Intellectual Property Antitrust Issues in Litigation

Litigation involving the intersection of intellectual property and
antitrust law raises complex jurisdictional, procedural, and choice-of-law
issues because appeals of most lawsuits involving patent law go to the
Court of Appeals for the Federal Circuit, whereas appeals from antitrust
cases go to the regional federal courts of appeal. Proceedings involving
patents and antitrust may also be heard at the International Trade
Commission (ITC) and the Federal Trade Commission (FTC).
Part A of this chapter reviews the history and scope of Federal
Circuit jurisdiction and then explores the choice-of-law questions that the
Federal Circuit faces when adjudicating nonpatent matters, such as
antitrust claims. It also reviews the choice-of-law issues that arise when
other courts of appeal and district courts adjudicate patent matters that
may involve antitrust issues. Part B of this chapter discusses procedural
issues that arise in intellectual property/antitrust litigation, including
when antitrust counterclaims are compulsory, and the possibility of
severing intellectual property and antitrust issues during litigation.
Finally, Part C of this chapter reviews available remedies in intellectual
property antitrust cases, including damages in private actions, damages
for prevailing patent infringement defendants, and equitable relief.
A. The Federal Circuit—Creation and Purpose
The Federal Circuit was established by the Federal Courts
Improvement Act of 19821 to create uniformity in patent law by, among
other things, “centralizing appeals in patent cases.”2 The creation of an
appellate forum with nationwide jurisdiction over patent cases was
expected to “increase doctrinal stability in the field of patent law.”3
1. Pub. L. No. 97-164, 96 Stat. 25 (1982).
2. See S. Rep. No. 97-275, at 2 (1982), reprinted in 1982 U.S.C.C.A.N. 11,
3. Id. at 5, 1982 U.S.C.C.A.N. at 15. See generally, Ronald S. Katz & Adam
J. Safer, Why Is One Patent Court Deciding Antitrust Law for the Whole
Country, ALI-ABA Course of Study Materials (Oct. 2000).
316 Intellectual Property and Antitrust Handbook
Congress intended the Federal Circuit’s jurisdiction to be confined to
the subject matter set forth in the Federal Courts Improvement Act.4
Aware of the potential for the new court to address issues beyond this
limited scope, Congress cautioned that “it is not the committee’s
judgment that broader subject matter jurisdiction is intended for this
court.”5 Of particular concern were the jurisdictional considerations in
patent-antitrust cases, where parties were likely to engage in forum
shopping by adding or dropping patent claims.6 Notwithstanding these
concerns, Congress left it to the Federal Circuit to interpret its own
jurisdictional mandate in accordance with the goals of the act and the
concerns expressed in the act’s legislative history.7 Consequently, the
Federal Circuit has taken responsibility for deciding questions of its own
jurisdiction on a case-by-case basis.
4. In addition to patent appeals, the Federal Circuit also exercises exclusive
jurisdiction over appeals from several types of other judicial and
administrative agency proceedings. 28. U.S.C. § 1295(a); see also Paul R.
Michel, A Review Of Recent Decisions Of The United States Court Of
Appeals For The Federal Circuit: Foreword: Assuring Consistency And
Uniformity Of Precedent And Legal Doctrine In The Areas Of Subject
Matter Jurisdiction Entrusted Exclusively To The U.S. Court Of Appeals
For The Federal Circuit: A View From The Top, 58 AM. U.L. REV. 699,
699-701 (2009) (article by then-Chief Judge of the Federal Circuit on the
court’s jurisdiction and operation).
5. S. Rep. No. 97-275, at 4 (1982), reprinted in 1982 U.S.C.C.A.N. 11, 14.
6. Id. at 19-20, 1982 U.S.C.C.A.N. 29-30 (warning against potential
manipulation of appellate jurisdiction by litigants whose claims are
predominantly antitrust-related).
7. Id.; see Atari, Inc. v. JS & A Grp., 747 F.2d 1422, 1428 (Fed. Cir. 1984)
(en banc) (noting that Congress expected the Federal Circuit to
“formulate appropriate standards for determining jurisdiction in cases
involving patent and non-patent claims in accordance with the objectives
of the Act”) (internal quotations omitted), overruled on other grounds by
Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059 (Fed. Cir.
1998). As the Atari court noted, Congress anticipated the need for the
Federal Circuit to determine the precise contours of its jurisdictional
mandate, stating: “[s]hould questions legitimately arise respecting
ancillary and pendent claims and for the direction of appeals in particular
cases, the Committee expects the courts to establish, as they have in
similar situations, jurisdictional guidelines respecting such cases.” Id.
(quoting H.R. REP. NO. 97-312, at 41 (1981)).
Issues in Litigation Involving Intellectual Property 317
The Federal Circuit applies its own precedent and that of its
predecessor courts to patent law claims.8 The Federal Circuit applies its
own circuit law to determine whether its exclusive appellate jurisdiction
is appropriate in a given case.9 When evaluating an antitrust claim, the
Federal Circuit applies its own law to those elements of the claim that are
unique to patent law and regional circuit law to those elements of the
claim that are not unique to patent law, such as relevant market and
market power.10
1. Jurisdiction: The Federal Circuit, Regional Circuits, and the
International Trade Commission
The Federal Circuit’s appellate jurisdiction is exclusive for cases in
which jurisdiction in the district court is based “in whole or in part” on
28 U.S.C. § 1338(a), the statute that gives district courts original
jurisdiction over claims “arising under” patent law.11 In all other cases,
8. See South Corp. v. United States, 690 F.2d 1368, 1369 (Fed. Cir. 1982)
(holding in the court’s first published decision that “the holdings of our
predecessor courts, the United States Court of Claims and the United
States Court of Customs and Patent Appeals, announced by those courts
before the close of business September 30, 1982, shall be binding as
precedent in this court”).
9. See Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1146 (Fed.
Cir. 2011) (“Whether this court has jurisdiction over an appeal taken from
a district court judgment is a question of Federal Circuit law, not that of
the regional circuit from which the case arose.”) (internal quotations
omitted); see also Woodard v. Sage Prods., 818 F.2d 841, 844 (Fed. Cir.
1987) (en banc) (Federal Circuit may look to regional circuits for
guidance on jurisdictional issues but that its “decision to follow another
circuit’s interpretation of a common jurisdictional statute results from the
persuasiveness of its analysis, not any binding effect.”).
10. IGT v. Alliance Gaming Corp., 702 F.3d 1338, 1343 (Fed. Cir. 2012)
(citing Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059,
1068 (Fed. Cir. 1998)).
11. 28 U.S.C. § 1295(a). Federal district courts exercise original jurisdiction
over all civil actions “arising under” the federal patent, copyright, and
trademark statutes. 28 U.S.C. § 1338(a). Claims based on an intellectual
property license or contract do not “arise under” such statutes for
purposes of federal subject matter jurisdiction. See Jim Arnold Corp. v.
Hydrotech Sys., 109 F.3d 1567, 1572 (Fed. Cir. 1997) (“well settled” that
causes of action based on contract rights or the common law of torts do
not arise under patent law); Schwarzkopf Dev. Corp. v. Ti-Coating, Inc.,
800 F.2d 240, 244 (Fed. Cir. 1986) (claim based on failure to pay

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