Monday 23 December 2013

The Debate about the U.S. Court of Appeals for the Federal Circuit Continues

Donald Dunner, one of the most respected advocates before the U.S. Court of Appeals for the Federal Circuit and partner at Finnegan Henderson, recently addressed Chief Judge Diane Wood’s (7th Circuit) criticism of the Federal Circuit.  His comments were recently published by the Federal Circuit Bar Association, here.  Dunner challenges Chief Judge Wood's arguments and states:

First, the specialist/generalist alternatives that she posits are reminiscent of the pre-Federal Circuit dialogue and the Rifkind comments to which the Meador proposal was expressly directed. While the Federal Circuit reviews almost all the patent appeals from the district courts and several other tribunals, and its judges develop meaningful expertise in patent law, it is by no means a specialist court. As I earlier noted, only four of the current active Federal Circuit judges had pre-judicial patent backgrounds and that has been true since the inception of the Court in 1982. It is also likely to continue to be true since even the patent bar is comfortable with the notion of having a limit on patent-trained judges on the Court. And the inclusion of many non-patent areas of review within the Court’s jurisdiction further minimizes the prospect that its judges will develop tunnel vision and become Egyptian Priest-like, as Judge Rifkind feared, or that they will never explain what the rules are or why one side or the other prevailed, as Chief Judge Wood fears.

Second, Judge Wood’s repeated focus on the complexity of patent appeals and on the fact that those appeals are no more complex than the non-patent appeals handled regularly by judges in the regional circuit courts is a strawman. The Federal Circuit was not established because it was felt that a special court was needed to deal with complex legal issues. If that was anyone’s concern, it was not vocalized loudly, and indeed I personally do not recall hearing of it -- and I was heavily involved in the events leading to the Court’s formation. On the contrary, the essential arguments in favor of the Court had to do with the widespread attitudinal differences between the circuit courts of appeals’ approach to patent law and the attendant lack of uniformity and predictability in their decision-making, leading to rampant forum shopping and the negative impact that had on corporate R&D decisions.

Third, Judge Wood’s concern about the need for percolation is understandable but not a reason to eliminate the Federal Circuit’s exclusive jurisdiction over patent appeals. For the fact is that the current Federal Circuit model generates a significant amount of percolation, not only in the not infrequent dissents from panel decisions but from the meaningful number of en banc decisions which generate their own meaningful number of dissents. These dissents, coupled with regularly filed amicus briefs and the not infrequent requests by the Supreme Court to the Solicitor General to provide recommendations as to whether Federal Circuit decisions should be reviewed by the Supreme Court, provide the diversity of views which Judge Wood feels is so important, without forfeiting the uniformity and predictability which was essentially non-existent before the establishment of the Federal Circuit.

Fourth, Chief Judge Wood’s observation that the lines between patent law and other areas of IP law are blurring and that there’s no reason why patent law should be singled out for special treatment ignores the fact that these other areas of IP  law were not faced with the problem of huge attitudinal differences between the regional circuits that led to massive forum shopping and a lack of predictability and uniformity in decision-making. As to the quality of Federal Circuit decision-making, which has been called into question by Judge Wood, it compares favorably to the quality of decision-making by the regional appellate courts. And that includes the two subject areas on which Judge Wood focuses: claim construction and obviousness. The Federal Circuit’s decision to make claim construction the province of the bench rather than the jury was affirmed by the Supreme Court in Markman. The Federal Circuit’s decision to adopt no deference appellate review of district court claim construction was adopted en banc in Cybor but has been subjected to an intra-court percolation process leading to the recently heard but yet undecided Lighting Ballast en banc review, providing exactly the percolation process with which Judge Wood is so concerned. As to obviousness, one can debate whether the Federal Circuit’s TSM (Teaching, Suggestion, Motivation) test was responsible for what Judge Wood characterizes as a “low” standard of obviousness resulting in “the thickets of patent rights on marginal improvements”, but I would suggest that the amorphous, ill-defined Supreme Court KSR framework is hardly conducive to generating a uniform and predictable body of law, the raison d’etre for the formation of the Federal Circuit. And the frequent Supreme Court review of Federal Circuit decisions has been the subject of multiple and varying explanations by Supreme Court experts, most of which have not focused on the lack of quality of Federal Circuit decisionmaking.

Which leads me to Judge Wood’s specific proposal for dealing with her concerns. Simply stated, it is in my view unworkable. Before the establishment of the Federal Circuit, the regional appellate courts were all over the lot in their attitudes toward patents, and because litigants had significant choices as between district courts in one or another circuit, subject only to venue and jurisdictional constraints, there not only was extensive forum shopping but little uniformity or predictability in litigation outcomes. Yet that is exactly what would happen under Chief Judge Wood’s proposed regime. While she provides a choice to litigants as between the Federal Circuit or the regional circuit in which their claim was first filed, there is little doubt that that choice would be made based on the same considerations applicable to the pre-Federal Circuit regime, namely which court is most favorable to the particular interests of the litigants. And the problem is compounded by the fact that at the district court level, before the choice of the appellate court is made, the district court would not know whose appellate jurisprudence to follow, not only on substantive but on procedural issues. As demonstrated by the pre-Federal Circuit experience, differences in jurisprudential approaches were often outcome-determinative. Nor is the problem alleviated by the JPML option which she provides for multiple pending appeals pertaining to a single patent in different circuits. For the dysfunctional system that predated the Federal Circuit was not keyed to multiple pending appeals pertaining to a single patent in different circuits. On the contrary, it was keyed to the fact that a patentee or accused infringer of a single patent had meaningful options to forum shop to select a favorable jurisdiction, an option which would also be available under Chief Judge Wood’s proposal. In short, not only are the problems Chief Judge Wood identifies not meaningful but her proposal to take us back to what she calls the “bad old days” is unworkable... It is accordingly my view and that of many of my colleagues in the bar that the appellate experiment that began 31 years ago has been a hugely successful one, for the reasons I have spelled out, and that it is not in need of a major fix of the type contemplated by Chief Judge Wood...

I find Mr. Dunner’s arguments persuasive.  What do you think?  Here is additional coverage of Mr. Dunner’s comments by Corporate Counsel, as well as additional discussion by Mr. Dunner. 


Anonymous said...

Mr. Dunner appropriately "schooled" J. Woods. I am glad he did. I was shocked by the lack of understanding of the history of patent litigation prior to formation of the CAFC displayed by J. Wood.

Peter said...

This is a point by point rebuttal of Judge Wood's observations. As someone who is counterattacking it is a good piece of work. But it is not an objective assessment of what she said. There is no real acknowledgment of the problems she addressed and the questions she raised. Is there no one in the US who has the sense to see the new perspectives she is bringing to the problems of have specialist courts? These are complex subtle issues for which clear answers are difficult. She has had the courage to raise them and discuss them. I see no one being appreciative of her efforts or being prepared to address them in a constructive way.

Anonymous said...

Lisa Ouellette argues (at that there are advantages in having heterogeneous approaches to patent laws, allowing us to gain perspectives on which approach is best for maximum innovation. That would argue against the harmonisation the Federal Circuit wishes to impose