Is the Federal Circuit succeeding? An empirical assessment of judicial performance.

• Author: Wagner, R. Polk

As an appellate body jurisdictionally demarcated by subject matter rather than geography, the United States Court of Appeals for the Federal Circuit occupies a unique role in the federal judiciary. This controversial institutional design has profoundly affected the jurisprudential development of legal regimes within its purview--especially in patent law, which the Federal Circuit has come to thoroughly dominate in its two decades of existence.

In this Article, we assess the court's performance against its basic premise: that, compared to prior regional circuit involvement, centralization of legal authority in the Federal Circuit will yield a clearer, more coherent, and more predictable legal infrastructure for patent law. Using empirical data obtained from a novel study of the Federal Circuit's jurisprudence of claim construction--the interpretation of language defining a patent's scope--we conclude that, on this indicator at least, the result has been decidedly mixed, although there are some encouraging signs.

Specifically, the study indicates that the Federal Circuit is sharply divided between two basic methodological approaches to claim construction, each of which leads to distinct results. The dominant analytic framework gained additional favor during the period of the study, and yet the court became increasingly polarized. We also find that the significantly different approaches to claim construction followed by individual Federal Circuit judges has led to panel dependency; claim construction analysis is clearly affected by the composition of the three-judge panel that hears and decides the case.

While little in the results of this study would lead one to conclude that the court has been an unqualified success, we believe that the picture of the Federal Circuit that emerges is of a court in broad transition. Driven in part by new appointments and an effort to respond to its special mandate, a new Federal Circuit is emerging--one that appears to be more rules-driven and more consistent than before. It is too early to be sure, but the findings here, perhaps bolstered by the procedural and jurisprudential reform suggestions we derived from the results, suggest that the Federal Circuit's unique position in the judiciary may yet be vindicated.

INTRODUCTION I. DESIGNING THE FEDERAL CIRCUIT: A DOCTRINAL AND THEORETICAL BACKGROUND A. The Theory of the Federal Circuit B. The Special Mandate of Claim Construction 1. A (Brief) Primer on Claim Construction 2. Markman and the Express Mandate C. A Look Inside: Claim Construction and the Federal Circuit II. STUDY DESIGN A. Measuring Jurisprudence: Court Opinions as Data B. Procedural Versus Holistic: Selecting Measurement Criteria 1. A Review of the Literature 2. "Bottom Up" Measurement Design C. Developing the Coding Instrument D. Evaluating the Measurement--Criteria I: Reliability E. Evaluating the Measurement--Criteria II: Validity 1. Methodology as a Driver of Claim Construction 2. The Reality of the Procedural/Holistic Dichotomy 3. Testing the Procedural/Holistic Categories F. Data Collection and Measurement 1. Selection of Judicial Opinions 2. Coding Judicial Opinions III. STUDY RESULTS A. Overall Results B. Methodological Trends over Time 1. Overall Trends 2. Authorship Activity Patterns C. The Methodology of Federal Circuit Judges 1. Descriptive Data 2. Judicial Methodology 3. Factions on the Federal Circuit 4. Judicial (In)consistency D. Predicting the Federal Circuit: Panel and Author Dependency in Claim Construction 1. Panel Membership and Methodology 2. Dependency and Factions 3. Dependency, Factions, and Panels 4. The Institutional Implications of Panel Dependency IV. SUCCESS AND THE FEDERAL CIRCUIT: THE IMPLICATIONS AND SOME POLICY PRESCRIPTIONS A. Is the Federal Circuit Succeeding? B. Policy Recommendations 1. The Importance of Panel Composition Information 2. Standardize (the Procedural) Methodological Approach 3. Taking Methodology Seriously 4. Evangelism and Enforcement: The Role of Individual Judges 5. Seeking External Assistance: The Role of the Supreme Court CONCLUSION APPENDIX A: THE RELATIONSHIP BETWEEN METHODOLOGY AND (IN)CONSISTENCY INTRODUCTION

In the last two decades, (1) the United States Court of Appeals for the Federal Circuit has become, by far, the most powerful and influential force in the U.S. patent system. (2) The significance of this development is impossible to overstate: even as the patent system has grown in economic importance, (3) technological complexity (4), and public awareness, the administration of the entire enterprise increasingly depends upon the twelve active judges of the Federal Circuit. (5)

Conferring such dominating power on the Federal Circuit has long been justified by the premise that this centralization of legal authority will yield a clearer, more coherent, more predictable legal infrastructure for the patent system. Indeed, as a response to widespread dissatisfaction due to confusion and uncertainty under the decentralized administration of the patent law, the Federal Circuit was created to play this very role. (6) And since its inception, the court--with some assistance from the Supreme Court (7)--has moved aggressively in support of its widely perceived mandate. (8)

This mandate gives rise to the obvious (yet surprisingly ephemeral) question concerning the Federal Circuit's role in the patent system: is it succeeding? Has the mandate been fulfilled? Has this grand experiment in allocating judicial authority resulted in clearer, more consistent, more coherent rules surrounding patents? (9) This is a question to which scholars, (10) the bar, (11) and even judges (12) are now turning with increasing interest--a reconsideration of the institutional design of the patent system. (13) Yet the analysis of its design requires careful evaluation, and most of this literature, while often illuminating, has not been empirically grounded. (14)

This Article provides important insights into this question by presenting the results of a novel empirical study of judicial performance. The findings suggest that the Federal Circuit is a court in a period of significant transition--one driven by an ongoing effort to meet the requirements of its special mandate and by important changes in court personnel. The Federal Circuit has perhaps not yet succeeded in fulfilling its mandate, though the present trajectory of its jurisprudence holds out the promise that it ultimately will do so.

Our contribution to the debate surrounding the efficacy of the patent administration system offers two features that do not presently exist in the contemporary literature. First, the analysis is systematic and empirical, synthesizing all relevant judicial pronouncements across the approximately seven-year time period of the study, rather than using scattered or individual case results. (15) Second, the study focuses squarely on the methodological approach of the Federal Circuit, rather than simply counting appellate results (i.e., reversal rates). (16) By looking (a) systematically and (b) at the expressed methodological approach, this study offers an unprecedented opportunity to evaluate the success of the court in its role as the arbiter of the patent law.

The study reported here analyzes the Federal Circuit's recent jurisprudence of claim construction--the interpretation of language defining a patent's scope--as a window into judicial performance. (17) Specifically, the study analyzed the court's methodological approach to claim construction in all written opinions since the April 1996 Supreme Court opinion in Markman II (18) using a specially developed case-coding technique that captured both general methodology and the strength of its form. The collected data was used to conduct descriptive statistical analyses, which revealed the Federal Circuit's overall methodological approaches, discernible trends over time, and the methodology of the court's judges on an individual basis.

The data reveals a sharp division within the court between two distinct methodological approaches (which we term "procedural" and "holistic," respectively), each of which leads to distinct results. (19) Specifically, we find that the Federal Circuit utilized the procedural approach in 63% of the cases and the holistic approach in the remaining 37%. During the time period of our study, the procedural approach gained favor with the court in a gradual, though statistically significant, fashion. We also find that the Federal Circuit's jurisprudence became increasingly polarized during this time, with a significant increase in the use of "strong" forms of each methodological approach. (20) These trends can be attributed, we believe, to increased activity among judges who typically author strong methodological opinions, as well as to the appointment of two strongly Proceduralist judges (Judges Linn and Dyk) to the court in 2000.

Our findings also indicate that claim construction at the Federal Circuit is panel dependent. (21) That is, the data reveals that the composition of the panel that hears and decides an appeal has a statistically significant effect on the claim construction analysis. Specifically, we find that individual judges vary widely in their methodological approach to claim construction, (22) and that the distribution of the judges allows useful classification into three groups: the "Proceduralists" (i.e., those preferring procedural analyses), the "Holistics" (i.e., those preferring holistic analyses), and a middle group, the "Swing Judges." Panel participation by members of both the Proceduralist and Holistic groups is statistically related to the form of claim construction analysis. (23) In addition, the differential odds of a particular methodological approach can be calculated with 95% statistical significance for half (i.e., six) of the currently active Federal Circuit judges. (24)

The totality of these results adds substantially to the...