June 19 was a big day for Simon Tam. It was the day the musician and his lawyers at Archer persuaded the U.S. Supreme Court to strike down a law banning disparaging trademarks.
It was also the lone bright spot of the 2016 term for the U.S. Court of Appeals for the Federal Circuit. Judge Kimberly Moore and eight other judges correctly anticipated the Supreme Court’s holding that the ban amounted to viewpoint discrimination.
The appellate court did not fare nearly as well on patent cases. The Supreme Court took up six of them—8 percent of its docket last term—and reversed the Federal Circuit on each.
Along the way the Supreme Court wiped away precedents on venue, laches and patent exhaustion that had stood on the Federal Circuit’s books for more than 25 years each. Four of the six Supreme Court rulings were by unanimous vote; the other two 7-1.
“There’s a certain irony to the Supreme Court,” said Emory Law IP professor Timothy Holbrook, recalling that the justices emphasized the “settled expectations of the inventing community” when disagreeing with the Federal Circuit years ago, a long-standing doctrine of patent liability.
Holbrook said he does not think the unanimous reversals are a black eye on the Federal Circuit as much as they reflect a generalist Supreme Court trying to speak with one voice to bolster its credibility with the specialized appellate court. The large number of cert grants reflect a Supreme Court that’s both interested in patent law and concerned about the Federal Circuit as an institution, Holbrook said.
Judge Timothy Dyk.Photo: Tony Mauro/ALM
That concern isn’t lost on the Federal Circuit judges. “Our court is viewed by the Supreme Court, and indeed, by the other circuits as inhabiting a world apart,” Judge Timothy Dyk wrote in a law review article last fall about the relationship between the two courts.
Dyk, who joined the Federal Circuit in 2000, attributed the divide to the increasingly specialized nature of the Federal Circuit, where a surge of patent cases has overwhelmed the more traditional cases on its docket. “This growing trend to patent dominance has increased our isolation, and the sense of our uniqueness, which I think is highly undesirable,” Dyk wrote.
He also noted that while Federal Circuit judges have been reaching out to district courts in recent years, sitting as visiting judges and participating in their judicial conferences, “no comparable lines of communication exist with respect to the Supreme Court or its justices.”
Holbrook, a former Federal Circuit clerk who published a response to Dyk’s article, agrees that more communication would be beneficial. “I don’t think there’s enough interaction” between the two courts, he said. While there are a few acquaintances between the two courts, no Federal Circuit judge has ever been elevated to the high court, so the court doesn’t benefit from the professional ties that, say, the Ninth Circuit does from Justice Anthony Kennedy’s previous service on that court.
The specialized Federal Circuit is never likely to become a “feeder” for the Supreme Court, Holbrook said, but closer ties could lead to the occasional hiring of a Federal Circuit clerk into Supreme Court chambers. To date only one Federal Circuit clerk has served at the Supreme Court, during the 2007 term.
Strengthening those kinds of bonds won’t change outcomes of Supreme Court decisions, Holbrook said, but it might have some impact on the reasoning of patent decisions. Narrower decisions might be easier for the Federal Circuit to unpack and apply, he said.
LOOKING TO NEXT TERM
Daniel Volchok, an appellate partner at Wilmer Cutler Pickering Hale and Dorr, said there are some structural reasons for the Federal Circuit’s reversal rate. First, he notes that the Supreme Court is always more likely to reverse a decision when it grants cert from any court. But it goes double for the Federal Circuit, because its exclusive jurisdiction over patent law means there are no circuit splits, and therefore less reason to take up and affirm a correctly decided case.
One other wild card: “Because patent disputes frequently involve large sums of money, litigants have both the motivation and the ability to retain standout counsel” who are adept at identifying and preserving issues for Supreme Court review, Volchok says.
The Supreme Court’s scrutiny of patent law doesn’t appear likely to end any time soon. The court has already granted cert in two challenges to the system of inter partes review created by the America Invents Act. One appeal challenges procedures adopted by the Patent Trial and Appeal Board for handling IPRs, and the other is a constitutional challenge to the PTAB’s right to conduct IPRs at all.
The court has also asked the solicitor general’s office to weigh in on a dispute over the availability of lost profits when components of a patented invention are exported and combined overseas.
Holbrook has been skeptical of the constitutional challenge to the PTAB, which the high court has passed over in previous cert petitions. He expects the justices have granted cert this time to clarify language from 19th century opinions that form the basis of the challenge.
But he isn’t writing off the challenge completely, due to new Justice Neil Gorsuch’s outspoken concerns about administrative law. “They denied the petitions in two earlier cases. Then Justice Gorsuch joined the bench and he has a particular view about the administrative state,” Holbrook said. “That’s the only thing that’s giving me pause.”
The Supreme Court has been highly critical of nonpracticing entities that abuse the patent system, and the IPR system—like it or not—has been effective in reining in that abuse, Holbrook said. If the Supreme Court were to strike it down as unconstitutional, he said, “that would be another irony.”