The Crossclaim Loophole Left Open by the America Invents Act, Inter-circuit Patent-law Splits

Congress established the United States Court of Appeals for the Federal Circuit over 30 years ago to bring uniformity to patent law. But the Federal Circuit is not truly a national patent court.

The Federal Circuit has never had jurisdiction over all appeals involving patents. The jurisdictional statute that Congress wrote for the Federal Circuit gave that court appellate jurisdiction over any civil action “arising under” the patent laws. OLYMPUS DIGITAL CAMERA

For many years, it was an open question whether the Federal Circuit had appellate jurisdiction over an action where there was no patent claim in the complaint but there was a patent claim in the answer or counterclaim. In 2002, the Supreme Court answered the question, holding that the Federal Circuit didn’t have jurisdiction unless the complaint raised a patent-law issue. Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826. Patent-law issues in an answer or counterclaim did not give the Federal Circuit jurisdiction, because “arising under” is a legal term of art that refers to the well-pleaded complaint rule—a court will look only at the complaint, and not other pleadings.

The America Invents Act (section 19(b)) overruled Vornado, and expanded the Federal Circuit’s jurisdiction to include cases where a patent law issue arises in a compulsory counterclaim:

 (b) COURT OF APPEALS FOR THE FEDERAL CIRCUIT.–Section 1295(a)(1) of title 28, United States Code, is amended to read as follows:

“(1) of an appeal from a final decision of a district court of the United States, the District Court of Guam, the District Court of the Virgin Islands, or the District Court of the Northern Mariana Islands, in any civil action arising under, or in any civil action in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or plant variety protection;”

But even after this amendment, some patent appeals will not go to the Federal Circuit. Patent-law crossclaims, for example, do not give the Federal Circuit jurisdiction. Nor do permissive patent-law counterclaims.

This crossclaim loophole apparently reflects Congress’s preference to avoid appellate forum shopping over patent-law uniformity.

A hypothetical law that gives the Federal Circuit jurisdiction over all actions involving a patent-law claim of any kind could lead to appellate forum shopping in non-patent cases. A party involved in a non-patent case who holds a potential permissive patent-law claim would be able to choose whether the Federal Circuit hears the appeal simply by adding a permissive patent-law crossclaim or counterclaim. Until such a law is passed, though, some patent cases will be appealable to regional circuits, leaving open the possibility of inter-circuit splits on areas of substantive patent law.

Posted on January 14, 2013, in History, Patent, Procedure and tagged , , . Bookmark the permalink. Comments Off on The Crossclaim Loophole Left Open by the America Invents Act, Inter-circuit Patent-law Splits.

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