In 1982, Congress created the Court of Appeals for the Federal Circuit (Fed. Cir.) The Federal Circuit was created through the merging of two specialized courts of limited subject matter but nationwide jurisdiction — the U.S. Court of Claims and the U.S. Court of Customs and Patent Appeals (C.C.P.A.). The Federal Circuit has exclusive jurisdiction of all appeals from final district court decisions in civil actions "arising under any Act of Congress relating to patents." The Federal Circuit was a bipartisan efforts to increase patent law uniformity. Congress created the Federal Circuit
|“||to bring about uniformity of decisions in certain critical areas of the law without the need for Supreme Court review to resolve conflicts between circuits. To this end, the Federal Circuit was given exclusive jurisdiction over appeals from all district courts in cases which arise under the patent laws. . . . A particular need was seen in the field of patents where instability in the law was having a detrimental effect on an important segment of our society, the industrial and business community.||”|
As Judge Newman observed, creation of the Federal Circuit was "a dramatic move for the purpose of adding stability to the patent law." Prior to creation of the Federal Circuit, in the most extreme cases, "different courts dealing with the same patent reached different conclusions." At the time, not all agreed that circuit splits required creation of the Federal Circuit. The Federal Circuit was to provide clearer and more consistent application of patent law, which in turn would increase the predictability of patents and, thus, their value as means to promote innovation.
Most commentators find that, as a general matter, the Federal Circuit strengthened patent rights significantly, upholding patent validity more frequently than in the anti-patent era of the 1930s to the 1970s.
Jurisdiction and choice of law issues
Two legal filters — jurisdiction and choice of law — affect the cases that the Federal Circuit decides and the law that the Federal Circuit applies in reaching its decisions. Jurisdiction is "the legal right by which judges exercise their authority. . . . It exists when [a] court has cognizance of class of cases involved, proper parties are present, and [the] point to be decided is within the powers of the court." Choice of law refers to the determination of what law should govern when a conflict in law arises. When the Federal Circuit evaluates what cases it will hear and what law it will apply, the value of patent law uniformity is explicitly and implicitly at issue.
"Determinations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system." The Federal Circuit's interpretations of its subject matter jurisdiction similarly have required such sensitive judgments.
"Arising under" jurisdiction
Title 28, Section 1295 of the U.S. Code establishes Federal Circuit jurisdiction. The Federal Circuit has exclusive jurisdiction over appeals from final decisions of district courts, if the district court jurisdiction was "based, in whole or in part, on section 1338." Section 1338(a) provides that "[t]he district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents. . . ."
The U.S. Supreme Court has addressed what constitutes "arising under" jurisdiction when the plaintiff does not allege a patent law claim, but the defendant files a compulsory patent counterclaim. The Federal Circuit had ruled such compulsory counterclaims were sufficient to establish the Federal Circuit's jurisdiction. The Supreme Court ruled they were not. The Court applied the "well-pleaded-complaint rule" as governing "arising under" jurisdiction for purposes of §1338. The Court held that, where a well-pleaded complaint does not assert any claim arising under federal patent law, the Federal Circuit cannot assert jurisdiction based solely upon a patent counterclaim.
"Substantial question of patent law"
In Christianson v. Colt, the Supreme Court held that the Federal Circuit also has jurisdiction over those cases in which "the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal patent law." The Federal Circuit itself has characterized Christianson as "set[ting] a lenient standard for jurisdiction under 28 U.S.C. §1338(a)." Federal Circuit jurisdiction mirrors the District Court patent jurisdiction, is not based on issues to be decided, but rather upon whether a federal patent law claim must necessarily be decided. For example, in Christianson there were clearly patent issues to be decided in connection with a defense to a counterclaim, but there were alternative defenses that were not patent-related, so that the outcome was not necessarily dependent on the resolution of any patent issue.
Choice of law
When the Federal Circuit decides cases that include one or more patent issues, it can apply its own law to those issues. For the other issues in its cases, the Federal Circuit can apply the law of the regional circuit from which the case came, or it can apply applicable state law, as appropriate. This sometimes presents choice of law questions as to whether a particular issue should be decided under Federal Circuit Law, regional circuit law, or state law.
- 28 U.S.C. §1295.
- Id. §1338(a).
- The United States Court of Appeals for the Federal Circuit — A History (1982-1990), at xi (1991).
- Id. at xii.
- See generally S. Rep. No. 97-275, at 5 (1981).
- See, e.g., Paul Janicke, "To Be or Not To Be: The Long Gestation of the U.S. Court of Appeals for the Federal Circuit (1887-1982)," 69 Antitrust L.J. 645, 646 n.5 (2002) and accompanying text.
- See generally American Bar Association Section of Antitrust Law, Report on the United States Court of Appeals for the Federal Circuit (Public Comment) 8-14 (full-text).
- Black's Law Dictionary 853 (6th ed. 1990).
- Id. at 241.
- Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809 n.2 (1988) (full-text) (discussing jurisdiction of Federal Circuit).
- 28 U.S.C. §1295(a)(1).
- Id. §1338(a).
- Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826 (2002) (full-text).
- Holmes Group, Inc. v. Vornado Air Circulation Sys., 13 Fed. Appx. 961 (2001); see also Aerojet-General Corp. v. Machine Tool Works, 895 F.2d 736, 741-42 (Fed. Cir. 1990) (full-text).
- Holmes, 535 U.S. at 829 (citing Christianson v. Colt, 486 U.S. 800 (1988)). The "well-pleaded complaint rule" provides that a federal district court's jurisdiction extends over "only those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law. . . ." Christianson, 486 U.S. at 808. The Supreme Court further held that "linguistic consistency" requires that § 1338(a) jurisdiction likewise extends only to those cases in which "patent law is a necessary element of [a] . . . well-pleaded claim[ ]." Id. at 808-09. The Supreme Court's invocation of the well-pleaded-complaint rule in Holmes implicitly raises additional issues. For example, the "well-pleaded complaint" rule typically applies to complaints as filed. Could Federal Circuit jurisdiction change depending upon the disposal of patent issues after filing but prior to appeal, such as through voluntary withdrawal, dismissal with prejudice, or severance followed by partial final judgments?
- Holmes, 535 U.S. at 833-34.
- Christianson, 486 U.S. at 809.
- U.S. Valves, Inc. v. Dray, 212 F.3d 1368, 1372 (Fed. Cir. 2000).
- As one commentator has aptly noted, a "fundamental choice of law problem faced by the Federal Circuit arises from its limited subject matter jurisdiction." Robert L. Harmon, Patents and the Federal Circuit §18.3, at 1086 (5th ed. 2001).