On your mark, get set, go! A new race to the courthouse sponsored by Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc.

Brigham Young University Law Review, 2003 by Fox, Christian A

I. INTRODUCTION

Congress responded to these cries for consistency in patent law by creating the Court of Appeals for the Federal Circuit.6 Since then, several cases have defined the scope of the Federal Circuit's jurisdiction, including the recent United States Supreme Court case Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc.'

In Holmes, the Supreme Court held that Federal Circuit appellate jurisdiction could not be based solely on a patent law counterclaim.' This Note disagrees with the decision and argues that the Supreme Court improperly interpreted Federal Circuit jurisdiction, disregarding the recognized congressional goal in creating the Federal Circuit of establishing patent law uniformity. As a result, Holmes may work to promote inconsistencies in patent law adjudications among the federal circuit courts of appeal and prompt races to the courthouse between patent owners and alleged infringers as each group shops for the most favorable forum in which to litigate.

II. BACKGROUND

A. Pre-Federal Circuit Patent Law

led to forum shopping" and races to the courts" by parties seeking to have their claims adjudicated by a court favorable to the parties' particular circumstances.

The confusion prompted Congress, in 1982, to establish the Court of Appeals for the Federal Circuit, a specialized court that would, among other responsibilities, adjudicate patent law claims." 28 U.S.C. (sec)1295(a) provides the United States Court of Appeals for the Federal Circuit with "exclusive jurisdiction... of an appeal from a final decision of a district court of the United States . . . if the jurisdiction of that [district] court was based, in whole or in part, on section 1338 of this title."19 Members of Congress expressed hope that the Federal Circuit could bring harmony among conflicting patent law decisions and alleviate the rampant forum shopping by parties.20 The specialized subject matter jurisdiction of the Federal Circuit would also provide a unique forum for handling the complex appellate litigation involved in most patent cases.21

B. Post-1982: Federal Circuit Era

the authority of the Federal Circuit to adjudicate non-patent issues included in a case having patent law claims in the complaint and with respect to which law the Federal Circuit would apply in such an adjudication.23 Subsequent cases addressed Federal Circuit jurisdiction in actions in which there was no patent law claim included in the original complaint.24

Two years later in Aerojet-General Corp. v. Machine Tool Works, Oerlikon-Buehrle Ltd., the Federal Circuit unanimously held that it did indeed have jurisdiction over an appeal wherein a patent issue was raised in a counterclaim but not in the complaint.29 The en banc court distinguished the Supreme Court's decision in Christianson by pointing out that Christianson involved a patent law defense.30 The Federal Circuit reasoned that, unlike a defense, a counterclaim "states a separate cause of action unquestionably `arising under' (indeed created by) a patent statute."31 Refusing to be bound by a strict application of the well-pleaded-complaint rule,32 the court concluded that it had jurisdiction over counterclaims raising patent issues.33 Such was the state of the law until Holmes.

III. HOLMES GROUP, INC. V. VORNADO AIR CIRCULATION SYSTEMS, INC.

A. Facts and Procedural History

issuing an injunction in favor of Vornado and held that Vornado had no protectable trade dress rights in the grill design of its fans.36

Notwithstanding the adverse decision of the Tenth Circuit, four years later Vornado filed a complaint with the United States International Trade Commission ("ITC") against Holmes Group, Inc. ("Holmes").38 Vornado claimed that Holmes's sale of fans and heaters with a spiral grill design infringed Vornado's patent rights and infringed the same trade dress that was the subject of the Tenth Circuit litigation.38 Several weeks later, Holmes filed an action in the United States District Court for the District of Kansas seeking a declaratory judgment that its products did not infringe Vornado's trade dress but sought no declaration with respect to Vornado's patent rights. Holmes also sought a preliminary injunction restraining Vornado from accusing Holmes of trade dress infringement in promotional materials.39 In response to Holmes's declaratory judgment action, Vornado asserted a compulsory counterclaim that raised allegations of patent and trade dress infringement, the same issues that were raised in the earlier ITC complaint.

with the reasoning of the Tenth Circuit,43 constituted a change in the law of trade dress, and, thus, collateral estoppel did not apply.' The district court rejected this argument by concluding that it was bound by Tenth Circuit law, which had not changed since the previous case, and that Vornado was estopped from re-litigating the trade dress claims.45 The district court added that Vornado's counterclaim for infringement would be dismissed if the declaratory judgment and the injunction were affirmed on appeal.46