“If the Federal Circuit is going to expansively read Supreme Court precedent, ignore Supreme Court warnings not to swallow all of patent law whole, and kill 90% or more of the software patents they see, what role does the Federal Circuit really play?”
I don’t really know why we need the Federal Circuit anymore. Witness the denial of en banc rehearing in Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC on July 3. This denial of rehearing provoked eight separate opinions, with no single opinion achieving more than four judges in support. With 12 judges deciding whether to rehear the case en banc that means no single opinion gained support from more than one-third of the Court. And that opinion that gained the most support was a dissenting opinion, meaning those judges wanted to rehear the case and specifically said that the claims “should be held eligible”. In fact, as Retired Chief Judge of the Federal Circuit, Paul Michel, noted yesterday, “all 12 active judges agreed that the Athena patent should be deemed eligible, even though seven judges apparently felt helpless in view of Mayo.”
The truth is the Federal Circuit is not helpless. The Federal Circuit is choosing to interpret Mayo—on the life science side—and Alice—on the software side—expansively. The Federal Circuit has one primary job, which is to bring stability and certainty to U.S. patent laws. It would be easy to distinguish both Mayo and Alice, but rather than recognize the peculiar facts of these cases as representing the most trivial of innovations, the Federal Circuit has used Mayo to destroy medical diagnostics and Alice to destroy software. More analytical prowess would be expected from a first-year law student.
Back to the Future
The entire reason that we have the Federal Circuit is because the regional circuits brought chaos to patent law. Well, the Federal Circuit is doing a wonderful job of bringing all the same chaos, uncertainty and unpredictability to patent law that existed prior to its creation some 37 years ago.
Those old enough to remember, or who have studied the history, know that prior to the creation of the Federal Circuit there were some regional circuits that never saw valid patents—ever. And Congress knew that the United States needed to have at least some patents valid in order to have a functioning patent system worth using. This led to a concerted effort during the Carter Administration that spilled over into the Reagan Administration to create a forum for patent disputes that wouldn’t be afraid to find worthwhile innovations that were described properly in well drafted patents to be adjudicated as valid.
With the help of the newly created Federal Circuit in 1982, the patent system was going to drive the engine of innovation that would bring the U.S. economy back. And it did.
The whole purpose, the raison d’etre, for have a Federal Circuit was to remove the uncertainty created by the regional circuits and replace it with predictable, certain and stable patent laws. In the words of Howard Markey, the first Chief Judge of the Federal Circuit, the express intent of Congress for the Federal Circuit was to “contribute to increased uniformity and reliability.” Today, and for some time now, we have two problems. First, because of a hopelessly fractured Federal Circuit, U.S. patent laws suffer from all the same uncertainty that plagued the system prior to the creation of the Federal Circuit.
Second, and quite ironically, because of a profound and irreconcilable ideological split between Federal Circuit judges, U.S. patent laws also suffer from all the same problems of predictability that plagued the system prior to the creation of the Federal Circuit. Just like patent owners would know they stood no chance in certain regional circuits pre-1982, once your panel is announced the morning of oral argument patent owners and challengers instantly know whether they have a fair chance, or whether they are merely going to go through the motions arguing in front of a panel of judges that are ideologically and philosophically never going to agree.
Luck of the Draw
You know when you’re a patent owner and Judge Dyk and Judge Mayer are on the panel together that you should probably just throw in the towel and save the 30 minutes of billable time. And there are other combinations of judges on various issues that have become predictably ideological in their rulings. Of course, that predictability once you know the panel leads to tremendous uncertainty because if you draw the right panel of judges, you win. So, it is hard to feel for the case load the Federal Circuit has; they have created it for themselves by refusing time and time again to work together to bring certainty to patent laws. Panels do not follow precedent from other panels, and panels don’t even follow en banc decisions. Witness the mockery certain panels are making of secondary considerations despite an alleged binding en banc decision in Apple v. Samsung, 839 F.3d 1034 (2016) saying secondary considerations are often the single most important of the four-factor obviousness test.
The state of patent law in America is this: You might as well appeal because if you get lucky and draw the right panel you will win. And like it or not, that is precisely what our patent justice system has become under the Federal Circuit. A crapshoot. And we all know it to be true.
The current state of utter disarray at the Federal Circuit, with panels doing whatever they want, judges not agreeing on anything, and ignoring en banc decisions as if they never happened isn’t what the Federal Circuit is meant to have become. The Federal Circuit is a disaster and the collective unwillingness of the judges to come together is making a mockery of an institution that is a critical piece in the U.S. innovation system. Indeed, the fact that the Federal Circuit is absent and unwilling to provide predictability and certainty, which literally was their only job, is why so many people are turning to Congress to solve the problems of the patent system.
The Federal Circuit is the entity within our system that the patent community has turned to for help since 1982, but they are not present currently. The Federal Circuit is so afraid of being overturned by the Supreme Court that they have lost their ability to distinguish even easily distinguishable cases. After all, Mayo dealt with an exceptionally poor claim where the Supreme Court took a shortcut using 101 instead of using 102 or 103. In Alice, they were told by the patentee’s attorney it was a trivial piece of software that could be coded over a weekend by a college student. These cases are easily distinguishable from any life sciences innovation of consequence or something like artificial intelligence or autonomous driving, for example. Yet, the Federal Circuit has expansively read these cases despite the explicit language of the Supreme Court telling them to narrowly read the cases lest all of patent law would be swallowed.
A Handcuffed Court is a Useless Court
The Federal Circuit has been absent. They have repeatedly said they are handcuffed by Supreme Court decisions, which was simply not true. They have, however, said it so many times that they have now effectively handcuffed themselves and the entire industry. So, that being the case, why do we need the Federal Circuit? If the Federal Circuit is going to expansively read Supreme Court precedent, ignore Supreme Court warnings not to swallow all of patent law whole, and kill 90% or more of the software patents they see (i.e., when you consider the Rule 36 affirmances) and virtually all of the medical diagnostics patents, what role does the Federal Circuit really play?
At a time when over 60% of all patented innovation in the U.S. is software related, we have all that same uncertainty and absolute predictability of patent hating from the regional circuits of yesteryear.
“To best serve its critical role in a free society, the law must be understandable, uniform, reliable, and consistent with the intent of the people’s representatives who enacted it,” wrote Chief Judge Markey as he reflected on the first ten years of the Federal Circuit. “To the maximum extent achievable by human beings, it can fairly be said that the law entrusted to the Court of Appeals for the Federal Circuit fully meets those criteria.”
Chief Judge Markey was correct. In the first decade, the Federal Circuit did faithfully administer and create an understandable, uniform, reliable and consistent set of patent laws as directed in the Congressional charter. Over the last decade, however, the Federal Circuit has failed miserably at delivering on Congressional intent to bring uniformity and reliability to the patent laws. That is why Congress must step in and fix the myriad problems we once looked to the Federal Circuit to address.
The Federal Circuit has become impotent due to the Court’s continued proclamations that it is unable to narrowly interpret two cases that beg for narrow interpretation. Two cases that the Supreme Court specifically cautioned against interpreting too broadly. So, here we are. The Federal Circuit is no longer performing its primary objective and isn’t even following the mandate of the Supreme Court. Instead, it is expansively applying dicta from Mayo and Alice, which dealt with non-inventions, to kill patent claims on inventions everyone agrees should be patent eligible. It is truly maddening that it has come to this.
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