Acting like an administrative agency: the Federal Circuit en banc.

• Author: Vacca, Ryan
• Position: Evolving the Court of Appeals for the Federal Circuit and Its Patent Law Jurisprudence

1. INTRODUCTION II. THE FEDERAL CIRCUIT EN BANC A. Disproportionality of the Federal Circuit's En Banc Practice B. The Federal Circuit Acting Sua Sponte C. The Scope of the Questions D. Amici Curiae Briefing in the Federal Circuit III. ANALOGIZING TO ADMINISTRATIVE SUBSTANTIVE RULEMAKING IV. A NORMATIVE EVALUATION A. Separation of Powers B. Lack of Review C. Alternative Choices 1. Congress's Capability for Patent Policy 2. The Supreme Court's Capability for Patent Policy 3. The District Courts' Capability for Patent Policy 4. The PTO's Capability for Patent Policy 5. The Federal Circuit's Capability for Patent Policy V. CONCLUSION APPENDIX I. INTRODUCTION

   When Congress created the Federal Circuit in 1982, (1) it intended to create a court of appeals. (2) Little did it know that it also was creating a quasi-administrative agency that would engage in substantive rulemaking and set policy in a manner substantially similar to administrative agencies. (3) In this Article, I examine the Federal Circuit's practices when it orders a case to be heard en banc and illustrate how these practices cause the Federal Circuit to look like an administrative agency engaging in substantive rulemaking. The number and breadth of questions the Federal Circuit agrees to hear en banc and the means by which it hears them go beyond the limited role of a court to decide the case before it.4 Instead of exercising restraint and addressing only what it must, the Federal Circuit raises wide-ranging questions and makes broad pronouncements of law that set or change patent policy. (5)

   Congress traditionally has delegated policy setting to administrative agencies that must comply with the Administrative Procedure Act (APA), (6) particularly the notice and comment provisions. (7) Despite being an appellate court not subject to the notice and comment requirements, (8) the Federal Circuit appears to comply with these requirements when it orders cases to be heard en banc. (9)

   And although some commentators object to the en banc Federal Circuit acting like an administrative agency by engaging in substantive rulemaking and policy setting, I argue that the Federal Circuit is in the best position to do so. However, other governmental bodies can and should play a larger role in shaping patent policy. (10)

   Part II of this Article describes the Federal Circuit's en banc practices since its creation in 1982, focusing on how the Federal Circuit compares to the other federal appellate courts in terms of the frequency of en banc decisions, how the Federal Circuit orders cases to be heard en banc, the number and scope of the questions presented for en banc consideration, and the use of amici curiae in the briefing stages of the case. Part III examines the Federal Circuit's en banc practices in light of how administrative agencies engage in substantive rulemaking under the APA and suggests that the Federal Circuit's en banc practices mimic those of administrative agencies. Part IV then takes a normative look at the en banc Federal Circuit by analyzing objections to its en banc practices. In response, Part IV evaluates alternatives to the Federal Circuit for directing patent policy and evaluates whether these alternative bodies are better suited than the Federal Circuit sitting en banc.

2. THE FEDERAL CIRCUIT EN BANC

   In 1982, Congress created the Court of Appeals for the Federal Circuit11 to serve as the appellate body for cases "arising under any Act of Congress relating to patents" (12) and appeals stemming from decisions of the Patent and Trademark Office's (PTO) Board of Patent Appeals and Interferences "with respect to patent applications and interferences." (13) Proponents of the Federal Circuit's creation hoped that channeling patent cases to a single appellate body would result in a uniform patent law with increased certainty and predictability that would "foster technological growth and industrial innovation." (14)

   But despite its specialized subject matter and unique jurisdiction, the Federal Circuit is, at the end of the day, a federal appellate court like other regional circuit courts. Its purpose is to resolve disputes between parties by interpreting and applying the law. Likewise, the Federal Rules of Appellate Procedure and other federal legislation empower and restrict the Federal Circuit. (15)

   One such power appellate courts possess is the ability to hear cases en banc. (16) Although three-judge panels decide most cases before circuit courts, the full court of active service judges within the circuit and senior judges who served on the three-judge panel deciding the case may convene to hear and decide the case together. (17) Once decided, the en banc court's ruling becomes the decision and the earlier panel's decision is vacated. (18) However, en banc decisions make up only a small percentage of appellate decisions. (19) Nonetheless, en banc hearings and decisions are important as they are reserved for situations involving significant value. In particular, an en banc hearing "will not be ordered unless: (1) en banc consideration is necessary to secure or maintain uniformity of the court's decisions; or (2) the proceeding involves a question of exceptional importance." (20) As Judge Douglas Ginsburg has pointed out, the latter standard of "'exceptional importance' is in the eye of the beholder," and therefore it "expresses more of an attitude than a standard." (21)

   The Federal Circuit has, like all of the circuit courts, ordered cases to be heard before it en banc. The remainder of this section examines the Federal Circuit's en banc presence by examining the proportion of the Federal Circuit's docket that is heard en banc, how often the Federal Circuit orders en banc hearings sua sponte, the number and scope of the questions presented to the Federal Circuit for en banc consideration, and the use of amici curiae in the briefing stage of en banc review.

   1. Disproportionality of the Federal Circuit's En Banc Practice

      Since its creation in 1982, the Federal Circuit has ordered en banc hearings in forty-six patent cases. (22) The Federal Circuit's en banc cases represent 0.10% of the total number of cases terminated from 1982-2010. (23) When not counting the cases that had not been decided yet en banc during this period (24) or were not decided en banc at all, (25) the number of cases drops to forty, which represents 0.09% of the total cases. However, this total number of cases terminated is not limited to patent cases. The Federal Circuit also has jurisdiction to hear cases involving international trade, government contracts, trademarks, claims against the U.S. government, veterans' benefits, and others. (26) In fact, only about one-third of the Federal Circuit's docket is comprised of patent cases. From 2006 through 2010, patent cases comprised 28% to 42% of the Federal Circuit's docket, averaging 33%. (27) By reducing the total number of cases terminated proportional to the average number of patent cases constituting the Federal Circuit's docket the percentage of en banc cases represents 0.32% (counting forty-four cases) and 0.29% (if counting only forty cases) of the total cases.

      Looking only at the data from 2001-2009, the percentages for the Federal Circuit are 0.30% (counting all cases ordered to be heard en banc (14)) and 0.23% (counting only cases decided en banc (11)). (28) To put these percentages in perspective, from 2001-2009, the other U.S. Courts of Appeals averaged 0.10% of en banc cases, with a range of 0.01% to 0.23%. The specific breakdown of the other circuit courts is below. (29)

      Sorted By Circuit En Banc Court Cases D.C. Circuit 0.15% First Circuit 0.10% Second Circuit 0.01% Third Circuit 0.07% Fourth Circuit 0.09% Fifth Circuit 0.08% Sixth Circuit 0.13% Seventh Circuit 0.07% Eighth Circuit 0.23% Ninth Circuit 0.14% Tenth Circuit 0.19% Eleventh Circuit 0.07% Sorted by Percentage En Banc Court Cases Second Circuit 0.01% Eleventh Circuit 0.07% Seventh Circuit 0.07% Third Circuit 0.07% Fifth Circuit 0.08% Fourth Circuit 0.09% First Circuit 0.10% Sixth Circuit 0.13% Ninth Circuit 0.14% D.C. Circuit 0.15% Tenth Circuit 0.19% Eighth Circuit 0.23% Based on this comparison, the Federal Circuit appears to decide more cases en banc than does any other circuit. (30) one could argue that because the active judges on the Federal Circuit sit in only one location, (31) the court is in a better position to hear cases en banc than the regional circuits whose judges are spread over a larger geographic area. (32) Although the relative convenience of sitting en banc may explain some of the differences between the Federal Circuit and the regional circuits, it does not explain the difference between the Federal Circuit and the D.C. Circuit, which also sits in only one location. (33)

   2. The Federal Circuit Acting Sua Sponte

      Another interesting aspect of the Federal Circuit's en banc practice is the number of times the Federal Circuit has sua sponte ordered a case to be heard en banc. Of the forty-six cases the Federal Circuit ordered to be heard en banc, I have found documentation for thirty-nine of the cases indicating whether one or more of the parties petitioned for the en banc order or whether the Federal Circuit sua sponte ordered the en banc hearing. (34) Of these thirty-nine cases, the Federal Circuit has ordered en banc hearings sua sponte in twenty-two of them (56%). (35) Even assuming one or more of the parties petitioned for an en banc hearing in the remaining seven cases, the result is that the Federal Circuit sua sponte ordered 48% of the en banc cases, a surprisingly high number. As discussed infra, the significance of the Federal Circuit's sua sponte usage of en banc orders is important in understanding how the Federal Circuit establishes broad patent rules on its own initiative and acts more like a policymaker than an adjudicator. (36)

   3. The Scope of the Questions

      More striking and more important than the number of en banc...