CAFC: The Rogue Patent Court, Captured By The Patent Bar, Needs To Go Away

from the make-it-stop dept

Back in 2004, when I first read the book Innovation and Its Discontents, I was convinced that the Court of Appeals for the Federal Circuit, better known as CAFC, or the "patent appeals court" was a huge part of the problem with the patent system. It was the special court that had been set up in the early 80s to handle all patent appeals, based on the totally misplaced notion that because patent issues were so technical, regular appeals courts wouldn't be able to handle the nuances. What we got instead was a court that became "patent specialists" in that they spent much of their time with the patent bar -- who tended to be lawyers who profited handsomely from an ever expanding patent law. It didn't help that one of the original CAFC judges was Giles Rich, a former patent attorney who almost single-handedly wrote the Patent Act of 1951. Rich more or less made it his lifetime goal to expand the patent system to cover "everything under the sun made by man," and he came close to succeeding.

In fact, some important research pointed out that the structure of the court means that it's really designed to only expand what is patentable, and never to contract it.

Two years ago, Tim Lee had a fantastic expose on CAFC and how it turned patents into a megabusiness by expanding them massively (often ignoring the Supreme Court to do so) and had become way too chummy with the patent bar. It appears that others are catching on as well. Over at the Cato Institute, Eli Dourado has a good article discussing just how "the patent bar captured a court and shrank the intellectual commons." It's a good read, going back over much of the territory that Lee and others have covered previously, but doing it in a nice succinct fashion. It also has a nice empirical summary of just how broadly the CAFC expanded patent law:

The creation of the court has significantly altered the law. Using a dataset of district and appellate patent decisions for the years 1953–2002, economists Matthew Henry and John Turner find that the Federal Circuit has been significantly more permissive with respect to affirming the validity of patents. They estimate that patentees are three times more likely to win on appeal after a district court ruling of invalidity in the post-1982 era. In addition, following the precedents set by the Federal Circuit, district courts have been 50 percent less likely to find a patent invalid in the first place, and patentees have become 25 percent more likely to appeal a decision of invalidity.

With patents more likely to be upheld in the Federal Circuit era, the incentive to patent has increased. Bronwyn Hall finds a highly significant structural break in patent applications occurring between 1983 and 1984. The number of patents granted by the U.S. Patent and Trademark Office also increased, from 63,005 in 1982 to 275,966 in 2012—a quadrupling of the rate in only 30 years.

This is important, in part, because one of the suggestions that's been floated to "fix" the problems of the patent system is actually to create another specialized patent court, this time at the district court level, with the claim being that this would stop things like the rush to bring patent lawsuits in east Texas, or unsophisticated juries deciding big patent cases. Except that, as we've pointed out, this would just exacerbate the problem.

Dourado's article -- as did Lee's -- quotes the astounding blog post by patent attorney (and unabashed patent system cheerleader) Gene Quinn after the Supreme Court struck down medical diagnostic patents in the Promethus v. Mayo Labs case (a precursor to later striking down or massively limiting gene and software patents), in which Quinn happily awaits CAFC "overruling" the Supreme Court:
How long will it take the Federal Circuit to overrule this inexplicable nonsense? The novice reader may find that question to be ignorant, since the Supreme Court is the highest court of the United States. Those well acquainted with the industry know that the Supreme Court is not the final word on patentability, and while the claims at issue in this particular case are unfortunately lost, the Federal Circuit will work to moderate (and eventually overturn) this embarrassing display by the Supreme Court.
There is, of course, some hope that maybe things are actually changing. The number of cases in which the Supreme Court has smacked down the CAFC grow each year, and in some of the more recent ones the Supreme Court's impatience with CAFC and its inability to properly interpret patent law have become clear. On top of that, CAFC is under new management, due to an ethics scandal involving the former chief judge. And the most recent few decisions have suggested that, perhaps, finally, CAFC is changing and getting the message.

That said, it still makes no sense at all to have a specialized court like CAFC for patent appeals. Like nearly all other kinds of cases, patent lawsuits should go up through the circuit courts. There, those courts will be more likely to actually listen to the Supreme Court, rather than think they can "overrule" the Supreme Court -- and on difficult cases there's more likely to be a circuit split where different opinions are discussed. And, most importantly, it means that the patent bar can't so aggressively lobby just a small group of "friendly" judges that they see over and over and over again.

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  • identicon
    JH, 10 Sep 2014 @ 4:01pm

    It's an interesting contrast from the UK, where there is a specialist court for first-instance (and no juries), but then general courts for appeals (though with panels of judges usually including at least one former patent judge).

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 Sep 2014 @ 9:27pm

    Abolition

    It is not just the CAFC that needs to go away. The whole patent system is a conspiracy against the rest of us, by the patent bar. The patent bar has had over 200 years to fix the patent system and make it do what it is supposed to do: "Promote the progress of the useful arts." It never has and it never will.

    Time is up. Do not get suckered into letting the patent bar make yet another attempt to "fix" the patent system. It is inherently unfixable. The people who are always charged with fixing it (the patent bar) never actually want to fix it. It works just fine to enrich the patent bar, right now, and the patent bar is happy with that.

    Liberty works better than government granted intellectual monopolies. The government granting monopolies has always been a corrupt practice, harmful to the economy. That which harms the economy, disproportionately harms the economic interests of the 99%. The whole patent system should be abolished, as soon as possible.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 11 Sep 2014 @ 12:35am

    CAFC might just be the best poster child for what is wrong with many things.

    The law is captured by those who stand to benefit from it, and it keeps getting expanded and bentover backwards for.

    Reminds me of something... can't put my finger on it...

    Shall we just nuke it from orbit and try again?

    reply to this | link to this | view in chronology ]

  • identicon
    David, 11 Sep 2014 @ 1:04am

    Out of the frying pan...

    It was the special court that had been set up in the early 80s to handle all patent appeals, based on the totally misplaced notion that because patent issues were so technical, regular appeals courts wouldn't be able to handle the nuances.

    Well, so they bought themselves a court that specializes on the technical aspects of patent issues and is incompetent on the legal, social, and economic ramifications.

    Way to go.

    reply to this | link to this | view in chronology ]

  • identicon
    staff, 11 Sep 2014 @ 7:30am

    more dissembling by Masnick

    'I was convinced that the Court of Appeals for the Federal Circuit, better known as CAFC, or the "patent appeals court" was a huge part of the problem with the patent system'

    Nonsense. The principal reason for the CAFC was to bring clarity and consistency to the way the courts handled patent cases. The problem was there were contradictory decisions coming from the courts which made patent law a mess.

    The word on the street is Masnick and his monkeys are paid puppets for some of the worlds biggest invention thieves. All they know about patents is...they don't have any.

    Masnick and his monkeys have an unreported conflict of interest-
    https://www.insightcommunity.com/cases.php?n=10&pg=1

    They sell blog filler and "insights" to major corporations including MS, HP, IBM etc. who just happen to be some of the world’s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick and his monkeys are not reporters. They are hacks representing themselves as legitimate journalists receiving funding from huge corporate infringers. They cannot be trusted and have no credibility. All they know about patents is they don’t have any.

    For the truth, please see http://www.truereform.piausa.org/
    https://www.facebook.com/pi.ausa.5
    http://piausa.wordpress.com/
    http://www.hoover.org/publications/defining-ideas/article/142741
    http://cpip.gmu.edu/2013/03/15/the-s hield-act-when-bad-economic-studies-make-bad-laws/

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 11 Sep 2014 @ 9:08am

      Re: more dissembling by Masnick

      Oh hi Mr. Riley

      reply to this | link to this | view in chronology ]

    • icon
      Gwiz (profile), 11 Sep 2014 @ 11:51am

      Re: more dissembling by Masnick

      The principal reason for the CAFC was to bring clarity and consistency to the way the courts handled patent cases.

      And that experiment has failed...hard. What we have now is good 'ole boys club that is seriously hindering innovation. The question is: why are you fighting to keep it that way?



      The word on the street is Masnick and his monkeys are paid puppets for some of the worlds biggest invention thieves.

      The word I heard on the street is that Mr. Riley and his astroturf organizations are not exactly on the up and up. "Slimy" is the word that comes to my mind. Here's some examples:

      http://ronaldjriley.blogspot.com/



      Masnick and his monkeys have an unreported conflict of interest-

      Nice ad hom. But anyways, it's not "unreported" (you found the info didn't you?).

      Secondly, Mike has always held that no sponsor or partner has ever or will ever be given editorial control over Techdirt. In Mike's own words:

      ...because I say what I think. The editorial content of this site has never been for sale, nor will it ever be. Because the only way I survive in this business is with my reputation. Source

      Thirdly, that's a real flimsy connection there anyways. Mike partnered with someone who does business with some big companies who sometimes are patent suit defendants. That's kind of like my wife's sister's friend's nephew's neighbor.

      reply to this | link to this | view in chronology ]

      • icon
        John Fenderson (profile), 11 Sep 2014 @ 12:56pm

        Re: Re: more dissembling by Masnick

        ""Slimy" is the word that comes to my mind"

        Actually, just saying "the word on the street is..." is slimy. He's probably talking about the street in front of his office. It's a fancy way of pulling the "some people say..." trick of accusing someone of something without looking like you're accusing someone of something.

        "Mike has always held that no sponsor or partner has ever or will ever be given editorial control over Techdirt."

        Even beyond this, Techdirt lost sponsors when it took an anti-SOPA stand. And took that stand anyway. Not only have I never seen a hint of Techdirt being the mouthpiece of sponsors, I see actual evidence of the opposite.

        reply to this | link to this | view in chronology ]

  • identicon
    Anon, 11 Sep 2014 @ 11:46am

    Misstatements abound

    Just wanted to pop in to say that this statement by the author is totally incorrect.

    "It was the special court that had been set up in the early 80s to handle all patent appeals, based on the totally misplaced notion that because patent issues were so technical, regular appeals courts wouldn't be able to handle the nuances."

    Instead, the reason why the Fed. Circuit was set up was because of the amount of conflicting caselaw that was coming from all of the other Circuit Courts of Appeal. There is a rather large policy incentive to have patents, which provide protection of intellectual property on a NATIONAL level, enforced equally no matter which state you are in.

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 11 Sep 2014 @ 12:58pm

      Re: Misstatements abound

      I don't know -- to my ears both what the article said and what you're saying are in agreement with each other.

      reply to this | link to this | view in chronology ]

      • icon
        Gwiz (profile), 11 Sep 2014 @ 1:41pm

        Re: Re: Misstatements abound

        I don't know -- to my ears both what the article said and what you're saying are in agreement with each other.

        I agree. I was going to respond to Anon's comment myself - but I got all sidetracked looking up the history of the CAFC and trying to determine what the mindset of Congress was at the time. I wasn't very successful.

        reply to this | link to this | view in chronology ]

  • identicon
    Yup, 15 Sep 2014 @ 7:17am

    Nope

    Sloppy. That quote: "everything under the sun made by man" attributed to Giles Rich is actually a direct quote from the Supreme Court.

    http://en.wikipedia.org/wiki/Diamond_v._Chakrabarty

    Should we abolish the Supreme Court, too?

    reply to this | link to this | view in chronology ]

  • identicon
    Some NoAccount, 18 Sep 2014 @ 11:53am

    techdirt for the rest of us...

    This shows more relevant material from a link from Slashdot and it is insightful and good. I want to add that it is law for the rest of us who have wired in existence.

    I have to feel comfort with the progress that in the 200 years or so that electronic submissions are enabled for patent application too and drawing, descriptions and modifications may all be done from a hotel room. But if there is something still that is hard to grasp is why don't the minority opinion still hope for majority or reasonable view about copyright, in an optimistic way as refining the science of submission is or can be a trademark for a smaller start. The only one crushing them in court is the would be giants.

    reply to this | link to this | view in chronology ]


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