Academic journal article Brigham Young University Law Review

On Your Mark, Get Set, Go! A New Race to the Courthouse Sponsored by Holmes Group, Inc. V. Vornado Air Circulation Systems, Inc

Academic journal article Brigham Young University Law Review

On Your Mark, Get Set, Go! A New Race to the Courthouse Sponsored by Holmes Group, Inc. V. Vornado Air Circulation Systems, Inc

Article excerpt

I. INTRODUCTION

Patents are a significant part of our nation's economy. Companies invest billions of dollars annually in patents covering innovative products and services.' In some fields, such as the hightechnology industry, a company must make substantial investments in research and patent protection to remain competitive.' Certainty and consistency in adjudications of patent issues are important so that companies and other parties who invest in patents have some confidence in their patent protection.' Before the formation of the United States Court of Appeals for the Federal Circuit, some commentators expressed a belief that consistency in the patent law arena could only be achieved through specialized courts that were experienced with patent issues,4 which include "some of the most complex and time-consuming issues the courts consider."' In 1982, IMAGE FORMULA3

Congress responded to these cries for consistency in patent law by creating the Court of Appeals for the Federal Circuit.6 Since then, several cases have defined the scope of the Federal Circuit's jurisdiction, including the recent United States Supreme Court case Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc.'

In Holmes, the Supreme Court held that Federal Circuit appellate jurisdiction could not be based solely on a patent law counterclaim.' This Note disagrees with the decision and argues that the Supreme Court improperly interpreted Federal Circuit jurisdiction, disregarding the recognized congressional goal in creating the Federal Circuit of establishing patent law uniformity. As a result, Holmes may work to promote inconsistencies in patent law adjudications among the federal circuit courts of appeal and prompt races to the courthouse between patent owners and alleged infringers as each group shops for the most favorable forum in which to litigate.

This Note addresses the limitation Holmes places on the scope of Federal Circuit jurisdiction and the likely consequences of the Court's decision. In Part II, this Note describes the state of patent law prior to the establishment of the Federal Circuit and recounts the subsequent development of the law concerning the patent law jurisdiction of this specialized court. Part III presents the facts of and the decision in Holmes, including the two concurring opinions. In Part IV, this Note analyzes the Court's reliance on the well-pleadedcomplaint rule, through strict textual interpretation of the "arising under" language of 28 U.S.C. (sec)1338, for limiting the Federal Circuit's jurisdiction. In addition, Part IV explains how federalism concerns do not apply in appellate jurisdiction questions and argues that policy considerations behind the creation of the Federal Circuit should have militated a different holding by the Court. Finally, Part V offers a brief conclusion. IMAGE FORMULA5

II. BACKGROUND

A. Pre-Federal Circuit Patent Law

Prior to the creation of the Federal Circuit in 1982, the state of patent law was anything but consistent.9 It was well settled that the United States district courts had original jurisdiction over cases "arising under" the patent laws," and appeals were filed by geographic jurisdiction in the various circuit courts of appeal.li However, because each appellate court reviewed patent decisions in its geographic area, regional biases surfaced among the circuits. For example, some circuits imposed higher standards on patentees attempting to assert the validity of their patents.12 Other circuits were known for being pro-patentee.13 Varying standards among the circuits" and other factors caused uncertainty and great concern to American businesses that did not know if their patent protection would be sustained in court.ls The inconsistency among circuits also IMAGE FORMULA9

led to forum shopping" and races to the courts" by parties seeking to have their claims adjudicated by a court favorable to the parties' particular circumstances. …

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