PTO did. Except for a few appeals to the DC Cir, the only control over the patent office was the Court of Customs and Patent Appeals
Second, there were also notorious differences among the regional circuits. Some really liked patents, others thought of them as monopolies.
Because of the huge variation in decisions on validity and infringement, patents lost value (why get a patent if you can’t be sure it will be litigated in a court that might enforce it?) – and the claim was that parties were keeping trade secrets, rather than risk acquiring patents
Furthermore, there was rampant forum shopping as patentees maneuvered to courts that liked patents and accused infringers tried to get into courts that did not like them.
Channeling the cases into one circuit would, at the very least, produce UNIFORM law – uniformity between the PTO and the courts and among courts.
- no matter where you start, you wind up at the Federal Circuit
- result: patents are stable and a more viable option for inventors
AND: channeling cases to a single court would be EFFICENT: as Chief Judge Markey told Congress ●:
“if I do brain surgery every day, day in and day out, chances are very good that I will do your brain surgery much quicker … than someone who does brain surgery once every couple of years.”
BUT: quicker is not necessarily BETTER. On the other hand, there were also many concerns about taking this step: ●
- isolating patent law might favor special interests – unlike appointments to regional courts, where every potential litigant cares about who’s chosen and fight each other so hard, their interests are diluted, that wouldn’t happen here.
Patent holders are very organized (relative to consumers), so the fear was that the biggest firms (pharmaceuticals, for example), would “capture” the court – influence the selection of judges and through them, determine how the case law evolves
- even without capture, these large firms would, it was thought, have an advantage: as repeat players they could wait for the perfect case to press issues they were particularly interested in having decided a particular way
- there were also fears that because the court wouldn’t hear other issues, the judges would develop tunnel vision. The saying is, if you have a hammer, everything looks like a nail. For these judges, society’s problems would all appear to be ones that could be cured with stronger patent rights
- further, people were worried the isolated court would evolve novel doctrines and procedures, and take patent law out of the jurisprudential mainstream.
- and folks worried about boundary problems: many cases present several issues:
- how do you decide when the patent issue is so dominant, it belongs in the specialized court rather than the regional circuit?
- what is the right hierarchical relationship among courts when one is specialized?
Congress actually took these concerns seriously. ●
Hruska Comm’n’s goal was to deal with overcrowding in the courts of appeal, so there was never any question that the “patent court” would be an appeals court. Trials in patent cases would remain in the district court.
28 USC § 1338: about cases “arising under” any act of Congress related to patents
BUT: new court has special jurisdiction:
28 USC § 1295: gives Federal Circuit power over cases from EVERY district court, where jur’n based on 1338
SUMMARY: Can see the change this made ●:
- before the “experiment”: as we saw, appeals from PTO went one place, appeals from trials went to different places all over the country
- after the experiment: appeals from trials went to the CAFC
AND: in separate legislation, Congress also changed the handling of PTO cases
- PTO BPAI CAFC (or, for new evidence D.Ct then CAFC)
RESULT: CAFC handles ALMOST all questions of patent law, no matter what the origins of the question
- although there’s still possibility of S.Ct review, it isn’t necessary to achieve uniformity
WHY almost? As I’ll mention later, the S.Ct. has decided that when the only patent issues in a case arise in the defense or counterclaim, the case does not “arise” under patent law, so it will go the regional circuit
On the whole though, the system does enjoy the benefits of expertise.
What about the costs? In fact, attempts are made to minimize them. ●
First, the court is specialized in more than just patent law. Congress gave it power over several areas. It’s hardly a court of general jurisdiction, but it does hear:
- some contract and tort cases. Specifically, claims against the United States
- some labor law cases. Specifically, appeals of decisions of the board that reviews termination of federal employees, and cases involving misconduct by legislators
- some other intellectual property cases: appeals from the trademark office, cases under the Plant Variety Protection Act
- appeals from the Court of International Trade and Int’l Trade Comm’n (unfair practices, export controls)
- appeals in other technically difficult cases: disputes over energy, gas, petroleum policy, economic stabilization issues.
In addition, Congress decided that appointments to the court should not come solely out of the patent bar (in the US, judges are drawn from the ranks of lawyers).
The first bench came from the Court of Customs and Patent Appeals, which was now without a docket.
Also: from the Court of Claims (the court that heard contract claims against the United States, which were now also channeled to the CAFC), so the judges were well versed in patentability law and in some of the contract work that they would do.
Subsequent appointments have been a mixed lot:
-a few patent specialists (Judges Newman and Lourie had been chemists and worked as patent attorneys for large R&D companies; Linn and Dyk worked for a law firm, Moore taught
- there’s been one other academic (Plager, who taught administrative law)
- one was a trademarks lawyer (Judge Nies, who has since died)
- two worked in the military (Archer, Mayer) and several others worked for various branches of government
- interestingly, three were ex-legislative aides (Rader, Michel, and Prost) and one judge’s claim to fame is that he lived next door to one of the legislators on the judiciary committee
Finally, of course, the Supreme Court can still intervene and interject a generalist perspective by choosing to review the Federal Circuit’s decisions
III. Experience
So, that’s the background; how is the court doing? ●
On the whole, practitioners think it’s terrific. Their initial skepticism is almost entirely overcome. They appreciate the UNIFORMITY
- it’s much easier to advise clients because it no longer matters in which circuit the case is brought, it winds up at the Federal Circuit.
Most also think the law is more PREDICTABLE.