United States: Lessons From The Recent Supreme Court Term: Ordinary Rules Apply In Patent Cases

If the judges on the United States Court of Appeals for the Federal Circuit choose to reflect on the recently concluded Term of the United States Supreme Court, in which five of the six Federal Circuit decisions the Supreme Court reviewed were either reversed or vacated,1 they might take some solace by recalling Justice Robert Jackson's earlier observations concerning the meaning of higher court reversals:

"Whenever decisions of one court are reviewed by another, a percentage of them are reversed. That reflects a difference in outlook normally found between personnel comprising different courts. However, reversal by a higher court is not proof that justice is thereby better done. There is no doubt that if there were a super-Supreme Court, a substantial proportion of our reversals of state courts would also be reversed. We are not final because we are infallible, but we are infallible only because we are final."

Brown v. Allen, 344 U.S. 443, 540 (1953)(Jackson, J., concurring). Finality, which imposes closure and legal, doctrinal uniformity, represents one of the cardinal virtues of appellate authority. This Term, more than most in recent time, the Supreme Court exercised its finality often on patent issues, which prompts this Note.

It is indisputable that each of the Supreme Court's patent law decisions this Term possesses significance to patent law generally, with special importance respecting the distinct area of patent law and practice that each decision specifically addresses. It is perhaps less obvious, but potentially more significant to analyze the decisional arc of these Supreme Court decisions, especially if taken in an even broader context by looking back to earlier Supreme Court's earlier patent law decisions reviewing Federal Circuit judgments, to see if there are lessons to be drawn from a discernible decisional pattern. It appears there are such lessons, and from those lessons may be drawn some yet further conclusions, with an eye to predicting and shaping the direction of patent practice in the United States. That is the focus of this Note.

The principal lesson to be drawn is remarkably simple, yet worthy of deeper consideration. The decisional arc seems to teach that when the Federal Circuit has crafted a rule applicable to patent cases that in some way deviates from rules generally and usually applied in litigated matters outside patent law, especially where the rule appears to be a "bright line" test, or an exclusive decisional calculus, the Supreme Court vacates those judgments and re-emphasizes (usually sub silentio) that patent cases are not somehow set apart from being subject to the ordinary rules of federal litigation. If anything, this broader historical view discloses that the development of the language of the Supreme Court in reviewing judgments of the Federal Circuit has devolved from respectful deference, even when reversing a judgment, to outright criticism of the Federal Circuit's reasoning.

Looking at this Term's decisions to discern a larger pattern in a broader, historical context of earlier decisions makes clear that the Federal Circuit's efforts to craft "special" rules for patent cases both draws Supreme Court criticism and directions to restore a doctrinal approach to adapt the regular rules of litigation within the patent context, not create exceptions from those rules for application simply because the controversy invokes the Patent Act.

The objective fact is that the decisional pattern of the Supreme Court's review of Federal Circuit judgments has for some time been principally one of reversals or vacaturs of the judgments and/or reasoning of the Federal Circuit respecting the important questions of patent law and practice under review.

This pattern, regularly rejecting the Federal Circuit's patent decisions, is particularly striking, not least for the reason that the Federal Circuit is unique among the thirteen Courts of Appeals in that it has nationwide appellate jurisdiction, unbounded by the geography of the trial court or administrative agency from which the appeal is taken, but limited to specific subject matters, principally including patent law, for whose jurisdiction the exponents of the creation of the Federal Circuit were primarily motivated. Indeed, one of the most compelling arguments in favor of creating the Federal Circuit was that it would be expert in the distinct subject matters to which its jurisdiction is subject matter specific, thereby assuring a uniformity of decisional law that would reflect this expertise.2

Even more striking is the fact that creation of the Federal Circuit was intended to eliminate the "splits" in regional circuit court opinions respecting patent law that would justify the Supreme Court in exercising its ultimate appellate authority to resolve those "splits" in authority to restore a uniformity of interpretation and enforcement of federal law on important questions of patent law. In fact, one salient purpose of creating the Federal Circuit and vesting it with exclusive appellate jurisdiction over patent cases was to eliminate the potential that, say, the Seventh Circuit had one standard for obviousness while the Second Circuit had a different one. This potential disparity of rules on basic patent law principles did occur in the past and motivated centralizing intermediate appellate review in one, non-regional court.

Indeed, those who led and inspired the movement to create the Federal Circuit as uniquely a subject matter expert Court of Appeals emphasized the benefits that having such a court interpreting patent law, and thereby hoped to bring national uniformity to patent law by having this expert Court of Appeals be the sole intermediate appellate voice on patent law issues. As a practical matter, then, the Federal Circuit, though theoretically the intermediate appellate court, was projected, in the usual circumstance, to be the final arbiter of the legal issues related to the subject matter of the appeals before it, especially patent law. That was presumed to be the case because, for most cases decided by the Federal Circuit, very much analogous to the decisions of the regional Courts of Appeals, the intermediate appellate court's decision is de facto the ultimate decision.

The decisional pattern of Supreme Court cases from Federal Circuit judgments discloses that the reality has been quite different from the expectation. As a practical matter, the Supreme Court, constitutionally the final arbiter of all legal matters related to federal law, has, in effect, become a "super Federal Circuit," to paraphrase and adapt Justice Jackson's earlier-quoted characterization, by reversing and vacating Federal Circuit pronouncements on subject matters for which the Federal Circuit was created and entrusted by Congress with special, expert and exclusive subject matter appellate jurisdiction.

By way of introductory example, this term, perhaps the apogee of the Supreme Court's criticism of Federal Circuit judgments came in Limelight, where a unanimous Supreme Court, in reversing the Federal Circuit's en banc decision defining the requirements of proving induced infringement in a patent infringement case, declared, "[t]he Federal Circuit's analysis fundamentally misunderstands what it means to infringe a method patent." Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111, 2117 (2014). Consider the implication of this comment: the Court of Appeals, specifically created to have exclusive appellate jurisdiction over patent cases, a substantial bulk of whose case load addresses those issues daily and whose members are chosen for their expertise and experience in this area of law, according to a unanimous Supreme Court, "fundamentally misunderstands" a basic concept of patent infringement liability. Though the Court's observation in Limelight may be the most pointed, there are others, which will be discussed further below that give scarcely lip service deference to the Federal Circuit's pronouncement on review before the Supreme Court.

Immediately upon the issuance of each of these opinions, a phalanx of commentators offered their instant analysis of what the Court had apparently done in each individual case and why, trying to discern potential lessons for the future direction the law may develop for patent litigation from the individual case. Ultimately, after the term closed, one observation pervaded This note leaves to others to sift and analyze the language of each of this Term's decisions in favor of looking at the ultimate holdings of each, in comparison to what the Federal Circuit had done. With reference to earlier Supreme Court cases reviewing Federal Circuit judgments, this note argues that there is in fact a discernible pattern whereby the Supreme Court continues to rein in Federal Circuit pronouncements on patent law that tend to establish rules that are outliers to the usual rules and applications in the context of other, non-patent litigations. Each of this Term's patent cases are discussed briefly in the following paragraphs.

Read in full here: Lessons from the Recent Supreme Court Term: Ordinary Rules Apply in Patent Cases

Footnotes

1 In the order of their decision by the Supreme Court: Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843 (2014); Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014); Highmark Inc. v. Allcare Health Mgmt. Sys. Inc., 134 S. Ct. 1744 (2014); Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014); Limelight Networks, Inc. Akamai Techs., Inc., 134 S. Ct. 2111 (2014); Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2247 (2014).

2 28 U.S.C. §1295 details the discrete subject matters for which appeals from district courts are exclusively to be taken to the Federal Circuit, one of which relates to appeals from judgments in the District Courts where jurisdiction is based on §1338, except, principally, for copyright and trademark.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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