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23–816 PDF 2005

IMPROVING FEDERAL COURT ADJUDICATION

OF PATENT CASES

HEARING

BEFORE THE

SUBCOMMITTEE ON COURTS, THE INTERNET, 

AND INTELLECTUAL PROPERTY

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

OCTOBER 6, 2005

Serial No. 109–59

Printed for the use of the Committee on the Judiciary

(

Available via the World Wide Web: http://judiciary.house.gov 

(II)

COMMITTEE ON THE JUDICIARY 

F. JAMES SENSENBRENNER, JR., Wisconsin, Chairman 

HENRY J. HYDE, Illinois 

HOWARD COBLE, North Carolina 

LAMAR SMITH, Texas 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

DANIEL E. LUNGREN, California 

WILLIAM L. JENKINS, Tennessee 

CHRIS CANNON, Utah 

SPENCER BACHUS, Alabama 

BOB INGLIS, South Carolina 

JOHN N. HOSTETTLER, Indiana 

MARK GREEN, Wisconsin 

RIC KELLER, Florida 

DARRELL ISSA, California 

JEFF FLAKE, Arizona 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TOM FEENEY, Florida 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

MARTIN T. MEEHAN, Massachusetts 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California 

CHRIS VAN HOLLEN, Maryland 

DEBBIE WASSERMAN SCHULTZ, Florida

PHILIP G. KIKO, General Counsel-Chief of Staff 

PERRY H. APELBAUM, Minority Chief Counsel 

SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

LAMAR SMITH, Texas, Chairman

HENRY J. HYDE, Illinois 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

WILLIAM L. JENKINS, Tennessee 

SPENCER BACHUS, Alabama 

BOB INGLIS, South Carolina 

RIC KELLER, Florida 

DARRELL ISSA, California 

CHRIS CANNON, Utah 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

HOWARD L. BERMAN, California 

JOHN CONYERS, JR., Michigan 

RICK BOUCHER, Virginia 

ZOE LOFGREN, California 

MAXINE WATERS, California 

MARTIN T. MEEHAN, Massachusetts 

ROBERT WEXLER, Florida 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California

BLAINE MERRITT, Chief Counsel 

DAVID WHITNEY, Counsel 

JOE KEELEY, Counsel 

RYAN VISCO, Counsel 

SHANNA WINTERS, Minority Counsel 

(III)

C O N T E N T S 

OCTOBER 6, 2005

OPENING STATEMENT 

Page 

The Honorable Lamar Smith, a Representative in Congress from the State 

of Texas, and Chairman, Subcommittee on Courts, the Internet, and Intellectual Property .................................................................................................... 1

The Honorable Howard L. Berman, a Representative in Congress from the 

State of California, and Ranking Member, Subcommittee on Courts, the 

Internet, and Intellectual Property .................................................................... 2

The Honorable Darrell Issa, a Representative in Congress from the State 

of California, and Member, Subcommittee on Courts, the Internet, and 

Intellectual Property ............................................................................................ 3

WITNESSES 

Ms. Kimberly A. Moore, Professor of Law, George Mason University School 

of Law 

Oral Testimony ..................................................................................................... 6

Prepared Statement ............................................................................................. 8

Mr. John B. Pegram, Senior Counsel, New York Office, Fish & Richardson, 

P.C. 

Oral Testimony ..................................................................................................... 11

Prepared Statement ............................................................................................. 13

Mr. Chris J. Katopis, Counsel, Drinker, Biddle & Reath, LLP 

Oral Testimony ..................................................................................................... 26

Prepared Statement ............................................................................................. 28

The Honorable T.S. Ellis, III, United States District Judge, Eastern District 

of Virginia 

Oral Testimony ..................................................................................................... 49

Summary of the Prepared Statement ................................................................. 52

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Howard L. Berman, a Representative 

in Congress from the State of California, and Ranking Member, Subcommittee on Courts, the Internet, and Intellectual Property ......................... 73

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, and Member, Subcommittee on 

Courts, the Internet, and Intellectual Property ................................................ 74

Article submitted by Kimberly A. Moore, Professor of Law, George Mason 

University School of Law, entitled ‘‘MARKMAN EIGHT YEARS LATER: 

IS CLAIM CONSTRUCTION MORE PREDICTABLE?’’ .................................. 75

Article submitted by Kimberly A. Moore, Professor of Law, George Mason 

University School of Law, entitled ‘‘FORUM SHOPPING IN PATENT 

CASES: DOES GEOGRAPHIC CHOICE AFFECT INNOVATION?’’ .............. 92

Article submitted by Kimberly A. Moore, Professor of Law, George Mason 

University School of Law, entitled ‘‘Are District Court Judges Equipped 

to Resolve Patent Cases?’’ ................................................................................... 139

Article submitted by John B. Pegram, Senior Counsel, New York Office, 

Fish & Richardson, P.C., entitled ‘‘Should There Be a U.S. Trial Court 

With a Specialization in Patent Litigation?’’ ..................................................... 176

Page

IV

Letter from the Honorable T.S. Ellis, III, United States District Judge, Eastern District of Virginia to the Honorable Lamar Smith, a Representative 

in Congress from the State of Texas, and Chairman, Subcommittee on 

Courts, the Internet, and Intellectual Property ................................................ 208

Article submitted by the Honorable T.S. Ellis, III, United States District 

Judge, Eastern District of Virginia entitled ‘‘Presentation: Distortion of 

Patent Economics by Litigation Costs’’ .............................................................. 213

Article submitted by the Honorable T.S. Ellis, III, United States District 

Judge, Eastern District of Virginia entitled ‘‘Presentation: Quicker and 

Less Expensive Enforcement of Patents: United States Courts’’ ..................... 218

Charts prepared by the Intellectual Property Owners Association (IPO) on 

IP Litigation Commenced in the U.S. District Courts, 1993–2004, and IP 

Suits Filed in U.S. District Courts, 1995–2005 ................................................. 229

(1)

IMPROVING FEDERAL COURT ADJUDICATION 

OF PATENT CASES 

THURSDAY, OCTOBER 6, 2005

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COURTS, THE INTERNET,

AND INTELLECTUAL PROPERTY, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC.

The Subcommittee met, pursuant to notice, at 4:34 p.m., in Room 

2141, Rayburn House Office Building, the Honorable Lamar Smith 

(Chair of the Subcommittee) presiding. 

Mr. SMITH. The Subcommittee on Courts, the Internet, and Intellectual Property will come to order. 

I’m going to have an opening statement. Then the Ranking Member will have an opening statement. And then Congressman Issa 

of California will have an opening statement, as well. Let me recognize myself for mine. 

Today, our Subcommittee will begin an examination of the state 

of patent adjudication in the Federal judiciary. In 1992, the Advisory Commission on Patent Law Reform stated, in a report to the 

Secretary of Commerce, ‘‘One of the most significant problems facing the United States patent system is the spiraling cost and complexity associated with the enforcement of patent rights.’’ Since that report, there has been an explosion in the cost, volume 

of cases, and complexities associated with enforcing patent rights. 

Though the number of patent cases filed in U.S. district courts has 

almost doubled in the last decade, the reality is that patent cases 

make up a small fraction—typically, less than 1 percent—of total 

cases filed in a given court. 

Nevertheless, this small percentage of cases accounts for nearly 

1 in 10 complex cases, which require 20 or more days of trial and 

demand disproportionate resources from district courts and attention from trial judges. 

The basic statutory structure of the Federal judicial system, 

which is responsible for adjudicating patent cases has been largely 

untouched by Congress for more than 20 years. In the last significant structural change, Congress created the Court of Appeals for 

the Federal Circuit in 1982, as part of the Federal Courts Improvements Act. 

In establishing the Federal Circuit, Congress eliminated the traditional ability of regional courts of appeals to hear patent cases, 

in the interest of promoting greater stability in the patent law, increasing uniformity of decisions, and restricting forum shopping. 

2

Nevertheless, there is a growing awareness that the U.S. patent 

adjudication system remains beset with inefficiencies, inconsistencies, and opportunities for forum shopping. 

Two of our witnesses today will provide the Subcommittee with 

considerable anecdotal and statistical evidence that suggest the 

patent adjudication system is not functioning in an efficient, costeffective, and predictable manner. 

While acknowledging deficiencies, our remaining witnesses will 

articulate the view that there is insubstantial evidence that the 

system is broken, and postulate that none of the proposed solutions 

are guaranteed to work. 

Still, there is a widespread and a well deserved perception that 

patent litigation is too expensive, too time consuming, and too unpredictable. In a knowledge-based economy that is intended to reward innovation, the cost and effects of unnecessary delays and uncertainty are not incidental or academic. 

A patent claim that is construed too broadly deprives potential 

competitors and consumers of new products. One construed too narrowly deprives patent holders of the full benefit of their innovation. 

As the Subcommittee with jurisdiction over both the administrative functions of the United States Patent and Trademark Office 

and the Federal judiciary, we should begin to address these issues. 

And I want to acknowledge here the role of Representative Issa, 

who suggested that we begin this inquiry. As one of the few Members of Congress who has actually held patents, he brings a practical perspective to our work on the Committee. And after I finish 

asking my questions today, I’m going to turn the gavel over to Representative Issa. 

That concludes my opening remarks. And the gentleman from 

California, the Ranking Member, Mr. Berman, is recognized for his. 

Mr. BERMAN. Well, thank you very much, Mr. Chairman, for 

scheduling this oversight hearing. This hearing about the courts 

that handle patent litigation is an interesting intersection of two 

separate issues within the Subcommittee’s jurisdiction. Patents are 

the cornerstone of the economy. They provide incentive for innovation. Therefore, the effect litigation of patents has on the preservation of patent rights is all the more important to continually assess. 

The combination of the complex science and technology, the 

unique patent procedures and laws, the historical right to jury 

trials, the equitable division of labor and administration of the 

courts and their dockets, and the multiple methods available for 

dealing with the issues raised by patent litigation makes improvement of the patent adjudication system a uniquely complicated and 

difficult task. 

Many say the system works well. Yet at the same time, some say 

the high costs of litigating and the reversal rate at the district 

court level reveal otherwise. These complexities appear to have distorted patent markets and patent economics. 

The increasing costs of litigating patent infringement and validity issues now frequently gives weak, untested, and presumptively 

valid patents the same kind of protection that was previously only 

granted to or reserved for strong or judicially tested patents. 

Patent quality has been a long-time priority of mine and, with 

the introduction of the Patent Reform Bill, we are trying as a SubVerDate 0ct 09 2002 11:52 Jan 03, 2006 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\100605\23816.000 HJUD1 PsN: 23816
3

committee to ensure the quality of patents. Even so, despite the 

many efforts made so far, there are still many legal scholars, patent owners, and members of the judiciary and patent bar who believe changes to the patent litigation process in the courts are also 

necessary to improve the quality of patents. 

The creation of the Court of Appeals for the Federal Circuit alleviated the inconsistencies at the regional circuit court level. However, some continue to raise concerns about forum shopping at the 

trial court level. 

The Court of Appeals for the Federal Circuit has placed the job 

of construing patent claims in the hands of our Federal district 

judges, and kept other complex issues, such as non-obviousness and 

equitable conduct and novelty, in the hands of the jury. Concerns 

have been expressed about whether a judge or jury can truly learn 

the intricacies of some of the science and technology placed before 

them during the length of a typical patent trial. 

Hopefully, if the post-grant opposition procedures in the Patent 

Reform Bill are enacted, this will address many of these complex 

issues before resort to district court litigation occurs. 

Recent accounts demonstrate that as time passes and the district 

court Federal judges are becoming more proficient at application of 

the claim construction rules spelled out by the Court of Appeals for 

the Federal Circuit in Markman, that that reversal rate is coming 

down. However, evidence suggests that our Federal district courts 

still spend a much greater ratio of time on patent cases than any 

other types of cases that come into their courts. 

There are many proposals for change in the patent adjudication 

system. Before implementing changes, we must first be able to 

fully understand the issues confronting the system, the many options that may be available to remedy issues in the patent litigation system that have been raised, and the effects of those proposed 

solutions. 

Thank you, Mr. Chairman. 

Mr. SMITH. Thank you, Mr. Berman. 

The gentleman from California, Mr. Issa, is recognized for his 

opening statement. 

Mr. ISSA. Thank you, Mr. Chairman. I greatly appreciate your 

holding this important hearing, a hearing that closely parallels the 

patent reform effort that you have spearheaded. I must say that I 

have never seen such interest generated about patents than you 

have generated in this last year. 

Your patent reform, to a great extent, is changing the product of 

the patent. This hearing today, hopefully, will begin the process of 

talking about the delivery system, or the evaluation system postpatent, beyond the Patent and Trademark Office. 

I believe that the axiom that ‘‘justice delayed is justice denied,’’ which is often used in the case of misdemeanors and felonies, is 

just as applicable in the business world, and certainly has proven 

to reduce the value of a patent until justice is finally delivered. 

As many of you know, I have a background in the electronics 

business. The company that I founded vigorously protected its staple of intellectual property, as did some of my competitors. This resulted in my involvement in numerous patent suits before the district courts, the ITC, and the fed circuit. 

4

When I was in business, I had to accept the cards that were dealt 

to me; but now I am in Congress, and have the unique and pleasurable opportunity to look into reforming this system so that others 

would not have to endure many of the examples that I found when 

in the private sector. 

I approach this effort with one key guiding principle: Business 

must have confidence in its intellectual property, confidence that 

derives from predictability of court decisions. This certainty allows 

a company to plan which products it will invest and develop, which 

it will market, and also fosters confidence from the investment 

community. 

District court patent holdings are currently reversed at least 35 

percent of the time. And as my colleague from California said, although that is coming down, I believe it is coming down very slowly, and will not come down much further without affirmative action 

by this body. 

Judges have often commented that this makes them feel like 

their time and effort are considered by the fed circuit to be something of a rough draft. Such high reversal rates encourage entities 

to enter into more appeals, rather than less, on patent issues than 

would otherwise occur; dragging out litigation for years longer than 

is necessary. Obviously, this does not foster certainty. 

We need to find mechanisms for improving the track record of 

the district courts. I think there is no one that would disagree with 

that. And that is why we are here today. 

I have circulated one proposal, to conduct a pilot program within 

the district courts to encourage patent specialization among the 

district judges. Unlike many drafts you’ll see, where the author believes that they have created the perfect document, this is a deliberately imperfect document. 

I’m looking forward to each of you responding as to the flaws you 

saw. Hopefully, many of those flaws will be common flaws. Certainly, the length of the study is open to debate, as are many of 

the other hurdles that we have to get past in this study; not the 

least of which is that everybody at the appellate level and at the 

district level is concerned that somehow any change will affect 

their lives adversely. 

I must add to this that we’re also looking—or at least, that I’m 

hoping to encourage the Chairman and the Committee to look into 

several other possible reforms; including, as part of this pilot, the 

moving up, or the encouraging of moving up, of the Markman process to the earliest point, as far before a potential trial as possible; 

and also, formally opening up the interlocutory appeals process to 

the fed circuit on claims construction, since that is where the majority of the appeals are, and in any study our goal would be to accelerate the process of learning of whether we’re doing better or 

worse by this specialization. 

I appreciate the witnesses joining us today. And I have had an 

opportunity to review your written testimony, but I look forward to 

a lively discussion afterwards. And I yield back, Mr. Chairman. 

Mr. SMITH. Thank you, Mr. Issa. Before I introduce our witnesses, would you all please stand and be sworn in. 

[Witnesses sworn.] 

5

Mr. SMITH. Thank you, and please be seated. Let me say, for the 

benefit of those in the audience today, that this is the first day 

Congress has been in session this week, and we don’t have any 

votes until 6:30 tonight. Despite that, this is a very good turnout 

of Members, and I appreciate their being here, as well as the people in the audience being here to hear what the witnesses have to 

say. 

Our first witness is Kimberly A. Moore, who is a professor of intellectual property law at George Mason University School of Law. 

Professor Moore is a co-author of the textbook entitled ‘‘Patent Litigation and Strategy.’’ She has conducted extensive empirical research on intellectual property topics, and has written numerous 

articles on patent case adjudication and patent litigation in general. 

Professor Moore earned her juris doctorate from the Georgetown 

University Law Center. She received a bachelor of science in electrical engineering and a master of science from MIT. 

Our second witness is John B. Pegram, who is senior counsel to 

the New York office of Fish and Richardson, where he specializes 

in patent litigation. 

Am I pronouncing that right, ‘‘Pegram’’? 

Mr. PEGRAM. You are, sir. Yes, you are. 

Mr. SMITH. Thank you. Thank you. Mr. Pegram is a past president of the New York Intellectual Property Law Association, and 

a past director of the American Intellectual Property Law Association, where he twice served as chair of the patent litigation committee. 

Mr. Pegram received his law degree from New York University, 

and earned an undergraduate degree in physics from Columbia 

University. 

Our next witness is Chris Katopis, who is a counsel with the intellectual property practice group of Drinker, Biddle and Reath. 

Mr. Katopis previously served as director of congressional relations 

for the U.S. Patent and Trademark Office. In that capacity, he was 

responsible for legislative policy within the Office of Legislative and 

International Affairs, which included patents, trademarks, copyrights enforcement, and other domestic and international intellectual property matters. 

Mr. Katopis is also an adjunct professor at the Catholic University. He attended the University of Pennsylvania, where he was 

awarded a bachelor of science degree in biomedical engineering. He 

received his JD from Temple University. 

Our final witness is the Honorable T.S. Ellis, III, who serves as 

U.S. District Judge in the Eastern District of Virginia. Judge Ellis 

was nominated by President Ronald Reagan on July 1, 1987, and 

confirmed by the U.S. Senate on August 5, 1987. Often referred to 

as the ‘‘rocket docket’’ by members of the legal profession, the Eastern District of Virginia has for years been among the top 25 districts in adjudicating patent cases. 

Judge Ellis received his JD from Harvard University, where he 

graduated magna cum laude. He earned his bachelor of science 

from Princeton. 

6

Now, welcome to you all. And we have your written statements 

which, without objection, will be made a part of the record. And 

please limit your testimony, as you already know, to 5 minutes. 

Judge Ellis, I’m tempted to look at the quick time it took you to 

be confirmed in 1987. I bet anybody now being considered would 

be jealous of those few days that it took back then. 

Our first witness and first person to testify today is Professor 

Moore, if you will begin. 

TESTIMONY OF KIMBERLY A. MOORE, PROFESSOR OF LAW, 

GEORGE MASON UNIVERSITY SCHOOL OF LAW 

Ms. MOORE. Chairman Smith, Ranking Member Berman, and 

Members of the Subcommittee, thank you for this opportunity to 

testify on this very important topic of Federal court adjudication of 

patent cases. I plan to focus my testimony today on two problems 

that I perceive confronting the patent litigation system. 

The first: Let me assure you, forum shopping is alive and well 

in patent cases in the district courts. If you look at my studies—

one from the 5-year period, 2000-2004—you find that 47 percent of 

all patent cases are consolidated in just the top ten districts. Well, 

that might suggest that: Why do we need anything specialized? We 

have great consolidation already. The problem is, when I compare 

that to my data from the five previous years, there were only 44 

percent consolidated. 

I’m making a bit of a joke here. The real problem is, it’s not the 

same ten districts. So you have consolidation among ten districts 

5 years ago; you have the same amount of consolidation now, but 

it’s not the same ten districts. Obviously, there’s some overlap, but 

there also are some changes and some differences. 

I’m articulating these statistics in the study in more detail in a 

paper that I have forthcoming. I’ve titled it ‘‘Patent Lemmings,’’

like the birds. 

Okay. So what I wanted to address in particular, in the way of 

a solution, would be the change to the patent venue statute. Lucky 

for me, Congress beat me to it. In H.R.2795, in the amendment in 

the way of a substitute, Congress has introduced a limitation to the 

venue statute, which I find very compelling and favor strongly. 

You would limit venue to the defendant’s principal place of business, or where the defendant has committed acts of infringement 

and has a regular and established place of business. This is a very 

important limitation. Currently, patentees have the ability to sue 

in any of the 94 district courts—virtually unfettered ability. 

My only two very minor suggestions with regard to the pending 

legislation would be to expand the idea of corporate residence to include State of incorporation. I think that it would be fair that a corporation could be sued in the State in which it incorporated. I 

would also suggest that you create an exception to the venue rule 

that permits patentee plaintiffs to consolidate their actions pursuant to an MDL agreement—pursuant to the MDL procedures, without a venue obstacle. So you would create an exception to the 

venue statute for MDL consolidated cases. 

The Coalition has made a recommendation to this Committee in 

the way of, instead of changing the venue statute, introducing a 

7

transfer of venue statute that is much more vibrant than the currently existing one. I prefer Congress’ way of doing it. 

In short, the transfer of venue statute will not level the playing 

field, and it just adds another layer to what is already extensive, 

complex patent litigation. If you recognize there is a problem existing in forum shopping, the way to solve that problem is ex ante, 

with the venue statute, not ex post, with a motion to transfer. So 

I think that it’s in everyone’s best interest that Congress continue 

to pursue the venue statute in H.R. 2795 exactly the way it has 

been currently articulated. 

This brings me to my second proposal: the idea of designating 

specialized district court judges to hear patent cases. Patent cases 

are complex, difficult, time consuming, and expensive. Despite the 

nature of these cases, they are litigated before generalist judges 

and lay juries. 

The United States is unique in this respect. No other country allows lay juries to decide patent cases. In fact, many countries have 

created specialized patent trial courts. 

We have nearly a thousand district court judges capable of currently hearing patent cases; 680 active judges, and another 290 

senior judges. There are only about 3,000 patent cases a year filed, 

and only 3 percent go to trial. 

As you can see, the result is that district court judges simply do 

not get sufficient exposure to patent cases to develop the kind of 

expertise that would assist them in adjudicating these very complicated cases. Certainly, a few notable patent jurists have arisen 

from the mass of district court judges who hear patent cases, and 

they truly are exceptional patent jurists. 

This is why my proposal is not to create a specialized court. I actually don’t think that’s the way to go. And it would be problematic, in light of the fact that we already have a specialized appellate court. But instead, to designate individual judges—the number 

to be decided according to the docket—in each district, that would 

hear all of the patent cases in that district. 

Why do we need this? Well, we need it because of the forum 

shopping. But we also need it because of the high reversal rate that 

currently exists among the district court judges. 

It is not for lack of trying. Our district court judges are unbelievably dedicated and hard-working. They have ever-increasing dockets that they continually face. Despite this, they try very hard to 

construe patent claims. Yet the reversal rate continues to be about 

35 percent. 

One thing I want to point out to the Committee in particular: 

The reversal rate is actually rising; not going down. In my study, 

which I produced to the Committee as one of the published papers, 

the reversal rate has actually increased over the course of the last 

10 years. The Federal Circuit has been reviewing the district 

courts’ claim construction for about 10 years since Markman, and 

the reversal rate is in fact climbing. 

So my proposal with regard to specialized district court judges 

would include allowing those judges to continue to hear the regular 

cases that district court judges hear. They should have a general 

docket. They should remain generalist judges. 

8

In the short term, I am very favorably inclined toward Congressman Issa’s proposal for the pilot program. I have just a few very 

modest, humble suggestions. The first is, 1 year is not enough time. 

Mr. SMITH. Professor Moore, your time has expired. 

Ms. MOORE. Oh, thank you, Chairman. I’m very sorry. 

Mr. SMITH. And maybe we could get those minor suggestions in 

the question-and-answer period. 

Ms. MOORE. Thank you, Chairman. 

[The prepared statement of Ms. Moore follows:]

PREPARED STATEMENT OF KIMBERLY A. MOORE

Chairman Smith, Ranking Member Berman and members of the Subcommittee, 

thank you for the opportunity to testify today on the topic of improving federal court 

adjudication of patent cases. Patent litigation is critically important to the functioning of our patent system. Without a credible, predictable means of enforcing patent rights, the rights themselves would cease to function effectively to spur innovation. 

I plan to speak today about two problems confronting the patent litigation system. 

Patent Venue Statute: The first is the virtually unfettered ability of patentee 

plaintiffs to file a patent suit in any of the 94 different district courts. The patent 

venue statute, 35 U.S.C. § 1391, allows a corporation to be sued anywhere that personal jurisdiction exists which is any judicial district in any state where products 

are sold. This was not a problem when commerce was limited geographically, but 

in this day of national and, in fact, global commerce, this venue statute is no longer 

workable. The Amendment to H.R. 2795 addresses this problem by limiting venue 

to the judicial district where the defendant resides or the judicial district where the 

defendant has committed acts of infringement and has a regular and established 

place of business. The Amendment defines corporate residence as the district where 

the corporation has its principle place of business. I support this change to the 

venue statute. 

I have two minor suggestions to make. First, expand the definition of corporate 

residence to include state of incorporation. Venue is appropriate in either the judicial district where the principle place of business is located or the judicial districts 

in the corporation’s state of incorporation. When a corporation selects a state in 

which to incorporate and thus avails themselves of the corporate laws of that state, 

it seems reasonable to permit them to be sued there. 

My second minor suggestion is to consider creating an exception to the venue rule 

that permits patentee plaintiffs to consolidate actions against defendants pursuant 

to the MDL procedures. If a patentee would like to simultaneously sue multiple defendants for the same or similar acts of infringement, it is more efficient to have 

these cases consolidated in a single forum and venue ought not to be an obstacle 

to that consolidation. 

I have also read the Coalition’s recommendation for venue reform which instead 

suggests a more vibrant transfer of venue statute. I favor the Amendment to H.R. 

2795. It is more effective and efficient to fix a problem ex ante than ex post. Transfer of venue motions will delay resolution and divert resources unnecessarily. Moreover, the Coalition draft language which allows the action to go forward anywhere 

there is ‘‘substantial evidence or witnesses’’ is sufficiently vague and likely to cause 

additional unnecessary litigation. 

The Coalition draft also suggests that venue ought to be appropriate in any judicial district where the patentee resides or maintains its principle place of business. 

The suggestion being that it should not be fair to make the patentee bear the expensive of litigating away from home. First, let me note that this merely shifts the burden of litigating away from home from the plaintiff to the defendant. Second, patent 

litigation now costs on average two to four million dollars per side, the marginal 

cost to the patentee of conducting the litigation in a district other than its home 

turf is not likely to inhibit anyone who can already afford this expense. Moreover, 

there are always contingent fee options and patent infringement insurance which 

aid patentees in enforcing their rights. Finally, the patentee who files suit gets to 

select the judicial district and the Amendment to H.R. 2795 gives her several districts from which to choose. Giving the patentee the option of choosing its own district would allow patent trolls to game the system more than they already do. They 

would simply locate themselves where they believe the laws and procedures to be 

most favorable and then litigate all their cases there. 

9

Amending the venue statute as proposed in H.R. 2795 with the modest changes 

suggested above will significantly reduce forum shopping by plaintiffs and some of 

the unpredictability which plagues the patent litigation system. 

Forum Shopping in Patent Cases: To the extent that there is any doubt about 

the existence and pervasiveness of forum shopping in patent cases, let me offer some 

empirical evidence. See Kimberly A. Moore, Forum Shopping in Patent Cases: Does 

Geographic Choice Affect Innovation, 79 N.C. L. REV. 934 (2001). Patent cases are 

not evenly distributed among the 94 district courts. Comparing the data on patent 

litigations from the five year period 1995–1999 (9542 patent cases) and 2000–2004 

(12,768 patent cases) provides insight into the changing landscape of patent litigation. In the last five years, the top ten district courts have 47% of all patent cases. 

Comparing this to the data from 1995–1999, where the top ten jurisdictions had 

44%, it seems at first blush like patent cases are even more heavily consolidated 

now in just a few key jurisdictions than they were five years ago. The problem is 

that it is not the same key jurisdictions. The data show, however, that plaintiffs in 

patent cases are moving en mass away from some judicial districts and towards others. I have titled the draft paper where I present these empirical results—Patent 

Lemmings. 

For example, the Eastern District of Virginia, affectionately know as the Rocket 

Docket, used to be a hub for patent cases. In 1997, 3.2% of all patent cases were 

resolved there. In 2004, the percentage dropped to 1.6% (a 50% decrease)—dropping 

in the rankings from seventh to twenty-third. The Eastern District of Texas, on the 

other hand had 0.3% of all patent cases in 1997 and in 2004, it had 1.9% (a 633% 

increase)—going from tied for fifty-eighth to seventeenth. These changes are not due 

to a major relocation of large sectors of industry—they reflect forum shopping on 

the part of opportunistic plaintiffs who perceive a benefit to filing in the Eastern 

District of Texas and who have grown disenchanted with the Eastern District of Virginia. I am not suggesting that the cases that are filed in Texas belong more properly in Virginia, in fact, the Eastern District of Virginia was not the appropriate 

venue for many of the patent cases that had been filed there—a fact reflected in 

their 16% transfer rate in 1997. 

I have also found that the percentage of patent cases in a given district is not 

always linked to the percentage of civil cases filed there or the percentage of patents 

acquired by the residents of the district. For example, the District of Delaware, had 

4.8% of all patent cases resolved in the last five years, but only 0.4% of all civil 

cases generally. Delaware’s high percentage of patent cases is not correlated with 

patenting by local industry either—Delaware only has 0.41% of U.S. patents issued 

to U.S. inventors. Some practitioners claim that Delaware is selected by patentees 

because it is a pro-patentee forum. Empirical evidence demonstrates that Delaware 

judges do not grant summary judgment as frequently as judges in other courts and 

that summary judgment is more often a win for the infringer. The failure to grant 

summary judgment means that Delaware allows a much higher than average number of cases to go to trial—generally a trial by jury. Given the perception that juries 

are pro-patentee (which is supported by empirical evidence), patentees may prefer 

Delaware for this reason. 

My conclusion from this empirical analysis is that plaintiffs, who are patentees 

in 85% of the patent suits, forum shop and their preferences change over time which 

undermines any expertise judges in a given district do develop in patent cases. I 

have also found considerable variation in the manner of patent case adjudication by 

the different district courts and significant differences in win rate. In short, patentees are gaining an unfair advantage in litigation by forum shopping. The Amendment to H.R. 2795 would significantly curtail this gamesmanship and level the playing field. 

This brings me to my second, related proposal. 

Designating Specialized District Court Judges: Patent cases are complex, 

difficult, time consuming and expensive. Despite the nature of these cases, they are 

litigated before generalist judges and lay juries. The United States is unique in this 

respect. No other country allows lay juries to decide patent cases. In fact, many 

countries no longer have patent cases decided by generalist judges and have instead 

created specialized patent trial courts such as Germany, China, Japan, the United 

Kingdom, Australia, New Zealand, Singapore, Zimbabwe, Jamaica, Kenya, Thailand, 

Korea and Turkey. 

In the United States, there are 680 active district court judges in the 94 districts 

(and 290 additional senior judges). With 2800 patent cases per year and only 3% 

going to trial, district court judges have little exposure to patent cases. If patent 

cases were consistently being consolidated in the same jurisdictions, then the market would itself be creating specialization and there would be no real need for a specialized trial court. However, as the empirical evidence demonstrates, the distribuVerDate 0ct 09 2002 11:52 Jan 03, 2006 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 G:\WORK\COURTS\100605\23816.000 HJUD1 PsN: 23816
10

tion of patent cases among the judicial districts fluctuates with patentee preferences. Although a few notable patent jurists have arisen from the mass of district 

court judges who hear patent cases, forum shopping combined with the small number of cases has inhibited judges from developing expertise. 

If all patent cases in a given district were consolidated in one or more designated 

trial court judges, they would have a better chance to develop expertise in this area. 

The high claim construction reversal rate of district court judges supports the need 

for such specialization. Claim construction is the most important part of any patent 

dispute. The Supreme Court ruled that claim construction ought to be performed by 

district court judges rather than juries because they would be better at it. The Federal Circuit held that claim construction is a matter of law which results in de novo 

review of all district court claim construction decisions. In an empirical study of all 

claim construction decisions appealed to the Federal Circuit from 1996 through 

2003, I found that district court claim constructions were reversed 35% of the time. 

Worse yet, the reversal rate is still going up ten years after district court judges 

were charged with the task of construing patent claims indicating that district court 

judges are not getting better at construing patent claims. See Kimberly A. Moore, 

Markman Eight Years Later: Is Claim Construction More Predictable?, 9 LEWIS &

CLARK L. REV. 231 (2005). See also Kimberly A. Moore, Are District Court Judges 

Equipped to Resolve Patent Cases?, 15 HARV. J. L. & TECH. 1 (2001). Given that 

claim construction is the starting point for any infringement or validity analysis, the 

high reversal rate of district court determinations results in considerable uncertainty until the Federal Circuit review process is over. Since the Federal Circuit has 

declined to review any claim construction decisions on interlocutory appeal, the parties and the district court are forced to adjudicate the entire patent case on what 

ends up being a faulty claim construction more than one third of the time. The inefficiencies and frustrations are obvious. 

The high reversal rate undermines confidence in district court decision-making 

and the integrity of our legal system. It also results in considerable frustration for 

the district court judges. This brings me to my proposed solution to these serious 

and pervasive problems—designating a limited number of district court judges in 

each judicial district to adjudicate patent disputes. The number of designated judges 

would, of course, have to be correlated with the size of the court generally. Clearly 

one district court judge would not be able to handle all the patent cases brought 

in the Northern District of California for example. 

Although there would certainly be advantages to a single specialized patent trial 

court, in my opinion, designating trial court judges in each judicial district is a better approach. If a specialized trial court were created, it would have to be given exclusive jurisdiction rather than concurrent jurisdiction with the district courts. Concurrent jurisdiction would merely provide yet another forum shopping alternative. 

A specialized trial court would eliminate forum shopping, inconsistency and unpredictability which would decrease patent litigation overall. The judges on a specialized trial court would develop greater expertise in patent law due to increased 

exposure. Moreover, creation of a specialized patent trial court would help reduce 

the crowded dockets of the district courts. 

There are, however, drawbacks to a specialized patent trial court. First, specialized courts are potentially subject to capture by the bar—in this case the patent bar. 

Second, having only one trial court for all patent cases would eliminate the percolation that currently occurs among the various district courts. Having numerous 

courts simultaneously considering similar issues permits the law to evolve and often 

aids in flushing out the best legal rules. Unlike other countries, the United States 

already has a specialized appellate court which resolves all patent cases—the 

United States Court of Appeals for the Federal Circuit. Given the single appellate 

court for all patent cases, adding a single specialized patent trial court would in my 

opinion be too much specialization. 

Instead, I propose that a single judge or a small number of judges in each judicial 

district be designated to adjudicate all the patent cases filed there. To the extent 

possible, the docket of the designated judge should not be limited to patent cases. 

Ideally, the judge who is appointed to this role would be technically educated or 

trained and/or have a patent background. This proposal would considerably limit the 

number of potential judges who would preside over patent cases and increase predictability without loosing the percolation and considered development of the law. 

Through experience these judges would develop more expertise at resolving patent 

cases. It would, of course, be important, that the designated judge remain the designated judge. In short, this position should not be rotated among the judges or the 

benefits of experience and predictability would be entirely eviscerated. Limiting the 

number of judges who adjudicate patent cases will decrease forum shopping and 

with experience these judges will develop greater expertise. 

11

Let me caveat this proposal by saying that I am not meaning to criticize the existing district court judges. They are charged with a difficult job and an ever increasing workload. District court judges work hard to resolve patent cases. In fact, many 

excellent patent jurists have evolved from this group. Yet, even some of these judges 

have raised concerns about adjudicating patent cases and one has publicly advocated for a specialized trial court to adjudicate patent cases. See Judge James F. 

Holderman, Judicial Patent Specialization: A View From the Trial Bench, 2002 U. 

ILL. J.L. TECH. & POL’Y 425 (2002). 

Let me also explain that I am not proposing that the specialized trial court eliminate the role of the American jury in patent litigation. Under current interpretations of the Seventh Amendment, it seems unlikely that the jury could ever be entirely removed from patent litigation. To the extent though that there is concern 

about juror comprehension or bias, a specialist district court judge would be in a 

better position to preside over patent cases to ensure more informed, accurate decision-making by the jury. The specialist judge, by virtue of his knowledge and experience, would also be better able to resolve issues as appropriate on summary judgment, eliminating unnecessary jury trials. 

In conclusion, empirical evidence substantiates forum shopping by patentee plaintiffs which is inefficient and reflects inequity in our legal system. By amending the 

patent venue statute, the Amendment to H.R. 2795 will significantly level the playing field for plaintiffs and defendants in patent cases. While changing the venue 

statute might result in a greater dispersion of patent cases among the judicial districts, designating specialized judges in each judicial district would consolidated patent cases among a smaller number of judges. The experience and expertise gained 

through this consolidation will increase predictability, reduce litigation, improve 

patent case adjudication and enhance the integrity of the legal process.

[Additional material submitted by Ms. Moore is located in the 

Appendix.] 

Mr. SMITH. Thank you. Mr. Pegram. 

TESTIMONY OF JOHN B. PEGRAM, SENIOR COUNSEL,

NEW YORK OFFICE, FISH & RICHARDSON, P.C. 

Mr. PEGRAM. Mr. Chairman, Ranking Member Berman, and 

Committee Members, thank you for all of the attention you’re giving to the improvement of the patent system. Thank you also for 

the opportunity to testify today. 

I’m testifying as an individual who has studied this subject of adjudication of patent cases for many years. I support the study of 

this subject by the Subcommittee. The problems are widely recognized. There have been many proposed solutions. There’s been little 

detailed study, to date. In particular, today I will be suggesting the 

designation of the U.S. Court of International Trade as an alternative or parallel jurisdiction patent trial court. 

The serious problems in the patent trial court system today are 

revealed in several ways. First is correctness. A high percentage of 

appealed cases are reversed, so the courts are not getting it correct 

as frequently as they do in other areas of the law. Predictability 

is low, and so the result is more litigation and more extended litigation. Efficiency: Cases are often slow, and there is a huge cost. 

Some of the causes are the limited patent experience of most 

judges. I would be happy if the witness to my right, with his biomedical degree, could clone Judge Ellis, and we could have him 

many times over. And that would certainly be one cure, but one 

that perhaps is not available yet. 

The judges have limited time. I want to emphasize the lack of 

standardized procedures. The Federal Circuit now defers to the regional circuits on issues that they conclude are not specific to patent law; which means, therefore, that the damages are calculated 

in different ways, depending on which regional circuit is involved. 

12

In my view, there is an excessive diversity of courts and judges. 

There is a lot of gaming of the system, the forum shopping that 

Professor Moore referred to. 

Today there are over 600 regular, and almost 300 senior, district 

judges. These are generalists. They have, on average, too little exposure to patent litigation. The average judge gets four to five new 

patent cases a year. There are only a hundred patent trials per 

year—a fairly steady number for many years. So that means the 

average judge gets a patent trial every 7 years. 

Judicial management is a big issue. The judges have limited 

time, because of their large dockets, and also because of the priority that is given to criminal cases. Also, it is difficult for a judge 

with limited patent experience to effectively manage the litigation. 

The litigants’ costs are higher, due to lack of standardized procedures. 

In the past, there’s been an aversion in the United States to specialized courts. The Court of Appeals for the Federal Circuit was 

intentionally made not just a patent appeals court, for that reason. 

However, if we benchmark, we find that the foreign courts are 

going to patent specialization; that the U.S. courts very successfully 

in other areas, such as business and commercial courts, have been 

moving toward greater specialization. 

And I would suggest a medical analogy: When you have cancer, 

do you want to go to the City of Hope Hospital, or just let your general practitioner take care of it? 

The Court of Appeals for the Federal—excuse me. The Court of 

International Trade is a court within the Federal Circuit, already. 

That would permit development of procedural law and simplified 

procedures under the Federal Circuit’s supervision. 

There would be substantially no cost to adopting my proposal. 

There are existing under-utilized judges; there’s an existing courthouse and offices. These judges have no criminal dockets which 

would delay their proceedings. As I mentioned, they have available 

time; although I would say that they’re not sitting on their hands. 

They’re being effectively used by designation in district courts, 

where they have experience. They have existing jury trial competence; both when they sit in their own court in certain types of 

cases, and also when they sit by designation in the district courts. 

And they have uniquely an existing authority to conduct trials anywhere in the United States. 

There are many more details and legislative suggestions in my 

articles. 

So if this proposal helps, hurray. If not, nothing would be lost. 

I look forward to the other witnesses’ testimony and the question 

period. Thank you very much. 

[The prepared statement of Mr. Pegram follows:]

13

PREPARED STATEMENT OF JOHN B. PEGRAM


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[Additional material submitted by Mr. Pegram is located in the 

Appendix.] 

Mr. SMITH. Thank you, Mr. Pegram. 

Mr. Katopis. 

TESTIMONY OF CHRIS J. KATOPIS, COUNSEL,

DRINKER, BIDDLE & REATH, LLP 

Mr. KATOPIS. Thank you very much, Chairman Smith, Ranking 

Member Berman, Members of the Subcommittee, for the privilege 

of testifying today. My name is Chris Katopis. I’m a patent attorney with the law firm of Drinker Biddle; although the views I’m 

espousing are my own, and should not be ascribed to any of our clients. 

I am testifying today not as a litigator, but as someone who has 

had a decade of experience in Government, with the House and the 

PTO, working on patent and judiciary issues. 

I’m sorry to tell Mr. Pegram that my Republican brethren generally frown on cloning, even in the case of esteemed judges. So I 

hope to focus your attention on some other alternatives that may 

prove useful. 

Certainly, this Subcommittee ‘‘gets it,’’ for continually, again and 

again, acknowledging the importance of the patent system for institutions like universities, investors, entrepreneurs, small business. 

You are to be commended for that. You are also to be commended 

for elevating patent issues to an unprecedented level, with a record 

number of hearings this year. I just wanted to acknowledge that. 

But patent litigation is notoriously known as ‘‘bet the company 

litigation.’’ The stakes are high; the verdicts are often huge, multimillion-dollar. And the fierce nature of our system, which is winner-take-all, I think, amplifies the sound of the crisis. 

But unfortunately, I don’t think the frustration, the statistics, 

the anecdotes that we’re hearing, justify suggesting that the system is flawed. And I also think it’s premature to suggest structural 

alternatives to the Federal judiciary and expanding some of the 

processes that will be discussed today, like expanding interlocutory 

appeals. 

In focusing your attention on issues to look at, I think you must 

start with the USPTO. As the Subcommittee heard at last month’s 

oversight hearing, the USPTO is engaged in a number of productivity initiatives. And if you have confidence in the PTO management, you will believe that they will be successful and this will 

lead to a dramatic increase in the number of patents issued over 

the next 5 years, as well as patents with increased complexity. 

And you can quibble. You know, we saw the graph last month, 

and there was some quibbling over how much the rate of increase 

would occur. But it is certain that the number of patents that will 

be entering the marketplace will increase, along with their complexity. And this will guarantee that the number of patents in litigation, as well as the percentage that goes to trial, will dramatically increase over the next 5 years. 

So this hearing is very timely for Congress to sort of assess and 

ask whether the system can adequately handle the enhanced caseload and the complexity of these cases. I call this the bulge in the 

snake moving. 

27

One of the issues which we’re going to talk about today is the 

Federal Circuit and the high reversal rate regarding interlocutory 

appeals. Even though there’s a big number attached to the statistic, for me, it doesn’t have meaning without more unraveling of 

the layers of the onion. 

It could be one of three things. It could be that the Federal Circuit is not putting enough deference to the lower court—the ‘‘run 

amok’’ argument. The lower courts may be lacking some capabilities. Or it may be that these cases are the tough cases; they’re too 

close to call and, in a winner-take-all system, the appeals are necessary, you know, to justify your inventive rights. 

So I think there’s some mix of issues at stake. And certainly, if 

you favor certainty, then it’s worth looking at ways of giving increased deference to the district court. And I outline a suggestion 

in my testimony. 

Further, I think we can still enhance the—even though we increase the certainty, increase the accuracy of the district courts. In 

my written statement, I justify a number of ways of adding capabilities to the district courts, in terms of education, resources, tools, 

expanding the use of special masters. 

It struck me in the course of researching and preparing for this 

hearing that—I talked to a special master, where the judge found 

him by doing a Google search. There is not a good resource for 

judges to find neutral court-appointed experts. I think this is lacking. 

So I think Congress needs to take a deep breath, and assess 

where we are with the system, what’s coming down the pike; do an 

in-depth study; conduct pilots; increase the capabilities of the district court; and open a dialogue between the courts and Congress. 

Today’s hearing is a great start, and I think that the sooner the 

better. There are initiatives that you can begin before Congress adjourns, sine die, the sooner the better. America’s entrepreneurs, inventors, and small businesses deserve nothing less. 

So thank you, and I’m happy to entertain any questions. 

[The prepared statement of Mr. Katopis follows:]

28

PREPARED STATEMENT OF CHRIS J. KATOPIS


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Mr. SMITH. Thank you, Mr. Katopis. 

Judge Ellis. 

TESTIMONY OF THE HONORABLE T.S. ELLIS, III, UNITED 

STATES DISTRICT JUDGE, EASTERN DISTRICT OF VIRGINIA 

Judge ELLIS. Thank you, Chairman Smith, Ranking Member 

Berman, and the other Members. I’m delighted to be here today, 

and I appreciate very much the opportunity to express my views 

on these various proposals. 

I’m here today, of course, speaking only for myself. But my 

views, of course, are informed by my life experiences, which I think 

are, in the circumstances, worth elaborating on very briefly. I’ve 

spent about 35 years, or 36 years, in the law. I’ve spent about 18 

years as a partner in a large law firm, where I litigated the widest 

variety of cases: business cases of all kinds, everything from nuclear licensing to motorcycle accidents, medical malpractice. Almost 

anything you can think of, I’ve tried, and lost, and won a few. 

Then, as noted, I was appointed to the bench in 1987. And I 

might note, since the Chairman noted it, that I was appointed by 

Ronald Reagan, so I should point out that this is as close as any 

Federal judge should get to law-making. 

Now, having said that, I should also point out that I appreciate 

the kind words by Mr. Pegram, but I’m sure that there are many 

litigants who have appeared before me—and my wife—who would 

have strong, cautionary words to say about trying to clone me. 

[Laughter.] 

In any event, going on, over the time that I’ve served as a district judge, again, I’ve tried the widest variety of cases. The Eastern District of Virginia has a very rich docket; everything from espionage cases, which I’m involved in almost all the time, to patent 

infringement cases, to product liability cases, environmental toxic 

tort cases, nude bathing in the Potomac—I can’t imagine being able 

to tell you how broad the range of litigation is. 

And I do suggest to you that the notion that patent infringement 

cases are the most complex or the most difficult or the most timeconsuming is not true. Sure, they’re time consuming, they’re labor 

intensive. And sure, they are complex. And I’ll get to the range of 

those cases that I’ve tried. But to conclude that they’re the only 

complex cases is a mistake. 

And they’re also not the only ‘‘bet the company case.’’ I can assure you of that, as well. Most cases these days—when I first 

began practicing law, a $30,000 case was a big case. Soon after 

that, everything became ‘‘third world war,’’ practically. 

In any event, based on that experience, it is my view that the 

current system is working. It is working to produce fair and generally correct results that are consistent with fairness and with the 

overall goals of the patent laws; which of course, as we know from 

the Constitution, is to promote the progress of the useful arts. 

But I agree with the Chairman that it is far too costly. I think 

the discovery process for all cases is a black hole into which we 

throw enormous resources and it gives off very little light in return. 

How do we deal with that? Judges need to deal with that. In the 

Eastern District of Virginia, we deal with it by having every case 

50

go to trial within about six or 8 months, regardless of nature or dimension; with only the rarest of exceptions. That includes patent 

cases. This is a fairly rigorous time schedule. It imposes severe discipline on judges and litigants. But it is appropriate. It does keep 

costs down. 

Now, there are other ways to keep costs down. We need to explore those. Although I have a strong caution about Congress getting into the job of micro-managing the adjudicatory process. I 

think that’s a mistake. But I do think it is important for judges to 

be more conscious of the enormous costs of litigation. And the fact 

is, I think one of the articles I submitted is an article I wrote on 

how litigation costs distort patent economics. I believe that’s available. 

But in any event, let me address what I think is the major impetus for the proposals. And that is the Markman decision and the 

reversal rate related to Markman. There’s no question that 

Markman, of course, was a landmark, a watershed event in patent 

infringement litigation. I tried lots of cases before which were nonMarkman, before Markman came along, and many since then; and 

I know the difference. 

And it is—it does make it more labor intensive. The principal result is that judges must engage the technology. They must engage 

it, and they must write opinions about their Markman decisions. 

And judges are now becoming aware of that. 

My view is that the first year there was about a 40-percent reversal rate, according to the figures I had from the Federal Circuit. 

And my view of that is that it took a while for district judges to 

get the message. And it’s still a message that is being propagated 

by the Federal judicial center and many of us. That is, to engage 

the technology, write opinions, and demonstrate that you have 

thought about it carefully. 

Then the reversal rate went way down, into the 20’s, by 1998. 

Then it crept up again. And it is now, as Professor Moore pointed 

out, I think about 35 percent. But that figure is flawed. It’s not 

flawed because of Professor Moore. She’s an exceptional researcher 

and an exceptional academic, and I bow to her. 

But she is limited by the way in which the data exists. She can’t, 

for example, tell you how many cases were not appealed, where the 

people were satisfied with the Markman determinations and accepted them. She cannot tell you how many cases where the Court 

of Appeals of the Federal Circuit reversed a Markman determination, but affirmed five or six others. 

I had a case in which I had 24 patents involved in electronics, 

transistor circuitry; patents in which I made dozens of Markman 

determinations. Now, that case never went to appeal. I think the 

parties might—they settled ultimately. I can tell an interesting 

story of how that went, because we used independent experts, 

which was not a good idea. And I can come back to that. 

But the fact of the matter is that there are many cases where 

numerous patent Markman determinations are made that are affirmed, in effect, by the Federal Circuit, and those aren’t accounted 

for in the 35 percent. 

But the bottom line is this. The normal reversal rate for cases 

is roughly 20 percent. But that includes both clearly erroneous or 

51

factual determinations, and de novo determinations, matters of 

law, about which there is a higher percentage rate. No one knows 

what that figure is exactly, so far as I’m aware; but it’s estimated 

to be about 24, 25, to 26 percent. 

Markman is up at 34, at the last I heard. I believe that will decline. I think it is stable now. I do not believe it’s rising. I believe 

it is stable and it will continue to decline. 

Why was there a blip going up? I think because the Federal Circuit was in the process of getting organized about its rules of construction. We all know about the dictionary disputes, and how that 

went back and forth for some period of time and caused some confusion. But that will stabilize, and that will come down. 

So I do not believe that there is any need for any specialty courts 

or specialty trial judges. And then, think of the problems that that 

would create. 

Mr. SMITH. Judge Ellis, I hate to say that you’re out of time; I 

hate to do that to any judge. But maybe there’ll be some time during the question-and-answer period. 

Judge ELLIS. This is your court, sir. [Laughter.] 

Mr. SMITH. Okay. 

[The summary of the prepared statement of Judge Ellis follows:]

52

SUMMARY OF THE PREPARED STATEMENT OF THE HONORABLE T.S. ELLIS, III


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[Additional material submitted by Judge Ellis is located in the 

Appendix.] 

Mr. SMITH. Professor Moore, let me direct my first question to 

you. But at the outset, let me say that, at least from my perspective, it seems to me that we do have a legitimate problem, both in 

the increase in the number of patent cases, their complexity, and 

perhaps or at least in the amount of reversals that we see; all of 

which have been documented by you. 

Judge Ellis called you a respected professor and researcher 

whom he admires, but he said your data was flawed. And I wanted 

to know if you wanted to respond to that. 

Ms. MOORE. Thank you, Chairman Smith. Well, the data is not 

flawed, and I’m happy to make it freely available to anyone who 

is interested in reviewing it. I do actually, contrary to Judge Ellis’

suggestion—the data includes every single claim term that was appealed. So if he had a case where 24 were appealed, and 23 were 

affirmed, those are all counted as 23 separate affirmances in my 

data and one reversal. 

Despite that, there’s a 35-percent reversal rate. The 35 percent 

reversal rate is the cumulative rate over the 8 years of the study 

from Markman to last year. The 35-percent reversal rate is for all 

8 years. If you do look at the graph, there is a continuing rise over 

the time period. So the most recent year is higher than 35 percent. 

It’s the mean of all the years. 

Mr. SMITH. Okay. Professor Moore, what do you think of Mr. 

Pegram’s idea; that is, giving the Court of International Trade patent jurisdiction? 

Ms. MOORE. Well, I am not—I don’t support the idea. If we were 

to give them concurrent jurisdiction with the district courts, it just 

creates another avenue for forum shopping by plaintiffs. 

Beyond that, if we give them exclusive jurisdiction—I’ll tell you, 

once I actually wrote an article advocating the consideration of a 

specialized trial court. I’d like to retract it here formally. You 

know, I’ll chalk it up to youth. 

But in any event, the reason that I oppose the idea now is simply 

because, with the creation of the Federal Circuit, I believe we have 

enough of a specialized court situation, and we would lose all the 

percolation that comes from having many district courts be able to 

weigh in on the law and then have the Federal Circuit look at all 

of those different interpretations and come up with the right one. 

Mr. SMITH. I understand. Mr. Pegram, in regard to your idea, 

you clearly, by saying that the Court of International Trade should 

have patent jurisdiction, are willing to designate a particular court 

and give that jurisdiction to a court other than the courts that now 

have it. So what’s wrong with Professor Moore’s idea about designating a judge within each district and having that judge become 

an expert in patent law? 

Mr. PEGRAM. Ninety patent courts is too many. And I think that 

there is a big difference between having a collegial court that are 

all under the same rules of procedure, which I think we should try 

as an experiment with the CIT, and having 90 different judges that 

the only thing that is assured is that each one’s in a different district and that they’re under all the different regional courts of appeal. 

56

Mr. SMITH. All right. Thank you. Mr. Katopis, I’m going to read 

from your testimony, page 10. You say that, ‘‘all of the available 

evidence suggests that the number and complexity of patent disputes will climb dramatically in a few short years.’’ And then you 

say further on that one of the underlying reasons that the Federal 

Circuit reversal rate is so high is that the district court lacks certain capabilities. 

Isn’t this the whole point of what Professor Moore is saying? And 

yet, your response is to suggest another study and another commission. If the problem is as severe as you describe it—and I believe 

that it is—why not have a specialty judge, so to speak? 

Mr. KATOPIS. I think that there may be merits in that, specialty 

judges. However, I think Congress really needs to take a deep 

breath, and assess what’s going on. I would be interested in knowing, in terms of the reversal rate, what’s really going on? Are these 

all electrical engineering cases, for example? Is there some problem 

with the electrical engineering patents that are coming out of the 

PTO? Is that something that we need to look at? 

So I think it’s important to—I would like to know, are special 

masters or magistrates being used in these cases? I’d like to understand why that number is so large, before Congress takes action, 

especially radical action. 

Mr. SMITH. Do you have a quick response, Professor Moore, to 

that? 

Ms. MOORE. Well, my quick response would be that, with regard 

to the 35 percent number, that 35 percent number has nothing to 

do with the PTO issuing good or bad patents, because it’s claim 

construction. Whether it’s a good or a bad patent, somebody’s got 

to construe the claims. And that’s, unfortunately, not getting done 

correctly 35 percent of the time. 

Mr. SMITH. Okay. Mr. Katopis, you don’t think that there might 

be at least just a little bit of institutional resistance here to a 

change in the status quo or the loss of jurisdiction on the part of 

some members of the judiciary? Which is totally understandable 

and totally natural. Members of Congress don’t want to give up any 

jurisdiction. Those of us on the Judiciary Committee don’t want to 

lose any of it to any other Committee, and so forth. But it strikes 

me that that might be a partial explanation for the resistance to 

something that might be needed in our society today. 

Mr. KATOPIS. Well, Mr. Chairman, maybe I’m just really conservative and leery of change. So perhaps that——

Mr. SMITH. Well, usually conservatives—at least, I don’t think 

it’s a Republican idea to suggest more studies and commissions, 

but maybe it is. I guess it depends on which side of the desk you’re 

on. 

And Judge Ellis, you wanted to respond, real quickly. And my 

time is up after your response. 

Judge ELLIS. Well, I agree that we don’t know the precise reasons for the high reversal rate, but I think I have a clue. And if 

you’ll give me some time, I’ll tell you. 

Mr. SMITH. Okay. Without objection, I’ll yield myself another 2 

minutes. 

Judge ELLIS. All right. 

Mr. SMITH. And please proceed. 

57

Judge ELLIS. If I reflect on the kinds of Markman determinations 

that I’ve been required to make, we’re talking about the vagaries 

of language. And it’s no respecter of technical area. You will find 

dicey Markman determinations in swimming pool toys, as I had recently, or in transistor circuitry, or in air disc brakes, or indeed 

anywhere. 

Because it is the goal of every person seeking a patent to get the 

broadest possible patent they can. And how do you do that? You 

use broad, vague claim language. And once you have that broad 

claim language, you can argue in a patent infringement case that 

it covers something you maybe hadn’t anticipated, but you can still 

argue it. And then, a district judge has to decide whether it’s that 

broad or not. And then, the court of appeals has to decide. 

I suppose everyone here knows, of course, that the Court of Appeals for the Federal Circuit has 12 judges, only six of whom have 

technical backgrounds. And what do you do? Do you then have—

there is a chemical PhD on the Federal Circuit, but there are no 

procedures in the Federal Circuit to ensure that Judge Newman 

hears all chemical patents. In fact, they have explicitly rejected 

such a procedure. 

Generalist people can do this, and can understand it. The ablest 

judges—or the ablest lawyers who have appeared before me in patent infringement cases have often had AB degrees in English. 

But the reason for the high reversal rate, I think, is the expansive, broad language, and the changing definitions, and district 

judges need to engage. 

Mr. SMITH. And not a lack of expertise; or so you would argue. 

Judge ELLIS. Not a lack of expertise. 

Mr. SMITH. Okay. 

Judge ELLIS. I think if you had an expert set of courts, you’d 

have disagreements again. And if you put appeals there, you’d have 

disagreements among experts up there. 

Mr. SMITH. Professor Moore, any response? 

Ms. MOORE. Well, the only response I would have to Judge Ellis’

comment is that you have to consider the position he’s coming 

from. He is, without question, one of the most esteemed of all the 

patent jurists in the country. He—I don’t know, but probably—has 

a lower reversal rate than other judges. I could look at my study 

and figure that out. 

So maybe what is easier for some judges, given the experience 

he has with the high number of patent cases, may not be quite so 

easy for other judges who have very, very few patent cases. 

Mr. SMITH. I thank you all for your responses. 

The gentleman from California, Mr. Berman, is recognized for his 

questions. 

Mr. BERMAN. Thank you very much, Mr. Chairman. 

If a group of schlubs like us can decide whether or not the patent 

law should be amended—I mean, I am a believer in a generalist 

being able to sort of learn enough—just enough to be dangerous. 

In other words, I mean, I wonder if you lose something by having 

somebody who is so tied up and so involved by background and 

training and everything else in patent law. Sometimes, the benefit 

of a fresh look at something is useful in these situations. 

58

The issue of reversal rates, there are people around who like to 

say, ‘‘Oh, the Ninth Circuit is reversed more than any other circuit.’’ And I say, ‘‘Well, let’s see, what does that measure? The 

number of times the court granted cert and then reversed the 

Ninth Circuit? Or was it the number of decisions the Ninth Circuit 

made? Or the number of decisions where someone sought cert and 

it was not granted? Is that factored into it?’’ I mean, you can create a lot of different conclusions based on 

where you decide to draw the line in determining the reversal rate. 

But I guess you indicate, Professor, you don’t want a specialized 

patent court. You want what, judges, one or more judges, in each 

of the districts to handle all the patent cases in that district? Is 

that your suggestion? 

Ms. MOORE. I think that would be a better proposal, yes, Mr. 

Berman. 

Mr. BERMAN. Done based on volunteering for it? Or the chief 

judge having the authority to say, ‘‘You’re the new guy here, you’re 

stuck with this’’? 

VOICE. That’s how they do it now. 

Mr. BERMAN. ‘‘Here’s your reward.’’ No, that isn’t how they do it 

now. Now they have a random method of selecting judges; notwithstanding the Judiciary Committee’s investigation into how judges 

get cases. It’s a random determination, by and large, isn’t it, in almost every district? 

Judge ELLIS. Well, it is in the Eastern District of Virginia, but 

it wasn’t until relatively recently. But relatively recently, for reasons we all understand now, it has now become random everywhere. 

Mr. BERMAN. The chief judge used to decide who would get the 

case? 

Judge ELLIS. Yes. But the chief judge didn’t do it. It was often— I can remember times in the ’80’s when someone would come in 

and say, ‘‘You know, I’m not really up to trying this case. I haven’t 

been feeling well. Who here wants to try it?’’ There were lots of different ways in which it happened, and that was wrong. They all 

ought to be randomly assigned, without regard. 

Now, I don’t know how you would appoint somebody, or designate somebody. If you designated, for example, somebody with an 

electrical engineering background, and somebody came to that person with a life sciences case, what good is that electrical engineering background going to do? 

Mr. BERMAN. And are patent cases the only kind of really complicated cases? 

Judge ELLIS. Absolutely not. I can attest that there are many 

other kinds of complicated cases that are—I’m not saying patent 

cases are not time consuming. They’re very labor intensive for 

judges. I cannot tell you how many hours I poured over transistor 

circuitry diagrams, struggling to understand it. 

But I have also had espionage cases that have been terribly difficult and time consuming; securities fraud cases; toxic tort environmental cases that involve very complicated questions of statistical methodology. 

Mr. BERMAN. How did you get Federal jurisdiction over a nude 

bathing case? 

59

Judge ELLIS. The Potomac. 

Mr. BERMAN. What, they bathe across State lines? 

Judge ELLIS. State park—national park. 

Mr. BERMAN. I see. Okay. So it wasn’t the original package doctrine. 

Judge ELLIS. No. 

Mr. BERMAN. Okay. [Laughter.] 

Judge ELLIS. It was really a very uninteresting case. [Laughter.] 

Mr. BERMAN. All right. The issue of claims construction, Professor, you divorced it from the issue of the quality of the patent. 

And I don’t quite understand why it would be divorced. If the Patent Office is granting a patent to a broad and vague claim, isn’t 

that, by definition, a critique of the quality of that patent? 

And how a claim is construed, if it’s construed in one way, it very 

well could be a poor quality patent, because there was prior art 

that wasn’t novel, or it was obvious. Construed that way, it was a 

poor-quality patent; construed another way, it might—Why aren’t 

they totally interrelated, the issue of quality of patents and how 

claims are construed? 

Ms. MOORE. I guess, Mr. Berman, I don’t see that as contributing 

to the complexity, making it more difficult for the district court 

judge to accurately figure out which way it should be construed. If 

it’s construed so broadly as it reads on the prior art, as you correctly pointed out, the patent is going to be invalid, and his job is 

actually quite easy. If it’s construed narrowly, then maybe you 

won’t have infringement. 

But I guess that I don’t see the quality of the job the Patent Office does as really having any very big impact on the likelihood a 

district court’s claim construction is going to be right or wrong, or 

get reversed or be affirmed. 

Mr. ISSA. [Presiding.] One more minute, by unanimous consent. 

Mr. BERMAN. Okay. Thank you. 

Judge ELLIS. May I respectfully dissent? I do think that the way 

in which the patent claim is written can affect the validity of it. 

And the vagueness of it can affect the validity of it. And it’s often 

a battle in construing a claim to construe a claim to preserve its 

validity; is one of the cardinal rules. And as I said earlier——

Mr. BERMAN. You mean like construing a statute to preserve its 

constitutionality? 

Judge ELLIS. That’s right. So while I agree in essence with Professor Moore that basically the validity of the patent isn’t inextricably intertwined with it, it can be related to it. And if you take 

a looking, I think it would be worth studying a range of the kinds 

of Markman determinations. 

You know, if you get a patent that says in a method, ‘‘heated to 

500 degrees approximately,’’ or ‘‘more or less,’’ and then a district 

judge has to decide, well, is 490 degrees ‘‘more or less’’; is 491 degrees ‘‘more or less’’? Experts are going to disagree about that. I 

had experts testifying in this transistor circuitry case, and even 

they couldn’t agree on the definition of a term. 

Mr. BERMAN. Could I just—this is really going to be sort of a 

‘‘yes’’ or ‘‘no’’ answer, if I could. 

Mr. ISSA. Without objection, an additional half-minute. 

60

Mr. BERMAN. Assuming that claim construction is essential to 

properly determining both issues of infringement and validity, and 

many cases would be settled earlier with reasonable claim constructions, would you recommend, would any of you recommend, 

establishing a procedure that would make interlocutory review of 

claim construction to the Federal Circuit available to litigants? I 

guess, under the theory that if you send that judge decision up for 

appeal on an interlocutory basis, and that’s resolved, you might in 

many cases get a settlement and do away with a lengthy jury trial 

and all of the other stuff that goes with it. 

Ms. MOORE. Yes, I would favor that. But there are some concerns 

you need to be wary of; which is the volume of cases that would 

put in the laps of the Federal Circuit judges. And you know, while 

you would remove a lot of the inefficiency from the district court, 

you may over-burden the court with very complicated cases. 

Mr. PEGRAM. For that reason, I’m not ready to adopt that proposal. But I’m willing to see what comes up in further discussion 

of this subject. 

Mr. KATOPIS. Well, I’m not a litigator, so I’m going to embarrass 

myself, probably. But I’ll say the earlier in the process you 

have——

Mr. BERMAN. You worked here. You can’t be more embarrassed 

than that. 

Mr. KATOPIS. Well, talk to Mr. Merrit. [Laughter.] 

The earlier in the process you have the appeal, the more halfbaked the record is. So you probably won’t have enough really to 

give a meaningful appeal. So I think there’s a little bit of a ‘‘Catch22.’’ But the judge can speak to that more fully. 

Judge ELLIS. I have not thoroughly thought that out, but I would 

be preliminarily opposed to it; the reason being that the record 

wouldn’t be sufficiently developed. But more than that, I have on 

many occasions—I always hold Markman hearings as early as possible—early as possible. It’s one of the first things I do, to get a 

sense of that. And I make rulings as early as I can. 

Oftentimes, I’m not able to make rulings, because I’m not confident that I fully understand the case. So I tell the lawyers, ‘‘Make 

alternative assumptions, and put those alternative assumptions to 

your infringement experts to see whether there is infringement.’’

I have even had occasion in the course of a trial to change my 

mind about a Markman determination and change my definition in 

front of the jury because a bright light went on in a dark recess 

of my mind that hadn’t gone on when it should have much earlier. 

So I’m not sure interlocutory appeal is the fix that it might appear 

to be. 

Mr. ISSA. Thank you. And the Chair recognizes the gentleman 

from Virginia, Mr. Goodlatte, for his round of questioning. 

Mr. GOODLATTE. Well, thank you, Mr. Chairman. I appreciate 

your yielding me this time. I was very interested in the last question asked by the gentleman from California, Mr. Berman, and I’d 

like to follow up on it. 

It seems like the majority of you are skeptical about the idea of 

an interlocutory appeal. I’m still concerned about the estimate that 

you’ve given us, Professor Moore, that perhaps as many as a third 

61

of district court claim constructions are improper. Others have said 

that it could be as high as 47 percent. 

And so I’ll ask you. But since you were somewhat supportive of 

the idea of interlocutory appeal, I also want to hear the three dissenters’ ideas of how we get away from that problem if we don’t 

use the interlocutory appeal. 

Are there other things that we can do before it gets to the district court? Are there things we can do to improve the quality of 

the district court decisions? Or do you disagree that the quality is 

that low? Because being wrong a third of the time is awfully high 

for any district court. They wouldn’t want to be reversed a third 

of the time on appeals in most other areas of the law. So we’ll start 

with you, and work our way back. 

Ms. MOORE. Thank you. Certainly, Congressman, I agree with 

you that the reversal rate is cause for concern. As far as interlocutory appeal goes, I am extremely receptive to the idea. I would very 

much like to see the Federal Circuit taking cases under interlocutory appeal. They’ve had many such appeals. They’ve rejected all 

of them; which is their matter of right. So maybe there would be 

a way that we could encourage them to take some. And that would 

probably be a very good thing. 

Mr. GOODLATTE. We could do that. Let me ask you to respond to 

Mr. Katopis’ observation that if you allow the appeal earlier in the 

process the record on which the appeal is based is skimpier. 

Ms. MOORE. That’s not a concern in claim construction, sir. In 

claim construction, you’re supposed to construe the claims in light 

of the intrinsic record. It’s like construing a statute in light of the 

legislative history. Once it’s there, it’s there. 

Really, district court judges are discouraged from looking outside 

of the patent documents itself to determine what the claim terms 

mean. So there really isn’t the need to develop this extremely extensive record for part of claim construction. 

Mr. GOODLATTE. Thank you. Mr. Pegram? 

Mr. PEGRAM. In the practical world, however, I agree with the 

views expressed by Judge Ellis, that sometimes the light does dawn 

later, either in the minds of counsel or in the minds [sic] of the 

judge. We are talking about something——

Mr. GOODLATTE. But obviously, if the rate of determination of 

improper constructions is between 33 percent and 47 percent, a lot 

of the time, the light never goes on. What do we do to get the light 

to go on? 

Mr. PEGRAM. Well, if you’ll bear with me, sir, I agree with Judge 

Ellis that the problem isn’t quite as bad as the statistics look, because there are so many cases in which the claim construction is 

never appealed: the parties have settled; there is an adjudication 

by summary judgment. Only 3.6 percent of the cases go to trial. So 

there are many, many cases in which the district court has reached 

a Markman decision of some sort, that may go unrecorded and unreported, that I think may not appear in the statistics. 

I, personally, don’t feel that the driving reason for making an improvement in the adjudication system is this issue of reversals on 

the Markman hearing. And I would tend to agree that we should 

encourage, as Judge Ellis said, a preliminary determination. 

62

But this is a matter of law. And as a matter of law, it’s subject 

right up to the end of the trial to be changed, and to be changed 

in the Federal Circuit. And that’s just the way it is in our system, 

if it’s going to be a matter of law. 

So there are going to be changes to occur. And I don’t think that 

the numbers are so outrageous, when you look at it in the context 

of over 3,000 patent cases a year. 

Mr. GOODLATTE. How many of those are appealed? 

Ms. MOORE. Four hundred and fifty a year. 

Mr. GOODLATTE. Out of 3,000 are appealed. And so we’re seeing 

somewhere between 150 and over 200 of those constructions determined to be improper. Judge Ellis? 

Judge ELLIS. Well, the reversals could be for other reasons, not 

having to do with Markman. So you can’t attribute the full 30——

Ms. MOORE. No, the 35 percent are solely claim construction reversals. 

Judge ELLIS. All right. Well, my view is that the interlocutory 

appeal is not a good idea, especially in our docket. Everything is 

over in 8 months. 

Mr. GOODLATTE. Okay. I heard that. What I’d like to know, with 

due respect to all of you, what do you do instead to reduce that 

number? 

Mr. KATOPIS. Congressman, if I may, I still don’t understand 

what underlies that number. Is it, as I suggested, the Federal Circuit running amok; a deficiency in the district courts; these are just 

tough cases, they imply issues of patent quality? I think there 

needs to be more information, and perhaps the Professor has that. 

And I have only been thinking about these issues for several 

months. 

The ‘‘water cooler talk’’ at the USPTO is pretty boring, actually. 

And this comes up——

Mr. GOODLATTE. I can imagine. 

Mr. KATOPIS. And one of the things that we discussed internally—and I probably shouldn’t talk about this too much—is that, 

where you have this problem, can you give greater deference to the 

district court by looking at what the legacy of Markman is? 

It was suggested that Markman took the issue away from the juries, gave it to the judges, but maybe didn’t make it a pure question of law; and maybe there’s a way Congress can revise the 

standard as de novo, based on a question of fact, or something to 

clamp down on the appellate review. 

This may limit an inventor’s rights. This may not be a good 

thing. I guess the goal for Congress is to decide what is an adequate number. Is it 33 percent, 20 percent, 10 percent? You know, 

what is the goal? Or is it just because of this sound of the cries 

of frustration that you keep hearing? 

Mr. GOODLATTE. Well, let’s ask Judge Ellis. Is there something 

that should be done in the process, before it reaches the district 

court, that would make district court judges better able to handle 

this? Or do you just not agree that they’re not handling it well to 

begin with? 

Judge ELLIS. Well, I don’t agree that they’re, en masse, not handling them right. There are always going to be district judges who 

63

don’t do their job as well as they should; just as there’s a bell curve 

in every profession, including lawmakers. 

Mr. GOODLATTE. Sure. Well, there’s no question about that. 

[Laughter.] 

Judge ELLIS. But in the main, I think we are a conscientious 

group, dedicated to doing the job in all cases. Now, what can be 

done in advance? Well, certainly there has been a process. We’ve 

only been at Markman for 10 years, and there has been a long, tedious process of getting correct, or getting straight, getting clear 

the rules of construction—from Vitronics through today—and that 

process is still going on, to some extent. 

In fact, I recall one case—and Professor Moore doesn’t have to 

look for it—I was reversed on a Markman construction, where I 

wasn’t reversed in other cases. But there was a dissent. So here is 

an expert court, two-to-one, and the person who dissented was the 

person with the technical background. 

What can be done? My view is that we can do better about requiring more specific language in patent claims, perhaps. You 

would be astonished, I think, and it would be instructive to look 

at the range of patent Markman decisions. What kind of language 

are judges being asked to determine? ‘‘Approximately,’’ ‘‘more or 

less,’’ ‘‘nearly,’’ that kind of thing. Some are technical terms, to be 

sure; but those are the easy ones. 

Mr. GOODLATTE. Mr. Chairman, I wonder if I might slide in one 

more question? 

Mr. ISSA. Without objection, the gentleman is granted an additional minute. 

Mr. GOODLATTE. I thank the Chairman. Mr. Pegram, since related State claims are often tried in Federal district court, what do 

you anticipate the effect on the parties would be if we permitted 

patent cases to be tried at the CIT, as you propose? 

Mr. PEGRAM. I don’t see that there would be any particular difficulty with that. The district judges have to take up the law of the 

particular state today, and under those circumstances the CIT 

judges would have to consider the law of the State. But the fact of 

the matter is that that rarely occurs and is really significant in, I 

would guess, less than 5 percent of the cases. 

Mr. GOODLATTE. Would this have any relation to these determinations made in district court? Is this court in any way better 

able to make these determinations than some of the other courts 

involved? 

Mr. PEGRAM. As to State claims? 

Mr. GOODLATTE. Yes. 

Mr. PEGRAM. Well, I don’t think that—you know, I think that, 

certainly, a district court sitting in a State would have the most 

knowledge about the laws of that State, and it therefore would be—

the CIT would be less of an expert court in the law of the State. 

Mr. GOODLATTE. So it’s not going to improve the results. 

Mr. PEGRAM. But in the 95 percent of the cases which were only 

patent issues, they’d be much more up to speed. And I would suggest, in answer to your prior question, that the way to have better 

dealing from the court’s point of view with Markman situations is 

to use more experienced judges. I think Judge Holderman, in his 

64

paper that I’ve submitted along with my materials, also alludes to 

that. 

The other thing, I do agree with what Judge Ellis has said; and 

that is that some of these patents are very poorly written claims, 

the ones that filter up. But what I can’t grasp is that, even if the 

U.S. Patent Office improved 90 percent of the patents issued, we 

would still be getting several thousand cases a year in which there 

were badly written claims that would be in the courts. And so I 

don’t really think that we’d have the problem. 

Where the claims are clear, we frequently don’t even have a dispute, we don’t even have a litigation. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Mr. ISSA. Well, thank you. And one nice thing about being the 

last to question, not only will I have, let’s just say, a greater flexibility on my time, but so many good questions have already been 

answered. 

Picking up where the gentleman from Virginia left off, Mr. 

Pegram, I would be the first to say that I would like this Committee to deal with the ITC and ITC reform, and perhaps enhancement. I have the luxury of being somebody who won a case as a 

defendant at the ITC. That’s the good news. 

The bad news is, I also understand that it denies the normal 

rights; not the least of which is, your accuser throws a Molotov 

cocktail and then runs away and lets a Federal judge and a Federal prosecutor double-team you. 

So having succeeded, I would say that, at this time, to include 

the ITC in anything that I’m going to suggest to the Chairman may 

not be yet appropriate. But I’ll give you, certainly, a chance to respond. I’d feel inappropriate otherwise. 

Mr. PEGRAM. We have the wonderful situation in the United 

States of several confusing designations. I am referring not to the 

International Trade Commission, or ITC, which does have a peculiar, to say the best, procedure. I am referring to what used to be 

the Customs Court, the Court of International Trade. 

This is an article 3 court, and it has judges who are fully equivalent to Federal district judges. Although it has its own rules of 

practice and procedure, they are almost identical to the Federal 

rules of civil procedure. But it has the benefit that if we wanted 

to try some experimentation, those rules could be revised for patent 

cases. 

And so I think that if you look at the Court of International 

Trade, who I think is a highly regarded court, that you might not 

have the reservations that you would have about the International 

Trade Commission. 

Mr. ISSA. Okay. But one of the proposals, I believe, that was out 

there was the ITC expanding beyond just injunctive relief, to have 

damages as something they could grant; which they presently can’t. 

Am I misunderstanding that? 

Mr. PEGRAM. It’s not my proposal. 

Mr. ISSA. It’s not your proposal. 

Mr. PEGRAM. I have heard people propose—— Mr. ISSA. Okay. 

Mr. PEGRAM. —expanding ITC. And there may have been some 

confusion with my proposal as a result of that. 

65

Mr. ISSA. Good. I’ve got this. 

Mr. PEGRAM. But I do not support that. 

Mr. ISSA. It’s in there. Chris? Or Mr. Katopis? 

Mr. KATOPIS. Congressman, if I may share one observation? And 

I don’t mean to be so sour about the CIT, but I think there’s a lot 

of concern about reversal rates. I invite your attention to the AOC’s 

website. The CIT has had traditionally about a 20 percent reversal 

rate by the Federal Circuit. For 2005, it’s 35 percent. So if you’re 

thinking about adding jurisdiction to the CIT, I just hope that, you 

know, it satisfies the goals that you’re trying to achieve. 

Mr. ISSA. Okay. To the core of the proposal of specialization within the court, first, let me make a comment. What I think I heard 

all of you say is you don’t want to take this and make it a separate, 

truly specialized court at this point, in spite of other countries’ actions that do in fact in many cases have a specialized court, without juries, etcetera. Is that generally a nod, that you’re all in various ways concerned about that? 

Okay. And the reason is, I’m concerned. The Federal judges I’ve 

talked to believe, as you do, Judge Ellis, that the generalist, given 

the right tools, can do better. 

To that extent, I’m going to ask a rhetorical question, as someone 

who’s, obviously, never been a judge—except one time in a contest, 

and it did not involve any of that Potomac activity of yours. 

[Laughter.] 

But Your Honor, you have a chief judge in your district. That 

chief has scheduling and other rights, and probably checks to make 

sure that, you know, the electric bill is being paid—a series of administrative responsibilities. 

Judge ELLIS. Yes. 

Mr. ISSA. And it’s usually done on a rotation basis? 

Judge ELLIS. No. 

Mr. ISSA. Okay. In San Diego, it’s a rotation, the way it works. 

Judge ELLIS. It is rotation in the sense that the most senior 

judge, provided he’s under 62 or something like that—— Mr. ISSA. Until he gets senior status, has it. 

Judge ELLIS. Well, he has it until he’s 62. You cannot take senior 

status into your 90’s. But you must be, I think it’s 62, before you 

are the most senior to take it. And then you may only hold it for 

7 years. 

Mr. ISSA. So it’s a limited period of time. 

Judge ELLIS. Yes. 

Mr. ISSA. Additional facilities and additional staff come with it? 

Judge ELLIS. Yes, I think it’s one secretary. 

Mr. ISSA. Okay. And that’s because it takes more people to do 

that job right. 

Judge ELLIS. Yes, sir. 

Mr. ISSA. Why would we not apply a similar concept to finding 

ways to deal with patent cases? And I know you’re smiling because—I’m not trying to trap you. 

Judge ELLIS. No, I think you’re going right down where I want 

to go. 

Mr. ISSA. Okay. [Laughter.] 

It’s not a question of whether the judge is better or worse. It’s 

not a question of whether they have a degree in chemical engineerVerDate 0ct 09 2002 11:52 Jan 03, 2006 Jkt 000000 PO 00000 Frm 00069 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\100605\23816.000 HJUD1 PsN: 23816
66

ing. Because I really appreciate how you focused on it’s not a matter of getting the right engineering degree for every patent case, 

and I think you’re right on. 

However, frequency—not exclusivity, but frequency of dealing 

with patent cases; the appropriate staff to help in that process, 

whether those are permanent staff or they’re staff loaned when you 

have a case, or in fact special assistants or masters, brought to you, 

instead of the plaintiff and defendant bringing you their experts 

and trying to spin your head around like ‘‘The Exorcist’’—is that 

what you’re saying would make your body work better? 

I know the gentleman next to you talked in terms of resources 

as one of the solutions. Is that what you’re trying to achieve to do 

your job better? 

Judge ELLIS. I think that’s a fascinating and interesting suggestion, and I think I like it. I haven’t thought it through. 

Mr. ISSA. I didn’t want you to. I wanted to get right to it. 

Judge ELLIS. If what you’re suggesting is that judges who get 

patent cases, or a lot of them, should have an extra law clerk with 

expertise? Absolutely. I wouldn’t disagree with that for a moment. 

That would be helpful. But I think it’s very important for all district judges not to appoint experts or magistrates. You can’t delegate what you’ve sworn to do. You’re the decision-maker. You’ve got 

to engage the technology and do it. 

Now, I do agree that you ought to have help in doing it. And, 

sure, if I had another—I have a pretty full docket, but if I had another 20 or 30 patent cases, rest assured, I would be asking you, 

‘‘Please let me have one or two more law clerks.’’ And I would certainly select them with some technical expertise; which might be 

in electrical engineering, but a person technically trained could 

think about life sciences, chemistry, and other things. 

Mr. ISSA. Well, to that extent—and I’m going to ask you a followup, because it is unique for me to—I mean, actually, a lot of what 

we’ve come up with has come from meetings with other Federal 

judges. It’s unique to have somebody in front of you, on the record, 

to help make the record. 

If in your court the rotation pattern, instead of being the next 

case, the next case, the next case, if it was, for the next year, every 

case that comes in that’s a patent case goes to you; and you’re supplemented with these people; but before people can figure out that 

they want to cheat the system and shop, you’re into another one; 

and then maybe they’re back to you, or maybe they’re on to a 

third—would that still meet the requirement that you’d have other 

cases, you’d still be a generalist, but that we could help to not have 

what usually happens in San Diego historically? 

And I’m speaking for a moment from experience in San Diego. 

Every time a magistrate became a Federal judge or a district judge, 

or somebody from outside came in, and you had to redivide, guess 

what got redivided? Every patent case. In Michigan, the exact opposite. Judge Cohn reached out and took cases. 

Now, I have the good fortune that I had a case that I prevailed 

on in front of a magistrate elevated and then given my case by 

somebody who wanted to dump it quickly. And then, I also was in 

Michigan, where Judge Cohn reached out and grabbed a case and, 

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oddly enough, a case that had been mismanaged and gone to the 

fed circuit and come back. 

I’ve seen the difference of time, expertise—exactly what you’re 

talking about, as somebody who probably does have a lower reversal rating, who does move the ‘‘rocket docket.’’

Is the goal reasonable, if we can keep from promoting burn-out, 

keep from artificially creating venue shopping, and if these generalists can be better at what they do, while still having other cases? 

Are those elements that you would say would work, while still potentially not having every patent case equally divided into 14 

judges? 

Judge ELLIS. Yes. 

Mr. ISSA. Excellent. Is there anyone that followed that, and 

agrees? [Laughter.] 

Ms. MOORE. I agree. 

Mr. PEGRAM. I agree, in principle, in the courts that have a sufficient number of judges to do that. But I think that there are other 

issues, as addressed in my testimony earlier; such as the coordination of procedures across the country and issues such as—I still believe, for example, that 94 district courts, each with a specialist 

judge, is too many. 

Mr. ISSA. Your Honor? 

Judge ELLIS. We’ve talked a little bit. I think Professor Moore 

mentioned narrowing the venue choices. I don’t have a view one 

way or the other, but that would certainly help in this regard. 

Right now, we allow people to select venues. And I believe—although Professor Moore can correct me—guess what? They go to 

the Northern District of California, they go to the Southern District 

of New York——

Mr. ISSA. Eastern District of Texas. 

Judge ELLIS. Eastern—well, that’s a new one. But you’re right. 

And the District of Delaware. The reason they go to the District of 

Delaware is there’s a marvelous hotel right across from the courthouse and good restaurants nearby. 

Mr. ISSA. Finally, a valid reason. 

Judge ELLIS. Yes. [Laughter.] 

But you’re always going to have some forum shopping; which is 

perfectly appropriate, if the venue statute allows it. If you have a 

venue statute that says you can go to ‘‘A,’’ ‘‘B,’’ or ‘‘C,’’ then that’s 

legitimate. And if you want to narrow it, go ahead and narrow it. 

But I understand what you’re suggesting is: Look, let us have a 

system where a designated number of Federal judges in various 

districts get the patent cases for some period of time, and we give 

them some more resources to do it, and let them do all the other 

cases in addition. 

I think there would be some district judges who would oppose 

that, because they want to do them and they wouldn’t be designated to do them. In other words, if you had a district of nine 

judges, as we do, there might only be two that would be designated. There might be another three or four who would want to 

do it. 

By the way, there are many kinds of cases. Those aren’t the only. 

There are a lot of district judges who, once they take senior status, 

68

say, ‘‘No more patent cases, no more capital cases, no more securities fraud cases, no more habeas cases.’’ So there are lots of those. 

Mr. ISSA. Or just the opposite. 

Judge ELLIS. Or just the opposite. 

Mr. ISSA. They choose to take—— Judge ELLIS. Exactly. 

Mr. ISSA. —certain cases, because they’re cerebrally beneficial. 

Judge ELLIS. I agree. I agree. But my own concern is that I don’t 

want district judges, and I don’t want, to reach out and take a case, 

because that impairs your impartiality. I think there ought to be 

a system that does it randomly; you get what you get, and you do 

what you are given to do. 

Mr. ISSA. Let me ask another question of the panel, because this 

is a suggestion that came up with a number of judges in the Southern District of California. For purposes of the pilot, the study, if we 

limited this to only double opt-in, meaning that although there 

would be a judge who was supplemented and relieved of sufficient 

other duties so that they would be able to rocket these cases, as 

appropriate—in other words, their criminal docket might be reduced—however, if there was this test, and there’s a judge in the 

Southern District and there’s a judge in your district or wherever, 

however, in order to get a case outside of the rotation, that both 

the plaintiff and defendant would have to agree, would that alleviate most of your concerns that somehow it was forum shopping? Or 

it would still be the same thing, except you’d have both sides agreeing to it? Yes, Professor Moore? 

Ms. MOORE. I think that would be disastrous. Because you’re 

never going to get agreement by them. And as a result, it’s always 

going to go back into the random selection process. I mean, very 

seldom are you ever going to get them to agree. Everyone’s going 

to have an idea of who’s better for them and who’s worse for them. 

Most of the time, the litigators are so smart, they can figure it 

out and get it right. So if it’s better for me, it’s worse for the other 

side, you know, and the other side is going to oppose the idea. 

Mr. ISSA. You know, every once in a while—and I’m not opposing 

your statement. You certainly have more qualification. But the only 

way you get a judge—a bench trial is if both the plaintiff and defendant do not demand a jury; which means both sides want justice, rather than the luck of the draw. And yet—well, I’m sorry— if you want justice, you get a judge; if you want your outcome, you 

hope for the jury. 

I wish I could disagree with that, but everyone who ever had a 

poor case but was hoping for the best, that I ever saw, asked for 

a jury. In patent cases. I’m being more narrow than general. 

That happens because both sides know that a bench trial is a lot 

faster. So to the extent that both sides agree to it because they’re 

assured that things will go quicker, etcetera, and they have high 

confidence, to the extent that that happens, why wouldn’t it happen that people would say, ‘‘Look, we’ve got a high-level dispute, 

it’s complicated, but we’d like a pro and we’d like it fast, and we’re 

willing to take the chances that we’re wrong’’? You don’t think that 

would ever happen? 

Ms. MOORE. To the extent they’re willing to do that, they already 

agree to binding arbitration and do it. Proctor and Gamble had a 

69

wonderful history of this. There are many companies that have engaged in binding arbitration. It avoids the litigation altogether. So 

to the extent that they want to sort of roll the dice, as you said——

Mr. ISSA. Roll the dice, but not roll the dice on the appeal. Your 

Honor? 

Judge ELLIS. I think I agree with Professor Moore. I think it 

would be rare that it would happen. I’ve only had—without browbeating the lawyers, I’ve only had one instance that I can remember where they freely chose to have a bench trial. 

And the other interesting thing in this technical aspect, I can’t 

tell you how many times I’ve had a technical case, and then had 

both lawyers strike every member of the jury with any technical 

expertise at all. We’re all familiar with that phenomenon. 

Mr. ISSA. I’m a witness to it. As a matter of fact, in my case, 

which was based on relay technology, one time, amazingly, the elevator repairman was specifically excluded, because, basically, that’s 

what elevators are, is relay circuits and relay logic at some point. 

The term of a study—now, let’s be presumptive, since I saw the 

right amount of nods that a pilot in a study seemed to be something everybody could agree would give us some potentially good 

information. Would 4 years be long enough? Would 5 years be too 

long? Can you give me your opinion of how long you think it would 

take to have this relatively small group that are proposed here? 

Let’s just say two districts in which this occurs—two circuits, and 

within that only a district in each. 

How long would you think we’d need to go through the process, 

learning, the additional funding, for trial failure and modification? 

Judge Moore? 

Ms. MOORE. No, not ‘‘Judge Moore’’——

Mr. ISSA. Oh, I’m sorry. Professor Moore. I’ll get to the judge in 

a moment. 

Ms. MOORE. If you have the power to do that, I’m all for it. No, 

I think that, at minimum——

Mr. ISSA. I’ll take you over to the other side of the rotunda. 

[Laughter.] 

Ms. MOORE. I think a minimum of 3 years, preferably five, would 

really be ideal; because just a couple of quick stats: Patent litigation takes on average 1.1 years, but that’s for all cases, even the 

ones that settle. For a case to get to trial, there’s an average over 

the last 20 years of 3.4 years. That’s abominable. But 3.4 years. So 

if we want to see if judges can develop expertise, we’ve got to give 

them enough time to have enough cases, and also have those cases 

get up to appeal and back down. 

Mr. ISSA. Excellent. Mr. Pegram? 

Mr. PEGRAM. I agree. 

Mr. ISSA. Chris? 

Mr. KATOPIS. I agree. And I’d also add, it may be possible, with 

all due respect to the stats we’ve seen, to have maybe another 

study looking back at 10 years of the results, the legacy of 

Markman; and try to figure out this granular information that 

keeps me up at night, apparently, about whether it’s electrical engineering cases, whether these cases relied on court-appointed experts in the adjudications. So, at least 3 years looking ahead, and 

70

then maybe you could also do something concurrently, looking 

back. 

Mr. ISSA. Your Honor? 

Judge ELLIS. Yes. Although my competency doesn’t really extend 

to knowing how long it would take to study something, I would 

think three to five—three would be minimal. 

Mr. ISSA. Okay. And I’m going to close in just a second. Because 

as much as I’d like to make the record very, very full, you certainly 

have all been generous with your time. But I do want to ask a 

question, because I think we have the right group. 

When we talked about claim construction, we talked about some 

of the challenges of reversal rates, I didn’t hear anyone talk about 

the changing interpretation of doctrine of equivalence. You’ve all 

been in practice during this period of time. How do you think that 

the long-term results on that are going to be? 

Because, obviously, claim construction at one time included the 

‘‘what if,’’ you know. And we certainly—it’s not just the 102 and 

103 that you deal with now. But it was also, you know, ‘‘How could 

we interpret somebody’s product to be somehow the equivalent of?’’

which often kept a case going for longer. Do you see that as changing these statistics, even if we did nothing? Professor Moore? 

Ms. MOORE. Thank you. The doctrine of equivalence is definitely 

being asserted in every, single patent litigation now. And it’s a 

complicated, difficult assessment. Most of the time, it’s left to the 

jury. However, the district court judge has the ability, through a 

number of avenues—like prosecution history estoppel and other 

mechanisms—to really impact the decision-making on whether or 

not it’s going to even reach the jury on equivalence. 

This is where I think specialized judges would also be an enormous value. Specialized judges, in the way we’ve been discussing 

them—via frequency, having the expertise and doing this over and 

over again—would allow them to interpret the prosecution history 

more easily and, hopefully, more accurately. So I think it would be 

beneficial there, as well. 

Mr. ISSA. Thank you. Mr. Pegram? 

Mr. PEGRAM. I agree completely. The cost of educating a judge 

who has not had the experience of a patent trial or the experience 

of a summary judgment motion in the area of the doctrine of 

equivalence, it’s an immense cost to educate that judge for the first 

time. 

Mr. KATOPIS. Congressman, with all due respect, I’m going to 

pass, because I’ve only been in private practice for a short time. 

And as you reminded me before the hearing, I spent the better half 

of the last number of years raising patent fees, so——

Mr. ISSA. And trying to raise them even further. 

Mr. KATOPIS. So I will not contribute to this. 

Mr. ISSA. Your Honor? 

Judge ELLIS. I agree with Professor Moore’s comments. I think 

I dissent from Mr. Pegram’s. You’re always going to educate the 

judge. And I don’t know what’s different about a patent case from 

any other case, in terms of educating them. There are judges who 

get maybe one espionage or national security case, one classified 

information case, every 5 years. They have to be educated in that. 

71

I really think we’ve got to focus back on why are we concerned. 

It’s this reversal rate that has everyone concerned. And I’m happy 

to have a further study of that. I think it’s important for us to remember that reversal rate for all issues of law is not much lower 

than 35 percent. 

Mr. ISSA. Well, and I’m going to close with a very, very quick 

statement and a conclusion that’s been written for me. [Laughter.] 

But this particular Member, I’m as concerned about the remaining 90 percent that don’t get to appeal and are never reversed, or 

not reversed; that the concept of specialization was the belief that 

if you lowered from 800-plus—over 1,000, actually, including everyone on senior status—down to 90—which Mr. Pegram objected to 

in some ways—that what we’re doing is we’re increasing from four 

a year, on the average, to maybe 40 a year that people would be 

dealing with. 

Even if it was only for a 2-year, 3-year period, 1-year period, the 

idea is that the intense focus—and Your Honor, you spoke about 

it, and I picked up on it. Judges need to focus more on this. The 

concept that we’re hoping to find through the study is: How do we 

get focused? 

And perhaps, like a sabbatical, somebody concentrating in this 

area within their district for a couple of years; and then, ‘‘Been 

there, done that, I’ll give you advice, but Joe down the hall now has 

the majority of these cases,’’ might allow for a ‘‘have your cake and 

eat it too.’’ It is a concern of mine; not, though, about the ones that get reversed, alone; it’s not just about that. It’s about—Your Honor, you 

did a great job of telling us how the ‘‘rocket docket’’ works. The ‘‘rocket docket’’ isn’t working everywhere. 

The hope is that all these cases would move better through some 

process. And if it’s not this one, Your Honor, I look forward to 

learning as much as I can about other ways to provide good results 

quicker. 

Anyone have any closing, before I close? 

[No response.] 

Mr. ISSA. With that, I’d like to thank the witnesses for their testimony. The Subcommittee is very appreciative of your contribution, and particularly the extended time you granted us. 

This concludes the oversight hearing on ‘‘Improving Federal 

Court Adjudication of Patent Cases.’’ The record will remain open 

for 1 week. I would like to ask, are all of you willing to take any 

additional questions that come from Members not able to be here? 

Then, we will also include that. Thank you for your cooperation. 

The Subcommittee stands adjourned. 

[Whereupon, at 6:05 p.m., the Subcommittee was adjourned.] 

(73)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE HOWARD L. BERMAN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA, AND RANKING MEMBER, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Mr. Chairman, thank you for scheduling this oversight hearing on improving federal court adjudication of patent cases. This hearing about the courts that handle 

patent litigation will be an interesting intersection of two separate issues within the 

subcommittee’s jurisdiction. 

Patents are the cornerstone of the economy, and provide incentive for innovation. 

Therefore, the effect litigation of patents has on the preservation of patent rights 

is all the more important to continually assess. 

The combination of the complex science and technology, the unique patent procedures and laws, the historical right to jury trials, the equitable division of labor and 

administration of the courts and their dockets, and the multiple methods available 

for dealing with the issues raised by patent litigation makes improvement of the 

patent adjudication system a uniquely complicated and difficult task. Many say the 

system works well, yet at the same time, some say the high costs of litigating and 

the reversal rate at the district court level reveal otherwise. 

These complexities appear to have distorted patent markets and patent economics. The increasing cost of litigating patent infringement and validity issues now frequently gives weak, untested and ‘‘presumptively valid’’ patents the same kind of 

protection that was previously only granted to or reserved for strong or judicially 

tested patents. 

Patent quality has been a long-time priority of mine, and with the introduction 

of the Patent Reform Bill, we are trying to ensure the quality of patents. Even so, 

despite the many efforts made so far, there are still many legal scholars, patent 

owners, and members of the judiciary and patent bar who believe changes to the 

patent litigation process in the courts are also necessary to improve the quality of 

patents. The creation of the Court of Appeals for the Federal Circuit alleviated the 

inconsistencies at the regional circuit court level. However, some continue to raise 

concerns about forum shopping at the trial court level. 

The Court of Appeals for the Federal Circuit has placed the job of construing patent claims in the hands of our federal district court judges (Markman), and kept 

other complex issues, such as nonobviousness, inequitable conduct, and novelty in 

the hands of the jury. Concerns have been expressed about whether a judge or jury 

can truly learn the intricacies of some of the science and technology placed before 

them during the length of a typical patent trial. Hopefully, if the post-grant opposition procedures in the Patent Reform Bill are enacted, this will address many of 

these complex issues before resort to district court litigation occurs. In addition, recent accounts demonstrate that as time passes, and the District Court federal judges 

are becoming more proficient at application of the claim construction rules spelled 

out by the Court of Appeals for the Federal Circuit, that the reversal rate is coming 

down. However, evidence suggests that our federal district courts still spend a much 

greater ratio of time on patent cases than any other types of cases that come into 

their courts. 

There are many proposals for change in the patent adjudication system. However, 

before implementing changes, we must first be able to fully understand the issues 

confronting the system, the many options that may be available to remedy issues 

in the patent litigation system that have been raised, and the effects of these proposed solutions. 

Thank you Mr. Chairman. I yield back the balance of my time.

74

PREPARED STATEMENT OF THE HONORABLE JOHN CONYERS, JR., A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF MICHIGAN, AND MEMBER, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

I have numerous concerns with the idea that Congress should establish a separate 

judicial system for patent cases. While I recognize that hyper-technical issues arise 

in patent lawsuits, every area of the law presents complex issues and circumstances. 

We should not go down the path of having isolated judiciaries or juries for every 

legal issue. 

During today’s hearing of possible reforms to adjudication of patent cases, some 

seek to remedy what they view as an inefficient and expensive system. They argue 

that the inefficiency is due to the inexperience of the judges, litigants, and lay juries 

on patent law as well as the technologies behind the cases. Although the increased 

expertise provided in these reforms, such as having only technical experts as judges 

or jurors, are an attempt to improve the system, I believe they may be misguided. 

The idea of designating certain judges as ‘‘experts’’ to hear those cases is problematic. For instance, how would we determine who gets the classification of ‘‘expert?’’

Furthermore, who would assign ‘‘special masters’’ to apply their technical proficiency and construe patent claims? And how would we be certain that these special 

masters would not have financial or personal conflicts? The replacement of a lay 

jury with a ‘‘blue-ribbon’’ jury in these cases invokes similar questions of classifications. 

More generally, if the Committee seeks to make these changes for patent litigation, an argument can be made that we should apply the same arguments of inefficiency to all other types of cases and permit only experts to hear them as well. A 

civil rights lawsuit would have only civil rights lawyers as a judge and jurors. A 

personal injury lawsuit stemming from an escalator accident would have only escalator engineers as jurors. 

For these reasons, I cannot immediately support any of the proposed reforms to 

the adjudication process for patent litigation.

75

ARTICLE SUBMITTED BY KIMBERLY A. MOORE, PROFESSOR OF LAW, GEORGE MASON

UNIVERSITY SCHOOL OF LAW, ENTITLED ‘‘MARKMAN EIGHT YEARS LATER: IS 

CLAIM CONSTRUCTION MORE PREDICTABLE?’’


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ARTICLE SUBMITTED BY KIMBERLY A. MOORE, PROFESSOR OF LAW, GEORGE MASON

UNIVERSITY SCHOOL OF LAW, ENTITLED ‘‘FORUM SHOPPING IN PATENT 

CASES: DOES GEOGRAPHIC CHOICE AFFECT INNOVATION?’’


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ARTICLE SUBMITTED BY KIMBERLY A. MOORE, PROFESSOR OF LAW, GEORGE MASON

UNIVERSITY SCHOOL OF LAW, ENTITLED ‘‘ARE DISTRICT COURT JUDGES EQUIPPED

TO RESOLVE PATENT CASES?’’


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ARTICLE SUBMITTED BY JOHN B. PEGRAM, SENIOR COUNSEL, NEW YORK OFFICE, FISH

& RICHARDSON, P.C., ENTITLED ‘‘SHOULD THERE BE A U.S. TRIAL COURT WITH A

SPECIALIZATION IN PATENT LITIGATION?’’


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LETTER FROM THE HONORABLE T.S. ELLIS, III, UNITED STATES DISTRICT JUDGE, 

EASTERN DISTRICT OF VIRGINIA TO THE HONORABLE LAMAR SMITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS, AND CHAIRMAN, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY


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ARTICLE SUBMITTED BY THE HONORABLE T.S. ELLIS, III, UNITED STATES DISTRICT

JUDGE, EASTERN DISTRICT OF VIRGINIA ENTITLED ‘‘PRESENTATION: DISTORTION OF

PATENT ECONOMICS BY LITIGATION COSTS’’


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ARTICLE SUBMITTED BY THE HONORABLE T.S. ELLIS, III, UNITED STATES DISTRICT

JUDGE, EASTERN DISTRICT OF VIRGINIA ENTITLED ‘‘PRESENTATION: QUICKER AND

LESS EXPENSIVE ENFORCEMENT OF PATENTS: UNITED STATES COURTS’’


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CHARTS PREPARED BY THE INTELLECTUAL PROPERTY OWNERS ASSOCIATION (IPO) ON

IP LITIGATION COMMENCED IN THE U.S. DISTRICT COURTS, 1993–2004, AND IP 

SUITS FILED IN U.S. DISTRICT COURTS, 1995–2005


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