Alert October 23, 2006

Are Patent Cases Too Complex?

It is unquestioned that technology is becoming more complex, building on what has come before. In 1965, Gordon Moore prophesized that the number of transistors on a chip would double about every 2 years. To put this in context, in 40 years, the number of transistors on a chip has risen from mere thousands to nearly 1 billion. See A corollary to Moore’s law is that the price will necessarily decrease each generation, putting more computing power into consumers’ hands at ever-lower costs. The technologies that allow more information to be packed into an ever-smaller space at lower costs are increasingly complex.

Similarly, patent law is generally acknowledged as one of the more complex bodies of law. In light of the complexity of modern day inventions, it is not surprising that defining the scope of protection afforded to these inventions is complicated. As put by one patent practitioner: “Patents are complex legal documents, and the rules for interpreting these documents are constantly evolving.” See David J.F. Gross et. al, You Must Be Mistaken: Federal Circuit “Corrections” of District Court Claim Constructions (2002-03), in PATENT LITIGATION 2003, at 47 (PLI, Handbook Series No. G-766, 2003); see also John R. Allison & Mark A. Lemley, The Growing Complexity of the United States Patent System, 82 B.U. L. REV. 77 (2002) (comparing patents from the 1970s with patents from 1990s and finding increasing complexity). The Manual of Complex Litigation acknowledges this trend with special sections dedicated to the handling of patent cases.

Indeed, the Court of Appeals for the Federal Circuit was formed in 1982 in large part to deal with this complexity. As noted by Peter O. Huang, The Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc.: The Return of Patent Appeals to the Regional Circuits, 5 J. APP. PRAC. & PROCESS 197, 203 (2003):

Patent cases can also involve particu­larly complex issues of law and procedure ... The Senate Report accompanying the Federal Courts Improvement Act of 1982 promised that the Court of Appeals for the Federal Circuit would have a ‘rich docket,’ composed of ‘unusually complex and technical’ cases. Since then, the richness and complexity of the court’s docket has grown as the court has applied the patent laws to increasingly sophisticated technologies.

In light of the increasingly complex technology, legislators and scholars have recently considered whether even the focused Court of Appeals is sufficient. Congress is proposing to have trial court judges within select districts assigned to patent cases. A summary of the proposals circulating in Congress can be found in the article by Erik Larson, Bill Would Create Patent “Rocket-Docket” Within Courts, IP LAW360, Feb. 7, 2006, at As Kimberly A. Moore notes, something “special” may be needed, be it “specialized trial judges or special masters; specialized trial courts; alternative dispute resolution; expert (‘blue ribbon’) juries; or Patent Office reexamination or opposition procedures.” Jury Demands: Who’s Asking?, 17 BERKELEY TECH. L.J. 847, 849 (2002) (hereinafter “Jury Demands”). Others have suggested a National Patent Board to resolve all patent matters, because the courts do not appear capable. Richard P. Cusick et al., A Critical Analysis of the Proposed National Patent Board, 13 J. OHIO ST. J. ON DISP. RESOL. 461 (1997).

In light of the complexity of technology and law, the question then arises, are patent cases so complex that it would vio­late a patent holder’s due process rights to have a trial by jury?

Can Any Case Be Too Complex?

Maybe. The Supreme Court has not ruled on the issue as to whether a case can be so complex as to violate due process by sending the case to a jury. However, a number of Appellate Courts have addressed the issue as to whether com­plexity should form part of the equation in determining if there should be a jury trial. Interestingly, there is a split in the circuits going back over 25 years. In 1979, the Ninth Circuit in In re U.S. Fin. Sec. Litig., 609 F.2d 411 (9th Cir. 1979) held that complex­ity is not a factor in determining the right to a jury trial. One year later, in 1980, the Third Circuit in In re Japanese Elec. Prods. Antitrust Litig., 631 F.2d 1069 (3d Cir. 1980) came to the opposite conclusion. Since that time, the Seventh Circuit has cited more favorably to the logic of In re U.S. Fin. Sec. Litig. See Soderbeck v. Burnett City, 752 F.2d 285 (7th Cir. 1985), while the Fifth and Eleventh Circuits have paid deference to In re Japanese. See Cotten v. Witco Chem. Corp., 651 F.2d 274 (5th Cir. 1981) and Phillips v. Kaplus, 764 F.2d 807 (11th Cir. 1985). The Second Circuit has straddled the fence. See N.Y. v. Pullman Inc., 662 F.2d 910 (2d Cir. 1981) (leaning toward In re Fin. Sec. Litig.); Cohen v. Franchard Corp., 478 F.2d 115 (2d Cir. 1973) (leaning toward In re Japanese).

The cases in support of complexity not being a factor point out that due process requires trials to be fair, but not perfect, and question whether a judge is better equipped than a jury to deal with the com­plexities. Other courts have stated that “[i]f there is such a thing as a complexity exception to the Seventh Amendment, it cannot be applied where it would merely be ‘most difficult, if not impossible, for a jury to reach a rational decision.’ … [W]e are confident that if such an exception exists, it is only to be applied when the trial judge finds that the case is so complex that a jury could not render a rational decision based upon a reasonable under­standing of the evidence and applicable rules of law.” Cotten, 651 F.2d at 276.

Can Patent Cases Be Too Complex?

Shortly after its formation, the Court of Appeals for the Federal Circuit addressed, for the first and only time, the issue of whether a patent case could be too com­plex to send to a jury. The Federal Circuit in SRI Int’l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107 (Fed. Cir. 1985) engaged in a long, detailed analysis of the issues involved, touching on the Fifth, Seventh, and Fourteenth Amendments to the Constitution. The court also analyzed both In re Japanese and In re U.S. Fin. Sec. Litig., before deciding that there was no com­plexity exception to a right to a jury trial in patent cases. In so holding, the Federal Circuit stated:

Empirical support is simply lacking for the assumption that the process provided in a properly conducted jury trial is necessarily less ‘due’ than that provided in a bench trial … We discern no authority and no compelling need to apply in patent infringement suits for damages a ‘complexity’ exception denying litigants their constitutional right under the Seventh Amendment. There is no peculiar cachet which removes ‘technical’ subject matter from the competency of a jury when competent counsel have carefully marshaled and presented the evidence of that subject matter and a competent judge has supplied carefully prepared instructions. SRI Int’l, 775 F.2d 1107, 1128-30 (citations omitted).

And there is some support for the Federal Circuit’s rejection of a complexity exception in SRI Int’l. Indeed, the process in a jury trial may not be less “due” than that provided in a bench trial. There is certainly no guarantee that a district court judge will be familiar with patent law. See Tenth Annual Judicial Conference of the United States Court of Appeals for the Federal Circuit, 146 F.R.D. 205, 372 (1993) (comments of Cohn, J. (E.D. Mich.)) (“[T]here’s an under-appreciation of the general lack of experience of district judges [regarding patent law] ... They simply can­not keep current with developments in the law.”). Since the Federal Circuit’s 1995 holding in Markman v. Westview Insts., Inc., 53 F.2d 967 (1995), the reversal rate by the Federal Circuit on claim construction issues, which are judicially handled (as opposed to handled by the trier of fact) has been approximately 33%. See Kimberly A. Moore, Are District Court Judges Equipped to Resolve Patent Cases?, 15 HARV. J.L. & TECH 1 (Fall 2001). Furthermore, in 1999­2000, the Federal Circuit reversed the same percentage of cases decided by juries as by judges (22%), indicating that juries may be holding their own in this field. Kimberly A. Moore, Judges, Juries, & Patent Cases — An Empirical Peek Inside The Black Box, 99 MICH. L.R. 365, 395 (2000) (hereinafter “Judges, Juries”).

However, since the Federal Court’s pro­nouncements in SRI Int’l, the number of patent applications filed has gone from 126,788 in 1985 to 382,139 in 2004. The number of issued patents has gone from 77,245 in 1985 to 181,302 in 2004. U.S. Patent Statistics Chart, UNITED STATES PATENT & TRADEMARK OFFICE, at (last visited Feb. 16, 2006). More patents on more obscure and technical inventions make it potentially more likely that a jury may be overwhelmed in a patent trial. See Paul Z. Zegger & Peter Lee, The Paper Side of Patent Jury Trials: Jury Instructions, Special Verdict Forms And Post-Trial Motions, in PATENT LITIGATION 2004, at 756-57 (PLI Hand-book Series No. 3149, 2004). Moore worries that juries simply “ … replace rationality with emotion in adjudicating patent disputes.” Jury Demands at 848. Notably, the evidence suggests that juries seem to be swayed by ruling in favor of the party that filed the suit, while judges appear immune to such influences. In jury-handled suits, there is a 68% patentee win rate in infringement decisions and only a 38% pat­entee win rate in declaratory judgments, while bench-handled suit results are uni­form. Judges, Juries at 368. In addition, the Federal Circuit uniform reversal statistics above may be misleading because of deferential standards of review. See Reynolds v. Chicago, 296 F.3d 524, 526-27 (7th Cir. 2002).


The due process concerns raised in SRI Int’l have not yet been erased, and the question remains whether juries can adequately understand complex patent litigation. Statistics aside, there is a stark difference between a judge erroneously deciding a case because of an alternate interpretation of the law, and a jury erroneously deciding a case due to incomprehension. One district court judge, when asked about having a jury handle a patent case stated:

Honest to God, I don’t see how you could try a patent matter to a jury. Goodness, I’ve gotten involved in a few of these things. It’s like somebody hit you between your eyes with a four-by-four. It’s factually so complicated. Judicial Panel Discussions on Science and the Law, 25 CONN. L. REV. 1127, 1144 (1993) (statement of Judge Covello, U.S. District Judge, Dist. of Conn.).

More recently, Judge Wilson of the Central District of California in handling a complex patent case on networking tech­nologies stated: “I don’t see how any jury would ever deliver an enlighten[ed] verdict in this case … [but] it’s my responsibility to make sure that the trial is as clear and enlighten[ed] as possible.” He then posed the question of “whether a case can be so inherently complicated that it’s beyond the pale of a jury, therefore, com­pelling a jury trial under the Seventh Amendment denied the same parties their due process rights.” See Hearing Transcript in Alcatel Internetworking, Inc. v. Cisco Systems, Inc., C.D.CA., CV 00-05799-SVW (CWx), Nov. 4, 2002.

It is time for a closer look at this issue.


This article is reprinted with permission from the July 2006 edition of the LAW JOURNAL NEWSLETTERS - PATENT STRATEGY & MANAGEMENT. © 2006 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited. For information, contact ALM Reprint Department at 800-888-8300 x6111 or visit #055/081-08-06-0006.