Reyna, Jimmie V.

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American University Law ReviewVolume 62 | Issue 4 Article 12013The Tariff and the Patent: A New IntersectionJimmie V. ReynaFollow this and additional works at: http://digitalcommons.wcl.american.edu/aulrPart of the Law CommonsThis Article is brought to you for free and open access by the Washington College of Law Journals & Law Reviews at Digital Commons @ AmericanUniversity Washington College of Law. It has been accepted for inclusion in American University Law Review by an authorized administrator of DigitalCommons @ American University Washington College of Law. For more information, please contact fbrown@wcl.american.edu.Recommended CitationReyna, Jimmie V. " The Tariff and the Patent: A New Intersection." American University Law Review 62, no.4 (2013): 779-785.The Tariff and the Patent: A New IntersectionKeywordsForeign trade regulation, Patent laws & legislation -- United States, Tariff -- Law & legislation -- United StatesThis article is available in American University Law Review: http://digitalcommons.wcl.american.edu/aulr/vol62/iss4/1FOREWORDTHE TARIFF AND THE PATENT: A NEWINTERSECTIONTHE HONORABLE JIMMIE V. REYNA*The Congress shall have Power. . . To promote the Progress of Science anduseful Arts, by securing for limited Times to Authors and Inventors theexclusive Right to their respective Writings and Discoveries;^The Congress shall have Power To lay and collect Taxes, Duties, Impostsand Excises, to pay the Debts and provide for the common Defence andgeneral Welfare of the United States,^Upon joining the judiciary as a Circuit Judge on the U.S. Court ofAppeals for the Federal Circuit, I was eager to become immersed inthe varied legal subject matter of the Federal Circuit. My anticipationwas not disappointed, but it was surpassed by the pleasant discoveryof the manner that international trade law and patent law haveintersected in my professional life. To me, the patent and the tariffhave married.Prior to joining the bench, I practiced international trade andcustoms law in Washington, DC for over twenty-five years. This meantproviding real-time assistance to companies in meeting theircommercial objectives in the context of an international businessenvironment. This rich experience has given me a unique andmultifaceted perspective to the issues inherent in the matters I nowhandle as a Circuit Judge. This perspective has proven invaluable indealing not only with the complex legal issues in our cases, but also in* Circuit Judge, United States Court of Appeals for the Federal Circuit. JudgeReyna thanks John A. Kelly for his assistance on this article.1. U.S. CONST, art. 1, § 8, cl. 8.2. Id. cl. 1.779780 AMERICAN UNIVERSITY LAW REVIEW [Vol. 62:779understanding the myriad of vexing technical and commercial issuesthat comprise the rich subject matter jurisdiction of the FederalCircuit.Often, I hear the Federal Circuit characterized as "the nation'spatent court."^ While there is no question that Congress created theFederal Circuit to bring about uniformity in the patent laws, Congressdid not stop there. Congress created a unique nationwidejurisdiction that is at once diverse, challenging, and highlyinteresting—spanning from international trade disputes togovernment contracts; personnel actions to veterans appeals; andeven from vaccine injuries to Native American claims. This volume ofthe American University Law Review's Federal Circuit review certainlyillustrates that diversity.Yet, I was surprised to discover the extent to which patent lawimplicates international issues. Consider, for example, patent lawjurisdiction. The Supreme Court has observed that "[o]ur patentsystem makes no claim to extraterritorial efíect; 'these acts ofCongress do not. and were not intended to, operate beyond the limitsof the United States.'"** Starting from this premise, one would expectthe reach of our patent jurisdiction to end at the border. Butcommerce has changed, technologies have evolved, and companieshave become more globalized. In the area of patents, largemultinational corporations are the norm. Acts of infringement arealleged to span not only between states, but also across countries allover the globe. The so<alled global "Smartphone Wars" are a goodillustration of this.^ These types of issues challenge the law andcertainly challenge the Federal Circuit to resolve them withinternational implications in mind.Not surprisingly, patent attorneys are increasingly confronted byissues that trade lawyers have dealt with for decades. This could beexpected given that the regimes of intellectual property andinternational trade, on some levels, attempt to address similarconcerns. Through application of antidumping and countervailingduties, U.S. trade law protects domestic industries from unfair tradepractices that artificially suppress prices and materially injure, orthreaten to injure, the health of the domestic industries that produce3. See, e.g., Paul R. Gugliuzza, Rethinkine Federal Circuit Jurisdiction, 100 GEO. L.I.1437,1444(2012). ^ J J4. Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 531 (1972) (quotingBrown v. Duchesne, 60 U.S. (19 How.) 183, 195 (1857)), superseded by statute, PatentLaw Amendments Acts of 1984, Pub. L. No. 98-622, 98 Stat. 3383, as recomized inMicrosoft Corp. v. AT&T Com., 550 U.S. 437 (2007).5. See, e.g., Apple Inc. v. Samsung Elees. Co., 695 F.3d 1370 (Fed. Cir. 2012).2013] THE TARIFF AND THE PATENT 781the same types of goods. The intellectual property system, byproviding a remedy for patent, trademark, and copyrightinfringement, similarly protects property rights arising fromingenuity and inventorship from being undercut by advantage-seeking copyists. The International Trade Commission's section 337jurisdiction further closes the loop between trade and patent law byenabling the patent holder to stop the importation of infringingarticles.^ In both section 337 actions and trade cases, exactly whatconstitutes a "domestic industry" is a threshold legal issue of standing.In trade cases, a "domestic industry" is well defined, while it is stillevolving in section 337 actions. The relationship betweeninternational trade law and patent law may be inevitable given theiroverlapping motivations, but patent law's reach beyond tiiis country'sborders in other respects is not quite so preordained.On the international stage, developments in business andmanufacturing can trigger new and unanticipated jurisdictionalissues in patent cases—related to both personal and subject matterjurisdiction. To establish personal jurisdiction within a state, aplaintiff normally must show tiiat the defendant is witiiin the reach ofthe state's long-arm statute and that exercising jurisdiction would beconsistent with the Due Process Clause of the FourteenthAmendment. The situation becomes complicated when die accusedinfringer is incorporated abroad and never sets foot within theUnited States; all it does is manxifacture infringing products that aredirectly or indirectiy imported in the United States. Federal Rule ofCivil Procedure 4(k)(2) eliminates the need to comply with aparticular state's long-arm statute when the defendant would not besubject to jurisdiction in any state.' Thus, as Merial Ltd. v. Cipla Ltd}illustrates, a pharmaceutical company located in Mumbai andincorporated under the laws of India can be subjected to personaljurisdiction in Georgia for infringing imports of fiea and tickmedicine despite the fact that the state's long-arm statute would notreach the defendant.^6. See 19 U.S.C. § 1337 (2006) (defining unfair practices in import trade).7. Rule 4(k) (2) provides:For a claim that arises under federal law, serving a summons or filing awaiver of service establishes personal jurisdiction over a defendant if:(A) the defendant is not subject to jurisdiction in any state's courts ofgeneral jurisdiction; and(B) exercising jurisdiction is consistent with the United StatesConstitution and laws.FED.R.CIV.P. 4(k)(2).8. 681 F.3d 1283 (Fed. Cir. 2012).9. See id. at 1294-95.782 AMERICAN UNIVERSITY LAW REVIEW [Vol. 62:779A case may present a thorny question of personal jurisdictioncaused by international business relationships for which the properresolution may not be altogether clear. Even then, the nature ofmultinational patent litigation, frequentiy involving many defendants,can straightforwardly resolve the case. In Technology Patents LLC v. T-Mobile (UK) Ltd.,^^ for example, the plaintiff sued over one hundreddefendants, including software providers, cellphone makers, anddomestic and foreign telephone carriers." Because the plaintiffrelied on a common, but unsuccessful, theory of infringement toaccuse not only the domestic carriers—who were subject to personaljurisdiction—but also the foreign carriers, the case against theforeign carriers could be resolved on noninfringement groundswithout having to delve into personal jurisdiction.^^ Difficultquestions touching on international conduct are not limited topersonal jurisdiction, but frequendy venture into the realm of subjectmatter jurisdiction as well.Before the Leahy-Smith America Invents Act,'^  there was somequestion of whether the Federal Circuit's subject matter jurisdictioncould extend to enforcing foreign patents. In Mars Inc. v. Kabushiki-Kaisha Nippon Conlux,^'^ the plaintiff, while asserting its domesticpatents, alleged that the defendant was also engaging in unfaircompetition proscribed by 28 U.S.C. § 1338(b) by violating theplaintiffs foreign patent rights abroad.'^ Rejecting this argument,tbe Federal Circuit held "as a matter of law that a claim ofinfringement of a foreign patent does not constitute a claim of unfaircompetition within the meaning of section 1338(b)."'^ In addition tohighlighting the presence of international issues in subject matterjurisdiction, this case also illustrates the malleability of the law. Whileprior cases acknowledged that foreign patents are not justiciable indomestic courts, the plaintiff in Mars invited the court to expand thedoctrine by broadly construing "'unfair competition' . . . to cover all'business torts,' including the infringement of a foreign patent."'^10. 700F.3d482(Fed. Cir. 2012).11. /í¿. at489.12. See id. 3it502-0B.13. Pub. L. No. 112-29,125 Stat. 284 (2011).14. 24 F.3d 1368 (Fed. Cir. 1994).15. Id. at 1370-71. Following passage of the America Invents Act, the FederalCircuit's jurisdiction under 28 U.S.C. § 1295 is no longer contingent upon thedistrict court's jurisdiction under § 1338. Instead, like § 1338(a), it is expresslylimited to "any civil action arising under, or in any civil action in which a party hasasserted a compulsory counterclaim arising under, any Act of Congress relating topatents or plant variety protection." 28 U.S.C. § 1295(a)(l) (Supp. V. 2012).16. Mori, 24 F.3d at 1373.17. M at 1372.2013] THE TARIFF AND THE PATENT 783The court ultimately rejected this invitation, but novel arguments likethese push the court to incorporate new approaches and stretcheveryone's understanding ofthe law.A good example of an extended application of the law can befound in TianRui Group Co. v. International Trade Commission}^ In anintriguing development, this case extended the International TradeCommission's jurisdiction over unfair acts of competition to includetrade secret misappropriation, even when the wrongful acts occurentirely outside the United States.'® While the Mars case resisted theinvitation to characterize infringement of a foreign patent as an act ofunfair competition, the TianRui case took a broader view on tradesecret misappropriation when the pertinent statute was broadenough for it to do so. Jurisdictional issues will no doubt continue tobe informed by our evolving understanding of the law as corporationsadapt to new global business models that further erode the alreadyvanishing border.Another area of federal patent law where international issues takecenter stage in the substantive law is section 337 actions at theInternational Trade Commission. The trade statute provides aremedy against the importation of infringing articles, meaning thatthe articles must have had an international character at some pointduring their lifecycle. International issues arise less frequently withinthe domestic industry component of the investigation because theplaintiff, or complainant, must establish that there exists or there isabout to exist a domestic industry for the patented article. Such anindustry is considered to exist if there is significant investment in aplant and equipment; significant employment of labor or capital; orsubstantial investment in the patent's exploitation, includingengineering, research and development, or licensing.^" UntilInterDigital Communications, LLC v. International Trade Commission,^^ itwas an open question whether licensing activities alone were sufficientto establish a domestic industry where the licensed products wereproduced abroad instead of in the United States. Over a vigorousdissent by Judge Newman, in a precedential order denying panelrehearing, the Federal Circuit clarified that the trade statute did notrequire domestic manufacturing to go hand-in-hand with licensing^^  In addition to establishing that international18. 661 F.3d 1322 (Fed. Cir. 2011).19. See ¿¿.at 1324.20. 19 U.S.C. § 1337(a) (3) (2006).21. 707 F.3d 1295 (Fed. Cir. 2013).22. Id. at 1303-04.784 AMERICAN UNIVERSITÍ'LAW REVIEW [Vol. 62:779manufacturing does not defeat a domestic industry formed solely bylicensing activities, this case further reinforces the fluidity of the law.I have found it truly remarkable how three exceptionally qualifiedjurists, each bringing their own unique and enlightened experience,can analyze the same statutory provision from their own perspectiveand reach sound, supported judgments that may differ from oneanother. The law is not binary—though some cases might deal withbinary coded decimals^^—but instead is made and flourishes in thegrey areas at the edges of settled doctrines. The Articles in thisedition of the American University Law Review Federal Circuit reviewattest to that fact.Frequendy, the Federal Circuit is settling national issues of patentlaw involving issues that may have international implications. Inother instances, however, it is the Supreme Court that resolves casestouching on international issues. In Microsoft Corp. v. AT&T Corp.,^^for example, the Court was asked to interpret Congress's enactmentspecifying that infringement occurs when one supplies from theUnited States, for combination abroad, a patented invention'scomponents.^^ Starting with the "general rule under United Statespatent law that no infringement occurs when a patented product ismade and sold in another country," the Court found no violationof § 271 (f) on the facts of that case, reinforcing this conclusion withthe presumption against extraterritoriality.^^ In a similar vein, theCourt has recendy decided in Kirtsaeng v. John Wiley àf Sons, Inc.^that the sale of a copyrighted work abroad exhausts the copyrightholder's right to sue for infringement following its subsequentimportation into the United States.^ ^ While this case arises in thecopyright context, it could have implications in the patent context aswell. Likely informed by conventional territorial understanding ofpatent law, the Supreme Court, like the Federal Circuit, finds itselfgrappling with tough issues touching on extraterritorial conduct thatcould, in some form or another, further liability under the statutes.Much is left to be settled.While issues with international significance may be a relatively newintroduction into our patent system, their presence will only expandand evolve as cross border commerce evolves and advances. Indeed,these issues will challenge the edges of established doctrines, and23. See, e.g., Gottschalk v. Benson, 409 U.S. 63 (1972).24. 550 U.S. 437(2007).25. Seg35 U.S.C. §271(f).26. Mzcroio/Î, 550 U.S. at 441, 454-56.27. 133S. Ct. 1351 (2013).28. /rf. at 1358.2013] THE TARIFF AND THE PATENT 785n^ove the laws in ways that adapt to new realities while remaining trueto the overriding legitimate objectives of the system. What hasbecome clear to me is that the patent has truly risen to theinternational stage and assumed a position alongside the tariff. Thisvolume may not be the first to celebrate the marriage between thepatent and the tariff, but it is certainly one of the early chapters inwhat is sure to be fascinating story.Copyright of American University Law Review is the property of American UniversityWashington College of Law and its content may not be copied or emailed to multiple sites orposted to a listserv without the copyright holder's express written permission. However, usersmay print, download, or email articles for individual use.

The Tariff and the Patent: A New Intersection

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