The Internet's unprecedented explosive growth,
favorably compared to that experienced during the Industrial Revolution, has created a “tangled web” of legal and scientific complexity that has far outpaced the judiciary's ability to manage these cases.
Exponential growth in this decade is also occurring in numerous high technology fields such as computer science, biotechnology, telecommunications, and engineering specialties.
Such technological achievement is essential to the integrity of the world's economy: In the Internet e-commerce arena alone, sales mushroomed to over $102 billion in 1998, with predictions that by 2003, e-commerce sales to consumers could well reach $400 billion.
Similarly, business-to-business e-commerce was anticipated to grow exponentially over tenfold, reaching $1331 billion in 2003.
The judicial system has been perplexed in the face of the extraordinary and unique complexities introduced by novel technologies and scientific breakthroughs. Judge Friendly and Judge Learned Hand were harbingers advocating court reform as a paradigm shift within the judiciary, as they predicted the occurrence of the current dilemmas posed by the modern technological age. For example, Judge Friendly observed that the tremendous complexity in intellectual property law challenges a generalist judge's
comprehension and capabilities. He noted, "courts must. . . deal today with a great number of patents in the higher reaches of electronics, chemistry, biochemistry, pharmacology, optics, harmonics, and nuclear physics, which are quite beyond the ability of the usual judge to understand without the expenditure of an inordinate amount of educational effort by counsel and of attempted self-education by the judge, and in many instances, even with it."
Judge Friendly's commentary regarding the limitations of federal judges echoed the words of Judge Learned Hand almost a century ago, when he observed that generalist courts were ill-equipped to decide complex technological issues:
I cannot stop without calling attention to the extraordinary condition of the law which makes it possible for a man without any knowledge of even the rudiments of [science and technology] to pass upon such questions as these. The inordinate expense of time is the least of the resulting evils, for only a trained [scientist] is really capable of passing upon such facts. . . . How long we shall continue to blunder along without the aid of unpartisan and authoritative scientific assistance in the administration of justice, no one knows; but all fair persons not conventionalized by provincial legal habits of mind ought, I should think, unite to effect some such advance.
More recently, Judge Michel observed, "it seems likely that society at large, not to mention the business community, will be less tolerant of any inconsistent or possibly unsound adjudications by general adjudicators handling highly complicatedmatters of great economic importance with widespread practical consequences."
He predicted that Congress might soon respond to pressures from the business community and from other countries to implement increased specialization within the Federal Circuit or other federal courts.
Corporations with enormous economic stakes in high technology races impose pressures on the legal system to transform itself, posing special challenges that promise to shift the boundaries and contours of intellectual property law.
Judge Learned Hand stated his prescription for the generalist court’s predicament:"No one will deny that the law should in some way effectively use expert knowledge wherever it will aid in settling disputes. The only question is as to how it can do so best."
He observed that courts historically have frequently and justifiably "summoned experts to help it where its knowledge was lacking," particularly where required "to help it out of its difficulties."
Nevertheless, the court’s simplistic deployment of experts in times of need may serve merely as a partial “band aid” remedy to the serious challenges against the integrity of our judicial system.
The federal judicial system has experienced difficulties in reaching uniform and just decisions in Internet and other technologically complex cases.
Most intellectual property disputes are decided by generalist judges and juries in U.S. District Courts with perhaps insufficient understanding of the technological and societal complexities raised by such cases.
The only federal court that specializes in intellectual property cases is the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit” or “CAFC”), a semi-specialized court with subject matter jurisdiction over patent, trademark, U.S. International Trade Commission, and other cases.
While currently only three of the twelve CAFC judges have technical backgrounds, the bench obtains intensive practical exposure to technologically complex cases through the large proportion of intellectual property cases on its calendar.
As a semi-specialized tribunal, the CAFC provides some guidance to district courts, the Patent and Trademark Office ("PTO"), and U.S. corporations, through published judicial opinions.Perhaps counterintuitively, the Federal Circuit, as a semi-specialized court, reviews the technical finding decisions of generalist district court. This specialist appellate court review of generalist trial court court decisions runs contrary to the generally accepted judicial principle that appellate courts should focus on significant societal policy interests in adjudication rather than becoming mired in the intricacies of factual determinations.
Consequently, the Federal Circuit’s appellate decisions may sometimes “miss the mark” through oversimplification of issues or failure to consider broader societal or socioeconomic implications.
The problem results, in part, from the divergence of science and law, where scientists familiarize themselves with hypotheses, data, and the scientific method, whereas judges and lawyers attune themselves to the world of laws, policies, and the application of legal principles. While the scientist's goal is to strive toward learning the scientifically verifiable and perhaps immutable objective truths of the universe manifested as laws of nature,
the lawyer's goal, in contrast, is to subjectively persuade the court or jury of the superiority and justness of his client's cause.
The American legal system, founded upon the adversarial theory that "if you set two liars to exposing each other, eventually the truth will come out,"
may not be conducive to a judge’s committed search for understanding.
A principal problem also lies in the technical complexity of the subject matter of intellectual property matter itself—where inventions, by definition, must satisfy a novelty requirement. Senator Patrick J. Leahy observed, "I believe that patent law stands apart from virtually every other legal discipline both in its extreme focus on science and technology and its need for uniformity in decision-making."
Federal judges and juries, with the notable exception of the Federal Circuit, generally lack the scientific expertise arguably necessary to comprehend and decide highly technical intellectual property cases such as those in Internet law.
Professor Kenneth Dueker states: "It is unreasonable to expect judges to be experts in the field of computer science as parties wrangle over the mechanics of the Internet."
Yet, the United States Supreme Court, in Daubert v. Merrell Dow Pharmaceuticals, Inc., held that under Federal Rule of Evidence 702,
"[T]he trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable."
This mandate allows courts to appoint experts such as expert witnesses, technical advisors, and special masters to help them meet their responsibility.
Chief Justice Rehnquist said that judges should not aspire to become members of a new generation of "amateur scientists."
He emphasized the importance of their "gatekeeping" role in admission and evaluation of scientific evidence, routinely encountered in cases dealing with intellectual property inventions.
Of course, balance is required, and judges should not shirk their responsibilities through over-delegation of their judicial decision-making responsibilities to technical or scientific experts who may have a clearer understanding of complex technical issues.
However, the “tangled web of technological complexity” has ensnared most of the generalist federal judiciary, in spite of the Supreme Court’s commendable objectives expressed in Kumho Tire and Joiner. The Internet and associated computer technologies create special challenges for judges, legislators and the entire legal system because of their unique differences from other prior forms of communication.
For example, the Internet has posed novel issues in copyright law relating to electronic data and transmission through cyberspace. Judge Coffman lamented that such challenging questions presented by new technologies creates "a legal problem vexing in its difficulty, [with] a dearth of squarely applicable precedents … seem[ing] inexplicable, and an almost complete absence of guidance from the terms of the Copyright Act."
Technological advances often far outpace established law and legal doctrine.
Judge Michel states his perception of the need for court reform within the federal judiciary for intellectual property cases as follows:
I have developed a strong sense that litigators, as well as a very large portion of the client base, consider the status quo to be significantly unsatisfactory. I am also sensitive to criticism that appears in academic commentary and in analyses done by experts that raise serious questions about whether the U.S. system of civil justice is not unduly slow, disruptive, expensive, and unnecessarily unpredictable. Therefore, if I have a bias, it is that the current practices are significantly unsatisfactory, and, therefore, major reforms should be considered and tried, at least on a pilot basis. (emphasis added).
Michel, Review of Federal Circuit Decisions, supra note 9, at 1203.
This article proposes that the “tangled web” of legal and scientific complexity experienced in the aftermath of explosive technological growth in this new millennium may be “untangled,” at least in part, through court reform by implementing policies of increased specialization within the judiciary. Part II discusses the current structure of adjudication in intellectual property cases. Federal jurisdiction is dominant in these areas, thus district courts, the Court of Appeals for the Federal Circuit, the Court of International Trade (as an Article III court), and the Patent and Trademark Office (as an Article I administrative court) are the primary focus. The Internet Corporation for Assigned Names and Numbers (“ICANN”), an independent administrative panel, is also briefly discussed.
Part III presents various policy arguments for and against increased specialization within the federal judicial system. Topics for discussion include (1) the specialist/generalist court debate over increased specialization within the judiciary;
(2) the effects of specialization within the federal court system on uniformity, determinancy, accuracy, precision, and predictability of judgment--with particular focus placed upon the Federal Circuit, a stabilizing semi-specialized tribunal; (3) criticisms of the Federal Circuit and federal courts for indeterminancy due to "panel dependency," doctrinal vagueness in claim interpretation, and inexperienced lay jury panels; (4) the impact of specialization in prevention of forum shopping through the uniformity of nationwide application of intellectual property law; (5) judicial efficiency and economy resulting from specialization in attempts to relieve the crisis in volume plaguing the federal courts; and (6) the effects of a more specialized judiciary on the protection of American business interests, promotion of research and development, with discussion of countervailing policy considerations.
Part IV explores potential models for federal court reform through increased specialization. This Part discusses (1) the court’s appointment of technical or scientific advisors, experts, special masters, and magistrates; (2) the increased use of specialized judges for intellectual property and other complex scientific or technical cases, (3) the establishment of specialized divisions within the federal courts, and (4) the potential deployment of “blue ribbon” expert juries or educated juries used to resolve complex issues of fact.
Finally, Part V provides concluding remarks that the challenge of complexity threatening to engulf the federal judicial system in high technology arenas may be met, at least in part, by increased specialization within the judiciary. Building upon the successes of the Federal Circuit as a "clear experiment"
in court reform, this article advocates the increased deployment of specialist judges, technical advisors, scientific expert witnesses, "blue ribbon" expert jury panels, specialist federal high technology judiciaries, or other approaches to provide the specialization required to meet the judicial challenges of the future.
Congressional authority for the creation of the federal courts is provided by Article III of the United States Constitution.
In addition, Congress has used its Article I powers to create administrative agencies or tribunals with adjudicative responsibilities.
This part of the article provides a brief overview of the federal court system, including existing specialty tribunals that hear intellectual property cases. It also presents initial discussion demonstrating the growing need for increased specialization in the federal judiciary.
Litigation of major Internet law disputes, as in most intellectual property cases, occurs primarily in U.S. District Courts with the potential for review by the Federal Circuit or other courts of appeal, depending on the particular issues involved.
Although the United States Supreme Court wields the theoretical power to hear and decide cases appealed from the Federal Circuit or, more rarely, from District Courts, the Supreme Court has infrequently chosen to interfere with the Federal Circuit's decisions.
Article III, § 1 of the United States Constitution states, "The judicial Power of the United States, shall be vested in one supreme court, and in such inferior Courts as the Congress may from time to time ordain and establish."
Since Article III, § 2, d.1 provides the Supreme Court with original jurisdiction only "[i]n all Cases affecting Ambassadors, other public Ministers and Consuls; and those in which a State shall be Party,"
this section implies that Congress must necessarily create lower federal courts for complete exercise of judicial power.
Congress created the first tier of lower federal courts, the district courts, which President George Washington signed into law as the Judiciary Act in 1789.
A century later, a second tier of federal courts, the courts of appeal, was added by the Evarts Act.
Congress has granted exclusive jurisdiction in patent law cases to the U.S. District Courts.
These lower federal courts, staffed by generalist judges and lay juries, resolve a large proportion of significant intellectual property disputes.
In contrast, both litigation and prosecution attorneys involved with patent law issues almost invariably specialize in their areas of expertise.
While litigation lawyers may lack technical backgrounds and are not required to register as "patent attorneys" with the Patent and Trademark Office ("PTO"), many of these litigators have become "specialized in fact,” with a virtually exclusive focus upon patent practice in the representation of clients before the federal courts.
Patent prosecution attorneys or patent agents, with technical backgrounds, generally prosecute patents virtually exclusively before the PTO.
In view of the practical necessity for deploying specialized litigation and patent prosecution lawyers to argue intellectual property cases, one could maintain by analogy that specialist district court judges should also possess greater expertise or understanding necessary to rightly decide technologically complex cases than current generalist judges. The Advisory Commission on Patent Law Reform, in acknowledging a need for greater specialization at the lower court level, proposed several solutions in court reform.
The Commission supported the following proposals: (1) appointment of specialized judges possessing experience in patent cases to a newly created special branch of federal district courts, (2) placement of an "expert" judge, with expertise in patent law, in every district court, and (3) restriction of the number of district courts with jurisdiction to hear patent cases.
Judicial expertise in patent law is particularly critical in "Markman" hearings where district court judges resolve disputes concerning claim interpretation
as matters of law. The judge’s interpretations of patent law claims are often dispositive in the jury's subsequent determinations regarding potential infringement.
Thus, district court reformers may reasonably consider proposals for increased specialization in reforming the first tier of our fundamental federal court system. While perhaps more radical than other proposals for specialization to be discussed, reformation at the district court level has the advantage that a specialized district court judge, as fact-finder, could possess adequate knowledge to effectively resolve complex matters at the interface of science and law.
In contrast to the generalist nature of the U.S. District Courts and courts of appeal,
the Court of Appeals for the Federal Circuit (“Federal Circuit” or “CAFC”) is a semi-specialized court with subject-matter jurisdiction,
rather than geographical jurisdiction, over intellectual property cases (e.g., patent, trademark), U.S. International Trade Commission cases, and Federal Tort Claims Act, among others.
The CAFC hears all appeals from the PTO and district courts involving intellectual property cases, typically serving as the “court of last resort” for intellectual property cases.
The Federal Circuit was created by the Federal Courts Improvement Act of 1982.
When established, the CAFC was unique--as the only Article III appellate court in existence with nationwide subject matter, rather than geographical, jurisdiction. The Federal Circuit has exclusive jurisdiction over PTO appeals for both patent denials and interference proceedings.
Unsuccessful inventors or assignees who have been denied patents and litigants who have lost in interference proceedings may wish to appeal PTO decisions to the Federal Circuit. Proponents of a more specialized intellectual property tribunal maintain that the Federal Circuit's mere "semi-specialized" status in hearing patent law cases among others in its mixed subject matter jurisdiction prevents the CAFC from achieving its full potential.
Correspondingly, Judge Howard Markey, previous Chief Judge of the Court of Customs and Patent Appeals (CCPA), the precursor to the Federal Circuit, observed, "The Court of Appeals for the Federal Circuit is obviously less specialized. . . than either of the two courts it consolidates. . . since. . . we will continue all of our present jurisdiction plus."
The Federal Circuit judges, appointed by the President with Senate advice and consent,
are primarily generalist judges, with only three current judges having any formal degrees in science.
Since Federal Circuit judges are usually not registered patent attorneys, they may also be subject to the same criticisms of generalist judges in district and appellate courts discussed further in Part III.A.
Notwithstanding its lack of specific expertise, the Federal Circuit has significantly advanced the delineation of patent law doctrine over the past three decades, due, at least in part, to its semi-specialized jurisdiction and focus. Some commentators maintain that the Federal Circuit has been "patent friendly" in defining this area of law,
supporting protection of the United States' business interests. For example, under 35 U.S.C. § 101, the CAFC has utilized its semi-specialized insights into patent law's "metes and boundaries" to expand statutory subject matter to include computer software programs,
living organisms,
and business methods, defined as "processes."
Such broadening of statutory categories by the Federal Circuit for patentable subject matter have served as the foundation upon which corporations have built the major pillars of novel computer software technologies, biotechnology developments, and business methods.
This CAFC policy shift contrasts with the federal courts’ historic failure in patent law to adequately protect the interests of the United States' semiconductor industry, leading to Japan’s dominance of this field in the 1980s.
Thus, the "experiment"
of the Federal Circuit as a semi-specialized court of appeals for intellectual property cases has apparently succeeded if success is measured in terms of protecting U.S. technology and business interests through such modes as expanding the categories of patentable subject matter.
In part, the Federal Circuit's semi-specialization in patent law has permitted that court to conduct detailed analysis of Bonito Boats' finely crafted bargain. The Supreme Court's Bonito Boats mandate is to achieve the proper balance between promoting industry’s business interests in the protection of valuable intellectual property rights, on one hand, and advancing the public’s interests in free access to information and societal objectives, on the other.
The Supreme Court and commentators note the success of the Federal Circuit in meeting both judicial substantive and procedural efficiency objectives, particularly in providing uniformity, order and predictability to a complex body of law.
Over the past quarter century, the U.S. Supreme Court has implicitly given the Federal Circuit its “vote of confidence” in resolving complex technological issues by rarely granting certiorari to hear patent or trademark cases. The Supreme Court, staffed by generalist justices, may hesitate to decide technologically difficult cases perhaps in part because of its unfamiliarity and discomfort with the world of high technology. Regardless of the underlying rationale, the Court has rarely intervened in intellectual property case decision-making by the Federal Circuit in spite of the enormous societal impact of high technology on economic policies affecting corporate business interests. In the period from 1945 to 1980, the U.S. Supreme Court denied certiorari in all but one patent case--and this was a case where the Court chose to resolve a circuit conflict.
Yet the Hruska Commission justified the Supreme Court’s acquiescent role by presenting an idealized view of the Supreme Court’s function in continuing to establish “national policy in the area of patent law as in other areas of federal law,” without the necessity of performing “a monitoring function on a continuing basis in this complex field.”
However, the Supreme Court apparently has only infrequently fulfilled this ostensible panoramic “monitoring function”
in high technology intellectual property cases.
Correspondingly, the Federal Circuit was established to provide uniformity in the application of intellectual property law,
prevention of forum shopping among federal courts,
and specialized expertise in a complex body of law.
Consistent with this historic trend, since 1980, the Supreme Court has chosen to resolve only a few select patent issues.
Thus, the Supreme Court, through its inaction in denying certiorari to intellectual property cases, has permitted the Federal Circuit to become, in essence, the de facto "court of last resort" for patent cases, in major part because of its "semi-specialized" understanding of this complex body of law.
Support for the Federal Circuit's expanded jurisdiction over intellectual property cases was documented by the White Commission, chaired by retired U.S. Supreme Court Justice Byron R. White. In 1998, the White Commission analyzed the workings of the federal appellate courts with an eye toward court reform.
The Commission noted that a significant increase in the Federal Circuit's jurisdiction over intellectual property cases was supported by academic scholars; but the Commission generally remained silent on whether it would support such a delegation of authority to the CAFC.
However, the Commission briefly discussed the option of placing copyright cases within the Federal Circuit's jurisdiction, transferring them from regional circuits and complementing the CAFC’s existing intellectual property jurisdiction over patent and trademark cases.
Most commentators recognize that the Federal Circuit has already provided some degree of uniformity and predictability to the area of intellectual property law.
However, further Federal Circuit specialization through the appointment of specialist judges with demonstrated legal and technical expertise in this field has been advocated to provide the CAFC with the tools necessary to accelerate transformation in this area of law to keep pace with innovative breakthroughs occurring in this technological age.
The United States Court of International Trade (“CIT”) is a specialized court that was fundamentally transformed by the Customs Courts Act of 1980,
from its original Article I status as the United States Customs Court
to its current Article III status. The historical roots of this court extend back to 1890, when Congress first formed the Board of General Appraisers, a Department of Treasury administrative agency.
The Customs Court responsibilities were originally more generally circumscribed and "directed to the execution of one or more such powers. . . prescribed by Congress." During the transformation from Article I to Article III status, CIT functions, jurisdiction, and powers were expanded in roles consistent with the Article III judiciary's "structure, organization, and procedure."
Within Federal Circuit's appellate jurisdiction, the CIT also employs full-time, specialized, and life-tenured Article III judges to serve on the bench.
The provision of life tenure is significant to advocates of increased specialization because it permits judges to develop expertise while on the bench and to provide stability to an increasingly complex body of international trade law,
obtained through congressional court reform.
Semi-specialized Article III federal courts,
staffed by part-time generalist judges
include the Temporary Emergency Court of Appeals,
the Special Court hearing railroad property matters,
the Foreign Intelligence Surveillance Courts,
and the federal district court division that appointed prosecutors under the Ethics in Government Act.
Such semi-specialized federal courts, perceived as combining the best of both worlds—the "panoramic viewpoints" of generalist courts and focused comprehension of specialized courts—have been utilized historically to address specific issues confronting the government.
Article I of the U.S. Constitution empowers Congress to establish specialized legislative tribunals, often referred to as "agency or Article I courts."
Under Article I, Congress may delegate rule-making and adjudicative authority to administrative agencies that specialize in statutorily defined areas of law. Representative administrative agencies created under Congress’ Article I power include the Environmental Protection Agency (EPA) and the Occupational Safety and Health Review Commision (OSHRC).
Judicial authority for Congress' establishment of agencies, as "legislative courts," was supported by Supreme Court decisions in Northern Pipeline Construction Co. v. Marthon Pipeline Co.
and Commodity Futures Trading Commission (CFTC) v. Schor
that circumscribed the limits of Article I agency tribunal powers. In Northern Pipeline, the Supreme Court plurality held that while it was Article III’s “inexorable command” that United States judicial power be placed only in judges with both life tenure and salary stability,
legislative courts and administrative tribunals could be created in accordance with “the exceptional power[] bestowed upon Congress by. . . historical consensus.”
Legislative courts or agencies are vested with authority to formulate rules and adjudicate cases based upon their specialized expertise.
Agencies were established to fill the interpretative void of legislative enactments to fulfill congressional intent in specialized areas of law. Agency interpretations of a statute are generally given "controlling weight" upon judicial review by an Article III court as long as it is reasonable, rather than "arbitrary, capricious, or manifestly contrary to statute."
Appellate courts generally uphold agency decisions in about 70-75% of cases.
Article I decisions are generally subject to judicial review by Article III courts. However, decisions by Article I courts or agencies, as adjudicative bodies, are often given some degree of deference by the courts.
Thus, federal courts generally support decisions by Article I agencies or courts, such as the PTO, unless these decisions are held to be “arbitrary and capricious,”
not supported by “substantial evidence,”
or an “abuse of discretion.”
The Board of Patent Appeals and Interferences of the PTO ("Board") operates functionally as a specialized Article I tribunal when it hears patent cases, such as those relating to the patentability of inventions, interference or priority proceedings, and other related issues. The PTO, a division of the Department of Commerce,
employs over three thousand patent examiners, reviews over two hundred thousand applications annually, and issues over one hundred thousand patents per year
in compliance with over three hundred pages of regulations promulgated by this agency in accordance with its congressional mandate.
The PTO’s principal focus is in issuance of patents and trademarks,
hiring and deploying expert scientists specialized in the subject matter of various scientific disciplines.
However, the PTO, through its Commissioner and Board, secondarily may re-examine patent validity,
declare an interference,
or consider reissue of a patent.
Thus, the specialized scientific expertise of the PTO Board, as a legislative tribunal, permits it to make pertinent decisions based on relatively established technical/legal grounds.
While the Federal Circuit reviews PTO Board and Commissioner decisions de novo,
practicing patent attorneys may consider such PTO administrative and adjudicative proceedings as practical alternatives to conventional patent litigation relegated to the federal courts.
In Dickinson v. Zurko, the Supreme Court shook the foundations of the patent world by holding that the review of PTO decisions by the Federal Circuit should be under the Administrative Procedure Act's ("APA's") “court/agency” standard articulated previously,
rather than under the “court/court” clearly erroneous standard under the Federal Rules of Civil Procedure.
One principal effect of the Supreme Court’s holding in Dickinson is that the semi-specialized Federal Circuit must now give greater deference to PTO findings and decisions, as a specialized Article I agency.
Some supporters of Dickinson maintain that the PTO, with its superior expertise in intellectual property law and mastery of factual inquiry, should justifiably be empowered with greater decision-making authority than the Federal Circuit, which is primarily composed of generalist judges without technical training.
PTO proponents, which often include the Patent Bar and American Bar Association, argue that heightened PTO authority would encourage America's investment in research by supporting the PTO's policy of patent protection of technologies. Conferring Article III status upon the PTO might aid in meeting these policy objectives.
In contrast, opponents maintain that the Federal Circuit, with its exclusive grant of subject matter jurisdiction in intellectual property arenas, possesses the greater expertise and broader understanding of legal principles.
Nevertheless, with the Supreme Court in Dickinson defining today's judicial standards in intellectual property law, the balance of power has tilted toward greater authority vested in the more specialized PTO, as an administrative agency composed of technical experts, to determine the patentability of inventions.
Certainly, the PTO's scientific expertise is vastly superior to that existing in any federal court today, perhaps even including the Federal Circuit. It is not surprising that the Federal Circuit, a semi-specialist court, has experienced some apparent difficulty in adjudicating complex technological cases. Moreover, since intellectual property is, by definition, novel--distinguishable in claims from any prior inventions-- the Supreme Court's Dickinson decision could be perceived perhaps as a rational “vote of confidence” in the specialist PTO agency's competence in making the difficult determinations concerning patentability of inventions. Even some Federal Circuit judges, such as Judge S. Jay Plager, support greater deference to the PTO as an expert administrative agency.
While appointment of specialist judges to the Federal Circuit or, alternatively, the CAFC's greater use of technical advisors in the future might remedy the Federal Circuit's lack of expertise, consistent with the goals of the Federal Courts Improvement Act that created the CAFC.
However, until greater specialization at the appellate level occurs through court reform, the constitutional mandate for "[promotion of] the Progress of Science and useful Arts"
might be best served by the Supreme Court's holding in Dickinson to ensure that greater decision-making authority is vested in the PTO.
The Internet Corporation for Assigned Names and Numbers ("ICANN") was created in 1998, as a result of U.S. Department of Commerce support, to organize and provide rules for the Internet domain name system.
The U.S. government founded ICANN as a prototypic private "court" with voluntary participation; however, once participants have agreed to register with ICANN and fall under this body's rubric, ICANN's contracts and decisions are binding.
Under ICANN’s Uniform Dispute Resolution Policy, ICANN requires that domain name holders submit to ICANN-administered arbitration proceedings.
At present, ICANN has authorized four approved dispute resolution providers: the World Intellectual Property Organization ("WIPO"), the National Arbitration Forum ("NAF"), the CPR Institute for Dispute Resolution ("CPR"), and eResolution ("eRes").
Trademark owners have preferred to utilize the WIPO because its panelists consist of attorneys or professors specializing in trademark law, in contrast to the NAF’s generalist judge panel.
According to ICANN's Registrar Accreditation Agreement, ICANN can prevent registration by those refusing to follow the UDRP.
Thus, ICANN and its dispute resolution arbitration panels may function as pseudo-judicial or pseudo-administrative regulatory bodies. ICANN effectively utilizes its authority and URDP policies to resolve domain name disputes at low cost and within a short two-month time frame.
Procedurally, the complainant submits a complaint to one of the approved administrative dispute resolution providers,
then chooses either a one or three person panel for arbitration.
ICANN decisions may be appealed to the courts,
with ICANN implementing the court's decision.
ICANN’s arbitration panels, while privately formulated under the UDRP, operate as public "court-like" entities with at least a semblance of (1) open board meetings and proceedings, (2) representation by a Board through consensual judgments, and (3) due process rights including notice, an opportunity to be heard, and access to appeal procedures.
Yet ICANN's Internet dispute resolution authority may be transient because, as noted in the WhiteCommission’s analysis: (1) the United States may be reluctant to maintain ICANN's role as the Internet's economic value increases, (2) the need for business competition in domain name registration becomes more apparent, and (3) some consensus regarding a replacement managerial administrative or judicial structure is obtained.
Thus, national or international courts or administrative agencies may be considered as reasonable alternative forums to ICANN panels in resolving domain name disputes.
Notwithstanding the benefits of ICANN's alternative dispute resolution ("ADR") panels in resolving Internet law and other complex high technology cases, Professor Stempel notes that "courts appear to continue to be distinctly more competent as the default option for adjudication than their current competitors—broad-based legislation, administrative agencies, arbitration, mediation, and variant hybrids."
While generalist district and appellate courts in their current form may exist as imperfect forums for the adjudication of complex technological issues in comparison to administrative agencies (e.g., PTO for patent and trademark issues) or private administrative bodies (e.g., ICANN for Internet trademark law),
courts should remain the preferred default decision-maker in these cases relative to other alternatives. Generalist federal courts may consider increased specialization to achieve higher levels of comprehension and competency in deciding complex high technology cases.
With the recent successes achieved by the semi-specialized Federal Circuit and the specialized PTO in advancing “Progress in Science and the useful Arts,” the tide of public and legal opinion has shifted dramatically over the last two decades towards support for increased specialization in the judiciary.
This part of the article discusses various policies relating to increased specialization in the federal judiciary. These policies include: (1) utilization of specialist rather than generalist adjudicators; (2) uniformity and greater predictability of judgment, with concomitant stabilization of jurisdictional and choice of law discrepancies among courts; (3) prevention of forum shopping; (4) increased judicial efficiency and economy; and (5) protection of business interests, promotion of corporate research and development, and patent disclosure of inventions to the public.
Tremendous controversy has historically existed and still exists today among judges, academic scholars, legislators, and lawyers regarding whether increased specialization within the judiciary would be beneficial. This part of the article addresses the following issues: (1) the lack of prestige characteristic of some specialist courts, (2) arguments that specialized judges have “myopic” focus, (3) criticisms that specialized courts may be particularly susceptible to special interest group manipulation, and (4) a reply to the suggestion that generalist judges may readily become self-educated to adjudicate technically or scientifically complex cases.
Opponents sometimes note that specialist courts, being less prestigious, would be unable to attract the most highly qualified judges to the bench, resulting in an inferior body of specialized law.
Since federal courts have historically deployed primarily generalist judges, and since specialized judges have primarily resided in state courts (e.g., family court, drug court) having lower status and compensation, specialization has been unfairly stigmatized as being inferior. However, conceptually, a specialized judge is no more inferior to a generalist judge than a specialist in neurology is inferior to a general practitioner in medicine. In fact, in the medical field, specialists are often considered more prestigious than generalists, drawing higher compensation for their expertise.
Societal perceptions of the prestigiousness of judicial positions are a product of political power and economic support that serve as the foundations of the current judicial system. Thus, increased specialization in the federal judiciary by appointment of more Article III specialist judges, with lifetime tenure and concomitant salary increases would undoubtedly enhance the prestige of a specialized bench.
For example, in the brief two-decade lifetime of the Federal Circuit's existence, the prestige of this semi-specialized court has increased, and the CAFC has been able to attract superior law clerks because of its sterling credentials and reputation in the legal community. However, even in the absence of Article III status, economic support manifested through increases in terms of tenure, greater employment security, salary, and budgets may provide the enhanced prestige necessary to attract highly qualified specialist judges to the bench.
Some specialist court opponents allege that specialist judges may make decisions based on an overly narrow "myopic focus."
These critics maintain that the status quo deployment of generalist judges with a more panoramic view of the law should be retained.
For example, the Hruska Commission originally criticized specialization by stating, “the quality of decision-making would suffer as the specialized judges become subject to ‘tunnel vision,’ seeing the cases in a narrow perspective without the insights stemming from broad exposure to legal problems in a variety of fields.”
Similarly, in the 97th Congressional Hearings, opponents cautioned, “the proposed [Federal Circuit] court with its limited and specialized jurisdiction may well lose the competence to act on the broad and fundamental questions posed, for example, in antitrust cases. I believe that these requisite broad views are acquired, and continually renewed, by constant exposure to the sometimes heated, and philosophical, debates to all areas of law.”
Consistent with this view, Judge Posner believed that specialized judges would lose their ability to see the broad panoramic policy landscape through “reduction . . . [of] the cross-pollination of legal ideas.”
However, the perceived "overly myopic" or "tunnel vision" focus of specialized judges may be based upon unsettled assumptions. First, the mere fact that a specialist judge concentrates his decision-making responsibilities in one distinct area of law certainly does not necessarily mean that his or her comprehension of larger societal and public policy concerns is deficient. Specialist judges may have unrestricted access and exposure to constitutional, legal, and sociological literature to permit a balanced, well-rounded view. Second, while generalist judges are often exposed to a wide variety of cases, many of such judges possess dockets that span more limited areas of law. Thus, for example, while the Delaware Supreme Court may be initially characterized as a generalist court, it hears a disproportionately large number of cases, relative to other states, of corporation and business-related cases.
Nevertheless, the Delaware Supreme Court's "specialization in fact" has not been criticized as endowing it with a narrow "myopic" focus.
Instead, this court’s specialized corporate focus has been held as an exemplary model for other states to follow.
Third, it would be highly inconsistent for detractors to maintain that generalist judges may become skilled in specialized areas of law through self-study but then argue that specialist judges could not use self-study to widen their span of knowledge of other areas of law outside their own expertise.
No reliable evidence, at present, appears to exist to demonstrate unequivocally that specialist judges at equivalent levels are any less capable or intelligent than their generalist counterparts.
Thus, it would be premature to conclude that specialist judges would remain "myopic" in focus rather than exploring tangential areas of law-science interfaces and social, economic, and legal policies impacting their respective areas of specialized law. Well-designed research and investigation is necessary to ensure that conclusions in this important area are based on fact rather than on unsupported opinion and conjecture.
As a variant of their argument, specialist court detractors sometimes caution that judicial specialization on the bench or otherwise in complex cases would remove these cases from the judicial mainstream, making them undecipherable to the "average lawyer or judge" or "man in the street"--an undesirable consequence.
Such opponents state that deployment of generalist judges to hear and decide complex technical or scientific cases, such as those in intellectual property law, would result in "more thorough airing [of] an issue."
They argue that generalist courts "air issues" in the public forum by virtue of the necessity for educating judges on the record, with subsequent publication of their decisions.
However, this argument neglects to consider that the average "Walter Mitty" man-in-the-street possesses little comprehension of the finer points of brain surgery or neurological medicine.
Yet this same hypothetical man will commonly rely upon the expert judgment of his specialized neurosurgeon or neurologist, in spite of his ignorance, to make intelligent decisions regarding his own health and well-being. Similarly, the average citizen, unable to fathom the scientific complexities of high technology cases, should support the foremost priority of the courts to achieve justice in their decisions through specialization.
Moreover, the detractors' argument incorrectly assumes that the man-in-the-street understands the substance and procedure of court testimony and decisions. Commentators have noted their frustration that lay jurors in complex scientific or technology cases, witnessing first-hand the "airing of issues," are unable to understand either the technology involved or the jury instructions concerning the law to be applied in the case.
Finally, the argument neglects the critical fact that the press, through news media, including newspapers, television, and radio, often functions to "air issues" pertaining to judicial decisions to the general populace. The press, as the true public forum, often functions practically in translating "legalese" and technical verbiage of court cases into language that is comprehensible to readers.
Specialist court detractors argue that a specialized judiciary hearing technically complex cases (e.g., intellectual property) may be particularly susceptible to political lobbying, a stratified bar, or special interest group manipulation that would ensure appointment of favorable judges to the specialist court's bench.
An underlying assumption is that special interest groups have positions contrary to the societal interests of the general public and possess sufficient political clout to manipulate the judicial system.
Judge Richard Posner believed that it is more probable that special interest groups would obtain control over a specialized court rather than a generalist court for two principal reasons: (1) specialized court appointments are necessarily made from special interest group "warring camps," unlike generalist court appointments, and (2) specialist benches are more susceptible to the vicissitudes of political opinion than generalist benches. However, constitutional scholars recognize that the United States Supreme Court historically has been subject to broad far-reaching swings in social policy depending on whether Democrats or Republican presidents have been empowered to make judicial appointments.
Thus, commentators observe that judges often align themselves politically among major party lines, with Democratic judges frequently supporting the disenfranchised blue collar working class, racial and other insular minorities, purchasers of goods and services, and criminal defendants.
In contrast, Republican judges commonly align their judgments with the economically privileged elite, corporate businesses/management, white Anglo-Saxon majoritarian America, sellers of goods and services, and criminal prosecutors.
With the enormous baseline "scatter" level of major policy swings depending upon political party affiliations of judicial appointees within the Supreme Court and other generalist courts, it would be difficult to find support for the hypothesis that specialist courts succumb to special interest group pressures more than generalist courts.
Some believe that federal generalist judges may readily educate themselves to acquire needed specialized information, "much as any intelligent, well-educated person does, through his or her readings of various publications, exposure to television and radio, and educational pursuits through courses, lectures, and seminars.”
Similarly, Justice Frankfurter once noted, “It is an old observation that the training of Anglo-American [generalist] judges ill fits them to discharge the duties cast upon them by patent legislation. . . . [S]o long as the Congress . . . makes the determination of originality [for patentability assessments] a judicial function, judges must overcome their scientific incompetence as best they can.”
Nevertheless, self-study by generalist judges remains an imperfect solution to remedying such deficiencies, particularly in complex high technology cases involving intellectual property issues, in part because of the intrinsic limitations in the knowledge base of generalist judges.
In contrast, proponents of specialized judiciaries maintain that specialized judges who are intimately familiar with one area of law—through either possession of technical/legal backgrounds or association with scientific/legal experts—may more rightly decide cases involving complex "cutting edge" technologies.
It is difficult to imagine that generalist judges, even through intensive self-study, may, in a short period of weeks or months, obtain sufficient knowledge of highly specialized areas of high technology to comprehend the finer nuances of these complex fields. Analogously, in medicine, a neurologist, proficient in his or her field, possesses the expertise to discuss with other brain specialists the latest breakthroughs in medical science in treatment of specific neurological disorders.
However, the prudent general practitioner would focus upon superficial diagnostic criteria for such diseases, relegating the in-depth diagnosis and treatment to the neurological experts.
Thus, specialized judges, with technical training and calendars dedicated to intellectual property matters, would possess both the ability and time to become “expert judges” in the intricacies, nuances and subtleties of complex areas of law.
Such specialized judges would potentially have the scientific and legal expertise needed to debate the finer points of intellectual property law as only experts in a field can.
These “expert" judges would possess the knowledge to resolve factually and legally complex cases expeditiously and decisively, to leave a legacy of consistent and uniform case law that clarifies rather than confuses.
If specialized judges are deployed and increased specialization within the judiciary is established, it is anticipated that the field of law could begin to make the paradigm transformations necessary to ensure the preservation of judicial system credibility much as the field of medicine has done when confronted with accelerating advances in technology.
Under our federalist system, experimentation within the state courts may be used as a model for court reform in the federal judiciary. Over the past two centuries, ongoing nationwide discussion of the benefits of state specialty courts has resulted in the successful formation and establishment of business courts,
adult drug courts,
family courts,
juvenile drug courts,
teen courts,
domestic violence courts,
and business courts.
Specialist judges in state courts have brought thoughtful in-depth analysis, logic, and consistency to judgments, leading to greater credibility of the judiciary in its pronouncements.
While specialty business courts have been established in many state jurisdictions, New York has made notable progress in establishing specialized courts as subdivisions or subunits of existing courts.
These include the Commercial Division of the Supreme Court, the Housing Court, family courts (with four specialized divisions), drug treatment courts, and domestic violence courts. Thus, specialized state courts, with their corresponding specialized judges, may serve as potential models for deployment of specialized judges and courts in the federal system.
Our nation's first specialized business court, the Delaware Court of Chancery, has existed for over two centuries.
Strictly speaking, the Delaware Court of Chancery is a semi-specialized tribunal--like the Federal Circuit--rather than a purely specialized tribunal, because its jurisdiction extends beyond corporate matters. While this well-regarded court's judges have developed considerable expertise in resolving corporate law issues through its extensive business docket, the court neither focuses exclusively on corporate cases nor hears all business cases arising in Delaware.
The Delaware court's significant accomplishments in pioneering major principles in corporate law has made this business court an exemplary model for other jurisdictions and areas of law to follow.
With the Delaware court as a historic predecessor, business courts have already been established in New York, New Jersey, North Carolina, and Wisconsin.
Recently, the American Corporate Counsel Association vocalized support for "business courts or specialized divisions or parts [of courts] dedicated to business litigation."
Thus, the Delaware Court of Chancery may serve as one appropriate example of successful state court reform that may serve as a preliminary model for studying potential federal judicial reform in increasing specialization for high technology cases.
State drug courts were instituted as part of a nationwide program known in the media as the “War on Drugs,” a term popular in the 1980s to describe the governmental response to America’s drug crisis. Drug courts were created “out of a sense of frustration that law enforcement and imprisonment policies were not having the impact on drug supply or demand that proponents of the war against drugs of the 1980s had hoped for.”
These courts have received tremendous public support, and there are now over 425 drug courts in operation in the United States today.
Since the War on Drugs has cost over $300 billion dollars to date
and has not had a major impact on the incidence of drug-related crime, treatment of drug abusers has been advocated as a logical, cost-effective alternative.
Thus, in the 1980s, states experimented with the concept of drug courts to manage the increasing number of drug abuse cases and place offenders in effective drug treatment programs.
Drug courts have promoted reduction of the financial and societal costs of incarceration through the monitoring of nonviolent drug abusers. Proponents of these courts predict that rehabilitation results in lowered recidivism or reconviction crime rates for these offenders, reducing court caseloads and correctional facility costs.
Drug court supporters maintain that drug tribunals have successfully reduced the incidence of drug abuse reoffenses, lowered drug-related criminal activity, diminished the number of prisoners incarcerated in prisons and jails, reduced court caseloads, and obtained considerable cost reductions throughout the criminal justice system.
Therefore, the well-regarded and successful establishment of state drug courts as specialty courts may serve as another model for federal courts considering enhanced specialization for complex high technology cases.
State family courts originated in the United States at the turn of the nineteenth century, about the same time as juvenile courts, but long before drug courts.
Comparable to drug courts, family courts created a nontraditional, nonadversarial tribunal to resolve a family’s legal issues efficiently and quickly, with a minimum of trauma to children and families in crisis.
As a result of relatively recent support by the American public, specialized family courts or divisions now exist in diverse forms in several states. In 1996, the American Bar Association funded a two-year project designed to facilitate the establishment of unified family courts in six cities.
A conference of bar presidents also advocated the establishment of these courts.
At present, five states utilize a separate family court for family law cases,
five other jurisdictions employ separate trial divisions for these matters,
and one state possesses a family department within the trial court.
In order to handle cases in different parts of their respective states, fourteen states place geographical restrictions on family courts or court divisions;
nine other states plan to or will experiment with family court programs in the near future.
Two other states have received legislative approval to establish these courts,
leaving fourteen states that continue to handle family law cases solely within general trial court proceedings.
A judge’s term within a family court may vary significantly. While some states’ family court judges receive lifetime appointments,
other states permit temporary judicial assignments of limited duration. Detractors maintain that these rotating judges possess less knowledge of this specialized area of law than is necessary for just and efficient adjudication of cases.
Yet for smaller jurisdictions with limited financial resources, such rotating judges may fill an appropriate prescription for minor judicial change. Rotating judges may also be considered as a viable practical alternative in the federal court system. Scholars have supported this practice for over a decade that provides judges with intensity and focus in one area of law, with subsequent rotation to other areas of law to prevent staleness and isolation.
Criticisms of the traditional generalist trial court forum include the following: (1) family matters are often burdensomely expensive and time consuming; some disputes are tried more than once, or are tried before different judges—or even different courts—in a fragmented, rather than unified, approach; (2) children may be inadvertently subjected to trauma; (3) judges hearing family law cases may lack interest in a given dispute, understanding, or the temperament to hear these cases; and (4) courts inadequately address needs of the poor, who lack financial resources to hire an attorney and must represent themselves.
Court reform has established state family courts that are designed to specifically address these disadvantages of traditional trial court fora. Thus, state family courts may serve as yet another distinctive, successful preliminary model for federal courts considering increased specialization in high technology arenas.
Specialization in the federal court system may provide judges with the tools for implementing greater uniformity of judgment, determinancy, accuracy, and predictability in intellectual property cases. Increased uniformity and predictability in adjudication almost invariably lead to enhanced judicial credibility and the resultant desired effect of stabilization within a given body of law. The absence of nationwide uniformity of law and the presence of conflicts between the PTO, district courts, and the circuits was a primary impetus for establishing the Federal Circuit as a semi-specialized Article III tribunal. Lack of uniformity of application of patent laws historically led to rampant forum shopping, with bitterly fought battles in the circuits over patent infringement cases.
In response, the 97th Congress addressed the need for a "Federal Circuit-type court," stating that a specialized patent law court would result in the desired uniformity of law, with concomitant decreases in expenses of litigation and forum shopping.
The Honorable Pauline Newman, prior to joining the Federal Circuit, testified before the legislature on her opinion that such a specialized appellate court would give "a greatly enhanced degree of predictability of the outcome of patent litigation," by providing uniformity in application of legal rules.
Even the Supreme Court, in Graham v. John Deere Co., noted a lack of uniformity that could well be remedied by the Federal Circuit to resolve the problem of "a notorious difference between the standards applied by the Patent Office and by the courts."
Whether the Federal Circuit has provided the level of uniformity and predictability of judgment that was originally envisioned has not yet been determined. However, since the Federal Circuit's inception, there has been a dramatic increase in the CAFC's affirmation of district court appeals.
Some commentators attribute this initial elevated affirmation rate to the Federal Circuit's success in establishing nationwide uniformity of judgment in patent law cases; however, a subsequent decrease in affirmation rate makes this conclusion equivocal.
Specialist court proponents maintain that increased specialization within the judiciary
may lead to greater uniformity of law and perhaps higher district court affirmation rates.
Patent attorneys often criticize that the Federal Circuit's 'panel-dependency,' resulting from the appointment of three-judge panels to hear cases, may lead to unpredictability or indeterminancy of judgments.
The concern, whether legitimate or not, is that various panels hearing infringement cases involving the extent of the applicability of the doctrine of equivalents in claim construction interpretation and assessment may decide such issues differently.
Yet, some level of indeterminancy is unavoidable because until the CAFC Panel decides an appealed case, the trial court's result is not viewed as being determinative.
The net result is that litigators may prefer to continue litigation on appeal rather than reach settlement
or accept summary judgment at the trial court level, vastly increasing costs of litigation.
Advocates of increased specialization in the federal courts maintain that court reform would result in greater uniformity and predictability of judgment with concomitant decrease in indeterminancy because logical rules will be developed to meet high technology objectives. Such enhanced uniformity of application of law would result in greater consistency among panels.
Indeterminancy or lack of predictability of judgment also exists in the application of vague patent law concepts, such as the critical issue of claim interpretation and the doctrine of equivalents.
Subsequent to the Supreme Court's decision in Warner-Jenkins Co. v. Hilton Davis Chemical Co.,
Judge Michel observed that this ambiguous doctrine has spawned "the greatest source of indeterminancy" in patent law, with almost all filed patent cases alleging both literal and equivalent infringement.
Recently, the Federal Circuit published Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., LTD.
In Festo, on remand from the Supreme Court, the CAFC decided en banc that the doctrine of equivalents was limited by prosecution history estoppel in that the subject matter relinquished during patent application prosecution was barred from claim coverage.
The Federal Circuit's decision in Festo may have been calculated to diminish the level of uncertainty of adjudication among the generalist lower courts resulting from this doctrine through erection of an easily applied "bright line" standard.
Certainly, indeterminancy in interpretation of the Doctrine of Equivalents in patent claims has led to increased uncertainty among the lower courts. In effect, Festo's per se "bright line" rule may have served to diminish the workload of the district courts, shifting litigation from the generalist lower federal courts to the specialist PTO's Board of Patent Appeals.
However, a rigid "bright line" rule, while perhaps enhancing predictability of judgment throughout the district courts,
may paradoxically lead to judicial inefficiency and ineconomy. This undesirable scenario might occur if patent applicants choose either to appeal PTO decisions on claim validity or to litigate claims in the courts rather than creating additional disadvantageous prosecution history estoppel under Festo. Alternatively, the Federal Circuit's decision in Festo may have resulted in the delegation of the principal responsibility of claim interpretation to the specialized PTO as a undefined mixture of technically complex factual and legal issues.
Nothwithstanding the Federal Circuit's en banc Festo decision, the expansion of claim coverage through the doctrine of equivalents and the contraction of coverage under the nonobviousness requirement continues to perpetuate indeterminancy in corporate competition in high stakes patent infringement and claim validity battles.
The Supreme Court has ineffectively attempted to reduce levels of indeterminancy in claim interpretation by delegating this decision to generalist judges rather than to generalist lay jurors. Thus, in Markman v. Westview Instruments, the Court held, "judges, not jurors, are the better suited to find the acquired meaning of patent terms."
Yet Berkeley Professor Mark Lemley noted that there has been a high Federal Circuit reversal rate for Markman district court decisions--as high as 40% reversal being reported in some studies.
Similarly, one observer comments "there's a high likelihood that on review, the [Federal Circuit] will change the construction of the claims."
The problem, in part, is that generalist district court judges, and perhaps even semi-specialized Federal Circuit judges, may lack the in-depth technical knowledge and training necessary to make sage determinations on such critical issues as claim interpretation in intellectual property law. Thus, indeterminancy is predicted to continue unless and until increased specialization is implemented within the federal judiciary in the resolution of complex issues of fact and law.
An additional source of indeterminancy occurs with the increasing use of lay juries in patent infringement cases.
Typical American juries, comprised of lay citizens with no specialized expertise in either law or science, are ill-equipped to comprehend the subtleties of such complex technologies as satellite telecommunications, genetically engineered human hormones, or the computer code used in Internet transmissions. Experienced litigators may capitalize on the naivete of juries to make simplistic or emotional arguments in "smoke screens" that may minimize the tremendous complexity of the field.
Consequently, increased use of special "blue ribbon" juries comprised of experts who truly comprehend the subtleties of intellectual property cases may constitute a significant proposal for court reform in this area of law.
Internet law, like other complex high technology cases, constantly challenges the competence limits of the legal system. The Internet, lacking territories or boundaries--"cyberspace" has no situs--has raised perplexing legal issues, particularly in jurisdiction and choice of law arenas, which have stymied the courts. In the wake of such unique issues, the courts have discovered that Internet and “computer technolog[ies] do not fit neatly within any of the categories of intellectual property law.”
Two such controversial Internet issues where federal courts differ radically in their decisions are (1) personal jurisdiction and (2) choice of law, both involving procedural due process under the Fourteenth Amendment.
Some courts have simplistically attempted to erect a "bright line" rule that transmitting information to a location or placing such information on the World Wide Web is sufficient to subject a defendant to the jurisdiction of the court where the information was received.
However, most courts, following the leading case of Zippo Manufacturing Co. v. Zippo Dot Com, Inc.,
have observed that no clear "bright-line" rules can be constructed for Internet jurisdictional issues since many of these cases lie on a spectrum depending upon whether a Web site may possesses commercial or interactive features.
The Pennsylvania court said that a "sliding scale" of the probability of a court's assertion of personal jurisdiction over a defendant depends on the "nature and quality of commercial activity that an entity conducts over the Internet."
Jurisdiction may be exercised over active Web sites, but not passive Web sites. However, for the "middle ground" cases, interactivity and commercial activity on the Web site is examined.
In an example of an active Web site, the Sixth Circuit Court of Appeals in CompuServe, Inc. v. Patterson,
noted that a principal issue in many Internet cases was whether sufficient Burger King-defined "minimum contacts"
occurred during business transactions. Here, the court concluded the Ohio district court possessed jurisdiction over a Texas Internet user because he "reached out" from Texas to Ohio and "originated and maintained" contacts in Ohio, when he subscribed to an Ohio online network service and entered into an agreement to sell his software over the Internet.
Minimum contact analysis becomes relatively straightforward in Internet cases where a defendant has intentionally and purposefully availed himself of the protections of the forum state, thereby leading a court to conclude that jurisdiction exists.
In contrast, in passive Web site cases, defendants typically argue that placing information passively on the Internet does not purposefully direct activities towards citizens in a targeted jurisdiction.
For example, in Bensusan Restaurant Corp. v. King,
the New York court determined no personal jurisdiction existed over a defendant who passively created an Internet Web site because that activity did not indicate purposeful availment of the benefits of New York state.
However, in State v. Granite Gate Resorts, the Minnesota Court of Appeals found jurisdiction over a relatively "passive" Internet gambling service website called "WagerNet," stating it was "open to international markets," noting the defendant's intent to recruit customers from a wide geographical range.
The court, in finding minimum contacts existed, analogized the passive Web site to broadcast and direct mail solicitation where advertisers distribute their messages over a large area, then wait for recipients of the ads to actively respond to purchase the products. Thus, although the Bensusan and Granite Gate Resorts cases both involved passive Web sites, the two courts arrived at opposite conclusions regarding assertion of personal jurisdiction over the defendant.
While cases involving classical active and passive Web sites at the extreme ends of the jurisdictional spectrum are more readily analyzed, interactive Web site mid-spectrum cases pose an inherently greater challenge for courts. For example, in Maritz, Inc. v. CyberGold, Inc.,
the Missouri court held that jurisdiction existed over defendant CyberGold, although the defendant claimed it operated a passive Web site. This court found that the 8th Circuit's minimum contacts "nature and quality of contacts prong" was met because CyberGold intentionally transmitted advertising information globally to Internet users.
In addition, the court found that the second "quantity of contacts prong" was met since CyberGold sent e-mail advertising to Missouri users about 130 times, indicating the defendant purposefully availed itself of Missouri privileges.
Some courts have modified the Zippo test employing a "totality of contacts" approach, where the court considers factors such as (1) interactivity of the Web site, (2) defendant's other actions involving the forum state, and (3) customers, advertisements, and wire communications in the forum state.
Still other courts have used the "effects test" for evaluating jurisdiction—rather than Zippo spectral analysis or the 8th Circuit analysis—whereby the court assesses whether the defendant's actions were targeted directly toward or have a direct effect in the forum state. For example, in Panavision International, L.P. v. Toeppen,
the Ninth Circuit court noted that the "effects doctrine" measured the "effects felt in California" as an indicator of purposeful availment, consistent with prior decisions in the 9th and 6th Circuits.
The court analogized this jurisdictional case with tort principles since here, the defendant's intentional actions in registering plaintiff's trademarks as domain names for the purpose of extortion caused harm to the plaintiff in California where jurisdiction was asserted.
Similarly, in the recent case of GTE News Media Services Inc. v. BellSouth Corp.,
the D.C. Circuit court utilized a strict purposeful availment standard, requiring that a defendant intentionally target its activities towards a specified forum before personal jurisdiction could be asserted. This limiting jurisdictional standard was intended to give potential Web site operator defendants notice that they will be liable for legal action if they target activity towards a forum.
Thus, various district courts differ substantially in their approach to the question of asserting personal jurisdiction over a defendant's Web site. Cases such as these, resulting from the inherent complexity of Internet interactions themselves, lead to circuit splits, lack of predictability of judgment, and forum shopping in the absence of uniformity of application of law. Internet Web site owner plaintiffs, faced with various jurisdictional approaches, might prefer to sue a defendant in a court known to use or favor the Zippo spectral analysis rather than one employing the D.C. Circuit's "effects doctrine" and strict purposeful availment standard: the Zippo court approach appears more "plaintiff friendly," while the "effects doctrine" approach is more "defendant friendly." Since the Worldwide Web permits instantaneous transactions in multiple states, litigants in high stakes Internet disputes find themselves consuming financial resources in costly jurisdiction battles with concomitant reductions in the forum court's efficiency and economy.
Internet cases raise choice of law issues because the various states have their own competing interests in applying their own substantive law.
The Internet is unique in that it permits parties in remote locations to instantaneously, at the click of a mouse, enter into contractual agreements with performance independent of the parties' physical situs or the information involved.
Of course, a court's choice of one state's law over another's should be rationally based with considerations for justice and fairness in decisions, consistent with the parties' expectations.
Historically, in Milliken v. Pratt,
the original version of the Restatement Conflicts of Laws was applied by the court that first held that the substantive law of the place of contracting was to govern the contract's validity and construction unless that law offended the public policy of the forum. Courts in the 1950s began to utilize the "center of gravity" approach that considered policies underlying conflicting laws.
Under this flexible approach, still used today, the court first examines all significant factors influencing the decision regarding the choice of law to be applied, and second, determines which state's substantive law possesses the most significant link to the transaction or parties and applies that state’s law in the case.
The "center of gravity" approach was later replaced in most states by the approach presented in the Second Restatement Conflict of Laws, where in the absence of a contractual provision for choice of law, the court examines (1) the places of contracting, negotiations, and performance; (2) the location of the contract's subject matter; and (3) the parties' places of business and incorporation, considering their domicile, residence, and nationality.
In addition, the Second Restatement provides the following criteria for evaluating the above factors: (1) the relevant policies of the forum, the interested states, and those underlying the relevant field of law; (2) the protection of the parties' justifiable expectations; (3) the interests of international and interstate jurisdictions; (4) the degree of effort needed for application of the law; and (5) the promotion of uniformity and consistency of judgment.
However, the Second Restatement's geographical "most significant relationship" approach to choice of law in the absence of a contractual forum selection clause cannot be readily applied to Internet transactions in "cyberspace," which is lacking a readily definable geographical situs or location.
The Organization for Economic Cooperative and Development observed that choice of law issues are "particularly difficult in the case of international computer networks where, because of dispersed location and rapid movements of data, and geographically dispersed data processing activities, several connecting factors could occur in a complex manner involving elements of legal novelty."
Some commentators maintain that only treaties such as TRIPs or the WIPO's Copyright Treaty could adequately resolve choice of law and jurisdiction issues relating to Internet technologies.
Correspondingly, the Berne Convention's rule stated that for copyright infringement action, the choice of law was to be the law of the nation in which the infringement occurs, rather than the law of the author's nation, or the law of the nation where the work was first published.
However, like personal jurisdictional issues, discussed previously in part III.B.3.a., the existence of the Internet raises choice of law issues that lead to lack of uniformity and predictability of judgment, with consequent forum shopping unless national or international courts or legislative bodies intervene to provide order to this complex, unsettled area of law. Issues of choice of law and jurisdiction raised by the Internet have been the recent topic of academic commentary for future courts and legislatures to resolve.
While the Federal Circuit has been instrumental in providing greater uniformity of application of law within circuits, it is perhaps inevitable that the complexity of high technology issues continues to challenge the federal courts, resulting in circuit splits and creating forum shopping opportunities for litigants .
For example, Professors Landau and Biederman recently noted that conflicts among the federal circuit courts of appeals in copyright law existed in virtually all doctrines ranging from "threshold issues of originality and ownership to infringement and damages."
Conflicts of substantive law led inevitably to forum shopping. This occured notwithstanding the enactment of the Copyright Act of 1976,
originally designed to provide uniformity of law. These professors noted that while some circuit clashes were resolved by either the Supreme Court
or Congress,
forum shopping by litigants for courts favorable to their positions continued to cause both the judiciary and litigants increased costs of adjudication and inefficiency due to lack of uniformity of law.
Prior to the Federal Circuit's creation, proactive legislators believed that a specialized patent court would reduce forum shopping and decrease expenses of litigation.
They predicted that such an expert court focusing on patent matters could provide uniformity and consistency in intellectual property law, resulting in increased judicial efficiency and economy. Even in antitrust appeals, Judge Newman contemplated that the specialized Federal Circuit’s focus upon patent claims, retaining nonpatent claim issues in generalist district courts, could be an effective means to prevent forum shopping by litigants, while preserving the "best of both worlds" of specialist and generalist court decision-making authority.
With increased specialization, particularly by the semi-specialized Federal Circuit and specialized PTO, intellectual property law has become more uniform, with a decrease in forum shopping.
However, with the exponential growth of high technology breakthroughs, litigants have invariably found themselves again forum shopping among circuits that may have ruled favorably on similar matters. Greater specialization in the district courts and/or the Federal Circuit may serve to significantly reduce the need
