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Patent Jurisdiction of Federal Circuit Enhanced by America Invents Act of 2011

Posted Monday, October 24, 2011 by Mike Gibbons

Patent infringement suits are originally heard in Federal Courts – specifically, in a United States District Court. These courts are located throughout the country, with at least one in every state. However, irrespective of the District Court in which a patent infringement case is heard at the trial level, appeals are intended by Congress to be heard in one place only – the United States Court of Appeals for the Federal Circuit (the “CAFC”).

Located in Washington, D.C., and overlooking the White House, the CAFC was established in 1982. The reason Congress granted exclusive jurisdiction to hear patent appeals to the CAFC was to ensure consistent rulings related to patent law, among other things. When appeals were heard at the regional Circuit Courts of Appeal, as they are with other federal cases, rulings were somewhat inconsistent in part due to the highly-specialized nature of patent cases. After all, a patent infringement case can turn on an extremely technical and fact-specific aspect of the matter that requires some scientific expertise to digest. Two judges who normally hear the broad gamut of cases that come before the courts, but only an occasional patent case, could easily interpret patent issues differently.

Thus, appeals of similar issues in patent cases were coming out with different results depending on the regional Circuit Court of Appeal that had the case. The inevitable result of that was “forum shopping,” that is, a party attempting to move the case through procedural maneuvers into a particular regional circuit where the party believed the case might be looked upon more favorably.

Congress eventually came to believe that expecting the regional Circuit Judges to have expertise on the law and enough scientific background to muddle through the issues in an infringement case was too much to ask. Centralizing the appeals in a single court – the CAFC – gives the judges of the CAFC more time to devote to patent matters. Additionally, as in other courts, the judges have clerks, but at the CAFC the clerks have varying scientific backgrounds (as do many of the judges). Even the newest technologies are likely to be able to be understood by at least one member of the Court staff.

For all of those reasons, as well as the desire to eliminate forum shopping, Congress gave the CAFC exclusive jurisdiction over patent case appeals. A case may have other, non-patent issues for adjudication, but as long as there’s a single patent issue the CAFC gets the appeal.

What would happen if a plaintiff sued a defendant for infringing the plaintiff’s trademark on a product, and the defendant responded by claiming that the plaintiff was actually infringing the defendant’s patent for that product? In other words, the plaintiff’s complaint merely includes a claim of trademark infringement, but it is the defendant’s counter-claim that raises the patent issue?

In 2002, the Supreme Court addressed that very issue. In the case of Holmes Group v. Vornado, the Supreme Court ruled that when deciding upon the Circuit Court of Appeal that has jurisdiction, only the plaintiff’s complaint is considered and not a counter-claim. Declining to make its decision based upon a furtherance of patent-law uniformity, the Court said even though there was a patent-law issue in the counter-claim the appeal in the Holmes v. Vornado case should be heard by the Court of Appeals for the Tenth Circuit.

That ruling might appear to cut against the intent of Congress to ensure the CAFC gets all patent appeals for consistency’s sake. So, in the recently-passed Leahy-Smith America Invents Act of 2011 which revised a substantial portion of U.S. patent law, the jurisdictional loophole created by the Holmes v. Vornado case was remedied. The relevant statute now also assigns patent appeals “in any civil action in which a party has asserted a compulsory counterclaim” to the CAFC. The intent of Congress to make consistent rulings in patent cases more likely is now once again intact.

Patent Jurisdiction of Federal Circuit Enhanced by America Invents Act of 2011 ›› Ruttler Mills PLLC