Federal Circuit Antitrust Law and the Legislative History of the Federal Courts Improvement Act of 1982

By DeZern, David T. | The Review of Litigation, Spring 2007 | Go to article overview

Federal Circuit Antitrust Law and the Legislative History of the Federal Courts Improvement Act of 1982


DeZern, David T., The Review of Litigation


I. controversy over federal circuit's choice-of-law rules

The Federal Circuit's decision to apply its own substantive law to elements of antitrust claims has engendered considerable debate among those concerned with the interplay between intellectual property rights and antitrust law. There are two aspects of this debate. First, there is the argument over whether or not the Federal Circuit's choice-of-law rule is appropriate in light of its enabling statute, the Federal Courts Improvement Act of 1982 (FCIA).1 Second, there is concern over whether or not the Federal Circuit's antitrust jurisprudence is sound and what effect that will have on the balance between intellectual property and antitrust.2 This Note will focus primarily on the first concern and whether or not the legislative history of the FCIA supports the Federal Circuit's choice-of-law rules. The effects of the court's choice-of-law rules will necessarily impact that discussion.

This Note approaches this debate by examining the legislative history of the FCIA and then proposing a rule to best serve the development of the boundary between patent and antitrust law without violating legislative intent. In Part II, this Note discusses the Federal Circuit's explanation and justification of the change in its choice-of-law rules. Part III then examines the criticisms of that change. After these two sides of the debate have been examined, Part IV gives a detailed analysis of the legislative history of the FCIA and discusses Congress's view of the Federal Circuit and its place in the federal judiciary. Based on that analysis, this Note argues that Congress neither intended to prevent the Federal Circuit from creating substantive antitrust law nor to grant the court exclusive jurisdiction over the intersection of antitrust and patent law. As a result, this Note proposes a rule under which the Federal Circuit continues to create its own substantive law at the boundary of patent and antitrust law, but the regional appellate courts give no deference to those decisions when boundary questions are presented for their review.

II. THE FEDERAL CIRCUIT'S VIEW OF ITS SUBSTANTIVE ANTITRUST LAW

The controversy began when the Federal Circuit overruled its own precedent and began applying its own substantive law to antitrust claims in Nobelpharma AB v. Implant Innovations, Inc.3 Prior to this decision, the Federal Circuit had applied the law of the circuit in which the district court sat to all antitrust claims pursuant to its decision in Atari, Inc. v.JS & A Group, Inc.4 In Nobelpharma, the court restated the general rule that antitrust claims are governed by regional circuit law, but the court added that Federal Circuit law would be used to determine whether "conduct in procuring or enforcing a patent is sufficient to strip a patentee of its immunity from the antitrust laws."5 Under this choice-of-law rule, the Federal Circuit applies its own law to decide whether or not a patentee's behavior can subject it to antitrust liability while the law of the appropriate regional circuit still applies to the other elements of an antitrust claim such as relevant market, market power, and damages.6

A. The Federal Circuit's Choice-of-Law and the Court's Justification

Prior to the Federal Circuit's appropriation of non-patent law in Nobelpharma, the court had applied regional circuit law to all non-patent issues pursuant to its decision in Atari Inc. v. JS & A Group, Inc.7 In Atari, the Federal Circuit was presented with an appeal of a contributory copyright infringement claim that had originally been brought along with a patent claim giving the Federal Circuit jurisdiction.8 In an en bane opinion, the court found that the legislative history indicated Congress did not want the Federal Circuit to usurp the substantive jurisdiction of the regional courts of appeal over non-patent issues, nor did Congress want the Federal Circuit to create new forum-shopping opportunities in non-patent matters.

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