How Potential Justice Gorsuch Sees Patent Law

Douglas Panzer      Mar. 20, 2017

Judge Neil Gorsuch meets the U.S. Senate today in confirmation hearings for his nomination as the next Justice of the Supreme Court of the United States.  In considering a prospective – and likely – Justice Gorsuch, I am looking to his positions in relation to patent law, and how they may shape the Supreme Court’s decisions as they handle future patent cases.  Presiding as a judge on the Tenth Circuit Court of Appeals, Judge Gorsuch’s decisions on patent matters are, of course, limited, as such appeals are reserved for the Court of Appeals for the Federal Circuit.  However, Judge Gorsuch’s cases on the Tenth Circuit have dealt with the application of patent related laws and legal doctrines from the Constitution, federal law, the Supreme Court and the Federal Circuit, in cases arising under other areas of the law, giving us the opportunity to understand his approach to interpreting and applying patent law.

Declaratory Judgment Jurisdiction

In the context of a trademark dispute, Surefoot LC v. Sure Foot Corp., Judge Gorsuch, in a 2008 opinion, rigorously analyzed and applied the Supreme Court’s then-new interpretation of the threshold for declaratory judgment jurisdiction handed down in MedImmune v. Genentech.  Prior to MedImmune, the Federal Circuit had laid out its requirement – adopted by its sister circuits – of a “reasonable apprehension of suit” in order to confer a prospective defendant sufficient jurisdiction to turn plaintiff in a declaratory judgment suit.  The Supreme Court’s holding in MedImmune expressly rejected that theory as overly restrictive and solidified the Court’s decades’ old test that asked instead, “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  Because the district court in Surefoot had refused to find a sufficient case or controversy to confer subject matter jurisdiction based upon the prior standard of “a reasonable apprehension of suit,” the appeals court took on the case when the Supreme Court handed down its MedImmune decision in the interim.

In an intellectually rigorous opinion, representing the Tenth Circuit court’s first opportunity to apply MedImmune, Judge Gorsuch squared his circuit’s case law with the MedImmune standard, writing:

“[T]he existence of an Article III case or controversy has never been decided by a judicial wager on the chances the parties will (imminently or otherwise) sue one another; rather it has always focused on the underlying facts, assessing whether they suggest an extant controversy between the parties or whether instead they merely call on us to supply an advisory opinion about a hypothetical dispute.”

In Surefoot, Judge Gorsuch and his panel colleagues unanimously found such an immediate and concrete controversy existed where the two similarly named parties had evidenced a history of adverse positions, including threats of suit, negotiations of settlement, and use of the USPTO trademark opposition process.

While overturning the decision of the district court on a legal basis, Judge Gorsuch was sure to expressly affirm the respect afforded to the lower court, pointing to its “faithful” application of the prior precedent.  This respect was indeed displayed in the remainder of the holding, in which the circuit court remanded the case to the District of Utah for further determination, observing that while the question of whether the court has jurisdiction and may take the case is a matter of law; but the question of whether the court should take the case is one of judicial discretion which the lower court should have been permitted to exercise.

Patent Act Preemption of State Trade Secret Law

In a second case touching on patent law, the Tenth Circuit reviewed a $20 million district court jury verdict in favor of a plaintiff alleging misappropriation of trade secrets.  Judge Gorsuch authored the opinion of the court in Russo v. Ballard Medical Products, as to the preemptive effect of the Patent Act with respect to the plaintiff’s state law trade secret claims, and whether that divested the lower court of subject matter jurisdiction.

As evidence of the alleged misappropriation, the plaintiff offered two U.S. patents and a published U.S. patent application owned by the defendant embodying the claimed trade secret information.  The appeals court was called on to determine whether the plaintiff’s use of these patents as evidence caused the plaintiff’s claims to “arise under” the Patent Act – federal law – thereby preempting the state trade secret law claims that led to the verdict and making the lower court’s hearing of that claim improper ab initio.

Judge Gorsuch’s opinion in the case again displayed a rigorous analytical approach, setting forth and explicating the three types of federal preemption – explicit, field, and conflict – and applying the last of those to the facts of the case before the court.  Gorsuch concluded that, “[i]f on the face of a well-pleaded complaint there are reasons completely unrelated to the provisions and purposes of the patent laws why the plaintiff may or may not be entitled to the relief it seeks, then the claim does not ‘arise under’ those laws.”  Finding that the claim was more akin to a breach of contract claim and that the patents and patent application were merely evidence of that claim, the court held that the lower court had proper jurisdiction because “federal patent law does not preempt state law claims for unjust enrichment for wrongful use of” another’s intellectual property.

(The judge also expressly held the defendant to task when his arguments told “only half the story.”)

Justice Gorsuch

Judge Gorsuch’s opinions evidence intellectual rigor and common sense application of the laws and their interpretation in precedential cases of the Supreme Court of the United States.  The Russo and Surefoot opinions also show a skillful ability of Judge Gorsuch to illustrate the legal doctrines’ place in the history of jurisprudential precedent, and to analyze that history in almost forensic fashion, taking the storyline back each time to the Constitution itself – in one case Article III’s conferring of judicial jurisdiction, and in the other Article IV’s federal Supremacy Clause.  These opinions also demonstrate Judge Gorsuch’s expectation that the parties and the lower courts will be equally faithful to these analyses in their application of law to fact.

I expect that Judge Gorsuch will shortly be Justice Gorsuch.  I also expect that in the area of patent law, Justice Gorsuch will look to the Constitution for the definition of patent law’s purpose – “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries” – and will be cautious in exercising his ability to shift fundamental precedent, but also questioning of parties’ attempts to invoke those precedents in ways that may hinder the progress of American innovation.


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