Supreme Court Breakfast Table

Pity the Federal Circuit for Bilski
An email conversation about the news of the day.
July 1 2010 1:25 PM

Supreme Court Breakfast Table

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I know the two of you have been focused on the hearings. I assume that General Kagan has not embraced a FIFA referee as her model of the proper judicial role or expressed sympathy for an unenumerated right to flop. I hope, if asked, she has come out squarely in favor of instant replay for goal-line decisions. Some matters really should be beyond debate.

In any event, before we close the book today on this year's discussion, I wanted to share a thought about the one decision in the court's final four we have not discussed, Bilski v. Kappos, which concerns patents of business methods. As far as patent law is concerned, the takeaway is that this decision is good news for two groups: holders of business-method patents (because the court came within a vote of rejecting the whole notion of business-method patents, but did not) and patent lawyers (because the court rejected a definitive bright-line test for patent eligibility, which means lots more litigation).

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Beyond that, the decision makes one thing crystal clear: It is not easy being the Federal Circuit Court of Appeals. Congress created the Federal Circuit a little more than a quarter-century ago to provide a special forum for, among other things, patent appeals. This was a departure from the usual model. Generally, the system allows disputes in federal trial courts to be appealed to the "regional courts of appeals," which are the 11 numbered circuits and the D.C. Circuit. These courts are generalists, like the Supreme Court that reviews their work. There is no specialized court for securities law or antitrust law. Not so with the Federal Circuit; it is a specialized patent court that hears patent appeals from all across the country. The idea is that a specialized court would be able to develop uniform rules for patent cases without the need for Supreme Court review.

This system worked pretty well for the first 20-plus years when the Supreme Court largely left patent law to the Federal Circuit. But recently, the Supreme Court has shown a renewed interest in patent law and Federal Circuit decisions have not fared very well. Before Bilski this week, the Roberts Court reversed the Federal Circuit in every patent case it reviewed, and most of the votes were unanimous. Now in Bilski the Federal Circuit has finally been affirmed, but it did not feel much like an affirmation. The court specifically rejected the Federal Circuit's new test for business method patents, which the circuit had tried to divine from Supreme Court precedents.

Let me be clear: I do not think anyone is really to blame for the Federal Circuit's difficulty. The Federal Circuit was told to supervise district courts all over the country, most of which rarely get a patent case. In providing that supervision, the Federal Circuit naturally gravitates to bright-line rules. Congress left the Supreme Court in a position to review Federal Circuit decisions, and when it does, it applies the same rules of statutory construction it applies in other contexts. If the Federal Circuit's bright-line rule does not appear in the statute, then the Supreme Court reverts to the more general language of the statute. That is what happened in KSR v. Teleflex, a big 2007 patent ruling, and that is what happened in Bilski. And even if no one is to blame, it sure does not make being the Federal Circuit any easier.

Dahlia and Walter, thanks again for letting me join you at the breakfast table this year.  I will be sad to see the trialogue come to an end, but the timing is fortuitous—I can now concentrate on the World Cup quarterfinals without having to read any more opinions.

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