The "essential relationship" spectrum: a framework for addressing choice of procedural law in the Federal Circuit.

AuthorMcEldowney, Sean M.

Because of the Federal Circuit's unique jurisdictional grant, the court faces a unique choice-of-law problem whenever a procedural issue is appealed in a patent suit. Unfortunately, rather than announcing and following a consistent doctrine for choice-of-law questions, the Federal Circuit has developed a menu of phraseology and policy concerns, selecting and then applying a unique combination of appetizer and entree each time it faces a choice-of-procedural-law question.

What is missing is a consistent conceptual framework. This Comment proposes such a framework, in the form of a conceptual spectrum, along which each choice-of-procedural-law question should be placed. Procedural questions bearing no relation to substantive patent doctrines (by which I mean, primarily, procedural questions that bear no relation to patent validity or infringement doctrines) are at one end of the spectrum, and those bearing a close and "essential" relationship are at the opposite end.

When considering questions in light of this framework, three principles should guide the Federal Circuit. First, each precedential point on the spectrum should be a bright and immovable point, so that each decision is construed to encompass all similar procedural questions. Second, each choice-of-procedural-law decision should be interpreted not only for its holding on a particular type of procedural question, but also for its holding on the degree of relationship between the procedural question and substantive patent law; in other words, the relevant unit of measure on the spectrum is the closeness of the relationship between a procedural question and substantive patent law. Third, the "essential relationship" point on the spectrum should generally require deference to regional circuit law--the Federal Circuit should only forge unique procedural laws when deference to regional circuit law on a particular procedural question would significantly undermine predictable application of the Federal Circuit's substantive patent doctrines.


Imagine you are outside counsel for a company, and are asked about the joint defense privilege (1) for a potential patent infringement suit. Your client and one of its competitors recently received notice from a third company, a patent holder, alleging that both your client's and its competitor's products infringe one of the patent holder's patents. To explore the strength of the patent holder's potential infringement suit, your client wants to exchange information with its competitor, but is concerned that doing so might waive privilege for the information they share. You know that in most regional circuits, the joint defense privilege would protect their shared information so long as your client and its competitor have a reasonable expectation of a lawsuit as well as a common legal interest. (2) However, because the potential suit would be a patent infringement suit, you also know that any appeals from the suit would be heard by the U.S. Court of Appeals for the Federal Circuit--which has never before addressed the joint defense privilege--rather than one of the federal regional circuit courts of appeals. (3)

Consequently, your advice to your client turns on the Federal Circuit's choice-of-law doctrine. Under this doctrine--stated generally--the Federal Circuit defers to regional circuit law for procedural questions that are not sufficiently "unique" or "related" (4) to patent law, or that do not "bear[] an essential relationship to" (5) patent law. So you can explain to your client that if the Federal Circuit chooses to defer to regional circuit law on this question, then the usual joint defense rule will apply. However, you must add a significant and unsatisfying caveat: the Federal Circuit might not defer to regional circuit law (perhaps on the theory that finding a reasonable apprehension of litigation turns on the strength of the patent holder's patent rights, and is thereby sufficiently related to patent law). In this case, since the Federal Circuit has never before addressed the joint defense privilege, your guess as to the Federal Circuit's likely decision would be no more than a guess. And to further complicate matters, the district court hearing the infringement suit would have to make the same guess as to choice of procedural law. Thus, despite the potential benefits of sharing information with its competitor, your client proceeds under significant uncertainty and at substantial risk. This is precisely the problem that patent practitioners and district court judges face when considering procedural questions in patent suits.

The problem arises as a result of the Federal Circuit's unique nationwide jurisdictional grant, which gives the court exclusive jurisdiction over appeals from suits "arising under" patent law. (6) Because the Federal Circuit has jurisdiction to hear the entire case, rather than simply patent law questions, the court faces the problem of determining how it should judge nonpatent issues arising in such appeals. At one extreme, the court could decide to create and apply its own law on all questions, patent and nonpatent. At the other extreme, the court could adopt a rule of complete deference to regional circuit law for all nonpatent issues. Recognizing that the former extreme might introduce unnecessary conflict in nonpatent law, (7) and that the latter extreme might be at odds with the Federal Circuit's mandate to unify patent law, the court has generally opted for a middle-ground approach-deferring to regional circuit law unless the issue is "unique," "related," or "bears an essential relationship" to patent law. However, in applying its general rule of deference, the court has not only been inconsistent, but has reached too far on many occasions, causing unnecessary confusion and conflict in procedural law. (8)

This Comment analyzes the Federal Circuit's choice-of-law problem with respect to procedural questions arising in patent suits. Part I frames the problem, explaining the origin of the Federal Circuit, its unique jurisdictional grant, and the implications of the choice-of-law problem. Part II discusses the policies and concerns that should guide the Federal Circuit in choosing an appropriate choice-of-law doctrine for procedural questions. Part III explains the Federal Circuit's various formulations of its choice-of-law standard, and highlights some problems with the court's approach. Based on the concerns raised in Parts II and III, Part IV proposes changes to the court's approach, suggesting a workable framework within which each choice-of-law decision would enhance the predictability of future choice-of-law questions, rather than (as seems to be the current trend) contribute to the existing confusion.


    To understand the choice-of-procedural-law problem facing the Federal Circuit, we begin with an explanation of the Federal Circuit's jurisdictional grant and how a patent progresses through the administrative and judicial systems.

    1. The Federal Circuit

      The Federal Circuit was created as the thirteenth federal appellate court by the Federal Courts Improvement Act of 1982 (FCIA). (9) Unlike other federal circuit courts, whose jurisdictions are defined geographically, the Federal Circuit is vested with nationwide jurisdiction over certain subject matters. Most important for the purposes of this Comment, the Federal Circuit is vested with jurisdiction over appeals from federal district courts for suits arising under patent law. (10)

      Although the focus of this Comment is on the Federal Circuit's role in patent suits, it is important to note that the court's jurisdictional grant includes many other areas of law, such as appeals from the Court of International Trade. (11)

    2. Patent Litigation

      The life of a patent begins in the United States Patent and Trademark Office (PTO) with patent prosecution--the process by which an inventor applies for a patent and works with the PTO to obtain an issued patent. Although an applicant can appeal an adverse decision by the PTO to a federal court, this sort of appeal does not raise the choice-of-procedural-law questions that arise in patent infringement suits because the Federal Circuit has exclusive jurisdiction over all issues on appeal. (12)

      Once issued, a patent can become the subject of litigation in various ways; most commonly, the patentee brings an infringement suit against a party she believes has made, sold, or used the patented device or method without the patentee's consent. (13) Other types of suits that are substantively similar to patent infringement suits can also bring a patent to the center of litigation (e.g., a declaratory judgment suit). However, in addition to these suits, which lie at the heart of substantive patent law, patents can become the subject of litigation in myriad other ways that do not implicate substantive patent law to the same extent. For instance, patents are often central to trade dress infringement, antitrust, and licensing dispute suits. (14)

      Prior to 1982, regardless of the subject matter of a lawsuit, the geographically appropriate regional circuit heard the appeal and had exclusive jurisdiction to rule on all questions raised in the case--both patent and nonpatent. However, because appeals from suits "arising under" patent law are now heard by the Federal Circuit, there are two questions that must be addressed in any suit that arguably arises under patent law. The first question asks which cases should be appealed to the Federal Circuit rather than the regional circuit court. Although an evolving doctrine, this question has been addressed in a variety of circumstances and extensively debated among scholars. (15)

      Once a court decides that a particular case should be appealed to the Federal Circuit, the second question, a choice-of-law question, arises: whose law should the Federal Circuit apply to questions outside the...

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