Tuesday, August 20, 2013

Gugliuzza: How far will the Federal Circuit go?

Does the Federal Circuit really ignore patent policy, as many of the court's judges have claimed?  In The Federal Circuit as a Federal Court, 54 Wm. & Mary L. Rev. 1791 (2013), Paul R. Gugliuzza describes the Federal Circuit's tendency for self-aggrandizement in its relationships with state courts, the PTO, district courts, and regional circuits.  In each of these relationships, Gugliuzza argues, the Federal Circuit has consolidated power by the citing objectives of uniformity and expert adjudication in patent law.

According to Gugliuzza, the Federal Circuit has broadly interpreted Supreme Court decisions regarding federal jurisdiction over state-law claims, which has increasingly allowed the Federal Circuit to act like a state court.  Although the Supreme Court has ruled that the Federal Circuit's exclusive jurisdiction over patent claims should be interpreted consistently with federal jurisdiction rules, the Federal Circuit has instead exercised jurisdiction over state claims that only peripherally address patent issues.  For example, the Federal Circuit has upheld federal jurisdiction on state malpractice claims that involve a "case-within-a-case" determination of whether the original patent infringement claim would have been successful in the absence of legal malpractice.  As Gugliuzza notes, however, the Supreme Court has largely corrected this trajectory of Federal Circuit appropriation of state issues in its recent decision in Gunn v. Minton, 133 S. Ct. 1059 (2013).

Gugliuzza next argues that in its relationship with the PTO, the Federal Circuit has similarly diminished the PTO's authority in favor of itself.  The Federal Circuit, for example, has minimized the deference given to PTO fact-finding, an approach that contradicts traditional doctrines of administrative review.  Additionally, the Federal Circuit has decided new issues on appeal that the PTO had not originally considered in its proceedings.  Again, this trend conflicts with Supreme Court precedent that courts may only review administrative actions on the issues addressed by the agency.  As Gugliuzza points out, the Federal Circuit's method of prescribing the process of patent examination ex post injects confusion into an already muddied procedure.

The Federal Circuit has also expanded its power by acting as a fact finder in patent litigation, an identity that supplants the district courts' long-established role.  The Federal Circuit's appellate review standards boost its own power by allowing the court to review decisions normally left to the district judges' discretion.  For example, the Federal Circuit has framed claim construction as a question of law even though the Supreme Court has described claim construction as a "mongrel" issue of both law and fact.  Rather than give deference to the trial judges' factual findings, the Federal Circuit reviews claim construction de novo.  According to Gugliuzza, this displacement of district courts results in patent-apathetic trial judges, inefficiency, and unpredictability on appeal.  The Federal Circuit itself, however, may reverse course rather than wait for the Supreme Court to reverse the de novo standard of review.  It is scheduled to hear arguments as an en banc court later this year in Lighting Ballast Control LLC v. Philips Electronics N.A. Corp., where it will consider whether to give deference to any aspect of a district court's claim construction.

Finally, Gugliuzza argues that the Federal Circuit has applied its choice-of-law rules in such a way that it is not clear when the law of the regional circuits should apply.  Gugliuzza criticizes the Federal Circuit's lack of uniformity in applying its or other regional courts' precedent to specific issues.  Rather, Gugliuzza advocates a more predictable approach whereby the Federal Circuit would apply its law to all cases arising under patent law.  Gugliuzza indicates the Federal Circuit may be reluctant to adopt this solution, however, as the court's current approach allows it to select the law that supports its preferred outcome.

According to Gugliuzza, the Federal Circuit's behavior is not just a naked power grab.  Rather, it reflects a pursuit of the policy goals for which Congress created the court over thirty years ago: promoting uniformity and providing expert patent decisions.  Gugliuzza suggests that a Federal Circuit with a more limited specialization might be less aggressive in excluding other institutions from shaping patent law.  Written Description posted a summary of Gugliuzza's article, Rethinking Federal Circuit Jurisdiction, addressing his recommendations and the resulting debate regarding his suggestions that the Federal Circuit have more limited specialization.

Gugliuzza brings attention to significant issues in appellate review of patent cases.  By generating a discussion regarding the methods of review by the Federal Circuit, Gugliuzza has taken the first step toward reforming the Federal Circuit's practices in favor of more fair and predictable outcomes.  The pertinence of Gugliuzza's concerns is emphasized by decisions like Gunn and Lighting Ballast.  Congress has also shown interest in addressing the issues raised by the article.  In 2011, Congress passed the patent pilot program, allowing select district court judges to enhance their proficiency in patent cases by increasing their patent caseload.  This program offers a counterweight to the Federal Circuit's appellate monopoly on patent cases.  These reforms, however, will required the same continued and thorough attention to the Federal Circuit's practices as Gugliuzza provides in this article.

Drafted by Andria Minyard (aminyard@smu.edu), research assistant to Professor Sarah Tran (Southern Methodist University). While Professor Tran is on leave, Professor David Taylor (Southern Methodist University) is supervising her research assistants. Andria is a 2015 Juris Doctor candidate at SMU Dedman School of Law. She received her B.S. in Biology from the University of Texas, Austin. Prior to law school, Andria worked as a Clinical Research Technician at RCTS Labs, Inc.

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