By Jason Rantanen
Yesterday, following the Supreme Court’s unanimous reversal of the Federal Circuit in Nautilus and Limelight, Vera Ranieri of the Electronic Frontier Foundation observed that:
These rulings mean that the Federal Circuit has been unanimously overruled in every single patent case heard by the Supreme Court this term. Since there have been five decisions, the Federal Circuit is now an extraordinary 0-45 in supporting votes by Supreme Court justices this year. Even the Chicago Cubs have a better record than that.
Vera Ranieri, Supreme Court Overrules Federal Circuit Again. And Again. (June 2, 2014).
Ranieri has a point: the Supreme Court has not been kind to the Federal Circuit this term. Worse than the record on these five decisions (Highmark, Octane Fitness, Medtronic, Nautilus, and Limelight), some of the Court’s comments are harshly critical of the appellate court. As Dennis noted yesterday, in Limelight the Court wrote that “The Federal Circuit’s analysis fundamentally misunderstands what it means to infringe a method patent.” By such measures it appears that the Federal Circuit does not currently have much credibility with the Court.
These are bleak numbers indeed, but some context is important. First, consider that even as the Supreme Court has reversed on these five cases, it also has denied certiorari in other petitions arising from the Federal Circuit (If anyone has solid figures on these, I’d love to see them). These petitions were vigorously pursued, often with the support of amicus. So it’s not as if the Federal Circuit is always “losing.”
In addition, it’s important to keep in mind the broader picture: so far this term, the Supreme Court has reversed in 77% of all merits decisions except those arising from the Federal Circuit. Last year, the Court’s final reversal rate was 72%. (source: SCOSTUSBLOG). So that the Federal Circuit went 0 for 5 (two of which, Octane Fitness and Highmark, were a linked pair) doesn’t mean that the sky is falling. And since 2010, the Federal Circuit has actually done fairly well: out of the 13 patent cases arising from the Federal Circuit since Bilski v. Kappos, the Supreme Court has affirmed the outcome in whole or part 7 times.
Even if these figures told the entire story on reversals, however, it’s not as if the Federal Circuit presently speaks with one voice, if it ever did. It is full of disuniformity, with multiple viewpoints that are at odds with one another. Given this disuniformity, it should not be surprising that two of the five cases in which the Court reversed the Federal Circuit involved a highly fractured court (Highmark and Limelight). In these cases, the Court did not reverse a unanimous Federal Circuit, but rather settled a deep intra-circuit divide. (Nautilus involved a concurrence by Judge Schall, but he agreed with the legal standard for indefiniteness applied by the majority).
Both Highmark and Limelight illustrate this point well: in Highmark, 5 of the 12 judges on the Federal Circuit favored a deferential standard for exceptional case determinations, an approach ultimately adopted by the Court. Likewise, in Limelight the Supreme Court essentially agreed with the five dissenting Federal Circuit judges that indirect infringement under 271(b) requires an act of direct infringement under 271(a) (although as Tim Holbrook pointed out to me, Justice Alito left open the door for active inducement of any type of direct infringement, such as 271(f) or (g)). And, when the Court issues its opinion in Alice, it will inevitably rule in the same direction as one or another group of judges in that highly fractured decision. So too in Teva v. Sandoz, which will address the issue of de novo review of claim construction that split the en banc Federal Circuit 6-4. What we are observing with the Court is, in substantial part, less outright reversals and more the resolution of intra-circuit splits, divisions that are arguably – at least in the case of subject matter eligibility – of its own making.
Thanks to former Iowa Law student and semester EFF intern Dan Garon for pointing me to Ms. Ranieri’s article. Full disclosure: I’m not a Cubs fan. Also, I made one substantive edit, revising the number of cases since Bilski to 13 (I had originally counted Caraco v. Novo, but on reflection it’s not really a patent case).