Rethinking Patent Law’s Uniformity Principle Craig A. Nard and John F. Duffy Patents and Diversity in Innovation University of Michigan Law School September 2006

Issue and Proposal Issue: What is optimal amount of centralization in patent law’s appellate architecture?  Choice between centralization and decentralization cannot be answered with polar solution  Pre-1982 characterized excessive decentralization  Post-1982 characterizes excessive centralization  Optimization Proposal: In addition to CAFC, grant appellate jurisdiction to at least one extant circuit court

Federal Circuit Experiment Structural Constraints  Power of precedent  No benefit of sister-circuit jurisprudence  No competition from peers  Poor mechanism to gather information and test innovations Self Induced  More adroitly deploy common law  More receptive to academic literature and district court complaints

Centralization v. Decentralization Issue has Broad application  Design of gov’t institutions  Federalism  International Law and Antitrust Law  Theory of business organizations  Theory of R&D Across wide range of institutions, similar arguments in support of centralization and decentralization Both centralization and decentralization have benefits and costs

Costs and Benefits of Centralization and Decentralization in Patent Law Competition  Judges value reputation and quality of opinions  Check on poor decisions and induce more complete and thoughtful rationales  Imbue confidence if a shared decision is reached independently Cost: Strategic behavior, namely forum shopping

Costs and Benefits of Centralization and Decentralization in Patent Law, cont. Information Gathering and Sharing  Appellate system relies on lawyer arguments  Multiple information gathering points allows for more complete and reliable data  Litigants and courts more likely to be creative, cite and rely on historical materials, academic literature, etc.  Allow for more appellate arguments, more cases, more factual scenarios, and more complete picture of particular issue  Percolation and teeing up for Supreme Court Cost: too much decentralization leads to less expertise – the pre-1982 problem

Costs and Benefits of Centralization and Decentralization in Patent Law, cont. Induce Innovations  Decentralization fosters innovation, experimentation, trial-and-error, etc.  Multi-circuit model allows for innovations to be tested Cost: Need baseline of concentrated knowledge – pre-82 there were too many cooks in the kitchen

Challenges and Concerns Forum Shopping  Appellate jurisdiction randomly assigned post- district court filing Claim Construction Disuniformity  Potential for disuniformity/duopoly  Uniformity fostered by issue preclusion and stare decisis Choice of Law

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