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Lamar Smith
Contact: Blair Jones 202 225 4236


Subcommittee Markup Statement on the “Intellectual Property Jurisdiction Clarification Act of 2005"

Washington, Jun 28 -

The purpose of H.R. 2955 is to reverse the effect of the Supreme Court’s decision in Holmes Group v. Vornado Air Circulation Systems, meaning the bill confers plenary authority on the U.S. Court of Appeals for the Federal Circuit to hear all patent appeals from lower courts.

As the Subcommittee’s March 17th hearing made clear, this is consistent with the practice of the Circuit and the expectation of litigants prior to 2002 (the year Holmes Group was issued).

By way of background, Congress created the Federal Circuit in 1982 by merging the Court of Claims and the Court of Customs and Patent Appeals.

The history of the enacting legislation reveals that Congress believed the merger would reduce overlapping functions between the two courts and create greater administrative efficiency within the federal system.

Patent practitioners, academics, and the “Hruska” Commission, which Congress created to study the federal appellate structure, determined that the regional circuits were doing a poor job of developing coherent patent law.

Specifically, litigants complained that the application of patent law to the facts of a case often produced different outcomes in different courtrooms in substantially similar cases.

In other words, forum-shopping was rampant, as some circuits were regarded as “pro-patent” and other circuits as “anti-patent.”

Arguably, channeling patent cases into a single appellate forum would create a stable, uniform law and would eliminate forum-shopping.

Greater certainty and predictability would foster technological growth and industrial innovation and would facilitate business planning.

Given this backdrop, many practitioners and academics believe Holmes Group contravenes the will of Congress when it created the Federal Circuit.

The Holmes Group decision induces litigants to engage in forum-shopping among the regional circuits and state courts.

Legal experts predict an erosion in the coherence of patent law that has been steadily building since the Circuit’s creation in 1982.

Opinions will always vary, but the Federal Circuit is probably viewed by most practitioners and others, including all of the witnesses at our hearing, as having largely complied with its mandate to bring stability, uniformity, and predictability to patent law.

In light of this background and the record to date, I have drafted legislation to cure the Holmes Group problem. This fix is based on testimony received at the hearing and consists of the following provisions:

First, to prevent state courts from acquiring jurisdiction over patent matters, the bill amends the second sentence of §1338(a) as follows: “No state court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights.”

Second, H.R. 2955 amends 28 U.S.C. §1295 (the statute defining Federal Circuit jurisdiction) by giving the court exclusive appellate jurisdiction “of an appeal from a final decision of a [U.S. district court] in any civil action in which a party has asserted a claim for relief arising under any Act of Congress relating to patents or plant variety protection.”

Finally, H.R. 2955 creates a new federal removal statute that would allow patent issues in a state action to be removed to U.S. district court while other state or supplementary matters would be remanded back.

This ensures that federal courts will continue to exercise exclusive jurisdiction over patent cases as they have since at least 1836. The provision also promotes administrative efficiencies by obviating the need for a state litigant to file a second suit to address patent claims in federal court.

In conclusion, H.R. 2955 furthers the original objective of Congress when it created the Federal Circuit back in 1982. I now recognize the Ranking Member for his statement.