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In this article, we attempt to answer some fundamental questions regarding the role played by the courts in the patent system by examining a set of patent cases in great detail. To this end, we have constructed a new database based on court docket reports for all patent cases filed in 1995 and 1997 and tracked the evolution of these cases (about 3700 cases) through to settlement or adjudication on the merits. The focus of this effort is on keeping track of a number of variables to understand the precise disposition of each case. We have also tracked different characteristics in order to estimate patent litigation costs in each case. For instance, we note the amount of time taken by each case through to final disposition. In addition, we have devised a new proxy for measuring costs - the number of documents filed by all the parties in each case - which we believe is more closely correlated with actual litigation costs than the traditional measures of time expended and the stage of termination in each case. Our results show that many more patent cases are adjudicated on the merits (either at the pre-trial stage through a grant of summary judgment or at trial) than is commonly thought. This work is one of the few scholarly efforts in empirical litigation scholarship that can actually estimate this amount because most other papers rely exclusively on the imprecise categorization of the Administrative Office of U.S. Courts to determine case outcomes. Our results demonstrate that in addition to the small number of patent cases going to trial (about 5%), another significant percentage of cases (about 8-9%) are resolved on the merits through summary judgment. Consequently, summary judgments are important in patent cases for determining patent validity and infringement, and the summary judgments related to patent validity occur earlier in the litigation compared to summary judgments related to patent infringement. This result is somewhat encouraging given the important role played by the courts in revoking patent rights improvidently granted at the outset by the PTO. Nevertheless, despite the fact that such rulings occur early in the proceedings compared to patent trials, we should still be concerned about the huge transaction costs associated with patent litigation because summary judgments in general, and summary judgment based on invalidity in particular, are expensive compared to summary judgments granted on other grounds. In addition, there is a significant difference in duration and number of documents filed in cases resolved through summary judgment for the 1997 filed cases compared to the 1995 filed cases. This is consistent with the changes brought about by the Markman decision that invigorated claim construction as a threshold legal issue in patent litigation. The increased importance placed on first construing the claims before addressing infringement or invalidity after Markman necessitates that significant resources be allotted to the step of claim construction before (or concurrent with) filing motions for summary judgment. Overall, our results show that transaction costs associated with patent litigation loom large, and rulings on the merits by the courts concerning patent validity, patent infringement, and remedies for infringement (i.e., injunctive relief or damages) are rare, expensive, and not pursued to completion by most litigants. Instead, most patent cases settle fairly quickly (about 12-15 months) after the filing of the complaint, thereby reducing the actual cost of patent litigation considerably. This work has significant implications for all civil litigation in general, and for recent efforts to reform the patent system by either improving patent quality through new administrative procedures at the PTO or for substantive patent law reform. Our results strongly suggest that patent litigation is largely a settlement mechanism, and hence, any proposed change in the patent laws should be analyzed in terms of the incentives generated for prompt settlement of patent disputes. In addition, entities and interest groups seeking cheaper and/or a greater number of patent rulings concerning validity and infringement will be wise to look elsewhere, perhaps at other patent institutions such as the PTO or at other alternative dispute resolution (ADR) mechanisms that complement the courts.
Patent scope plays a central role in the operation of the patent system, making patent claim construction a critical aspect of just about every patent litigation. With the resurgence of patent jury trials in the 1980s, the allocation of responsibility for interpreting patent claims between trial judge and jury emerged as a salient issue. While the Supreme Court's Markman decision usefully removed claim construction from the black box of jury deliberations notwithstanding its "mongrel" mixed fact/law character, the Federal Circuit's adherence to the view that claim construction is a pure question of law subject to de novo appellate review produced an unusually high reversal rate, distorting the evidentiary foundation of claim construction determinations, delaying settlement of patent cases, running up litigation costs, and turning appellate review of nearly every patent case into re-litigation of patent claim terms. In 2004, the Federal Circuit undertook to reassess this regime in the Phillips case. The majority en banc opinion largely stayed the course. Indeed, the empirical studies to have emerged since Phillips suggest that not much has changed, finding that the reversal rate remained high and that the Federal Circuit's analytical framework remained largely unchanged. This article presents the results of a comprehensive empirical analysis of the Federal Circuit's claim construction jurisprudence from 2000 through 2011. In contrast to prior analyses, we find that the claim construction reversal rate has dropped precipitously since the Phillips decision from 37.6% to 23.8% on a per claim term basis. Reversal rates have fallen for all members of the Federal Circuit and across all technology fields except business methods. During 2011, the average reversal rate dipped to 17%. This does not mean, however, that the problems of de novo review have been adequately resolved. So long as the Federal Circuit clings to the view that claim construction is a question of law subject to de novo review, district courts will downplay their resort to experts and fact-finding in managing claim construction. This will undermine the quality of adjudication and appellate review by failing to elicit relevant evidence and perpetuating opaque analysis and reasoning. We propose a "mongrel" standard of appellate review of claim construction decisions that better reflects the comparative strengths of trial judges in determining how skilled artisans understand patent claim terms. Formal recognition of this more deferential standard promises to improve the quality of claim construction at the trial court level while improving transparency and encouraging earlier settlement of patent disputes.
The creation of the U.S. Court of Appeals for the Federal Circuit (CAFC) is generally regarded as an improvement in the system of patent adjudication in the United States. There is, however, considerable support for the creation of a specialized patent trial court based on the argument that we need to create specialized, judicial human capital at the trial level. Proponents favoring this change base their reasoning on the two-part argument that, because of the complexity of patent cases and the natural limitation on most federal judges to be hearing a significant volume of patent cases, experienced federal judges on a specialized patent trial court will (1) resolve cases more efficiently (i.e., the duration of patent cases will be shorter), and (2) render more accurate decisions (i.e., lower reversal rate on appeal). We treat each part of this argument as hypotheses to be tested by statistically analyzing the relationship between both general and patent-specific judicial experience of federal judges hearing patent cases and the efficiency and accuracy with which their cases were handled. In other words, we empirically answer the question whether federal judges exposed to more patent cases are better in terms of efficiently and accurately deciding patent cases compared to their judicial counterparts who have lesser exposure to patent cases. We measure general experience in terms of years on the bench (and other variables), cumulative patent experience in terms of the total number of patent cases a judge had presided over since the Federal Circuit Markman ruling, and recent patent experience by the number of patent cases a judge had presided over in the three year previous to the case at hand. We then test the impact of these experience measures on the efficiency with which a case is terminated, measured in terms of duration of the case, and the accuracy of the judge's decisions, measured by the reversal rate on appeal. With respect to efficiency, we find that both general and specialized patent experience shorten case duration, but only by a moderate amont. However, there is some weak evidence that patent cases handled by judges with more time on the bench may be more likely to result in settlements. Thus, it is possible that the impact of general judicial experience on case duration could be due to the ability of experienced judges to facilitate settlements rather than adjudicating to a ruling on the merits (summary judgment or through to trial). There is, however, no greater propensity to settle in the case of judges with more patent-specific judicial experience. With respect to accuracy, we find that patent-specific judicial experience may increase the probability that a district court judge's rulings are fully affirmed by the Federal Circuit (CAFC) and reduce the probability that they will be at least partially reversed by the CAFC. However, general judicial experience has no statistically significant impact on the reversal rate on appeal in patent cases. When the impact of specialized patent experience is tested for individual legal issues, we find that increased patent-specific experience may lower the reversal rate on appeal for rulings on preliminary injunctions, judgments as a matter of law, and infringement that involves issues other than claim construction. With respect to the issue of claim construction, our findings are consistent with other work demonstrating that experience with patent cases per se has no impact on the reversal rate of district court claim construction rulings. Our results establish a real but moderate case for the development of patent-specific, judicial human capital at the district court level through the establishment of a specialized patent trial court.
Patent Disputes: Litigation Forms and Analysis, Second Edition contains over 60 full-length agreements - with accompanying checklists and commentary - covering virtually every area of patent litigation in federal courts and before other administrative bodies, such as interpartes proceedings in the PTO. The book is organized sequentially, following the course of the litigation process - from complaint to appeals. Forms include: Sample complaints for federal court and administrative proceedings Sample answers, counterclaims and third party complaints Sample motions ranging from Motion to Dismiss to Motions for Sanctions/Attorney's Fees Discovery forms, such as interrogatories and protective orders Forms for Markman Hearings Trial forms such as jury instructions Forms for appeal such as Notice of Appeal, and Petition for Cert With your purchase of Patent Disputes: Litigation Forms and Analysis, Second Edition, you'll also receive the bonus companion CD-ROM containing fully customizable versions of all of the forms and documents in the book.
In recent years, business leaders, policymakers, and inventors have complained to the media and to Congress that today's patent system stifles innovation instead of fostering it. But like the infamous patent on the peanut butter and jelly sandwich, much of the cited evidence about the patent system is pure anecdote--making realistic policy formation difficult. Is the patent system fundamentally broken, or can it be fixed with a few modest reforms? Moving beyond rhetoric, Patent Failure provides the first authoritative and comprehensive look at the economic performance of patents in forty years. James Bessen and Michael Meurer ask whether patents work well as property rights, and, if not, what institutional and legal reforms are necessary to make the patent system more effective. Patent Failure presents a wide range of empirical evidence from history, law, and economics. The book's findings are stark and conclusive. While patents do provide incentives to invest in research, development, and commercialization, for most businesses today, patents fail to provide predictable property rights. Instead, they produce costly disputes and excessive litigation that outweigh positive incentives. Only in some sectors, such as the pharmaceutical industry, do patents act as advertised, with their benefits outweighing the related costs. By showing how the patent system has fallen short in providing predictable legal boundaries, Patent Failure serves as a call for change in institutions and laws. There are no simple solutions, but Bessen and Meurer's reform proposals need to be heard. The health and competitiveness of the nation's economy depend on it.
Produced with the support of the University of California at Berkeley School of Law and the Berkeley Judicial Institute, this Guide highlights the progress achieved in patent case management in ten patent-heavy jurisdictions. The Guide offers an overview of the patent system in each jurisdiction, including the role of patent offices in evaluating and deciding on patent validity, and the judicial structures responsible for resolving patent disputes. Thereafter chapters are structured on the different stages of patent litigation in civil infringement cases. Readers can create their own custom guide by selecting any combination of jurisdictions and topics covered in the Guide. Please see the Custom guide link: https://www.wipo.int/about-patent-judicial-guide/en
The International Trade Commission (ITC) provides a special forum for adjudicating patent disputes involving imports. It offers several advantages over U.S. district courts to patentees, including relaxed jurisdictional requirements, speed, and unique remedies. Unlike district courts, the ITC almost automatically grants injunctive relief to prevailing patentees, and does not recognize certain defenses to infringement. These features have been justified as needed to prosecute foreign infringers who would otherwise evade U.S. district court. However, they have also led to charges that the ITC is protectionist and unfair to defendants, and fosters inconsistency in U.S. patent law. Based on an analysis of every patent investigation initiated at the ITC from 1995 to mid-2007, this Article assesses these charges. It fails to find support for the first two contentions. ITC cases involve domestic defendants as often as they do foreign defendants, and 72% of the time in combination. Thus, U.S. companies are thus just as likely to be named in ITC actions as defendants as are foreigners. When cases were adjudicated, plaintiffs at the ITC were more likely to win than plaintiffs in district court (58% v. 35%). However, when cases filed in both venues were compared, most of this difference disappeared (54% v. 50%), cutting against claims of an anti-defendant bias. The data, however, provide some support for the third contention. The ITC takes about half as much time to decide cases, is four times more likely to adjudicate a case (44% v. 11%), and more readily awards injunctions to prevailing patentees (100% v. 79%) than district court. However, the ITC cannot award damages, and its decisions do not bind district courts. The relief provided is thus neither complete nor final. This creates incentives for litigants to file in both venues, which is done 65% of the time and creates the possibility of duplicative litigation and inconsistent results. As the number of ITC-eligible cases expands with the growth in overseas manufacturing, the interface between the venues should be revisited. This Article suggests several ways to strengthen coordination between the ITC and district courts to take into account the increase in parallel litigation and concurrent risk of judicial inefficiency. These include (1) limiting patent jurisdiction at the ITC to cases that otherwise could not be heard in a U.S. district court, and (2) reducing the incentive for cases to be filed in both venues by harmonizing their rules and remedies.