Our founding fathers deemed patent rights so vitally important to the success and stability of our new country that these rights were written into the Constitution, a document not generally known for its length and specificity. Indeed, James Madison noted in Federalist Paper No. 43, the usefulness of the power given the Congress to award patents “will scarcely be questioned.” Moreover, President George Washington during his first State of the Union speech, which was a mere 1,096 words, implored Congress to pass the nation’s first Patent Act with all due haste.
The Patent Act itself clearly and unambiguously states that patents are property. See 35 U.S.C. 261. Unfortunately, this property right of Constitutional significance has increasingly come under attack over the last decade. While one may be able to debate substantive patent law changes as being good or bad, numerous procedural laws and regulations have struck at the heart of fundamental fairness to the point where the due process rights of patent owners have been significantly impaired if not completely eroded.
During the Republican Presidential Debate on Thursday, January 14, 2016, Senator Ted Cruz (R-TX) said that throughout his career he has steadfastly defended the Constitution before the Supreme Court and promised to continue that defense at all costs. With the Supreme Court accepting Cuozzo Speed Technologies v. Lee, there is an opportunity for Senator Cruz to take a pro-patent, pro-property right stand at the Supreme Court.
Cruz, a former Texas Solicitor General, has not been bashful about participating in Supreme Court cases, having authored more than 80 Supreme Court briefs, while arguing nine cases before the Supreme Court. One of those cases Cruz argued was a patent case in which he successfully represented a patent owner in an infringement matter against the supplier of a knock-off product. See Global-Tech Appliances, Inc. v. SEB S.A. The ideologically conservative Cruz prevailed for the patent owner 8-1, even managing to persuade Justices Breyer, Ginsburg, Sotomayor and Kagan, all whom are his ideological opposites. Only Justice Kennedy dissented.
The issues that will be decided by the Supreme Court in Cuozzo relate to the new administrative procedures created by the America Invents Act (AIA), which have made it easier to strip patent owners of issued patent rights without any of the safeguards guaranteed to the patent owner in a federal district court proceeding. The AIA, supported and signed by President Barack Obama, created the Patent Trial and Appeal Board (PTAB), which is an administrative tribunal at the United States Patent and Trademark Office (USPTO). This administrative tribunal has striped patent property rights away from patent owners to the point where some have characterized PTAB as a “death squad.”
The first Chief Patent Judge of the PTAB publicly wore this “death squad” moniker as a badge of honor, telling the Patent Public Advisory Committee that if the PTAB were not “doing some death squadding” they would not be doing their job. Given that judges, including Article II administrative judges, are supposed to be impartial, this candid admission has to call into question the impartiality of tribunals and processes in place at the USPTO.
In proceedings at the PTAB patent owners are given no presumption of validity, in direct violation of 35 U.S.C. 282, which promises a presumption of validity for issued patents. Patent claims are also interpreted using the broadest reasonable interpretation, which is the standard used during examination of an application prior to issuance of a patent as a property right. Even more disturbing, when patent property rights are being striped in these one-sided post grant trials they are being taken away by an Article II tribunal with certain of the decisions made by that Article II tribunal insulated from judicial review. See e.g. 35 U.S.C. 314(d). Insulating executive decisions from judicial review at the very least violates the spirit of checks and balances embodied in the Constitution, and should raise serious Constitutional questions when property rights are at stake.
These and many other procedural peculiarities make the PTAB an extremely inhospitable forum for those who own property. For example, it is difficult to comprehend under what authority the PTAB refuses patent owners the right to amend in an inter partes review (IPR) when 35 U.S.C. 316(d) specifically grants the right to amend. Similarly, 35 U.S.C. 313 gives patent owners the right to file a preliminary response to an IPR, but the USPTO prohibits the submission of testimonial evidence and confines patent owners to the record submitted by the challenger seeking to strip the property right away from the patent owner. Indeed, at every turn the regulations are written to favor the challenger and not the owner of the property right that is statute supposed to be presumed valid.
Without either substantial legislative fixes, or a new Administration that orders a new Director of the USPTO to rewrite post grant regulations, no single case could undue the significant damage that has been done to the U.S. patent system by the creation of the PTAB and post grant proceedings. That being said, Cuozzo does offer an excellent opportunity to say enough is enough and fight to protect a Constitutionally critical property right our most respected Founding Fathers thought to be absolutely critical.
If this type of fundamental unfairness can be exerted by the federal government on behalf of a handful of tech companies that are well-known financiers of the Obama campaign, where will it end? The patent system needs a strong Constitutional conservative to stand up and fight the good fight.
The skeptical among us might ask: Why would someone running for President fight for a patent issue at the Supreme Court? The answer is simple. A principled Constitutional conservative fights government overreach wherever it is and whenever it happens.
Senator Cruz was not yet elected to the Senate when the AIA passed, so he did not have an opportunity to fight for patent property rights then. Cruz has since voted against currently pending patent reform on the Senate Judiciary Committee. “We have in our economy a particular obligation to protect innovators, the little guy inventing the next great invention that will change the world,” Cruz said during a hearing on the bill on June 5, 2015.
The patent system needs a champion who isn’t afraid to stand up and fight. Senator Cruz has a history of fighting to defend the Constitution. Will he do that once again, this time fighting for the patent system Madison and Washington knew America needed? Will he fight for patent rights so that they might, in the words of Abraham Lincoln, continue to add “the fuel of interest to the fire of genius”?
Call me crazy, but I have a strange feeling we may see an amicus filing by Senator Cruz in Cuozzo.