Deciding Who Decides Intellectual Property Appeals

Abstract

In Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., the Supreme Court narrowed the Federal Circuit’s appellate jurisdiction over patent cases. The Court decided that if an issue of patent law appears only in a defendant’s counterclaim, rather than the plaintiff’s complaint, the appeal must be routed instead to a regional circuit. The ruling raised fears of forum shopping in patent cases and patent law conflicts among the regional circuits.

This Article appraises Holmes Group as a decision about federal jurisdiction, not patent policy. The proposition for which Holmes Group is known – that a counterclaim does not provide a basis for a district court’s original jurisdiction – was not well presented, because a claim in the complaint already satisfied the relevant jurisdictional provision. Far more important, however, the Court neglected to explicate a statutory provision, 28 U.S.C. § 1295, that determines the appellate forum for intellectual property cases. Specifically, the Court overlooked the statute’s “except” clause, which routes some but not all intellectual property appeals to the Federal Circuit. That neglect, abetted by the parties, led the Court to reach the wrong result.

The except clause, properly construed, poses an unrecognized obstacle to legislative efforts to expand Federal Circuit jurisdiction. Moreover, the provision requires Federal Circuit appeals for disputes about proposed new forms of intellectual property, including fashion, furniture, and other forms of original design. The case offers a cautionary tale about Supreme Court review of cases that mix specialized issues with matters of more general and perhaps greater concern to the Court.

Keywords: appeals, fashion, Federal Circuit, forum shopping, Holmes Group, intellectual property, jurisdiction, patent, statutory interpretation, Supreme Court