# Deciding Who Decides Intellectual Property Appeals

**Authors:** C. Scott Hemphill
**Citation:** "Deciding Who Decides Intellectual Property Appeals," 19 *Federal Circuit Bar Journal* 379 (2010)

**Abstract:** In Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., the Supreme Court narrowed the Federal Circuit’s appellate jurisdiction over patent cases. The Court decided that if an issue of patent law appears only in a defendant’s counterclaim, rather than the plaintiff’s complaint, the appeal must be routed instead to a regional circuit. The ruling raised fears of forum shopping in patent cases and patent law conflicts among the regional circuits. This Article appraises Holmes Group as a decision about federal jurisdiction, not patent policy. The proposition for which Holmes Group is known – that a counterclaim does not provide a basis for a district court’s original jurisdiction – was not well presented, because a claim in the complaint already satisfied the relevant jurisdictional provision. Far more important, however, the Court neglected to explicate a statutory provision, 28 U.S.C. § 1295, that determines the appellate forum for intellectual property cases. Specifically, the Court overlooked the statute’s “except” clause, which routes some but not all intellectual property appeals to the Federal Circuit. That neglect, abetted by the parties, led the Court to reach the wrong result. The except clause, properly construed, poses an unrecognized obstacle to legislative efforts to expand Federal Circuit jurisdiction. Moreover, the provision requires Federal Circuit appeals for disputes about proposed new forms of intellectual property, including fashion, furniture, and other forms of original design. The case offers a cautionary tale about Supreme Court review of cases that mix specialized issues with matters of more general and perhaps greater concern to the Court.
**Source:** https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1554591

## Introduction

*p. 2*
The Federal Circuit, as the U.S. Court of Appeals with jurisdiction over patent appeals, is at the center of longstanding debates about the merits of specialized courts. In Holmes Group,Inc. v. Vornado Air Circulation Systems,Inc.,1 the Supreme Court stirred up fresh controversy by narrowing the Federal Circuit's appellate jurisdiction over patent cases. 2 The Court decided that if an issue of patent law appears only in a defendant's counterclaim, rather than the plaintiff's complaint, the appeal must be routed instead to a regional circuit. 3 Holmes Group ignited a firestorm of criticism that focused on the result of the case, a fragmentation of patent lawmaking. 4 Critics feared the resulting dilution of expertise in patent intellectual property appeals to the Federal Circuit. That neglect, abetted by the parties, led the Court to reach the wrong result. Subsequent commentators have neglected the clause too.

*p. 4*
The except clause has important consequences for the appellate forum of intellectual property cases. It poses an unrecognized obstacle to legislative efforts to expand Federal Circuit jurisdiction. Moreover, the provision, properly construed, requires Federal Circuit appeals for disputes over new forms of intellectual property-in particular, for proposals to expand federal protection for original designs. This surprising result would have a far-reaching impact upon the development of protection for fashion, furniture, and other forms of original design.

*p. 4*
The case provides a new datum in the ongoing debate about Supreme Court supervision of the Federal Circuit. In recent years, the Court has become an increasingly aggressive reviewer of Federal Circuit patent lawmaking. 11 Observers have suggested that aggressive supervision is undesirable because the Court lacks sufficient expertise in patent law. 12 The Court's errors in Holmes Group, however, had nothing to do with any supposed patent inexpertise, suggesting the need for a revised account of the supervisory dynamic. As this Article explains, the Court's analysis emphasized general knowledge about jurisdiction at the expense of specialized facts about how intellectual property is applied in the real world. Thus, the Court's opinion provides a window into the role of specialized legal knowledge, and how it is processed by a generalist court-here, the Supreme Court. This Article has two parts. Part I explains how Holmes Group falls short as a statutory analysis of appellate jurisdiction. It sets out the statutory scheme and the Court's partial explication of the statute, and offers a new interpretation of the except clause. Part II describes the consequences of these errors for legislative override of Holmes Group and appeals of cases pertaining to new forms of intellectual property. The Article concludes by presenting Holmes Group as a cautionary tale about Supreme Court review of cases that mix specialized analysis, such as intellectual property appeals, with issues of more general and perhaps greater concern to the Court.

## I. What Holmes Group Left Out

*p. 5*
This Part explains what is missing from Holmes Group and other analyses of the proper appellate forum for intellectual property cases. Part I.A describes the relevant statutory provisions and how they fit together. Part I.B examines the Court's opinion in Holmes Group, which explicated only part of the relevant statutory provisions, ignoring the except clause of § 1295. Part I.C interprets the except clause, concluding that the case was wrongly decided on the facts presented.

## A. The Statutory Scheme

*p. 5*
Title 28, section 1295 of the United States Code selects the appellate forum for a wide range of intellectual property cases. 13 The relevant provision within § 1295 has two parts, which we will call the granting clause and the except clause. Its language is convoluted:

*p. 5*
The . . . Federal Circuit shall have exclusive jurisdiction of an appeal from a final decision of a district court . . . , if the jurisdiction of that court was based, in whole or in part, on [28 U.S.C. §] 1338 . . . , except that a case involving a claim arising under any Act of Congress relating to copyrights, exclusive rights in mask works, or trademarks and no other claims under section 1338(a) shall be governed by [provisions for regional circuit appeals] . . . . 14 The granting clause sweeps in any case whose jurisdiction is "based" at least partly on § 1338, and gives them all, provisionally, a Federal Circuit appeal. 15 The except clause then countermands that order for a subset of these cases. 16 The except clause is unusual but not unique. When Congress established the Federal Circuit, it gave the court jurisdiction over ten categories of appeal. 17 Most are defined by reference to another decision making body, such as the Merit Systems Protection Board. 18 For two categories, intellectual property cases and suits against the U.S. government, appellate jurisdiction is identified by reference to a provision defining original jurisdiction, and an except clause narrows that set. 19 One effect is that when the "source" statute increases in scope, the grant of Federal Circuit jurisdiction increases too.

*p. 6*
Section 1338, to which § 1295's granting clause refers, vests district courts with original jurisdiction of a wide range of intellectual property cases: "The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks." 20 In addition to patents, plant variety protection, 14 Id. § 1295(a)(1). For simplicity, this provision is referred to as § 1295 in text. 15 Id. 16 Id. 17 See Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, § 127, 96 Stat. 25, 37-38 (codified at § 1295(a)). Several additional categories were added later. 18 See 28 U.S.C. § 1295(a)(9). 19 Id. § 1295(a)(1), (2). The second granting clause sweeps in a substantial number of suits against the United States, including Federal Tort Claims Act cases, § 1346(b), and "Little Tucker Act" claims, § 1346(a)(2), which are non-tort civil actions not exceeding $10,000 in value. Id. § 1346. The except clause excludes the Federal Tort Claims Act cases and those Little Tucker Act claims that deal with tax. Id. § 1295(a)(2). This provision was interpreted in United States v. Hohri, 482 U.S. 64 (1987). In that case, Justice Blackmun was moved to complain: "[T]he statute the Court is forced to construe in this case is not a model of legislative craftsmanship. Surely, Congress is able to make its intent more evident than in the language it has utilized here." Id. at 76 (Blackmun, J., concurring). Thus, for example, jurisdiction cannot be based upon a federal defense. 23 Sections 1338 and 1295 operate in tandem to determine the appellate venue in a particular case. Consider, for example, a plaintiff's complaint raising a single claim of trademark infringement. The case is a "civil action arising under" the Lanham Act; therefore, the jurisdiction of the district court is based on § 1338's trademark jurisdiction, and the granting clause is satisfied. We are not yet finished, however, as we must still check whether the claim satisfies the except clause. The "other claims" referred to in the except clause are the types of claims that are discussed in § 1338 but missing from the except clause list-patents, plant variety protection, and exclusive rights in designs. 24 Thus, the except clause asks: is this a case that includes 25 copyright, trademark, or mask work claims, and no patent, plant variety protection, or exclusive rights in designs claims? The answer is yes, and so the case has a regional circuit appeal. If the complaint in addition contains a patent claim, then the answer is no, it does contain one of the "other" claims-a patent claim-and the appeal is to the Federal Circuit. Figure 1 contains a graphical depiction of this procedure.

*p. 7*
21 Id. § 1338(c). Section 1338(c) provides that § 1338(a) applies to these forms of protection to the same extent that § 1338(a) applies to copyright. Id. The granting clause of § 1295(a)(1) refers to § 1338 generally, not only § 1338(a). The except clause, however, refers to § 1338(a), a detail suppressed in the text. This distinction makes a difference for the appeal of certain design cases. See infra note 122. 22 Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152 (1908).

*p. 7*
23 Vaden v. Discover Bank, 129 S. Ct. 1262, 1272 (2009) (citing Mottley, 211 U.S. at 152).

*p. 7*
25 "[C]ase involving a claim" is assumed here to mean "case including a claim. " See id. § 1295(a).

*p. 7*
29 Id. at 19 n.19 ("[F]ederal courts have consistently adjudicated suits by alleged patent infringers to declare a patent invalid, on the theory that an infringement suit by the declaratory judgment defendant would raise a federal question over which the federal courts have exclusive jurisdiction."); see id. at 19 ("Federal courts have regularly taken original jurisdiction over declaratory judgment suits in which, if the declaratory judgment defendant brought a coercive action to enforce its rights, that suit would necessarily present a federal question."). 30 See, e.g., Golan v. Pingel Enter., Inc., 310 F.3d 1360, 1366-67 (Fed. Cir. 2002) (relying on Franchise Tax Board and Holmes Group and concluding that "Golan's well-pleaded complaint sought declarations of patent noninfringement. Consequently, the complaint arose, in part, under . . . § 1338."). One might nevertheless argue that the action, though within original jurisdiction, is not a "civil action arising under" patent law, and in addition that this causes the case to fail § 1295's requirement that the district court's jurisdiction be based, at least in part, on

## B. The Supreme Court's Partial Analysis

*p. 9*
Holmes Group considered a case in which the plaintiff filed a declaratory judgment action for trade dress infringement in federal court, and the defendant responded with a patentlaw counterclaim. 31 The Supreme Court accepted for review the question whether § 1295 divests regional circuits of jurisdiction when the well-pleaded complaint alleges no claim arising under patent law. 32 The Court, in a short opinion 33 authored by Justice Scalia, answered these questions by focusing on the patent-law counterclaim. 34 The Court noted that § 1338 invokes the well-pleaded complaint rule, and concluded that this rule excludes consideration of counterclaims, just as it excludes consideration of defenses. 35 Thus, the patent-law counterclaim was insufficient to satisfy § 1338, and hence it did not satisfy the granting clause of § 1295 either. 36 The result, the Court concluded, was a regional circuit appeal. 37 The significance of Holmes Group is twofold. First, the Court's holding places the resolution of some patent questions outside the jurisdiction of the Federal Circuit. It also provides an opportunity for forum shopping, because a party anticipating being a defendant in a patent suit can file a complaint that contains no patent-law claims, yet provokes a patent-law counterclaim, thus forcing the case into a regional circuit. Moreover, this tactic cannot be § 1338. That argument does not appear to have been attempted or accepted by any court. If it were accepted, routine declaratory judgment cases about patent law would no longer have Federal Circuit appeals. 31 Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 828 (2002). 32 See Petition for Writ of Certiorari at ii, Holmes Group, 535 U.S. 826 (No. 01-408) (describing three questions); Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 534 U.S. 1016, 1016 (2001) (granting the petition, limited to the first and third questions). 33 The opinion contains just over 1700 words of text, plus about 500 words in footnotes, mostly in response to separate opinions by Justices Ginsburg and Stevens. See Holmes Group, 535 U.S. 826.

*p. 10*
neutralized by bifurcation of the patent and non-patent parts of the case, unlike other forms of Federal Circuit forum shopping. 38 Second, Holmes Group has become a canonical case about the scope of federal subject matter jurisdiction.

*p. 10*
Holmes Group now stands for the proposition that "arising under" jurisdiction may not rest upon a counterclaim. 39 Federal courts commentary accepts this understanding of the case. 40 In a case decided this past Term, the Court recited and relied upon the Holmes Group rule, stating that Holmes Group had "amplified" the well-pleaded complaint rule by applying the rule to counterclaims. This point applies not only to patent cases under § 1338, but more generally to cases that "arise under" federal law. (A closely parallel provision, § 1331, vests district courts with original jurisdiction of "all civil actions arising under the Constitution, laws, or treaties of the United States." ) A further implication, not considered in detail here, is that a counterclaim is insufficient to remove a case to federal court.

*p. 10*
38 For example, a party might seek out a Federal Circuit appeal, rather than avoiding it, by adding a patentlaw claim to its complaint. In that case, bifurcation by the district judge might prevent the whole case from having a Federal Circuit appeal, depending upon the details of when and how this was accomplished. See, e.g., Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1428-30 (Fed. Cir. 1984) (relying upon a policy against bifurcation in holding that entire case had Federal Circuit appeal, despite a district court order separating patent and nonpatent claims); Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1189-90 (Fed. Cir. 2004) (retaining jurisdiction despite the fact that only nonpatent questions remained in the case, following effective dismissal with prejudice of patent claims). Bifurcation is not a useful strategy for avoiding the tactic discussed in the text, however, because a patent-law counterclaim, even if separated from the rest of the litigation, is still a counterclaim, and as such, provides no adequate basis for Federal Circuit jurisdiction under the holding of Holmes Group. 535 U.S. at 833-34. 39 47 See Holmes Group, 535 U.S. at 829. Vaden goes even further than Holmes Group, by omitting the ellipses that at least hint that § 1338(a) continues beyond patents, or, as discussed infra, that § 1295(a)(1) extends beyond the granting clause. Vaden v. Discover Bank, 129 S. Ct. 1262, 1272 n.10 (2009).

*p. 11*
[W]e must recognize that the exclusive jurisdiction of the Federal Circuit defined in § 1295(a)(1) does not comprise claims arising under the trademark and copyright laws, which are included in the district court's grant of jurisdiction under § 1338(a). As the instant litigation demonstrates, claims sounding in these other areas of intellectual property law are not infrequently bound up with patent counterclaims.

*p. 11*
Holmes Group, 535 U.S. at 837 (Stevens, J., concurring) (emphasis added). Justice Stevens joined most of the Court's analysis, but wrote separately to state his view that post-filing amendments to the complaint are relevant

*p. 12*
Because the facts of Holmes Group did not present the question of whether a counterclaim satisfies original jurisdiction, the case is a doubtful reference for the (uncontroversial) proposition that it does not. That is not, by itself, enough to conclude that certiorari was improvidently granted. 50 The question accepted for review by the Court was whether § 1295 divests regional circuits of jurisdiction when the well-pleaded complaint alleges no claim arising under patent law. 51 That question was still presented, but required the Court to parse the except clause of § 1295. 52 The Court did not do so; its quotation of § 1295 stops with the granting clause.

## C. Parsing the Except Clause

*p. 12*
As explained in Part I.B, the Supreme Court needed to parse the except clause to properly decide Holmes Group. The key question is whether the except clause's distinct language and context bear a meaning different from the well-pleaded complaint rule. The except clause to the determination of appellate jurisdiction (a question not raised by the case) and to emphasize certain policies underlying use of the well-pleaded complaint rule. Id. at 834-39. 49 The petitioner appears to have relied, albeit implicitly, upon the fact that the complaint did not mention § 1338. The complaint explicitly alleged federal question and diversity jurisdiction, as well as jurisdiction under a trademark-specific provision (15 U.S.C. § 1121) and supplemental jurisdiction over non-federal claims. Brief for Petitioner at 2, Holmes Group, 535 U. S. 826 (No. 01-408). The petitioner acknowledged in its merits brief that its complaint "could have" invoked jurisdiction under § 1338, id. at 19 n.13, with the negative implication that the complaint did not do so. Jurisdiction, however, depends upon the nature of the action pleaded by the plaintiff, not the provisions of the Judicial Code recited by the plaintiff. See Chem. Eng 'g Corp. v. Marlo, Inc., 754 F.2d 331, 333 (Fed. Cir. 1984) ("[J]urisdiction of the district court under . . . § 1338 inheres in the nature of the action."). Otherwise, any patent plaintiff could avoid Federal Circuit appellate jurisdiction merely by omitting mention of § 1338. 50 In the only known discussion of the trade dress complaint, the authors conclude (incorrectly) that satisfying § 1338 suffices for a Federal Circuit appeal, and that therefore the writ of certiorari was improvidently granted and the case wrongly decided. Bass & Alcorn, supra note 4, at 512. Taylor, supra note 4, at 5 n.11, also mentions the error in passing. 51 See supra note 32 and accompanying text.

*p. 13*
excludes from Federal Circuit jurisdiction any "case involving a claim arising under" specified types of intellectual property law. 54 This language differs from the familiar formulation of arising under jurisdiction, which addresses any "civil action arising under" the relevant statutory grant of jurisdiction. 55 Section 1338 refers to a civil action, § 1295 to a case involving a claim. 56 As a matter of statutory interpretation, the goal should be to give effect to the different phrasing of "case involving a claim." 57 The most straightforward way to do that is to conclude that the except clause applies to a claim, not a case, whether the claim is located in the complaint or in an answer. Such a use of "claim," to refer to both claims in the answer (i.e., counterclaims) and claims in the complaint, is employed in the supplemental jurisdiction statute, 58 the Federal Rules of Civil Procedure, 59 and elsewhere. 60 57 "Case" and "civil action" are equivalent. The first sentence of § 1338(a) refers to a "civil action," but the second sentence refers to "cases": "Such jurisdiction shall be exclusive of the courts of the states in patent, plant variety protection and copyright cases" (and, hence, not trademark cases). Id. § 1338(a). It seems unlikely that this difference imports a subtle further difference between the scope of original and exclusive jurisdiction. 58 See id. § 1367(a) (providing "supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy"); id. § 1367(c) (permitting a district court to decline jurisdiction over certain "claims"); id. § 1367(d) (tolling limitations period for some "claims").

*p. 13*
59 E.g., FED. R. CIV. P. 8(a) (providing that "[a] pleading that states a claim for relief must contain" three features, including "a short and plain statement of the claim showing that the pleader is entitled to relief"); id. 54(b) (providing that "[w]hen an action presents more than one claim for relief-whether as a claim, counterclaim, crossclaim, or third-party claim," the court may enter judgment "as to one or more, but fewer than all, claims"); id. 14(a)(2)(D) (permitting a third-party defendant to "assert against the plaintiff any claim arising out of the transaction or occurrence that is the subject matter of the plaintiff's claim against the third-party plaintiff").

*p. 13*
60 E.g., BLACK'S LAW DICTIONARY 240 (7th ed. 1999) (defining claim as "[t]he aggregate of operative facts giving rise to a right enforceable by a court").

*p. 13*
copyrights, exclusive rights in mask works, or trademarks and [involving no claim arising under an Act of Congress relating to the excluded types]"? No, because it involved a trade dress claim and a patent counterclaim. A trade dress claim alone would have clearly satisfied the except clause, but the combination should have routed the appeal to the Federal Circuit.

*p. 14*
There is a contrary view. Despite its different language, the except clause's reference to "a case involving a claim arising under" might be understood to invoke the well-pleaded complaint rule, just as it does in § 1338, even though a "claim," not a civil action, is involved.

*p. 14*
Under this view, the patent-law counterclaim is irrelevant, because the well-pleaded complaint rule ignores all counterclaims. Thus, cases like Holmes Group belong in a regional circuit. This appears to be Justice Scalia's view of the except clause. 61 The Court's opinion ignored the except clause, and asserted incorrectly that § 1295 lacks any mention of "arising under." 62 At oral argument, however, Justice Scalia correctly identified the except clause as the key phrase to interpret. 63 His conclusion was that "arising under" in the except clause amounts to what he called "magic language" that triggers application of the rule. 64 61 Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830-32 (2002).

*p. 14*
Our task here is not to determine what would further Congress's goal of ensuring patentlaw uniformity, but to determine what the words of the statute must fairly be understood to mean. It would be difficult enough to give "arising under" the meaning urged by respondent if that phrase appeared in § 1295(a)(1)-the jurisdiction-conferring statute-itself. Even then the phrase would not be some neologism that might justify our adverting to the general purpose of the legislation, but rather a term familiar to all law students as invoking the well-pleaded-complaint rule. But the present case is even weaker than that, since § 1295(a)(1) does not itself use the term, but rather refers to jurisdiction under § 1338, where it is well established that "arising under any Act of Congress relating to patents" invokes, specifically, the well-pleaded-complaint rule. It would be an unprecedented feat of interpretive necromancy to say that § 1338(a)'s "arising under" language means one thing (the well-pleaded-complaint rule) in its own right, but something quite different (respondent's complaint-or-counterclaim rule) when referred to by § 1295(a)(1).

*p. 14*
Id. (internal citations omitted). 63 Transcript of Oral Argument at 29-30, Holmes Group, 535 U.S. 826 (No. 01-408) ("[T]he issue really before us is what does section 1295 mean. What was it understood to mean when it spoke of a claim arising under any act of Congress relating to copyrights and trademarks?").

*p. 15*
The matter is not free from doubt, but the better view is that the except clause applies to counterclaims. First, the magic-language approach to "arising under" is not always consistently followed. Indeed, the most famous deployment of "arising under" is in Article III of the The magic-language approach makes the most sense when the surrounding language and context, in addition to the use of "arising under," suggest a close parallel between the provisions. 68 Consider, for example, § 1331 and § 1338. There, parallel construction is justified by the identical wording of the two provisions ("civil action arising under"), similar purpose, and parallel positioning. 69 Second, and more importantly, the approach does not so readily extend to § 1295, where the surrounding language and context differ from that of § 1331 and § 1338. 1883, 1889 (2008) ("The federal question statute is almost identical to Article III's grant of 'arising under' jurisdiction, yet the Court has implied a well-pleaded complaint rule for the former but not for the latter."). 68 See, e.g., Northcross v. Bd. of Educ., 412 U.S. 427, 428 (1973) (per curiam) ("The similarity of language . . . [is] a strong indication that the two statutes should be interpreted pari passu."). Northcross, which dealt with attorney's fees for a prevailing plaintiff, considered effectively identical language in the two statutes. Id. at 427-28.

*p. 15*
69 This is the reasoning followed in Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 830 (2002), and Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808-09 (1988).

*p. 15*
understood that differences in language must be given different meaning. 70 Textualists and nontextualists alike would be loath to ignore a congressional decision to deviate from familiar statutory language in a jurisdictional grant such as § 1295.

*p. 16*
The Court applied this principle to "arising under" in a case decided just two years after Holmes Group. 71 There, the Court considered the scope of a "catch-all" statute of limitations provision providing a four-year limitations period for "civil action[s] arising under an Act of Congress enacted after" December 1, 1990. 72 The Court considered petitioners' argument that "arising under," as used in subject matter jurisdiction provisions such as § 1331 and § 1338, required interpreting the limitations provision in the same way. 73 In a unanimous opinion authored by Justice Stevens, the Court rejected this view, insisting instead that an interpreting court "must look beyond the bare text of [the provision] to the context in which it was enacted and the purposes it was designed to accomplish." 74 It is also relevant that § 1295 is a later enacted provision that refers to an earlier provision, § 1338. If the language of the earlier provision had been fully repeated in the later provision, then the narrow scope of § 1338 might readily be imposed upon § 1295. 75 Even though § 1295 refers directly to § 1338, the drafters chose different language for the except clause. By comparison, an earlier statute establishing the jurisdiction of a short-lived appeals 70 E.g., Sosa v. Alvarez-Machain, 542 U.S. 692, 711 n.9 (2004) (noting "usual rule" that "when the legislature uses certain language in one part of the statute and different language in another, the court assumes different meanings were intended"). 71 See Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 373 (2004).

*p. 16*
74 Id. at 377. 75 See, e.g., Bragdon v. Abbott, 524 U.S. 624, 645 (1998) ("When administrative and judicial interpretations have settled the meaning of an existing statutory provision, repetition of the same language in a new statute indicates . . . the intent to incorporate its administrative and judicial interpretations as well."); see also Sullivan v. Stroop, 496 U.S. 478, 484 (1990) (applying the "normal rule of statutory construction that identical words used in different parts of the same act are intended to have the same meaning" (internal quotation marks omitted)).

*p. 16*
court used the phrase "cases and controversies arising under," a closer recycling of the language of § 1331. 76 The magic-language result would be more persuasive here if "claim" were constrained to mean "claim in the complaint." To the contrary, as discussed above, "claim" often encompasses counterclaims too. 77 Nor does the meaning of "arising under" by its own force require that the word preceding it be limited to a claim in the complaint. For example, in a concurrence in Holmes Group, Justice Ginsburg had no trouble arguing for Federal Circuit jurisdiction in certain circumstances "when the claim stated in a compulsory counterclaim 'aris[es] under' federal patent law." 78 Similar language appears in a pre-Holmes Group opinion of the Court interpreting § 1338 79 and in post-Holmes Group lower court opinions. 80 Sometimes "claim" is constrained by context to bear a narrower meaning, as in removal jurisdiction, where the "claim" that "arises 76 Coastal States Mktg., Inc. v. New Eng. Petroleum Corp., 604 F.2d 179, 183 (2d Cir. 1979). In Coastal States Marketing, the court stated:

*p. 17*
The use of the phrase "cases and controversies arising under" in [the statute creating the Temporary Emergency Court of Appeals] is strong evidence that Congress intended to borrow the body of decisional law that has developed under [ § 1331] and other grants of jurisdiction to the district courts over cases "arising under" various regulatory statutes. See, e.g., 28 U.S.C. § § 1337, 1338, 1339, 1340. The traditional meaning associated with these words could hardly have been overlooked.

*p. 17*
Id. 77 See supra notes 58-60 and accompanying text. 78 Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 839 (2002) (Ginsburg, J., concurring) (arguing that the Federal Circuit should have jurisdiction if the claim was adjudicated on the merits by the district court); see also id. at 835 (Stevens, J., concurring) (discussing "claims alleged in a compulsory counterclaim").

*p. 17*
79 Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809 (1988) (explaining that for purposes of § 1338(a), "whether a claim 'arises under' patent law must be determined from" the well-pleaded complaint). Thus, if a particular claim, such as a counterclaim, does not appear in the well-pleaded complaint, it is deemed not to arise under patent law; but it is still a "claim." 80 See, e.g., Golan v. Pingel Enter., Inc., 310 F.3d 1360, 1366 (Fed. Cir. 2002) ("After Vornado, we may no longer rely solely on counterclaims arising under the patent laws to establish our appellate jurisdiction."); see also Topeka Hous. Auth. v. Johnson, 404 F.3d 1245, 1247 (10th Cir. 2005) ("[A] case may not be removed to federal court solely because of a defense or counterclaim arising under federal law." (citing Holmes Group, 535 U.S. at 830-31 & n.2)).

*p. 18*
under" federal law is a claim in the complaint. 81 In that instance, however, it is not the word "claim" that achieves that result, but rather the provision's narrow focus upon those claims on which the district court's original jurisdiction could have been "founded." 82 This interpretation is consistent with the purpose of Federal Circuit jurisdiction over patent cases, which is to achieve uniformity in the development of patent law. 83 The legislative history suggests that to effectuate this goal, patent counterclaims suffice as a basis for routing appeals to the Federal Circuit. 84 For example, the relevant Senate report suggests that district courts should use their authority to separate final decisions on claims about antitrust law from "trivial patent claims, counterclaims, cross-claims, or third party claims," in order to avoid manipulation of appellate jurisdiction-in such a case, a strategy to ensure a Federal Circuit appeal, rather than avoid it. 85 That suggestion makes no sense if patent-law counterclaims were already irrelevant to Federal Circuit jurisdiction.

*p. 18*
The House report is not to the contrary. To be sure, it states that "cases will be within the jurisdiction of the [Federal Circuit] in the same sense that cases are said to 'arise under' federal law for purposes of federal question jurisdiction." 86 However, in 1982, when § 1295 was enacted, the scope of "arising under" was not established as to counterclaims, even with regard to original jurisdiction under § 1338, much less with respect to § 1295. Some lower courts had 81 E.g., 28 U.S.C. § 1441(b) (2006) (referring to a "civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States").

*p. 18*
82 Id. 83 See, e.g., Markman v. Westview Instruments, Inc., 517 U.S. 370, 390 (1996) ("It was just for the sake of such desirable uniformity that Congress created the [Federal Circuit] as an exclusive appellate court for patent cases . . . ."); United States v. Hohri, 482 U.S. 64, 71 (1987) ("A motivating concern of Congress in creating the Federal Circuit was the special need for nationwide uniformity in certain areas of the law." (internal quotation marks omitted)); S. REP. NO. 97-275, at 5 (1981)

*p. 19*
concluded that a counterclaim provided a sufficient basis for jurisdiction. 87 Indeed, Holmes Group itself established the proposition that a counterclaim failed to establish "arising under" jurisdiction. 88 Congress appears not to have anticipated the interpretive significance that might later be attributed to "arising under" in § 1295 (or, for that matter, § 1338). This failure of foresight echoes the fight, which took place during the same Term as Holmes Group, about what the word "equitable" means in ERISA. 89 Is it defined by the word's meaning in the "days of the divided bench," prior to the merger of law and equity courts? 90 There, too, Justice Scalia adopted a magic-language approach, over the objection of Justice Ginsburg, who in that case emphasized the high likelihood that Congress was unaware of the magic-language significance that the Court would later attribute to the word. 91 If the except clause is read to apply to both claims in the complaint and counterclaims, that understanding may, in turn, bear upon the best reading of the granting clause. Recall that the granting clause routes the appeal to the Federal Circuit, subject to the except clause, "if the jurisdiction of that court was based, in whole or in part, on [ §] 1338." 92 One interpretation is that the granting clause is satisfied if and only if the complaint satisfies the well-pleaded complaint 87 See, e.g., Duncan v. First Nat'l Bank, 597 F.2d 51, 55 n.3 (5th Cir. 1979) (concluding that a counterclaim was an independent basis for jurisdiction); Christian A. Fox, Note, On Your Mark, Get Set, Go! A New Race to the Courthouse Sponsored by Holmes Group, Inc. rule. This interpretation creates a mismatch between the granting clause and the except clause.

*p. 20*
The granting clause, limited (on this view) to cases satisfying the well-pleaded complaint rule, applies only to claims in the complaint. 93 By contrast, the except clause, which applies to a "case involving a claim," 94 operates not only upon claims in the complaint, but also counterclaims. As a consequence, some but not all patent counterclaims are reviewed by the Federal Circuit. There

*p. 20*
is no single answer to the question presented in Holmes Group, namely, whether § 1295 divests regional circuits of jurisdiction when the well-pleaded complaint alleges no claim arising under patent law. 95 The answer is yes for some cases-for example, a case with a copyright claim in the complaint and a patent counterclaim. It is no for others-for example, a case with a patent counterclaim and no intellectual property claim in the complaint.

*p. 20*
The oddness of the no-single-answer result is caused not by the except clause, but by the unchanged and inflexible-and, to § 1295's drafters, probably unexpected-narrowness of § 1338. The except clause maximizes the number of patent cases that reach the Federal Circuit, subject to the statutory constraint of § 1338's narrowness. This result is unsatisfying, though not so much so to engage the absurdity exception sometimes thought to soften textualist readings. 96 The result is also a bit complicated, but then again, so is the statute. If simplicity were preferred, Congress ought to have passed a simpler statute, one that more closely resembled the Holmes Group Court's abridgement, rather than the more complicated provisions that actually exist.

*p. 20*
It is possible to relax the constraint caused by this interpretation of the granting clause, and thereby relieve the mismatch between the granting clause and the except clause. A second interpretation of the granting clause is that any case with a patent claim, including a counterclaim, satisfies the granting clause. This is a revisionist interpretation not of § 1338, but of the § 1295 granting clause's reference to § 1338. On this view, the granting clause's requirement that the jurisdiction of the district court be "based on" § 1338 is broader than "arising under" jurisdiction. Rather, "based on" is simply a loose directive that the case must contain a claim in the complaint or counterclaim of one of the types listed in § 1338. This interpretation of the granting clause is a less natural reading of the text. On the other hand, it more fully effectuates the goal of maximizing patent law uniformity, as well as congressional understanding of the effect of § 1295. It also avoids a result in which some but not all cases with a patent law counterclaim have Federal Circuit appeals. This interpretation provides an alternative route to the Federal Circuit's pre-Holmes Group view that a patent-law counterclaim sufficed to route a case to the Federal Circuit. 97 The Federal Circuit's view rested upon a particular interpretation of § 1338-that a patent-law counterclaim satisfies § 1338. 98 That view is squarely foreclosed by the well-pleaded complaint rule. Unlike the Federal Circuit's pre-Holmes Group view, the present interpretation leaves unaffected the Supreme Court's understanding of § 1338.

## II. Legislative Reform

*p. 21*
Part I explicated the except clause and showed that it is a neglected but central provision in the forum determination of intellectual property appeals. This Part considers two types of 97 See Aerojet-General Corp. v. Mach. Tool Works, Oerlikon-Buehrle Ltd., 895 F.2d 736, 745 (Fed. Cir. 1990) (en banc), overruled by Holmes Group, 535 U.S. 826.

*p. 21*
98 Id. at 741 ("Our holding here accords with [previous opinions of the Federal Circuit] respecting the role of a nonfrivolous compulsory counterclaim for patent infringement in setting the section 1338 jurisdiction of the district court and hence the section 1295 jurisdiction of this court."); see also id. ("[T]he Justices did not intend to make a rigid application of the well-pleaded complaint rule a Procrustean bed for this court's jurisdiction."). legislative reform that are undermined or altered by operation of the except clause, whether or not Holmes Group was wrongly decided. Part II.A considers legislative proposals to expand Federal Circuit jurisdiction to include patent-law counterclaims. Part II.B considers the appellate forum for proposed expansions of federal intellectual property.

## A. Expanding Federal Circuit Jurisdiction

*p. 22*
Right or wrong, the Court's analysis in Holmes Group is now authoritative. The Court addressed the following question: "whether the [Federal Circuit] has appellate jurisdiction over a case in which the complaint does not allege a claim arising under federal patent law, but the answer contains a patent-law counterclaim." 99 The Court answered no, using general language. 100 It is conceivable that the Court might reconsider its result if presented with an argument founded upon the except clause, but in the meantime, the result is binding.

*p. 22*
In response, there have been numerous legislative proposals to expand the Federal Circuit's jurisdiction to include cases with patent-law counterclaims, and thereby restore the pre-Holmes Group status quo. 101 The most prominent of these, adopted by the House Judiciary Committee, replaces § 1295 with new language, so that the Federal Circuit would have jurisdiction "of an appeal from a final decision of a [district court] in any civil action in which a party has asserted a claim for relief arising under any Act of Congress relating to patents or plant variety protection." 102 99 Holmes Group, 535 U.S. at 827. 100 Id. at 829-30. 101 E.g., Intellectual Property Jurisdiction Clarification Act of 2006, H.R. 2955, 109th Cong. § 3 (2006). 102 Id.

*p. 23*
The proposal relies upon the expectation that courts will understand a "claim for relief arising under" patent law to include counterclaims. 103 That is true if the difference in language-"claim for relief" rather than "case"-is enough to sidestep the well-pleaded complaint rule. Part I.C advances the view that this interpretation of the language is correct.

*p. 23*
Readers who find Part I.C unpersuasive, however, and think the well-pleaded complaint rule is controlling even here, should also conclude that the Judiciary Committee language is unlikely to succeed in expanding jurisdiction. Even if this Article's interpretation of the except clause is persuasive, moreover, Holmes Group itself may render the proposed fix ineffective.

*p. 23*
After all, Holmes Group made "arising under" into magic language. 104 Even if that understanding was incorrect as applied to the except clause-a clause that the Holmes Group Court did not even consider-a court might conclude that it is authoritative now that the case has been decided. The Court's opinion is worded broadly: "it is well established that 'arising under any Act of Congress relating to patents' invokes, specifically, the well-pleaded-complaint rule." 105 On the other hand, a court might be reluctant to declare the Judiciary Committee proposal ineffective in expanding jurisdiction to counterclaims. A court interpreting the new enactment might focus upon the "public history of the times" 106 and give effect to the clear effort to expand the Federal Circuit's jurisdiction.

*p. 23*
A second proposal, offered by the Federal Circuit Bar Association ("FCBA"), would alter § 1338 by adding five words that would give a district court original jurisdiction of "any civil action involving any claim for relief arising under any Act of Congress relating to patents, plant 103 Id.; see supra Part I.C. 104 See Holmes Group, 535 U.S. at 829-30. variety protection, copyrights and trademarks." 107 This proposal has the same flaw as the Judiciary Committee proposal because it employs the same "claim . . . arising under" language. 108 The FCBA proposal raises the additional complication that it would aim to expand original jurisdiction in § 1338, a much more radical change. It creates still another problem by relying on courts to recognize the derivative effect of expanded original jurisdiction under § 1338 on counterclaims under the except clause, even though the except clause's text remained unchanged. Otherwise, recognizing a change to § 1338 but not § 1295 would yield perverse results. For example, a copyright counterclaim would satisfy the (expanded) § 1338, but would then be ignored by the except clause, resulting in a Federal Circuit appeal for the whole case. To avoid this outcome, the court would need to recognize a changed reading of the existing except clause. 109 A better course would be to focus entirely on § 1295 and to rewrite that section in such a way as to eliminate both the except clause and any reference to "arising under." In particular, Congress could provide that Federal Circuit jurisdiction exists for any "appeal from a final decision of a district court, in any civil action in which any party has asserted a claim (including a counterclaim) for relief pertaining to any Act of Congress relating to patents or plant variety protection." 107 FCBA Report, supra note 4, at 714; see also H.R. REP. NO. 109-407, at 5 (2006); Holmes Group, the Federal Circuit, and the State of Patent Appeals: Hearing Before the Subcomm. on Courts, the Internet, and Intellectual Property of the H. Comm. on the Judiciary, 109th Cong. 6-7 (2005) (statement of Ed Reines, Secretary, Federal Circuit Bar Association).

*p. 24*
108 Indeed, the FCBA proposal emphasizes the similarity between its proposed addition to § 1338(a) and the existing language of the except clause. See FCBA Report, supra note 4, at 714. 109 See, e.g., United States v. Hutcheson, 312 U.S. 219 (1941). For a discussion of changed readings of existing statutes, see generally Lawrence Lessig, Understanding Changed Readings: Fidelity and Theory, 47 STAN. L. REV. 395 (1995). See also Sullivan v. Finkelstein, 496 U.S. 617, 631-632 (1990) (Scalia, J., concurring) (noting the possibility that a legislator's expression about a previously enacted statute "may bear upon the meaning of a provision in a bill under consideration-which provision, if passed, may in turn affect judicial interpretation of the previously enacted statute, since statutes in pari materia should be interpreted harmoniously").

*p. 25*
That said, it might be even better to leave the statute alone, so far as patent counterclaims are concerned. Decentralization has significant virtues, which seem to have been slighted by Congress in its effort to centralize all patent claims in the Federal Circuit. These virtues include the percolation of contrary views among the regional circuits, which helps the Supreme Court in selecting and deciding cases. 110 Percolation helps to overcome the difficulty in identifying and correcting judicial errors that otherwise result when a single court has nationwide appellate jurisdiction. One might therefore prefer variety in regional circuit law to a single Federal Circuit view, in antitrust and other areas that intersect with patent law. 111 Moreover, although decentralization enables some forms of forum shopping, it curbs other forms. 112 A further reason to adopt a wait-and-see attitude is that in the first seven years since the Court decided Holmes Group, only five cases with a patent-law counterclaim have been routed to a regional circuit, judging by appeals court opinions that remark upon the routing. 113 Of these, just two have resulted in opinions on a point of patent law. 114 Moreover, even if a case is sent to a regional court, there is no guarantee that anything much will happen. The court might simply decide to employ Federal Circuit law. 115 Appeals courts often defer to sibling circuits with superior expertise in other specialized areas of knowledge, such as state law. 116 This principle has been applied in one of the five cases. 117 Of course, this state of affairs may not be permanent.

*p. 26*
Sometimes litigants take years to learn how to take advantage of a legal loophole. But for now, legislative change motivated by patent counterclaims does not seem worth the trouble.

## B. Adding "New" Forms of Intellectual Property

*p. 26*
The except clause has a second important implication for legislative change. The clause determines the appellate forum for any case whose jurisdiction is based, at least in part, on § 1338. That includes not only familiar forms of intellectual property, such as patent and trademark, but also new forms of protection that have been or may be added to the scope of § 1338. This effect does not depend upon whether the except clause applies to counterclaims.

*p. 27*
As discussed in Part I.A, six types of intellectual property cases satisfy § 1338: patent, plant variety protection, copyright, trademark, semiconductor mask works, and exclusive rights in designs. All six satisfy § 1295's granting clause. 118 Copyright, trademark, and mask work protection are enumerated in the except clause and have regional circuit appeals. Patent, plant protection, 119 and exclusive rights in designs are not enumerated, 120 and these have Federal Circuit appeals. 121 In short, exclusive rights in design have Federal Circuit appeals to the same extent as patents. 122 121 It is possible to argue that exclusive rights in designs is an "Act of Congress relating to copyrights" for purposes of the except clause, in which case the appeal goes to a regional circuit. See 28 U.S.C. § 1295(a)(1). This argument might be made because the design right, like mask work protection, is a chapter in the Copyright Act. Cf. 17 U.S.C. § § 901-914 (2006); id. § § 1301-1332. That argument fails, however. This, like mask work protection, is a sui generis form of protection separate from copyright law. Both forms are enumerated separately in the text of § 1338; if either was an "Act of Congress relating to copyright," then that step would be unnecessary. See 28 U.S.C. § 1338(c). Moreover, they are enumerated separately from copyrights in § 1400(a)-providing for district court venue-and in the headers of § § 1338 and 1400. See id. § § 1338, 1400. Finally, mask works are explicitly mentioned in the except clause, in addition to copyright. See id. § 1295(a)(1). Design rights ought to have been included too if a regional circuit appeal were intended. 122 One might argue that the except clause ignores design right claims on the ground that such claims are not among the "other claims under 1338(a)" referred to in the final phrase of the except clause. If this were true, some but not all design right claims would reach the Federal Circuit. For example, a complaint asserting a design right claim and no other intellectual property claim would satisfy the granting clause, be ignored by the except clause, and still have a Federal Circuit appeal. By contrast, a complaint containing both a design right claim and a claim enumerated in the except clause-copyright, for example-would have a regional circuit appeal.

*p. 27*
That argument rests upon a literal interpretation of "under § 1338(a)" because § 1338(a) does not directly mention design right claims. See 28 U.S.C. § 1338(a). The contrary argument is that § 1338(c) provides that § 1338(a) applies to design protection, and that this is enough to satisfy "under § 1338(a)." This latter interpretation better accords with the reference to "other claims," which is relative to the types of claims enumerated in the except clause. The enumerated claims include mask work protection, suggesting that mask work protection is a type of claim "under § 1338(a)." If that is true, then the design right likewise falls under § 1338(a).

*p. 28*
The provision for a Federal Circuit appeal for design cases has gone unnoticed. One reason is that the scope of design protection, despite the generality of the term, is currently quite narrow. In fact, it is limited to boat hulls. 123 Boat hull protection was enacted upon an ambitious statutory scaffolding that bears the hopeful title "Protection of Original Designs." 124 Protection is accorded, expansively, to original designs of useful articles. 125 A second restrictive clause limits the definition of useful articles to vessel hulls. 126 Boat hull protection is very seldom invoked. 127 In the only reported appeal, heard in a regional circuit, 128 neither party considered, or in any event advocated, a Federal Circuit appeal. 129 The question of appellate forum becomes quite important if Congress expands design protection to encompass products such as original fashion articles, furniture, and automobile parts, an action that likely would produce a large number of design appeals. The logical and most frequently mentioned way to expand design protection would be to delete the restriction that Opening Brief of Maverick Boat Co., Inc. at vii, Maverick Boat, 418 F.3d 1186 (No. 04-11259) (asserting that jurisdiction is based on 28 U.S.C. § 1291). Similarly, the only academic article focusing on boat hull appeals concludes that such appeals are heard by a regional circuit. Chris J. Katopis, The Federal Circuit's Forgotten Lessons?: Annealing New Forms of Intellectual Property Through Consolidated Appellate Jurisdiction, 32 J. MARSHALL L. REV. 581, 605-06 (1999). The article mentions the except clause in passing but makes nothing of it. See id. at 604. limits protection to boat hulls. 130 Some commentators applaud this idea, considering hull protection to be "pilot legislation" for a broader design right. 131 Others have viewed the possibility more darkly, speculating that the great breadth of the provision is part of a plan to enact full design protection without anyone noticing until it is too late. 132 Would it then be desirable to have design right appeals in the Federal Circuit? The question has received little attention, 133 which is surprising given the extensive attention devoted to design protection over the years, and the great significance attached to the Federal Circuit's dominance of patent appeals. One might expect that the Federal Circuit's perceived sympathy for patent holders is a significant consideration, 134 although the extent of this inclination, if any, is contestable. 135 There is a more important factor at work here. Given that a broad design right 130 See, e.g., DONALD S. CHISUM, CHISUM ON PATENTS § 23.06(3) (2005) ("[T]he Act's language could easily be broadened to include other types of useful articles, and, therefore, to provide the type of design registration scheme that has been proposed for years in the United States . . . .").

*p. 29*
131 Orit Fischman Afori, Reconceptualizing Property in Designs, 25 CARDOZO ARTS & ENT. L.J. 1105, 1126-27 (2008) ("[T]he [Vessel Hull Design Protection Act] remains the major model for future design legislation . . . ."). 132 See David Nimmer, Codifying Copyright Comprehensibly, 51 UCLA L. REV. 1233, 1318 (2004) ("Evidently someone went to the trouble to draft the thirty-two sections of the . . . Act as broadly as possible. One need not be a conspiracy theorist to speculate that the reason behind it might have been to set the stage for yet another stealth amendment to the Copyright Act in the future.").

*p. 29*
133 Several commentators have criticized the Federal Circuit as a forum for design patent appeals. 12, 115-22 (2004) (asserting that the Federal Circuit has favored patent holders with respect to remedies, subject matter, and low thresholds for validity); see also Arti K. Rai, Engaging Facts and Policy: A Multi-Institutional Approach to Patent System Reform, 103 Colum. L. Rev. 1035, 1114-15 (2003) (concluding that bias may play a role, but formalism is a more important explanation of Federal Circuit decision making). 135 See Dreyfuss, supra note 110, at 770 ("[S]uspicions of a pro-patentee bias in the court's early years . . . have largely abated."); Golden, supra note 11, at 680 ("[T]he pro-patent aspects of the Federal Circuit's would be new, it would be particularly useful to have the diverse regional circuits develop the early case law that will arise as the right is established. The Federal Circuit took control of patent appeals only after decades of percolation among regional circuits. The design right should go through a similar phase before Congress considers centralization of design appeals in a single circuit.

*p. 30*
Instead of providing for a broad right applicable to the full range of useful articles, from car parts to furniture to fashion designs, Congress could choose to enact a narrower right that applies to only a few categories. In fact, a currently active proposal accords new protection to just one type of design-original fashion designs. 136 This and similar proposals expand the existing "exclusive rights in designs" structure, and therefore, such cases would have Federal Circuit appeals. 137 Single-industry design protection provides an additional argument for some degree of consolidation. With only one type of article receiving protection and appeals scattered among regional circuits, there is a risk that no circuit will have sufficient scale to acquire adequate expertise in developing the new right. A lack of scale, however, may be overcome without formal centralization. Under regional decentralization, the Second and Ninth Circuits are likely to hear the great majority of fashion appeals because most fashion design occurs within these two circuits. That is already the case with copyright law, as the music, publishing, and movie jurisprudence may not have exceeded what might have been expected from any court system in the wake of the era in which the Circuit was created."). The usual counterargument is that patents, though easy to get, tend to be interpreted narrowly for infringement purposes. See Dreyfuss, supra note 110, at 770 n.5.

*p. 30*
136 Design Piracy Prohibition Act, H.R. 2196, 111th Cong. (2009).

*p. 31*
industries are concentrated within these two circuits. 138 Having two circuits hearing fashion design cases would provide some percolation, while maintaining some of the benefits of specialization. 139 To avoid excessive centralization of design right appeals, § 1295 would need to be rewritten. That is an unexpected benefit, then, of the Judiciary Committee proposal, which replaces § 1295 with a new provision that enumerates specific categories with Federal Circuit appeals-patents and plant variety protection-rather than using an except clause. 140 No appeals founded on design claims would reach the Federal Circuit (except to the extent that they also raised patent or plant variety protection claims). By contrast, the FCBA approach, which does not address § 1295, would leave uncertain the proper appellate forum for design claims.

## Conclusion

*p. 31*
Holmes Group failed to take full account of the statutory scheme governing intellectual property appeals. The Court did not notice that the complaint in the case already satisfied § 1338.

*p. 31*
That misstep contributed to its neglect of the except clause, the key provision necessary to resolve the case. As a consequence, the Court created obstacles to legislative amendment, and obscured the effect of the except clause on appeals of new forms of intellectual property. In this, the Court was not alone. Litigants, lower courts, commentators, and legislators have also failed to take account of the except clause. This Article is an effort to fill that gap. Copyright (Craig Joyce ed., 2009), in 46 HOUS. L. REV. 215, 343 & n.4 (2009) (arguing that the Second, Seventh, and Ninth Circuits have a bias against copyright infringement defendants due to their proximity to the major copyright holders). 140 See Intellectual Property Jurisdiction Clarification Act, H.R. 2955, 109th Cong. § 3 (2006).

*p. 32*
Holmes Group raises questions about the effectiveness of the Court as a supervisor of the Federal Circuit. The Court is sometimes criticized for errors it commits during its forays into patent law. The usual context is a question of substantive patent law, in which the Court is faulted for not being expert enough. In the view of critics, the Court misunderstands the relevant policy considerations, or the effect of particular language, and therefore creates new problems without knowing it. 141 The expertise critique is plausible. Patent cases are technical, often focused on unfamiliar doctrines, and the Justices lack patent law expertise when they join the Court. Given a Court composed entirely of former regional circuit judges, centralizing patent appeals removes one opportunity to impart patent expertise to future Justices. Few of the Justices' clerks have taken patent law, or have seen a patent case during their previous (regional) circuit clerkship. 142 That said, it is difficult to evaluate whether outcomes really are worse in patent cases taken by the Supreme Court, compared to cases taken from other areas of law. The criticisms usually pertain to nuance, not a basic misunderstanding of patent law. 143 And in other areas of law, too, experts very often are critical of Supreme Court opinions within their expertise. 141 See, e.g., Chisum, supra note 11, at 4 ("[I]n many opinions by the Supreme Court on patent law, the reasoning and the justification for the result [are] extraordinarily weak, illogical, ambiguous, or inconsistent."); Golden,supra note 11,at 689. 142 According to Wikipedia's list of law clerks, the only exception is one clerk hired by Justice Ginsburg for the 2007 Term, who previously clerked for Judge Dyk. Wikipedia, List of Law Clerks of the Supreme Court of the United States, http://en.wikipedia.org/wiki/List_of_law_clerks_of_the_Supreme_Court_of_the_United_States (last visited Feb. 3, 2010). 143 See, e.g., Mark D. Janis, Patent Law in the Age of the Invisible Supreme Court, 2001 U. ILL. L. REV. 387, 414 & n.123 (arguing that when the Court decided Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997), where the Court directed lower courts to presume that if a patent applicant fails to explain the reason for a claim-narrowing amendment during prosecution, then the doctrine of equivalents does not apply, "the Court appears to have been unaware that a body of case law had already developed around the question").

*p. 33*
The patent expertise critique is inapplicable to Holmes Group. Here, patent-law expertise was unnecessary. 144 Nor could one easily argue that this was one of those patent cases that the Justices might find "technologically complex and boring too," 145 and thereby treat as a "second class citizen[]." 146 This was a case about federal jurisdiction-an opportunity to adjust the relationships of other decision makers-and thus an issue at the core of the Court's interest and expertise.

*p. 33*
An alternative explanation is that the Court found this latter role too interesting. That is, the Court saw an opportunity to make a general point about the arising under jurisdiction of the district court-that it does not apply to counterclaims-and the incomplete briefing caused the Court to lose sight of the intellectual property aspects of the case. In focusing upon the more general relevance of § 1338, § 1295 was lost in the shuffle. Focusing on the general federal jurisdiction dimension of the case, rather than its intellectual property aspects, made it easy to miss that the plaintiff's trade dress claim satisfied § 1338. 147 Recognizing that the trade dress claim satisfied § 1338 would have forced the Court to investigate more closely the intricacies of the Federal Circuit's intellectual property jurisdiction. In short, Holmes Group was more of an intellectual property case than the Court realized. 144 Other cases raise questions of patent law without plumbing the depths of patent doctrine. For example, in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), the Court rejected the Federal Circuit's rule that a patent infringement finding automatically leads to injunctive relief. Id. at 393-94. There, too, observers have raised significant objections to the four-factor test devised by the Court, including its adaptation of a test applicable to preliminary (rather than permanent) injunctions, a requirement of past (rather than future) irreparable harm, and an insistence that the plaintiff satisfy all (rather than some) of the factors in the Court's test. For critiques, see DOUGLAS LAYCOCK, MODERN AMERICAN REMEDIES: CASES AND MATERIALS 57-59 (3d ed. Supp. 2008); Golden, supra note 11, at 693-700. 145 Duffy, supra note 11, at 330. 146 Chisum, supra note 11, at 16 ("Justices seem to treat patent cases as second class citizens and write opinions that read as though they were dictated while standing waiting for the elevator.").

*p. 33*
147 It may not have helped that federal trade dress protection is a species of intellectual property not directly enumerated in § 1338(a), but rather an "act of Congress relating to . . . trademark."

*p. 34*
The limits of the Court as a supervisor of the Federal Circuit might be ameliorated through a return to the other question about specialization with which Holmes Group has been most directly associated-allocation of authority among appeals courts. If there had been multiple circuits considering the interaction of § 1338 and § 1295, it is more likely that one of them would have noticed the importance of the except clause for the scope of Federal Circuit jurisdiction. In turn, it is less likely that the Court would have neglected to analyze the clause.

*p. 34*
That is one way in which fragmentation of appellate decision-making authority might enhance the effectiveness of Supreme Court review-not only in managing the intricacies of patent law, but in assessing the related jurisdictional and other general provisions in which patent law is embedded.

## Footnotes

> See 28 U.S.C. § 1295(a) (2006).

> Vaden v. Discover Bank, 129 S. Ct. 1262, 1272-73 (2009). Vaden relied on Holmes Group in the course of interpreting the Federal Arbitration Act, 9 U.S.C. § § 1-14(2006). Id. at 1273. The "amplification" refers to the fact that prior to Holmes Group, the Court had not explicitly ruled that counterclaims are outside the scope of the well-pleaded complaint rule.

> 28 U.S.C. § 1331 (2006).

> See id. § 1441(b) (providing for removal of certain "civil action[s] . . . arising under the Constitution, treaties or laws of the United States");Green v. Hendrickson Publishers, Inc., 770 N.E.2d 784, 793 (Ind. 2002) ("Holmes [Group] requires us to reject the federal authorities stating or implying that a state court may not entertain a counterclaim under patent or copyright law."); Cotropia, Counterclaims, supra note 4, at 22.

> The Court accepted a second question for review, asking whether this case is a "civil action arising under" patent law for purposes of § 1295 and § 1338. See supra note 32. That question is inapt, as § 1295 lacks the phrase "civil action arising under," and the case requires parsing of the except clause, which uses different language.

> A concurrence by Justice Stevens quoted, but did not parse, the except clause. Holmes Group, 535 U.S. at 837 n.2 (Stevens, J., concurring).

> See Holmes Group, 535 U.S. at 839 (Stevens, J., concurring) (stating that in patent law, "[a]n occasional conflict in decisions may be useful in identifying questions that merit this Court's attention"); Craig Allen Nard & John F. Duffy, Rethinking Patent Law's Uniformity Principle, 101 NW. U. L.REV. 1619REV. , 1624REV. (2007)). Decentralization does reduce diversity in one respect, by removing the Federal Circuit voice from certain cases where the issue only appears in combination with a patent-law counterclaim. See Rochelle Cooper Dreyfuss, The Federal Circuit: A Continuing Experiment in Specialization, 54 CASE W. RES. L.REV. 769, 787-88 (2004).

> See, e.g., id.; S. 1957 S. , 110th Cong. (2007);); H.R. 2033 H.R. , 110th Cong. (2007);); H.R. 5055, 109th Cong. (2006). For a discussion of several of these proposals, see C. Scott Hemphill & Jeannie Suk, The Law,Culture, and Economics of Fashion, 61 STAN. L. REV. 1147, 1187-90 (2009).

> 20 28 U.S.C. § 1338(a). For simplicity, this provision is referred to as § 1338 in text. copyrights

> The result is the same for a suit brought under the Declaratory Judgment Act 26 seeking a declaration of patent invalidity or non-infringement. One might think that such a suit is outside the court's original jurisdiction, on the view that the Act was not intended to expand the court's jurisdiction.27 However, the Supreme Court made clear in Franchise TaxBoard v. Construction Laborers Vacation Trust 28 that such declaratory judgment actions are within the district court's original jurisdiction.29 The Federal Circuit, relying upon Franchise Tax Board, has held repeatedly that declaratory judgment actions satisfy § 1338. 30 26 Id. § 2201.27 See Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671 (1950) ("Jurisdiction . . . was not altered by the Declaratory Judgment Act.").28 463 U.S. 1 (1983).

> It is commonly 65 U.S. CONST. art. III, § 2. 66 Verlinden B.V. v. Cent. Bank of Nig., 461 U.S. 480, 494-95 (1983). 67 Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738, 822 (1824); see Barry Friedman,

> 84 See S. REP.NO. 97-275, at 20, reprinted in 1982 U.S.C.C.A.N. at 30; see also Thompson, supra note 4, at 537-39 (discussing legislative history). 85 S. REP. NO. 97-275, at 20, reprinted in 1982 U.S.C.C.A.N. at 30. 86 H.R. REP. NO. 97-312, at 41 (1981).