Open Letter from Conservatives: What’s at stake in Oil States v. Greene’s Energy Group

By Dan Schneider & James Edwards
November 28, 2017

We are writing to call your attention to a case that will be heard by the U.S. Supreme Court this month, which we believe all conservatives should be aware of. If wrongly decided, Oil States Energy Services v. Greene’s Energy Group may be the next Kelo v. City of New London decision. At bottom, the case will decide whether patent rights – which are enshrined in our Constitution – are fundamental private property rights, or something less. If the Court adopts the latter perspective, it would radically change the American view of property rights and endanger an innovation edge enjoyed by American companies and consumers alike.

Constitutional conservatives are watching closely to see whether the Court will protect our patent rights, or instead allow for the continued degradation of these rights. In Oil States, the Justices will be asked to decide whether a rogue, out-of-control bureaucratic agency known as the Patent Trial and Appeal Board (PTAB) is constitutional. Congress created the PTAB in 2011 as part of a “patent reform” law that attempted to make patent challenges more efficient. Instead, the law has created another administrative process for challenging patent rights, further undermining the judicial branch’s role in patent review.

While perhaps a worthy goal, the PTAB has become a regulatory agency run amok. The former head of the Federal Circuit even labeled it a “patent death squad.” And the data support this label. The PTAB’s patent invalidation rate ranges from 62% to 92%. In some high- tech sectors, well over 90% of patents are invalidated. This is partly because the U.S. Patent and Trademark Office (PTO) frequently uses the PTAB to carry out its own agenda. For instance, during the Obama administration, the director of the PTO often stacked the deck by convening multiple panels of PTAB judges until a panel would achieve her desired result and invalidate a patent that she believed was not valid.

Although the PTAB was intended to be a “fast track” for patent challenges that saved time and reduced the costs associated with courtroom litigation, challenges often occur before the PTAB and in federal court at the same time. Patent holders who have spent years and a great deal of money obtaining a patent now must defend their patent rights on multiple fronts. Moreover, PTAB challenges can be brought by anyone, even if the party has no direct interest in the patent. With such a low barrier to filing, numerous entities can use the PTAB to harass patent owners, challenge their inventions, and hamstring their businesses.

The PTAB raises significant constitutional issues: it undermines judicial review of patent rights and distorts the separation of powers by shifting more power to the executive branch. As Ilya Shapiro and Greg Dolin write in a joint amicus brief from the CATO Institute and the American Conservative Union Foundation (ACUF), this administrative review system has “deprived the federal courts of their power and authority to adjudicate federal rights and to enforce their own judgments.” Shapiro and Dolin further explain that “[t]he inter partes review process makes final judgments of federal courts always subject to revision and modification by the executive branch.”

Constitutional conservatives have begun to understand the importance of this case. In addition to the CATO and ACUF brief, Eagle Forum Education & Legal Defense Fund, a dozen conservative leaders and organizations, along with 27 law professors, have submitted separate briefs. Alden Abbott, a legal and intellectual property expert at the Heritage Foundation, has called for the Court to “strike down board review.” These voices are asking the Court to invalidate this out-of-control administrative tribunal and uphold the enduring American concept that patent rights are fundamental property rights enumerated in the Constitution.

Conservatives must be vigilant about the importance of the Oil States case and understand what is at stake. We do not want to wake up on the morning after this decision and find, just as we did after the Kelo decision, that more of our property rights are slipping away. The Supreme Court must uphold our constitutional patent rights and end the administrative usurpation of this judicial responsibility. Our constitutional principles, and the future of American innovation, depend on it.

Dan Schneider
Executive Director, American Conservative Union

Jackie Anderson
Director of Policy and Public Affairs, American Conservative Union Foundation

Kevin L. Kearns
President, U.S. Business & Industry Council

The Honorable J. Kenneth Blackwell
Distinguished Fellow, American Civil Rights Union

George Landrith
President, Frontiers of Freedom

Ed Martin
President, Eagle Forum Education & Legal Defense Fund

Curt Levey
President, Committee for Justice

Dick Patten
President, American Business Defense Council

James Edwards
Executive Director, Conservatives for Property Rights

C. Preston Noell III
President, Tradition, Family, Property, Inc.

Rick Manning
President, Americans for Limited Government

Paul Caprio
Director, Family Pac Federal

Jenny Beth Martin
President, Tea Party Patriots Foundation

Gerrye Johnston
Founder/CEO, Women for Democracy in America, Inc.
D/b/a/ Men and Women for a Representative Democracy in America

Seton Motley
President, Less Government

Matthew Kandrach
President, Consumer Action for a Strong Economy

* Organization names appear for identification purposes only.

 

The Author

Dan Schneider

Dan Schneider serves as Executive Director of the American Conservative Union (ACU), America’s oldest and largest grassroots conservative organization. He has dedicated his career to supporting conservative ideals at the highest levels of government as well as leading grassroots advocacy on the most important issues in the conservative movement.

Dan Schneider

James Edwards consults on intellectual property, health care innovation, and regulatory and policy issues. Among other clients, Edwards advises the nonprofit group Eagle Forum on patent policy and is Co-Director of the Inventor's Project. He participates in the Medical Device Manufacturers Association's Patent Working Group. Edwards mentors start-ups and early-stage companies, largely in the med tech space, and is involved in several IP-centric projects.

Edwards served as Legislative Director to Rep. Ed Bryant, R-Tenn., then a member of the U.S. House Judiciary Committee, and handled IP legislative matters. Edwards also worked on the staffs of Rep. John Duncan, R-Tenn., the U.S. Senate Judiciary Committee, and Sen. Strom Thurmond, R-S.C. In addition, he was an association executive at the Healthcare Leadership Council. Edwards earned a Ph.D. at the University of Tennessee, and bachelor's and master's degrees at the University of Georgia.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 3 Comments comments. Join the discussion.

  1. Edward Heller November 29, 2017 1:00 pm

    One of the reasons we divide power among the three branches is because we learned the lessons of history, particularly from our English forefathers. The struggle between the Crown, Parliament and the courts at the time of the James I and Charles I of England that centered on patents lead to the English Civil War. Not only did the Crown want to issue patents to its favorites regardless of whether they were inventors, but to cancel patents at its pleasure. Late in the reign of James I, Sir Edward Coke led Parliament to pass the Statute of Monopolies that among other things limited patents to inventions of new manufactures, and further limited the revocation of patents to the common-law courts specifically ousting the jurisdiction of the Crown to do so. Nevertheless, in the year immediately following the ascension of Charles I, the Crown forbade the common-law courts from considering the issue of patent revocation. It wasn’t until two revolutions later that the Crown through its privy Council finally, in 1753, stopped interfering with properly issued patents and allowed patent owner’s the their unfettered right to defend the validity of their patents in the courts.

    What English history has taught us is that private property rights are not secure unless their owners have a right to defend their validity in a court of law. That is whole point of the Magna Carta, a fundamental document in both English and American history that established the rule of law and due process. The trend to take away fundamental rights of property owners and concentrate power in the the executive branch is a trend towards tyranny where the favorites of those in power are advanced at the expense of those who are not so much in favor.

  2. Joachim Martillo December 2, 2017 9:36 pm

    I would hesitate to call myself a Constitutional conservative. I am rather apolitical but have an inclination toward highly mathematical political economics.

    As far as I am concerned, patent rights are intrinsic to creating and to maintaining a highly inclusion economic and political system.

    Protecting the rights of the individual is often a progressive cause.

  3. Joachim Martillo December 2, 2017 9:40 pm

    In Joachim Martillo@2 I meant “inclusive” and not “inclusion.”

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