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Abstract

The law governing the Federal Circuit's appellate jurisdiction was brought into question in Holmes Group, Inc. v. Vornado Circulation Systems, Inc. The Federal Circuit's appellate jurisdiction over Vornado's appeal rested solely on Vornado's counterclaim alleging patent infringement by Holmes. Holmes's complaint sought a declaratory judgment of no trade dress infringement and did not include any patent law claims. While the Federal Circuit found appellate jurisdiction over Vornado's appeal based on the counterclaim of patent infringement, the Supreme Court disagreed. The Court focused on the language in 35 U.S.C. § 1338(a), which defines the Federal Circuit's appellate jurisdiction by the statute's reference in 35 U.S.C. § 1295(a)(1). The Court indicated that the "arising under" language in § 1338(a) invokes the well-pleaded complaint rule. The Court noted that the well pleaded complaint rule provides that whether a case "aris[es] under" federal law, or in this case patent law, must be determined from the plaintiff's complaint. The Court therefore concluded that a counterclaim, such as Vornado's, did not "aris[e] under" patent law because it was not contained within the plaintiff's, in this case Holmes's, complaint, and thus could not give the Federal Circuit appellate jurisdiction[...] The Supreme Court's decision in Holmes presents significant questions about the scope of the Federal Circuit's appellate jurisdiction and the removal and exclusive jurisdiction of federal district courts over patent law claims. This uncertainty threatens the uniformity in patent law that the Federal Circuit was charged with creating. This Article addresses these questions and concludes that the potential for non-uniformity resulting from the ruling in Holmes is real. The rationale underlying the Holmes decision will divert patent law counterclaims from the federal judicial system, not just the Federal Circuit's appellate review. In addition, situations will likely arise where regional circuits revisit issues already decided by the Federal Circuit in light of the circuit's pre-1982 case law. A body of state law on patent issues may also be developed. To prevent these situations from occurring, the effect of Holmes on the Federal Circuit's appellate jurisdiction must be limited and regional circuits and state courts must look to the Federal Circuit for guidance on patent law issues. Just as the Federal Circuit gives proper deference to regional circuit decisions on non-patent law issues, regional circuits and state courts should give deference to the Federal Circuit on issues related to patent law. Additionally, legislative responses could provide an absolute solution to the problem presented by Holmes. Congress can amend § 1295(a) and § 1338 to return the Federal Circuit's appellate jurisdiction, and federal district court jurisdiction, to its state before Holmes. This would ensure, even post-Holmes, that patent law claims are litigated at the federal level and reviewed by the Federal Circuit. This Article reaches these conclusions in the following manner. Part I of this Article begins by looking at the creation of the Federal Circuit, including the reasons Congress created a specialized appellate court for patent law. Part I proceeds to examine the development of the case law that defined the Federal Circuit's appellate jurisdiction over patent law claims, up to the Supreme Court's decision in Holmes. Part II of this Article examines, in-depth, the Supreme Court's decision in Holmes. Part III attempts to further define the specific types of cases that must, under Holmes, be appealed to a regional circuit as opposed to being appealed to the Federal Circuit. The effect of Holmes on federal district court removal and exclusive jurisdiction over patent law claims will also be examined. To provide an empirical prospective, published Federal Circuit cases, since the Federal Circuit's inception in 1982, will be reviewed to determine which of these cases would, under the Holmes decision, have gone to the regional circuit or stayed in state court. Part III also discusses the "choice of law" rules that regional circuits and state courts may adopt to handle the patent law claims they will review or decide. Part III also examines the non-uniformity and conflicts that will be created if regional circuits and state courts ignore the Federal Circuit's case law and begin to develop their own, independent precedent on patent issues. Part III takes as an example specific areas of patent law, such as the patentability of business method patents, and looks to how different regional circuits and state courts may treat these patent law issues. Part IV focuses on the non-uniformity that the holding in Holmes creates. In particular, Part IV investigates the harm the result of Holmes will have on doctrinal stability and horizontal equity in patent law. Finally, Part V presents potential solutions to prevent this breach of uniformity in patent law post-Holmes, suggesting that regional circuits and state courts observe Federal Circuit law as controlling on patent law claims and that, in order to truly preserve patent law uniformity, legislation must be passed to restore the Federal Circuit's appellate jurisdiction, and federal district court exclusive jurisdiction, to where it stood before the Supreme Court's decision in Holmes.

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