Few "Reform" Provisions Remain in S. 23 Relating to the Judiciary

By Kevin E. Noonan --

Seante bill S. 23 (the "America Invents Act"), as passed on March 13, 2011, contains few provisions related to aspects of patent law administered by the judiciary.  This is ironic, in view of the extent to which calls for reform of damages, venue, willfulness, and other issues provided a major impetus to the persistent calls for reform that originally motivated such legislation (see, e.g., "Tech Companies Send Letter on Patent Reform to Secretary Locke"; "Draft Report on Senate Patent Reform Bill Circulated"; "Draft Report on Senate Patent Reform Bill: Damages"; "Senate Leadership Unveils Details of Patent Reform Agreement").  Decisions by the Supreme Court (eBay, KSR, Bilski, Lucent, Uniloc, TS Tech, Seagate, and the prospect of Microsoft v. i4i) may have blunted the force of these arguments (mostly by the "high tech" industry), but it is noteworthy that S. 23 contains nothing relating to the "grand compromise" worked out by Judiciary Committee Chairman Senator Leahy (D-VT), Senator Feinstein (D-CA), and Senator Specter (R-, then D-PA) in the prior bill, S. 515, which was reported out of committee in 2010 but never brought to a vote on the Senate floor.

The only provisions regarding venue, Section 8 of S. 23, relate to what the bill terms "technical amendments," wherein §§ 32, 145, 146, 154(b)(4)(A), and 293 of 35 U.S.C. and § 21(b)(4) of the Lanham Act are revised by replacing the U.S. District Court for the District of Columbia with the U.S. District Court for the Eastern District of Virginia, in recognition that the U.S. Patent and Trademark Office has moved to Arlington, Virginia.  This change will be effective on the enactment date of the Act.

The bill also contains Section 11, which applies to the residency requirement for judges on the Court of Appeals for the Federal Circuit.  Under current law, Federal Circuit judges are required to reside within 50 miles of the District of Columbia (also known as the "Baldwin Rule"), a requirement that precludes them from travelling from the residences to the court as needed (much like former Deputy PTO Director Sharon Barner was able to do during her term in the Office).  Section 11 provides that  28 U.S.C. § 44(c) be amended to read:

(c) Except in the District of Columbia, each circuit judge shall be a resident of the circuit for which appointed at the time of his appointment and thereafter while in active service.

While in active service, each circuit judge of the Federal judicial circuit appointed after the effective date of the Federal Courts Improvement Act of 1982, and the chief judge of the Federal judicial circuit, whenever appointed, shall reside within fifty miles of the District of Columbia.

In each circuit (other than the Federal judicial circuit) there shall be at least one circuit judge in regular active service appointed from the residents of each state . . . in that circuit.

On the other hand, Section 11(b) provides that repeal of the residency requirement for Federal Circuit judges "shall not be construed to authorize the provision of any court facilities or administrative support services outside of the District of Columbia," which immediately reduces the likelihood that any member of the court will be able to live outside the District.  These provisions will be effective on the date the bill is enacted into law.

Section 15 of the bill removes the best mode requirement as way of proving invalidity under 35 U.S.C. § 282 or for alleging a defect to a patent for reissue under 35 U.S.C. § 251.  The requirement is also deleted (Section 15(b)) from the requirements for claiming priority under 35 U.S.C. § 119(e)(1) or 35 U.S.C. § 120.  These provisions will be effective on the date the bill is enacted into law "and shall apply to proceedings commenced on or after that date."

Section 17 "clarifies jurisdiction" of federal courts over patenting matters, amending 28 U.S.C. § 1338(a) to affirmatively recite that "[n]o State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights" (Section 11(b)).  In a similar vein, the bill (Section 17(c)) amends 28 U.S.C. § 1295(a)(1) to recite that the Federal Circuit has jurisdiction for ". . .  an appeal from a final decision of a district court of the United States, the District Court of Guam, the District Court of the Virgin Islands, or the District Court of the Northern Mariana Islands, in any civil action arising under, or in any civil action in which a party has asserted a compulsory counterclaim arising under, any Act of Congress relating to patents or plant variety protection" (Section 17(c)(1)).  Removal of a state action to Federal Court is provided in Section 17(d) of the bill, amending 28 U.S.C. § 89 by adding new section 1454:

Sec. 1454. Patent, plant variety protection, and copyright cases

(a)  In General- A civil action in which any party asserts a claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights may be removed to the district court of the United States for the district and division embracing the place where such action is pending.

(b)  Special Rules- The removal of an action under this section shall be made in accordance with section 1446 of this chapter, except that if the removal is based solely on this section—

(1)  the action may be removed by any party; and

(2)  the time limitations contained in section 1446(b) may be extended at any time for cause shown.

(c)  Derivative Jurisdiction Not Required- The court to which a civil action is removed under this section is not precluded from hearing and determining any claim in such civil action because the State court from which such civil action is removed did not have jurisdiction over that claim.

(d)  Remand- If a civil action is removed solely under this section, the district court—

(1)  shall remand all claims that are neither a basis for removal under subsection (a) nor within the original or supplemental jurisdiction of the district court under any Act of Congress; and

(2)  may, under the circumstances specified in section 1367(c), remand any claims within the supplemental jurisdiction of the district court under section 1367.

Similarly, the bill (Section 17(e)) amends 28 U.S.C. § 89 by adding new section 1632:

Sec. 1632. Transfer by the Court of Appeals for the Federal Circuit

When a case is appealed to the Court of Appeals for the Federal Circuit under section 1295(a)(1), and no claim for relief arising under any Act of Congress relating to patents or plant variety protection is the subject of the appeal by any party, the Court of Appeals for the Federal Circuit shall transfer the appeal to the court of appeals for the regional circuit embracing the district from which the appeal has been taken.

The effective date of these amendments made will apply to "any civil action commenced on or after the date of the enactment of this Act."

For additional information regarding thisand other related topics, please see:

• "Additional Opportunities for Pre- and Post-grant Review, and Brand New Patent Trial and Appeal Board in S. 23," March 17, 2011
• "Post-grant Review Provisions of S. 23," March 16, 2011
• "Inventor's Interests, If Not Rights, Limited by S. 23," March 15, 2011
• "What Are the Provisions of the Proposed "First-Inventor-to-File" System in S. 23?" March 14, 2011
• "Obama Administration Supports S. 23," March 9, 2011
• "Reaction to Senate Passage of S. 23," March 8, 2011
• "Senate Passes S. 23," March 8, 2011

Comments

[EG]

Kevin,

Again, referring to S. 23 as "patent law reform" is a misnomer, and calling it the "America Invents Act" is oxymoronic.

[Lonely Numbered Circuit Judge]

Is my understanding correct that Section 17 will supersede Holmes Group v. Vornado? That is, only the Fed. Cir. will hear cases involving patent claims and counterclaims?

[Kevin E. Noonan]

Dear Lonely:

I think that is the intent, to make explicit that if a patent issue is involved the CAFC is the appellate court to hear the case (and, I suppose, apply the law of the regional circuit or even the state on all non-patent issues).

Thanks for the comment.

[6]

Seems to me like it might be worth it to setup a Fed. Circ courthouse on the west coast and one in texas and then have everyone come together for the rare en banc decisions.

Similar to the PTO satellite offices. I mean, if they don't want to then fine, but it seems worthwhile to allow it.