Law Professors File Briefs with the Supreme Court in Oil States

Supreme Court doorA review of amici briefs filed with the U.S. Supreme Court in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC provides evidence of a stark split in how various stakeholders in the U.S. patent system view the patent validity challenge activities ongoing at the Patent Trial and Appeal Board (PTAB). Whereas many of the world’s largest tech companies who have a dominant advantage in the consumer marketplace are in favor of the PTAB remaining active, many small entities and individual inventors are greatly opposed to the PTAB and its differing standards on patent validity leading to a higher rate of invalidation than in Article III district court proceedings. A look at amici briefs coming from law professors can shed some light on where the academic sector comes down on the subject of the PTAB’s constitutionality.

72 Professors of Intellectual Property Law Brief in Favor of Respondent Greene’s Energy Group

Although the 72 IP law professors contributing to this brief do not have a personal interest in the case, they have “a professional interest in seeing patent law develop in a way that encourages innovation and creativity as efficiently as possible.” Included among the IP law professor amici include Mark Lemley of Stanford Law School and Arti Rai of Duke Law School.

Amici argue that the Supreme Court’s precedent on non-Article III adjudication allows Congress to permit administrative agencies to correct errors in patent rights which have been granted, citing to the Court’s 2011 decision in Stern V. Marshall which found that issues stemming from a “federal regulatory scheme” may be adjudicated by an administrative agency. Amici argue that inventors “never had exclusive rights to inventions at common law, citing to the Court’s 1834 decision in Wheaton v. Peters. The error corrections afforded by the PTAB are related to the U.S. Patent and Trademark Office’s administrative role of examining and granting patents. Citing to SCOTUS’ 1892 decision in Pope Manufacturing Company v. Gormully, amici argue that it is of public importance that “competition should not be repressed by worthless patents.” The IP law professors also push back against Oil States’ contention that the fora for patent cancellation should be limited to those available in 1789 as patent cancellation in the English patent system existed through the Crown’s Privy Council, not just through court proceedings.

Errors in patent issuance are going to occur, amici argue, because of the incredibly high number of patent applications filed with the USPTO leading to patent grants. In 2016, the USPTO received more than 650,000 patent applications and allowed more than 360,000 patents and “erroneous determinations of novelty and non-obviousness “are particularly likely.” Inter partes review (IPR) proceedings maintain the substantive rules of inter partes reexamination which was previously available to challenge validity, including Congressional provision for the amendment of claims, “a uniquely administrative task in which Article III courts cannot engage.” Article III courts still have final review over error corrections at the PTAB which can be appealed to the judiciary for the protection of “not only separation of powers but also individual liberty interests. Amici also argue that petitioner Oil States “sweeping facial challenge” would render moot future efforts of the USPTO to improve post-grant administrative review.

Finally, amici argue that the constitutionality of PTAB proceedings is confirmed by the absence of a Seventh Amendment right to a jury trial for adjudicating validity. Citing to the Supreme court’s 1974 decision in Curtis v. Loether, amici note that Congress can provide for administrative adjudication of statutory rights “free from the strictures of the Seventh Amendment.” Although infringement cases must be tried by a jury, amici notes that the Supreme Court’s 1996 decision in Markman v. Westview Instruments, Inc. found that a particular issue within a jury trial may not be tried by a jury even if the infringement issue must be tried by a jury.

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27 Law Professors in Support of Petitioner Oil States

Amici in a brief submitted by 27 law professors in Oil States have “an interest in both promoting continuity in the evolution of these interrelated doctrines and ensuring that the patent system continues to secure innovation to its creators and owners” although they have no personal stake in the parties or the outcome of the case. Listed among the amici in this brief is Adam Mossoff of George Mason University’s Antonin Scalia Law School.

Amici argue that the Supreme Court has long defined patents as property rights dating back to the early days of the American republic, citing to the Court’s 1824 ruling in Ex Parte Wood and Brundage. In 1829’s Pennock & Sellers v. Dialogue, the Court similarly held that patents afford “the inchoate right to the exclusive use of the invention.” District court rulings from the 19th century also affirmed the status of patent right as “a species of property.”

The Supreme Court has extended constitutional protection to patents as private property rights for 200 years, amici argue, citing to the Court’s 1843 holding in McClurg v. Kingsland which set a standard of patents as private property rights which has never been reduced or limited over the 174 years following the decision. Further, the U.S. Court of Claims set a precedent in its 1878 decision in McKeever v. United States that the Takings Clause of the Fifth Amendment secures patents as “private property.” The McKeever opinion established a “fundamental difference between the English Crown’s personal privilege and the American private property right,” amici argue. This flies in the face of the Court of Appeals for the Federal Circuit’s ruling in Oil States, which is based on the assumption that patents are “public rights.”

Not only does historical jurisprudence from the Supreme Court support the notion of patents as private property, recent case law supports constitutional protection of these rights, amici argue. The law professors cite to language from SCOTUS’ 2015 decision in Horne v. Department of Agriculture which restated the Court’s position that a patent “confers upon the patentee an exclusive property in the patented invention.” A similar finding comes from the Court’s 1999 decision in College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, which found that patents are property rights secured under the Fourteenth Amendment’s Due Process Clause.

Professors of Administrative Law et. al. in Favor of Respondent Greene’s Energy Services

Along with administrative law professors, amici in this brief include professors of federal court and intellectual property law “who have an interest in the efficient operation of the United States’ patent system in promoting technological advance in conformity with constitutional and other legal requirements.” Amici in this brief follow the argument that patents are public rights and do not confer private property rights upon the patentee.

Compared to the government’s granting of land patents, Congressional power to grant invention patents is limited in various respects, amici argue, as such grants are only conferred for “limited times” and such grants are in the ultimate service of promoting science and the useful arts. Although patent validity challenges were entertained by English common law courts at the time of the United States’ founding, it does not necessarily follow that invention patents were core private property rights and patents were granted by special statute up until Congress passed the Patent Act of 1790. Although petitioner Oil States argued that the revocation of English patents by the Crown’s Privy Council was rare, amici in this brief argue that the percentage of English patents challenged by petitioning the Privy Council corresponds to the number of IPRs filed to challenge patents at the PTAB today.

Because patents are public rights, amici argue that the Supreme Court has empowered Congress in the past to prevent judicial matters on such rights from being brought  within the cognizance of the courts of the United States,” citing to the Court’s 1856 decision in Murray’s Lessee v. Hoboken Land & Improvement Company. “IPRs are narrowly focused on statutorily prescribed questions of patentability that are at the heart of the PTO’s areas of expertise and 24 responsibility,” amici argue. IPRs are limited to a certain subset of validity challenges which are derived from Congress’ Article I powers. Because IPRs allow for third-party petitioners and not simply parties who face infringement challenges, these proceedings “contrast dramatically” with the bankruptcy court adjudications prohibited by the court in Stern v. Marshall. The ability for Article III courts to review IPR decisions provides constitutional limits to Congressional power in allowing the Executive Branch cancelling issued patent claims.

Amici in this brief also take the argument that the large number of patent applications filed each year with the USPTO necessitate a mechanism for error correction. Leveraging third-party private information on the validity of patent claims “plays a crucial role in facilitating the PTO’s maintenance of overall patent quality,” amici argue. Citing to the Supreme Court’s 1969 decision in Lear, Inc. v. Adkins, amici argue that a patent “simply represents a legal conclusion reached by the Patent Office” in supporting patent licensee challenges to patent validity. Further, amici contend that parties filing U.S. patent applications after November 29th, 1999, have consented to IPR as inter partes reexamination was first authorized at that time. Amici argue that the patent-in-case here, which was first filed in August 1999, is still subject to IPR under this reasoning as petitioner Oil States has not advanced an argument on this point, thus waiving their right to it.

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5 comments so far.

  • [Avatar for B]
    B
    November 29, 2017 01:11 pm

    So who got political? Be specific.

  • [Avatar for 4]
    4
    November 29, 2017 12:31 pm

    aaaah yeah, here we go! time to get political all up in here. take that Trump! screw you patent trolls! we know you’re “the man.” take that! yeah woodstock! woooo! PATENTS SUCK!

  • [Avatar for B]
    B
    November 27, 2017 02:53 pm

    “Amici in this brief [administrative law professors] follow the argument that patents are public rights and do not confer private property rights upon the patentee.”

    SMH. Public rights cannot be vindicated by private citizens. Obviously, these ‘tards should look up the meaning of a public right.

  • [Avatar for Anon]
    Anon
    November 27, 2017 10:00 am

    EG,

    As to “ How they could swear such malarkey with a straight-face…,” they can – and do – because there is NO repercussions of doing so. Notably, there is no (or no effective) code of ethics for such professors.

    It is indeed shocking that someone (and not just the professors here) can try to influence the Court with an Amici brief, and not be bound by strict ethical canons.

    For attorneys, there is a code of ethics – and rightly so, given our proximity to shaping law. For “IP law professors,” the fact that there is little to no code of ethics at all is mind-boggling. Not only are such in every bit of position with a nexus of shaping law, but – as you mention – these people are also entrusted to “indoctrinate[e] their law students with an anti-patent [bias].”

    I had the fortunate occurrence to attend law school after careers in the “real world” with hands-on innovation efforts, and I was able to engage in (quite lively) debates with my law school professors (I believe to an extensive benefit to all the other students who were shown that the “gospel” being fed in law school can – and should – be challenged.

  • [Avatar for EG]
    EG
    November 27, 2017 08:23 am

    Hey Steve,

    I side with the 27. As usual, professor Mossoff’s research is steller.

    On the other hand, calling many of the 72 “IP law professors” is an oxymoron. Many of them have no science or technical background, no real experience in patent law practice, and, regrettably, are indoctrinating their law students with an anti-patent basis. Their “Interest of Amici” statement is breathtaking: “We have no personal interest in the outcome of this case,but a professional interest in seeing patent law develop in a way that encourages innovation and creativity as efficiently as possible.” How they could swear such malarkey with a straight-face makes me ill.