Judicial Wisdom or Patent Envy? the Eleventh, Seventh and Federal Circuits' Patent Jurisdictional Battle

• Publication year: 2016

Judicial Wisdom or Patent Envy? The Eleventh, Seventh and Federal Circuits' Patent Jurisdictional Battle

Xuan-Thao Nguyen

Indiana University Robert H. McKinney School of Law

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JUDICIAL WISDOM OR PATENT ENVY? THE ELEVENTH, SEVENTH AND FEDERAL CIRCUITS' PATENT JURISDICTIONAL BATTLE

Xuan-Thao Nguyen^*

Abstract

This article observes a startling new appellate jurisdictional battle waged by regional circuit courts to chip away the Federal Circuit's exclusive jurisdiction in patent cases. The Eleventh circuit took an unprecedented step by engaging in patent claim construction and infringement under literal infringement analysis and the doctrine of equivalents analysis. In a case of first impression, the Eleventh Circuit asserted that it legitimately has appellate jurisdiction to decide cases involving substantive patent law. Instead of grabbing jurisdiction, the seventh Circuit, through its Chief Judge, grabbed public attention by advocating for the abolishment of the Federal Circuit's exclusive jurisdiction over patent cases. The Chief Judge announced that the seventh Circuit is able and ready to hear patent cases. Why do regional circuit courts now want to assert jurisdiction over patent cases? What implications can be drawn from the jurisdictional battle? Are their assertions of jurisdiction over patent cases legitimate? This article addresses these urgent questions.

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Table of Contents

Introduction.............................................................................305

I. The Eleventh Circuit Grabbing Jurisdiction..........................................................................310

II. Critique of the Eleventh Circuit's Patent Decision...................................................................315

A. Incompetence in and Ignorance of Patent Law.......................................................................315
B. Openly Contradicting Other Sister Circuits' Precedents........................................................321
C. Disregard for the Supreme Court's Teaching...........................................................................329
D. Violating a Congressional Act.........................................331

III. New Response from the Seventh Circuit..................................................................................332

IV. Possible Explanations for Circuit Courts' Responses..............................................................334

A. Judicial Wisdom and Patent Envy: Patents Are Common Today............................................335
B. Judicial Wisdom and Patent Envy: Lack of Multiple Perspectives..........................................339

V. Toward a More Legitimate Ground: Federalism Principles........................................................340

A. Federalism Principles .....................................................340
B. Patent Issues are Non-substantial and Hypothetical..............................................................343
C. Patent Counterclaims, Not Compulsory Counterclaims..................................................................349

Conclusion................................................................................354

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Introduction

The Federal Circuit has enjoyed its rise in prominence, as patent cases have attracted media attention across the nation and the world.¹ A little more than three decades since its creation by a congressional act² to inject uniformity into the patent law system³ and to discourage forum shopping,⁴ the Federal Circuit saw its patent docket rise from 121 cases in 1983 to 448 cases in 2013.⁵ Companies aggressively procure patents for every imaginable invention.⁶ Patent applications leaped fivefold from 117,987 in 1982 to 609,052 in 2013.⁷ The latest overhaul of patent law, the Leahy-Smith America Invents Act⁸ for

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innovation and job creation purposes, ironically obtained the nickname of "Patent Lawyers' Full Employment Act."⁹ That means as the numbers of patent applications and patent grants increase, so follow the filings for patent litigation in district courts across the nation and subsequent appeals to the Federal Circuit.¹⁰ All indications demonstrate a sure bet that the Federal Circuit will continue to be "the Almighty"¹¹ and "the envy of the system."¹²

Perhaps, the Federal Circuit desires more than enthroning on the apex of the system, though. The Federal Circuit has previously overreached in areas that it should not and must not.¹³ For example, the Federal Circuit's overreach into areas of state law, from sales of intellectual property assets to secured transactions with patents as collateral, has drawn much scrutiny and criticism from scholars and judges.¹⁴ The Federal Circuit's expansion has prompted a new patent jurisdictional battle emboldened by the Supreme Court's decision in Gunn v. Minton¹⁵ —finding no Federal Circuit jurisdiction over state

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claims of legal malpractice in patent cases—and being waged by the Eleventh and Seventh Circuits.¹⁶

The Eleventh Circuit could not sit idly by watching the Federal Circuit hear all cases related to patents.¹⁷ The Eleventh Circuit decided to strike back.¹⁸ In a case of first impression, the Eleventh Circuit embarked on a patent claim construction and infringement analysis under literal infringement and the doctrine of equivalents.¹⁹ Conducting de novo review of the district court's claim construction, the Eleventh Circuit allowed general dictionaries, such as Merriam-Webster's Collegiate Dictionary and Oxford English Dictionary, to be the primary sources for constructing ordinary meanings of claim terms.²⁰ The Eleventh Circuit's standard for claim construction is in direct conflict with the Federal Circuit's standard, paving the way for forum shopping.²¹

While the Eleventh Circuit is quietly grabbing jurisdiction to justify its new experiment in patent claim construction and infringement analysis, the Seventh Circuit—through Chief Judge Diane P. Wood—has employed a different approach.²² Chief Judge Wood of the Seventh Circuit grabbed the public's attention by vocalizing policy reasons in support of a quest to end the Federal Circuit's exclusive patent jurisdiction.²³ The Chief Judge announced that the Seventh Circuit is ready and able to handle patent issues.²⁴

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What could be some possible explanations for the Eleventh Circuit seizing jurisdiction in patent cases and the Seventh Circuit demanding for a share of patent cases? Why do they desire and seek to hear patent cases? Do they have judicial wisdom to offer, or are they envious of the Federal Circuit's rising prominence? Are there some merits to the circuits' actions that other regional circuits may soon adopt? This Article explores possible answers to these questions.

Part I of this Article explains the genesis of the Eleventh Circuit's jurisdiction grabbing in a case where patent claim construction and infringement analysis are at the heart of the plaintiff's action against the defendant.²⁵ This Part also carefully presents how the district court constructed claim terms and how the Eleventh Circuit conducted the de novo review of the claim construction and infringement analysis.²⁶ Part II offers a critique of the Eleventh Circuit's decision.²⁷ There are three sections in this Part of the Article. The first section dissects how the decision displays both an incompetence in, and ignorance of, patent law, particularly complex rules of claim construction governing intrinsic and extrinsic evidence and policy reasons for procedures and sources of interpretation.²⁸ The second section focuses on how the Eleventh Circuit's experiment with patent claim construction is in direct conflict with sister circuits' precedents, notably the Seventh and Fifth Circuits in cases with similar facts.²⁹ Prior cases establish that both the Seventh and Fifth Circuits routinely declined jurisdiction in similar patent cases under the "well-pleaded complaint" doctrine.³⁰ The last section explains how the Eleventh Circuit's seizure of jurisdiction shows a disregard

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for the Supreme Court's "age-old rule"³¹ that a court extending its jurisdiction "where none exists has always worked injustice in particular cases."³²

Part III follows by focusing on the Seventh Circuit's recent action.³³ Part III identifies the Seventh Circuit's response vis-a-vis Chief Judge Wood's keynote remarks to end the Federal Circuit's exclusive patent jurisdiction in light of its own precedents in similar cases.³⁴ Part IV explains the circuits' responses in two sections.³⁵ The first section frames the possible explanation of their responses as "judicial wisdom or patent envy" in the context of what patents have become in today's economy.³⁶ Patents are undeniably important, prevalent, and omnipresent today.³⁷ The second section focuses on the rise of the "Almighty" Federal Circuit and examines whether judicial wisdom or patent envy may be a plausible answer.³⁸ Regardless, the Eleventh Circuit has already injected uncertainty in patent law for claim construction, and the Seventh Circuit has demanded a share of patent appeal cases.³⁹ If other regional circuits follow suit—either by demanding or seizing jurisdiction to engage in claim construction—the end of patent law uniformity and the beginning of forum shopping will soon arrive.⁴⁰

Facing the reality explained in Part IV, this Article suggests to regional circuit courts that there are more legitimate grounds for asserting appellate jurisdiction in cases involving patents.⁴¹ For example, as explained in Part V of this Article, in cases where the patent issues are non-substantial and where state interests are stronger than federal interests in resolving state claims, federalism principles dictate that state courts have jurisdiction over those

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cases.⁴² That means if the cases are in federal courts due to diversity and supplemental jurisdiction, regional circuits will have jurisdiction on...