The Federal Circuit's "Good" Term

For much of the last ten years, the joke has been that the Federal Circuit is the New Ninth Circuit, in having an ignominious record before the Supreme Court.  This term, however, the Federal Circuit’s batting average went up considerably, with three affirmances in the last month on patent law.  This has led to some commentary suggesting that the Federal Circuit has had a good term.  I want to push back on that argument somewhat. 

An initial observation is that only one of the three opinions, Stanford v. Roche, was a complete affirmance (I was rather heavily involved in this case, so I’ll refrain from further comment).  The second opinion, Global Tech Appliances, Inc. v. SEB S.A., was an affirmance-in-name-only, since the Court repudiated the Federal Circuit’s test and substituted its own, much more defendant-friendly, test for secondary infringement liability.  This still very much fits the traditional meme that the Federal Circuit is too patentee-friendly and the Supreme Court is reining it in.

The last case, Microsoft Corp. v. i4i Limited Partnership, has received the most attention and seems the most puzzling.  Microsoft dealt with the standard of proof to invalidate a patent.  For a long time, the Federal Circuit has held that the standard is the relatively-high burden of “clear and convincing evidence.”  In 2007, the Supreme Court commented (unanimously) that it could see little reason for this high standard in cases where the challenge to patentability is based on evidence that was not presented to the patent office.

The puzzling aspect is that the Supreme Court affirmed the Federal Circuit standard, seemingly in contradiction of its inclination a mere four years earlier.  But I want to suggest that this is far less of a turnabout than appears at first glance.  The Supreme Court stated that the standard is clear and convincing, but juries from now on should be instructed that evidence not presented to the PTO should be given greater weight.  From an analytical perspective, there is no great difference between saying that the standard of proof is lower when evidence has not been presented to the PTO, and saying that evidence goes further when it has not been presented to the PTO.  The Court has effectively shaped the law to do exactly what it wanted in 2007, albeit using slightly different language.  It would thus be a mistake to read Microsoft v. i4i as a victory for the Federal Circuit.  Once again the law has been moved in a more defendant-friendly direction.

There is one notable difference between this Term and prior ones in terms of the Court’s treatment of the Federal Circuit.  Gone are the days when the Court refers to the Federal Circuit’s jurisprudence as “gobbledygook.”  But to say that the Federal Circuit has had a good term because of this is only saying that it had no place to go but up.