# The Federal Circuit’s Reach as a Specialized Court Beyond Patent Law

**Authors:** Jeanne C. Fromer
**Citation:** The Federal Circuit’s Reach as a Specialized Court Beyond Patent Law, in *Improving Intellectual Property* 138 (Susy Frankel, Margaret Chon, Graeme B. Dinwoodie, Jens Schovsbo et al. eds., 2023)
**Source:** https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4535057

## INTRODUCTION

*p. 1*
Professor Rochelle Dreyfuss' scholarship is both voluminous and influential. There is rarely a question about any of the many aspects of intellectual property law on which she has not written thoughtfully and prominently. One of the first articles by Dreyfuss that I ever read was her seminal article evaluating the Federal Circuit as a specialized court. 2 In it, she evaluates the successes, failures, promise, and peril of this court, both through a lens of substantive patent law and a lens of civil procedure. One of her many important insights is about how the Federal Circuit should consider handling legal issues beyond patent law that arise in patent cases. She has seen the importance of this issue since the outset of the court, yet the court's thinking here has barely evolved or matured. Given the ongoing developments in the Federal Circuit on innovation and competition issues beyond patent law-including in copyright, preemption, and antitrust-it is high time for the court to heed her recommendations for more thoughtful development of these areas of law.

## THE FEDERAL CIRCUIT

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The course of US patent law changed significantly in 1982 in the shadow of a secondary finding by the Hruska Commission, appointed to study a caseload 1 I gratefully acknowledge support from the Filomen D'Agostino and Max E. Greenberg Research Fund. The Federal Circuit's reach as a specialized court beyond patent law crisis of the federal courts. 3 The commission found that patent law decision making in the federal courts was askew. 4 As Dreyfuss vividly explains:

*p. 2*
Statistics demonstrate that in the period 1945-1957, a patent was twice as likely to be held valid and infringed in the Fifth Circuit than in the Seventh Circuit, and almost four times more likely to be enforced in the Seventh Circuit than in the Second Circuit. 5 As a result of these differential outcomes, forum shopping was prevalent as was legal uncertainty about any patent's validity and any third party's infringement. 6 Although the Supreme Court could in theory have reviewed more patent cases to stabilize and clarify the law, they were not. 7 Congress sought to solve these problems through passage of the Federal Court Improvements Act of 1982, which created the US Court of Appeals for the Federal Circuit. 8 As the law stands, the Federal Circuit has exclusive jurisdiction:

*p. 2*
of an appeal from a final decision of a district court of the United States, the District Court of Guam, the District Court of the Virgin Islands, or the District Court of the Northern Mariana Islands, in any civil action arising under, or in any civil action in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or plant variety protection. 9

*p. 2*
No matter the district court in which a plaintiff brings a patent claim, the appeal of any final decision arising under patent law would lie in the Federal Circuit, rather than the corresponding regional circuit court of appeals. The Federal Circuit was also granted exclusive jurisdiction over most appeals from decisions of the Patent Trial and Appeal Board of the US Patent and Trademark Office (PTO) (such as regarding patent applications). 10 The establishment of the Federal Circuit's exclusive jurisdiction over these patent cases sought to eliminate the forum shopping plaguing patent cases and smooth out the courts' patent law decisions, bringing more uniformity and 3 Id. at 6. clarity to the law. 11 By honing its expertise in patent law and issuing more predictable decisions, it was thought that the Federal Circuit would do a better job of accomplishing patent law's goals of encouraging investment in technological innovation. 12 Moreover, removing the complex and time-intensive patent cases from the regional circuit courts of appeal could improve their workload. 13 Even though the Federal Circuit has exclusive jurisdiction over most patent appeals, it does not adjudicate only patent cases. Congress also conferred exclusive jurisdiction in the Federal Circuit over appeals of final decisions of the US Court of Federal Claims, certain decisions as to trademark applications originating in the US Patent and Trademark Office, final decisions of the US Court of International Trade, final decisions of the Merit Systems Protection Board, and final decisions of an agency board of contract appeals, among other things. 14 The Federal Circuit has ruled that it will adjudicate non-patent law issues on appeal in cases that arise under patent law, even if there are no patent claims on appeal. 15 As to choice of law for non-patent issues, the court held that it 'shall review procedural matters, that are not unique to patent issues, under the law of the particular regional circuit court where appeals from the district court would normally lie.' 16 The court reasoned that it chose to do so 'to minimize confusion and conflicts,' elaborating that '[s]ince our mandate is to eliminate conflicts and uncertainties in the area of patent law, we must not, in doing so, create unnecessary conflicts and confusion in procedural matters.' 17 It has ruled similarly that regional circuit law too governs substantive non-patent matters on appeal to the Federal Circuit. 18 Panduit, 744 F.2d at 1574-75. The Federal Circuit's reach as a specialized court beyond patent law seven years after the court's establishment, Dreyfuss analyzes the Federal Circuit as a specialized court. 19 Dissecting the expected benefits of the Federal Circuit, Dreyfuss finds that indeed due to the inability to forum shop on appeals, the Federal Circuit had made patent law more precise by producing greater horizontal equity across similar cases. 20 An important way to achieve this equity was by formulating what Dreyfuss describes as '[b]right line rules, objective criteria, and minimal exceptions,' which 'may not make for accurate adjudication (the 'right' result in every case), but they create a body of law that is easier to apply uniformly and to predict with certainty.' 21 Dreyfuss also finds that the Federal Circuit was issuing more accurate decisions on patent law than the regional circuits, in the sense of 'formulat [ing] rules that reflect sensitivity to the needs of the technology industry' and therefore innovation. 22 Relatedly, she also emphasizes that because the Federal Circuit had exclusive jurisdiction over appeals of patent infringement and validity decisions from the district courts and of patentability decisions from the PTO, for the first time, a single court could synthesize patent law across patentability and enforcement. 23 Dreyfuss additionally finds that five years after the Federal Circuit's establishment, filings in district courts had not slowed down, even if one might have expected them to do so because there was less value to relitigation. 24 In fact, Dreyfuss wonders if the Federal Circuit was so successful that it was attracting more court filings to resolve issues of patent law that might have been resolved extrajudicially in the past. 25 Turning to the expected costs of the Federal Circuit, Dreyfuss explores the worries that '[t]he repetitious nature of the docket might lead to greater coherency but it would take patents out of the mainstream of legal thought, expose the court to a one-sided view of the issues, and discourage qualified people from serving as judges.' 26 She finds reason to substantiate these worries. There was generally a perception of pro-patentee bias in the Federal Circuit, though Dreyfuss with careful nuance explores whether some of that might owe to changes in the law and other circumstances and whether there is as much pro-patentee bias as others worry. 27 balance on patent issues because of strong lawyering on both sides of patent cases. 28 Dreyfuss also analyzes the procedural complexities arising from the creation of the Federal Circuit: what makes something a patent case over which the Federal Circuit gets exclusive appellate jurisdiction, 29 and how should the Federal Circuit address the non-patent issues that arise in patent cases? As to the first question, Dreyfuss emphasizes the lack of fully settled law, but indicates that so long as a well-pleaded complaint arises under patent law, the court would take jurisdiction over appeals even when the patent issues had been severed or dismissed from the case. 30 As to the second question, Dreyfuss reasons that the court's decision to use regional circuit law to resolve these questions 31 'is not illogical, [but] the result it has reached-which is almost unique in federal jurisprudence-is objectionable.' 32 For one thing, it will frequently be difficult to distinguish substantive patent law, where the Federal Circuit would apply its own law, from procedural law, where it would apply regional circuit law. 33 It might similarly be difficult to distinguish substantive patent law issues from substantive non-patent law issues, such as with regard to preemption. 34 Moreover, Dreyfuss observes that there will be many instances in which the regional circuit court will not have previously considered the precise issue on which the Federal Circuit must apply the regional circuit law, especially when there are issues that will frequently arise along with patent claims as the Federal Circuit 'has largely displaced the regional circuits on issues that normally arise in conjunction' with them. 35 This means that the Federal Circuit, as per Dreyfuss, 'will now have to guess how a regional circuit would have decided a question that it never did, will, or could face.' Id. at 41. The Federal Circuit's reach as a specialized court beyond patent law Dreyfuss highlights as an example issues that will tend to arise in antitrust law at the interface between patent and antitrust. 37 She elaborates: 38 If a case arises in a circuit that has not revised its position on antitrust law, then the [Federal Circuit] is paralyzed; it cannot apply new theories to the antitrust issues, despite the fact that its own analysis of the same problem in the patent law context yields a different result. Even if a case comes up in a circuit that has generally re-evaluated its notions of antitrust policy, it is unlikely that the regional court will have considered how the analysis should operate when there are patent interests at stake from several perspectives.

## ANALYSIS OF THE FEDERAL CIRCUIT AS A SPECIALIZED PATENT COURT

*p. 6*
Dreyfuss indicates that the court could cure these concerns by crafting and applying its own law to non-patent issues. 39 That said, she recognizes that this creates other problems, of a district court being bound to look to either the regional circuit law or Federal Circuit law depending on whether the non-patent issue is bound up in a case arising under patent law. 40 Ultimately, she concludes that the Federal Circuit:

*p. 6*
will not develop expertise in, or appreciation for, competition issues unless it is required to analyze for itself the rules that it is called upon to apply. But empowering the court to interpret the law is not a drawback to extending its jurisdiction. Rather, it is a significant benefit. 41 Relatedly, she insists that 'freeing the [Federal Circuit] from regional circuit law would put the court's experience to better use,' such as when patent protection overlaps with other forms of intellectual property, whether copyright, trademark, or state protections. 42 Over the years, Dreyfuss has periodically returned to reevaluate her foundational scholarship on the Federal Circuit. In 2004, for the court's 20th anniversary, she points out some of the continuing perceived concerns, such as internal and external consistency, and some potential solutions, such as expanding the court's jurisdiction and designating more visiting judges from other courts to rule in Federal Circuit cases. 43 In 2008, for the court's 25th anniversary, Dreyfuss underscores how 'now that the court is established, it is no longer required to prove its bona fides. It has the luxury to step back, intro- spectively assess its role in patent lawmaking, and develop new norms and fresh approaches to crafting its decisions,' especially if judges with extensive practice experience before the court will be appointed. 44 In 2010, she writes how the Federal Circuit and the US Supreme Court can teach one another. 45 That same year, she considers how the Federal Circuit, more than Congress or the Supreme Court, is well placed to reinterpret patent law in light of the immense technological changes that have occurred. 46 In 2013, for the 30-year anniversary of the Federal Circuit, Dreyfuss considers how the court has lacked percolation on patent issues, but how recent legal changes offer up more opportunity for valuable percolation. 47 One year later, she responds skeptically to Judge Diane Wood's recommendation to abolish the Federal Circuit.foot_4

## THE FEDERAL CIRCUIT'S REACH BEYOND PATENT LAW IN PATENT CASES

*p. 7*
Dreyfuss's foundational and continuing work studying the Federal Circuit as a specialized court has been crucial in so many ways to evaluate the court's effect on patent law and beyond. In the court's earliest years, she had the foresight to lay out foundational issues with which the court is still wrestling. Herein, I focus on the Federal Circuit's choice to apply regional circuit law to non-patent issues in patent cases.

*p. 7*
Over the nearly four decades now of the Federal Circuit's existence, there have been several non-patent areas that tend to crop up in cases involving patent law. That is, there are many other areas of law that tend to recur when there are patent issues. In addition to procedural issues, these recurring areas tend to relate broadly to innovation and competition. Prominent among these are three areas that Dreyfuss pointed out in her earliest work: preemption, antitrust, and copyright.

*p. 7*
Preemption of state law by federal patent law gets at the heart of innovation and competition by ensuring that states cannot give protection that, as the Supreme Court puts it, 'clashes with the objectives of federal patent laws,' such as a patent term extension. 49 It is therefore unsurprising that when a plaintiff brings a patent infringement claim, the plaintiff might add on a state law claim that, if successful, would grant similar relief, or that the defendant might counterclaim on the basis of state law to shield itself from liability. Indeed, preemption claims often come up in patent cases. 50 Early in its existence, the Federal Circuit applied its general rule to preemption claims, that it would apply the law of the regional circuit court to this non-patent issue. 51 Yet in 1999, the Federal Circuit took a step toward absorbing Dreyfuss's fundamental claim, that some of the non-patent aspects of a patent case can implicate fundamental aspects of patent law and applying regional circuit law could thus be detrimental. In 1999, the Federal Circuit ruled that certain matters like preemption that it had previously considered non-patent matters-to which it would apply regional circuit law-were truly patent matters-to which it would need to make and apply its own law. 52 It reasoned that '[i]n order to fulfill our obligation of promoting uniformity in the field of patent law, it is … important to apply our construction of patent law to the questions whether and to what extent patent law preempts or conflicts with other causes of action.' 53 The court concluded that this was good policy consistent with the reasons for creating the Federal Circuit in the first place: 54

*p. 8*
If we simply follow regional circuit law in deciding questions involving the interaction between patent law principles and other legal remedies, other courts will not have the benefit of our analysis of the substance and scope of patent law in such cases. Such abdication, we think, would in the end disserve the interest in attaining coherence and consistency in the law relating to patents.

*p. 8*
The Federal Circuit made a similar move in 1998 in the context of antitrust claims. Antitrust claims frequently come up in patent cases because a patent grant can impede competition in ways that extend beyond the scope of a valid The Federal Circuit's reach as a specialized court beyond patent law had jurisdiction over Oracle's appeals of the district court's determination that the API's so-called 'declaring code'-the names of each operation (or method) contained in the API and the methods' organization-was not copyrightable and that Google's copying was fair use. 62 The Federal Circuit stated it was applying the law of the regional circuit, here the Ninth Circuit, to resolve these copyright questions. 63 The court then proceeded to reverse both district court findings, concluding that the API declaring code is copyrightable and that Google's copying did not constitute fair use. 64 (Ultimately, the Supreme Court reversed the Federal Circuit, finding fair use but expressing no view on copyrightability. 65 ) With regard to each legal issue, there was no Ninth Circuit case law squarely on point. The Federal Circuit claimed to be applying the closest Ninth Circuit analogues, which seemed to disfavor copyrightability and favor fair use, yet it reasoned its way to the opposite outcomes in what might best be described as legal goulash. One speculates that this is precisely what Oracle wanted. Whether Oracle inserted its patent claims strategically to confer exclusive appellate jurisdiction in the Federal Circuit or this was a mere happy coincidence that got it to the Federal Circuit on its copyright appeal, it likely hoped that a court frequently perceived as being pro-patentee would favor copyright owners as well. Regardless of the Federal Circuit's outcome, a much cleaner, more constructive, and more honest approach would have had the court crafting its own law-by thinking through the legal and policy issues, including by looking to similarities and differences with patent law and reflecting on the overlaps in protection of patent and copyright in this context. Questions about the scope of copyright law-be they about copyrightability or fair use-remain distinct from questions about patent scope. Yet both copyright and patent laws are fundamentally grounded in promoting innovation and creation. 66 And from that vantage point, the Federal Circuit's own considered views would be enormously helpful.

*p. 10*
The Google case is not an isolated one and might indeed be a harbinger of important software copyright cases that will head to the Federal Circuit because of a coinciding patent infringement claim. Indeed, a critical follow-up to Google about the copyrightability of statistical analysis software is currently 62 Id. at 1348; Oracle Am., Inc. v. Google Inc., 886 F.3d 1179, 1189-90 (Fed. Cir. 2018) pending before the Federal Circuit because the case also involves patent infringement. 67 Another overlap between patent and copyright laws where the Federal Circuit may see increasing activity concerns design, such as in the fashion industry. Design patent cases head to the Federal Circuit on appeal just as utility patent cases do. 68 Recently, the Supreme Court expanded the copyrightability of design by construing narrowly the useful article doctrine that limits the availability of copyright protection. 69 It has become more likely that design can be the subject matter of utility and design patents as well as copyright. 70 As the Federal Circuit begins to review such cases, it would be similarly helpful for the court to bring its own expertise in patent law to bear on the requisite copyright issues, including the innovation-and competition-inflected policy concerns of overlapping forms of protection for design.

## CONCLUSION

*p. 11*
In her seminal work studying the Federal Circuit as a specialized court, Dreyfuss foresaw how the court could be structured to helpfully rule on competition and innovation questions bound up in or connected to patent law, even if they are not directly about patent law. She has rightfully sounded this note for years. Now with increasing numbers of copyright issues on its horizon, the Federal Circuit ought to draw on Dreyfuss' insights to develop and apply its own law for issues that are not directly about patent law but implicate issues of innovation and competition. Braun Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 819 (Fed. Cir. 1992).

*p. 11*
69 Star Athletica, LLC v. Varsity Brands, Inc., 137 S. Ct. 1002 (2017).

## Footnotes

> Rochelle Cooper Dreyfuss, The Federal Circuit: A Case Study in Specialized Courts, 64 1, 6 (1989).

> U.S.C. § 1295(a)(1). 10 Id. § 1295(a)(4)(A).

> Atari, 747 F.2d at 1439-40.

> Rochelle Cooper Dreyfuss, The Federal Circuit: A Continuing Experiment inSpecialization, 54 769 (2004).

> Rochelle Cooper Dreyfuss, Abolishing Exclusive Jurisdiction in the Federal Circuit: A Response to Judge Wood, 13 327 (2014).

> 11Dreyfuss, supra note 2, at 7. 12 Id.13Id. 14 28 U.S.C. § 1295(a).15Atari, Inc. v. JS & A Grp., 747 F.2d 1422, 1429-38 (Fed. Cir. 1984) (en banc);