Constitutional Separation of Powers & Patents of Invention: Oil States Energy Services, LLC v. Greene’s Energy Group, LLC

By N. Scott Pierce
November 27, 2018

“[T]here may be no limit to the power Congress can grant to the Patent Office over the validity of patents, potentially usurping any role for the judiciary in this regard under Article III.”

Constitutional Separation of Powers and Patents of InventionThe Supreme Court recently held in Oil States Energy Services, LLC v.  Greene’s Energy Group, LLC138 S.Ct. 1365 (2018), that inter partes review (IPR) “does not violate Article III or the Seventh Amendment.”  With respect to Article III, the Court in Oil States premised its holding on a distinction between “public rights” and “private rights,” wherein, according to Justice Thomas, “[Supreme Court] precedents have given Congress significant latitude to assign adjudication of public rights to entities other than Article III courts.”  The majority held that “[i]nter partes review falls squarely within the public-rights doctrine.”  In particular, Justice Thomas stated that, “the decision to grant a patent is a matter involving public rights – specifically, the grant of a public franchise,” and that “[i]nter partes review is simply a reconsideration of that grant,” for which “Congress has permissibly reserved the PTO’s authority to conduct that reconsideration.”  However, Justice Thomas admitted that, “[t]his Court has not ‘definitively explained’ the distinction between public and private rights,” and, that “precedents applying the public-rights doctrine have ‘not been entirely consistent.’”  Further, despite reciting several Supreme Court cases that referenced patents as “public franchises,” the term, “franchise,” was not defined in Oil States, nor were “public rights” distinguished from “private rights” in the context of granted patents. A Seventh Amendment right to a jury trial was denied pursuant to the Court’s Article III holding.

This article will assess whether, absent the Supreme Court’s recent holding in Oil States, patents are properly viewed as private or public rights, and the implications of both alternatives from the perspective of constitutional separation of powers.  Analysis will begin, in Part I, with the historical limit of the public rights doctrine and then proceed, in Part II, to briefly summarize recent expansion of that doctrine.  Parts III and IV will touch on the implications of holding patents to be public rights and private rights, respectively, including the relevance of any Seventh Amendment right to a jury trial.  A proposed solution to the problem of inter partes  review that protects separation of powers, regardless of how patents are viewed by the Court, will conclude the argument.

I. Historical Limits on the Government’s Ability to Invalidate Issued Patents

For at least the last one-hundred years, a private right in patents has dictated that the government is precluded from being party to a determination of patent validity.  For example, in McCormick Harvesting Mach. Co. v. C. Aultman & Co., 169 U.S. 606 (1898), decided in 1898, the Supreme Court stated that, upon issuance, a patent has “become the property of the patentee” and, therefore, any attempt to cancel an issued patent by an examiner “would be in fact an invasion of the judicial branch of the government by the executive.”  The Court in McCormick upheld statutory provisions for reissue proceedings because such proceedings requiredthat the patenteevoluntarily surrender the patent.  As stated by the Court:

If the patentee abandoned his application for reissue, he is entitled to a return of his original patent precisely as it stood when such application was made, and the patent office has no greater authority to mutilate it by rejecting any of its claims than it has to cancel the entire patent.

A year later, in 1899, the Court in United States v. Duell, 172 U.S. 576 (1899), held that determination of validity of claimed subject matter prior to grant of an issued patent was a matter of “public rights,” thereby entitling the legislative branch to remove, at its discretion, what would otherwise be subject to Article III review.  This is consistent with McCormick and decisions by the Supreme Court that limited such public rights to patent applications.  Moreover, treatment of letters patents generally, namely land patents and patents of invention, in the United States did not necessarily follow from practice in England.  For example, the Court in United States v. American Bell, 128 U.S. 315 (1888), expressly dismissed reliance on“scire facias,” whereby letters patent could be invalidated at the prerogative of the King:  “We have no king in this country; we have no prerogative of the crown ….  The patent, then, …  is not subject to be repealed or revoked by the president, the secretary of the interior, or the commissioner of patents, when once issued.”

The reason for distinguishing between pre- and post-grant status was stated broadly as a “rule” in Michigan Lumber v. Rust (168 U.S. 589 (1897)): “[W]herever the granting act specifically provides for the issue of a patent, then the rule is that the legal title remains in the government until the issue of the patent.”  The policy behind the rule, at least with respect to land patents, was made clear twenty years earlier, in Moore v.  Robbins:

‘A patent,’ says the court in United States v. Stone [69 U.S. 525, 535 (1864)],‘is the highest evidence of title, and is conclusive against the government and all claiming under junior patents or titles, until it is set aside or annulled by some judicial tribunal.  In England, this was originally done by scire facias; but a bill in chancery is found a more convenient remedy.’

But in all this [in the United States] there is no place for the further control of the Executive Department over the title … He [the President] is absolutely without authority.  ‘If this were not so, the titles derived from the United States, instead of being the safe and assured evidence of ownership which they are generally supposed to be, would be always subject to the fluctuating and in many cases, unreliable, action of the land office.’

Arguably, the same reasoning can be applied to patents of invention and the Patent Office, particularly in view of the parallel often drawn between land patents and patents of invention, as expressed, for example, by the Supreme Court in American Bell:

The power, therefore, to issue a patent for an invention, and the authority to issue such an instrument for a grant of land, emanate from the same source; and, although exercised by different bureaus or offices under the government, are of the same nature, character, and validity, and imply in each case the exercise of the government according to modes regulated by acts of congress.

Moreover, the Supreme Court in American Bell affirmed only “the power of the government of the United States to get rid of a patent [that was] obtained from it by fraud and deceit,” and left to the legislature to give “private individuals a more limited form of relief, by way of defense to an action by the patentee.”

[[Advertisement]]

II. Expansion of Public Rights Doctrine

A. Private Rights vs. Protection of the Public

A dilemma appears between the nature of private property that would ban the government from unilaterally withdrawing a patent grant without being a party in any challenge to its validity, and the interest of the government in protecting the public from patents improperly granted.  Resolution may be found in proceedings authorized by Congress to address issues of fraud by the patentee, mistake by the Patent Office, and “equity” among inventors.  In other words, while a limited exclusionary right to inventions is granted by the Constitution, Congress has defined the manner in which patents are to be granted. On one hand, a granted patent is private property and, therefore, protected by the judiciary under Article III of the Constitution.  On the other hand, the legislative and executive branches are charged with protecting the public’s legitimate interest against mistakes made by the granting authority.

In Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982), which was a bankruptcy case addressing the constitutionality of the Bankruptcy Act of 1978, the Supreme Court distinguished between “rights created by Congress and other rights,” including “a critical difference between rights created by federal statute and rights recognized by the Constitution.”  If “the right being adjudicated is not of congressional creation [but, rather, of the Constitution],” then:

[S]ubstantial inroads into functions that have traditionally been performed by the Judiciary cannot be characterized merely as incidental extensions of Congress’ power to define rights that it has created.  Rather, such inroads suggest unwarranted encroachments upon the judicial power of the United States, which our Constitution reserves for Article III courts.

The Court recognized the “delicate accommodations required by the principle of separation of powers reflected in Article III” by, for example, limiting the powers of an adjunct court (at least in bankruptcy proceedings) to making “only specialized, narrowly confined factual determinations regarding a particularized area of law.”

Tellingly, the Court in Oil States did not specifically address whether patents of invention are “rights recognized by the Constitution.”  It could have done so, at least by virtue of Article I, § 8, cl. 8, which states that Congress shall have the power “[t]o promote the Progress of …  useful Arts, by securing for limited Times to …  inventors the exclusive right to their …  Discoveries.” Such recognition, however, would likely have made the case for constitutionality of inter partes review, as they currently are conducted, substantially weaker.

B. Resolution of Competing Private and Public Interests in Patents, and Recent Decisions by the Federal CircuitExplaining the Public Rights Doctrine

Resolution of the above-described dilemma presented by conflicting rights of patent owners and obligations of the government can be realized by limiting post-issuance review of patent rights at the Patent Trial and Appeal Board to “only specialized, narrowly confined factual determinations.”   The Board would have possession of “only a limited power to issue…  orders pursuant to specialized procedures,” wherein a district court could set aside any such order if “not supported by the evidence.”  Ignoring these limiting principles would, in the words of the Northern Pipeline Court, “require that we replace the principles delineated in our precedents, rooted in history and the Constitution, with a rule of broad legislative discretion that could effectively evisceratethe constitutional guarantee of an independent Judicial Branch of the Federal Government.”

“Evisceration” may, in fact, have already been the consequence, at least with respect to patents of invention, in MCM Portfolio LLC. v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015),where the Court of Appeals for the Federal Circuit (Federal Circuit) recently held that “patent rights are public rights, and their validity susceptible to review by an administrative agency.”  This conclusion was not based on Supreme Court precedent, but derived from earlier decisions only tangentially associated with Article III.  For example, according to the Federal Circuit, the Supreme Court’s decision in McCormick was limited to reissue proceedings, which held only that cancellation of a patent without surrender of the patent by the patent owner would be a deprivation of due process of law.  From this holding, however, the Federal Circuit inferred that McCormick “did not address Article III and certainly did not forbid Congress from granting the PTO the authority to correct or cancel an issued patent.”  The Federal Circuit then drew from another Supreme Court decision, Thomas v. Union Carbide Agr. Products Co., 473 U.S. 568 (1985), stating in dicta that Congress “may create a seemingly ‘private’ right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary.”  The Federal Circuit, consequently, deemed “the PTO, [to be] ‘an executive agency with specific authority and expertise’ in the patent law,” and asserted that “[i]t would be odd indeed if Congress could not authorize the PTO to reconsider its own decisions.”  The Federal Circuit in MCM extended this reasoning to reexamination, which is a statutory mechanism for examination of issued patents at the Patent Office available to “any person” who can establish a “substantial new question of patentability.”

Contrary to the contention of the Federal Circuit in MCM, the Supreme Court in McCormick did not imply that the PTO could “correct or cancel” a patent simply as a function of “statutory authorization.” Further, it would not make sense for the Court in McCormick, or in American Bell for that matter, to do so because the result would leave the doctrine of separation of powers between the legislative, executive and judicial branches solely at the discretion of the legislative branch–a clear and self-evident misunderstanding of this fundamental concept.

Overall, the Federal Circuit in MCM did not rely on Supreme Court authority to conclude that patents of invention are “public rights.”  No such authority existed at the Supreme Court prior to the holding in Oil States.

III. The Relevance of Oil States’ Arguments Invoking the Seventh Amendment Right to Jury Trial

Oil States Energy Services, LLC argued that, based on the Constitution’s adoption of English common law “‘preserving the right under the Seventh Amendment to jury trial as it existed in 1791’” and historical precedent, determinations of patent validity are to be tried before a jury regardless of whether patents are considered to be private or public rights.  This issue would be expected to take on added significance given that the Court has determined issued patentsto be public rights, since adjudicative responsibility for deciding patent validity under an Article I court might then be subject to an overriding Seventh Amendment right under common law that is to be “preserved” for jury trial.

The Court in Oil States, however, summarily dismissed this prospect by stating that, “when Congress properly assigns a matter to adjudication in a non-Article III tribunal, ‘the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.’” Of course, this begs the question in that, if Congress has improperly assigned a matter to a non-Article III tribunal, as this article proposes, then a jury, nevertheless, may be required as a factfinder.

Despite the ambiguous history of a right to jury trial, it is clear that, while determinations of patent validity were considered pursuant to a writ of scire facia sin the Kings Privy Council, by 1789 such actions were being heard in the Court of Chancery, which had no provision for a jury.  However, it would be error to conclude that, therefore, patent validity, as a matter of scire facias, was an issue of equity rather than common law, and not subject to jury trial.  Instead, as indicated by Lemley (Lemley, Mark A., “Why Do Juries Decide if Patents are Valid,” 99 Va. L. Rev.1673 (Dec. 2013)), for example, “scire facias actions seem to have been part of the Chancery Court’s subsidiary common-law jurisdiction.” As also commented upon by Lemley, Chancery Court was known to “seek the advice of a jury in assessing the facts underlying a scire facias petition” by having the “Lord Chancellor deliver the record to the King’s Bench for a jury trial and return the verdict to the Chancellor for consideration and judgment.”  Consequently, even though the Supreme Court has now held that issued patents are “public rights,” there is substantial support for also holding that there was a common law tradition in 1789 of judging patent validity by jury trial under the Seventh Amendment, at least as to issues of fact.

IV. One Possible Result had Patents Been Held to be Private Rights

Justice Scalia stated, in his minority view in another Supreme Court case, Granfinanciera v. Nordberg, 492 U.S. 33 (1989), that the Court in Thomas improperly broadened the “public rights doctrine” beyond “rightsof the public– that is, rights pertaining to claims brought by or against the United States.” If the Court in Oil States had agreed, it could have limited “public rights” suits to those where the government is a party.  “Public rights doctrine,” then,  would not extend to “purely private federally created action[s],” such as disputes between private parties over the validity of granted patents.  Accordingly, it would not matter whether IPRs, which do not include the government as a party, were part of a “seemingly private” statutory right “so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary,” as was prescribed by the majority in Thomas.

An Article I tribunal, such as the Patent Trial and Appeal Board of the Patent Office, under this view, should only be able to operate as an adjunct to a district court, and then only in an advisory capacity as to issues of fact.  Such a holding, moreover, would also implicate examination of “covered business methods,” post-grant reviews, ex parte re-examination proceedings requested by third parties, and interference proceedings (that challenge issued patents).

Conclusion

Despite potentially relevant Supreme Court precedent in Thomas and Granfinanciera, the better view under the weight of Supreme Court precedent with respect to patent validity, absent the recent decision by the Court in Oil States, is that determination of the validity of issued patents does not include the government as a party and, therefore, only private rights are involved.  Jurisdiction should, therefore, be solely within Article III, and preclude final determinations of patent validity as they currently exist under the AIA, as well as other post-issuance adjudication, such as interference proceedings and ex parte reexamination.  Statutory provisions for post-grant examination at the Patent Office should be limited to an advisory capacity as an adjunct to a federal district court and address only issues of fact.  Such factual determinations coming from the Patent Office should be subject to review for substantial evidence by a district court in order to pass constitutional muster under Article III.

However, given that issued patents are deemed to be “public rights” and that IPRs have been upheld as constitutionally valid under Oil States, there may be no limit to the power Congress can grant to the Patent Office over the validity of patents, potentially usurping any role for the judiciary in this regard under Article III.

 

NOTE: The author is solely responsible for the views of this article, which do not necessarily represent those of his Firm, or any client or organization.

 

Image Source: Deposit Photos

The Author

N. Scott Pierce

N. Scott Pierce is a partner at Saul Ewing Arnstein & Lehr, LLP in Boston, MA, and Adjunct Professor at Suffolk University Law School. He has been practicing patent law for 30 years. Some areas of technology include: organic, polymer and physical chemistry; biotechnology; and biomechanical, chemical, electromechanical and software engineering. In addition to his state bar and U.S. Patent and Trademark Office admissions, Scott is admitted to appear before the Court of Appeals for the Federal Circuit, U.S. District Court for the District of Massachusetts and U.S. Supreme Court. For more information, or to contact Scott, please visit his firm profile page.

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 15 Comments comments. Join the discussion.

  1. Mike November 27, 2018 5:55 pm

    It might be time for a gut check at the Supreme Court. Many on the Court expressed discomfort with the state of IPRs in the oral arguments, despite ruling its constitutionality regarding Article III and the Seventh Amendment.

    “is there a kind of what Brandeis said in Crowell was a due process problem? Is there a problem of it’s unfair to hold these people to the new statute because they got their patent before the statute was enacted? That’s a practical thing, and much of the questioning has been around different variations on that theme, what’s unfair.”
    – Justice Breyer, Oil States (2018) oral argument

    If “the Court in Oil States did not specifically address whether patents of invention are rights recognized by the Constitution”, then there should be a case presented where it rests on this issue. Being that Congress shall have the power “[t]o promote the Progress of … useful Arts, by securing for limited Times to … inventors the exclusive right to their … Discoveries”, it is clear that these rights are not rights that are given. Rather, these are rights that already exist. The government’s role is to secure the right to an inventor’s discovery as one that is exclusive.

    Assuming that a patent is a public franchise, one pressing question is: “Is there any property right vested in the public franchise issued by the government to an inventor by way of a patent grant?” Given that “patents shall have the attributes of personal property”, it would seem so.

    So if the answer is “Yes”, then the current state of IPRs run contrary to at least the Takings Clause, even more so, IPRs applied retroactively, which ex post facto flies in the face of the patent bargain social compact. Due Process, Takings, Ex Post Facto, or Appointments Clause — take your pick.

    Regarding retroactivity of IPRs to patents having priority dates before the AIA, take all of these in combination:

    “[W]e address only the precise constitutional challenges that Oil States raised here. Oil States does not challenge the retroactive application of inter partes review, even though that procedure was not in place when its patent issued. Nor has Oil States raised a due process challenge. Finally, our decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.”
    – Oil States (2018), Justice Thomas delivering Opinion of the Court

    “No Bill of Attainder or ex post facto Law shall be passed.”
    – U.S. Constitution, Article 1 – The Legislative Branch, Section 9 – Limits on Congress

    “I write separately to emphasize that the Ex Post Facto Clause of the Constitution, Art. I, § 9, cl. 3, even more clearly reflects the principle that ‘[r]etrospective laws are, indeed, generally unjust.’ J. Story, Commentaries on the Constitution § 1398, p. 272 (5th ed. 1891). Since Calder (1798), however, this Court has considered the Ex Post Facto Clause to apply only in the criminal context. I have never been convinced of the soundness of this limitation, which in Calder was principally justified because a contrary interpretation would render the Takings Clause unnecessary. See id., at 394 (opinion of Chase, J.). In an appropriate case, therefore, I would be willing to reconsider Calder and its progeny to determine whether a retroactive civil law that passes muster under our current Takings Clause jurisprudence is nonetheless unconstitutional under the Ex Post Facto Clause.”
    – Eastern Enterprises v. Apfel (1998), Justice Thomas, concurring opinion

    “Bills of attainder, ex-post-facto laws, and laws impairing the obligation of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. The two former are expressly prohibited by the declarations prefixed to some of the State constitutions, and all of them are prohibited by the spirit and scope of these fundamental charters. Our own experience has taught us, nevertheless, that additional fences against these dangers ought not to be omitted. Very properly, therefore, have the convention added this constitutional bulwark in favor of personal security and private rights; and I am much deceived if they have not, in so doing, as faithfully consulted the genuine sentiments as the undoubted interests of their constituents. The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more industrious and less informed part of the community. They have seen, too, that one legislative interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding. They very rightly infer, therefore, that some thorough reform is wanting, which will banish speculations on public measures, inspire a general prudence and industry, and give a regular course to the business of society.”
    – Federalist Paper No 44.

    New evidence clearly shows the technical meaning of Ex Post Facto at the time of the framing of the Constitution included BOTH civil and criminal law. See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2469141

    “I was thinking as I was reading the briefs, sometimes we have accidental theme days at the Supreme Court. So today’s accidental theme is: When 30 years of practice goes against you, what happens?”
    – Justice Kagan, TC Heartland (2017) oral argument, in which 30 years of interpretive practice was irrelevant to the ultimate ruling

  2. Non Sequitur II November 27, 2018 7:33 pm

    Your Seventh Amendment argument is inverted.

    In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

    The 7th Amendment applies to “suits at common law.” It doesn’t grant the right to a suit at common law. Your argument acknowledges this fact. “Of course, this begs the question in that, if Congress has improperly assigned a matter to a non-Article III tribunal, as this article proposes, then a jury, nevertheless, may be required as a factfinder.” Thus, the right to a jury is contingent on the dispute being assigned to an Article III tribunal. Accordingly, the issue is whether Congress has properly assigned the dispute without regard to potential consequences like a jury trial.

  3. Anon November 27, 2018 8:06 pm

    Not to disagree with your gut-check Mike, but Oil States was such a pre-AIA case.

    Be wary of the dicta offered that if had been applied, would have carried the case to an opposite conclusion.

  4. Josh Malone November 27, 2018 9:51 pm

    What did Justice Thomas mean by this emphasized statement?:

    This Court’s precedents establish that, when Congress properly assigns a matter to adjudication in a non-Article III tribunal, “the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” No party challenges or attempts to distinguish those precedents.

    Is the problem of taking a property valued in excess of $20 without a jury still an open issue if framed properly?

  5. Josh Malone November 27, 2018 9:52 pm

    I refer to the last sentence – No party challenges or attempts to distinguish those precedents.

  6. Mike November 28, 2018 2:13 am

    Anon,

    You say that “it *would* have carried the case to an opposite conclusion”, but would it have? What possibly could have been the legal hang up that prevented them from sua sponte ruling? Answering this question and finding the lingering issue might very well present the golden nugget needed to overcome the current abomination.

    Pardon me for my lack of legal knowledge (and maybe poor analogy), but suppose:
    ====
    There exists a law that says the termination of another’s human life is illegal unless done via a) order by capital punishment in a state venue, or b) euthanasia.

    Also suppose a person having a capital punishment death sentence, when on his way to be executed, trips, hits his head, and falls into a coma. Said person is then sent to a hospital for care. The state then sends the doctor who previously received the execution order to the hospital, and said person has his life terminated by the doctor. Then said person’s family sues the doctor for illegal termination of life.

    The order to terminate was presented to the judge, including the fact that the act was carried out in a hospital. Rather than argue the relevance of the location of the termination vs the authority of the order, the doctor claimed that the termination was euthanasia, and, being confident that the law was on his side, he did not argue that the termination was by order of capital punishment.

    The judge then decides that the termination was not euthanasia because there was evidence that the coma was reversible, and the doctor is found guilty of murder.

    If the facts had been applied, this might have carried the case to an opposite conclusion. I say *might*, because the argument for capital punishment in lieu of the state’s order was never presented nor scrutinized, and it would have been questionable given that the termination was performed in a hospital.

    So must a judge, prior to this finding of guilt, consider a nonexistent capital punishment argument?
    =====

    With respect to Oil States, if there is something questionable regarding retroactivity, Due Process, or Takings, shouldn’t the Court hold their ruling narrowly and express the concerns not raised that might otherwise carry the case to an opposite conclusion, basically implying that Oil States should have made a different argument to prevail?

    This “something questionable” is what the next case should discover and overcome.

  7. Anon November 28, 2018 7:08 am

    Mike,

    Even before getting to your new hypothetical, let’s look at your reply to my post:

    but would it have?

    Yes, it would have.

    What possibly could have been the legal hang up that prevented them from sua sponte ruling?

    Nothing. That is precisely why I point out that the “fig leaf” offered as “dicta” is so misleadingly treacherous. The Court not only “could have,” but should have reached this “sua sponte” conclusion (and sua sponte in quotes, because as you reflect from the oral questioning, the concept WAS on the table before the Justices, and reaching this would not have been a true “sua sponte” move).

    Answering this question and finding the lingering issue might very well present the golden nugget needed to overcome the current abomination.

    The current abomination if the Court itself, and its legislating from the bench. The “lingering issue” is the addiction of the Court of thrusting its fingers into the Nose of Wax of patent eligibility.

    The entire “Gist of the Invention,” “Search for Inventive Step” or any of dozens of like phrases has been seen before (think pre-1952 common law power to set the meaning of the term “invention,” which had been allowed by Congress to be a power within the Judicial Branch). That power was revoked in the Act of 1952, when Congress grew tired of an anti-patent Court (think of the self-described phrase of “the only valid patent is one that has not yet appeared before us”), and replaced a former single paragraph with the current 101/102/103 system, and instead of this “hunt of gist of invention” (or whatever), Congress chose nonobviousness.

    The scoreboard is broken. We will not be able to fix that scoreboard by relying on the broken scoreboard.

    Congress acted once before, and they need to act again, this time with decided force (I have recommended the use of the Constitutional power of jurisdiction stripping of the non-original jurisdiction of patent appeals away from the Supreme Court).

  8. Anon November 28, 2018 7:21 am

    Your hypo is a bit contrived; that is, it is not capable of withstanding scutiny and remain standing on its merits.

    For example, the hypo provides as a baseline fact that capital punishment had been indicated. At that point, the intervening trip/fall/coma is a red herring. The person was on his way to be executed, and the intervening act does not – and cannot – change that fact.

  9. Disenfranchised Patent Owner November 28, 2018 11:33 am

    Mike,

    In its conference on October 5, 2018, SCOTUS passed on hearing case #18-183 which squarely raised both the Takings Clause and retroactivity of IPR’s issues.

    If Justice Kavanaugh had been sworn in one day earlier than when he was on October 6, 2018, perhaps that decision would have been different. (See footnote to first page of SCOTUS Order List dated October 9, 2018)

  10. Mike November 28, 2018 12:13 pm

    Me: What possibly could have been the legal hang up that prevented them from sua sponte ruling?
    You: Nothing.

    Me: Answering this question and finding the lingering issue might very well present the golden nugget needed to overcome the current abomination.
    You: The current abomination is the Court itself, and its legislating from the bench. The “lingering issue” is the addiction of the Court of thrusting its fingers into the Nose of Wax of patent eligibility.

    =====

    I’m not certain if your stance is going to be fruitful in the art of persuasion. For example, was ex parte reexamination retroactively applied? Was it constitutional? If no, how so? Does IPR follow the same “illegality”? If yes, what differences are there between IPR and ex parte reexamination that would render IPRs unconstitutional?

    Was any of this argued? Would any member of SCOTUS have reason to doubt a sua sponte ruling with respect to the foregoing?

    So, moving forward, and in the interest of pursuing patents as having property rights worthy of a constitutional defense, I don’t follow your sua sponte argument, especially when the bench has shown it is not going to sua sponte rule.

    Sure, the scoreboard may be broken, but the game is in *that* stadium. Learning the defense and adjusting gameplay is paramount. Preparing for Game 2 and vouching for different rules (Congress) should be something to consider, yes, but this doesn’t mean we should throw in the towel on Game 1 when it is not over yet. Continuing to fight in a losing Game 1 might just put some points on the board, and it can even help the strategy in Game 2, even creating positive adjustments for us in Game 2 because of our fight in Game 1.

    Out of complete respect to you and your postings here, I must admit that I do not find the “Nothing” comment to be satisfactory in the interest of pursuing patents as having property rights worthy of a constitutional defense. Can you provide “something more”?

  11. Mike November 28, 2018 1:08 pm

    Thanks Disenfranchised Patent Owner.

    In Case 18-189 (Smartflash), the opposition brief states that
    1) Smartflash is collaterally estopped from re-litigating the patent-eligibility issue that was already conclusively resolved against it in Smartflash LLC v. Apple Inc., 680 F. App’x 977, 984 (Fed. Cir. 2017), cert. denied, 138 S. Ct. 687 (2018), and
    2) Smartflash did not present constitutional issues to the PTAB or Federal Circuit, nor did the PTAB or Federal Circuit decide those issues. The opposition states “[t]hat is reason enough to deny certiorari. See, e.g., Zivotofsky ex rel. Zivotofsky v. Clinton, 132 S. Ct. 1421, 1431 (2012) (declining to decide issue ‘in the first instance’ where the Court was ‘without the benefit of thorough lower court opinions to guide [its] analysis’).”

    Also, in Case 18-183 (Advanced Audio), the petitioner for a writ of certiorari states that “While AAD did not expressly mention Fifth Amendment takings among its constitutional claims, that omission did not affect proceedings below given the ultimate no-opinion character of the Federal Circuit disposition.” They then request the Court to decide an issue that was not raised in below courts.

    Without lower court opinions, I don’t think SCOTUS is going to grant certiorari on this issue. They may never grant cert, but it does at least appear they are not going to grant cert without first lower court opinions and arguments on the merits.

  12. Anon November 28, 2018 7:36 pm

    Mike,

    Appreciate the note of respect – thank you.

    As to “nothing” though (your view of my answer as to what was the legal hang-up), I think that you need to look at my response again. I do not say “nothing” is the legal hang up. I do say that the legal hang-up is the Supreme Court itself.

    And I explain why.

    The offering – purely in dicta – means that THAT dicta is essentially worthless given the facts of the case already adjudicated.

    I take it that you are not an attorney (nothing wrong with that), and maybe you are not grasping the difference between persuasiveness of holdings and dicta.

    That’s OK – I know plenty of attorneys who fawn obsequiously at ANYTHING uttered by the Supreme Court, as if even the dicta is “persuasively” binding.

    Hint: it is not. Further, any level of critical thinking that is applied to (even) the musings of the Supreme Court can be used to show Supreme fallacy.

    There is a huge problem (as you may grasp) though in just why any such musings as ours here on a blog and being effective in making changes IN the court system may be worlds apart. It has to do with the structure of the Court, the cases it itself chooses to hear, and the apparent lack of spine from our Congress (admittedly divided, and currently very much in the thralls of Monied “voices,” a la Citizens United) for that Congress to rightfully smack the Court upside its figurative head and tell the Court that it has NO PLACE writing substantive patent law (and any such writing – such as the insertions into 35 USC 101 that are NOT interpretative by any stretch of the imagination – are ultra vires).

    There is a huge difference there. Both in ANY attempts to “be persuasive” in the short term and to be effective in the long term (i.e., jurisdiction stripping).

    I have long posted about the differences between our current Congress and the Congress that DID rise up and smack a prior anti-patent Supreme Court – resulting in the Act of 1952. Back then (and prior to becoming a jurist), we had a Mr. Rich help compose the law. Today, sadly, we have no such helper for Congress.

  13. Anon November 29, 2018 9:50 am

    On a larger note (and unfortunately, travel plans will impact my ability to compose a deeper message), many of the ideas at play in this article have been entertained on these and other blog pages previously by yours truly.

    Especially in conversations with the late Ned Heller (attorney involved in the cited case here of MCM Portfolio). Ned, while dedicated to MCM Portfolio, made a poor champion for the larger notion of Private Personal rights nature of patent rights because he could not expand his scope of thinking beyond some of the historical cases and could not entertain the various avenues and impacts from those other avenues (e.g., Takings Law).

    It was in one of our last exchanges that I laid out a “vision” of how Oil States case may come out negatively for patent holders along the lines of a “Public Right” notion created by Congress, and the notion that if allowed, then may create a pathway for Congress to abrogate ANY traditional Private Personal right (including private personal property rights) by creating “mirror legislation” and “reflective” Public rights, all of which would provide a dangerous precedent.

    While the Court did not take the path that I had outlined in conversations with Mr. Heller, the end result is shockingly similar.

    As we have seen with the actual degradation of Patent Rights (from the legislated standing of personal rights [untouched, by the way with the AIA], to the Court-rewritten Public Franchise rights), any other Constitutional protections based on personal property – that exist outside of the patent law realm, and which include notions of Takings law (for example), edge closer into simply not being applicable based on the notion that Public Rights MAY be shifted out of Article III forums (and the inherent separation of powers protections that such a shift berefts those rights of having.

    This article portrays an interesting, but academic dead-end with its attempt to not embrace the impact that the Court HAS created with its (continued) legislating from the bench in an anti-patent manner. The change (and make no mistake, it is a change) from Private personal property right to Public Franchise property right has far more ramifactions than what has been largely admitted to.

  14. Scott Pierce November 29, 2018 4:58 pm

    Thank you all for your comments. My only regret is that I don’t know who you are, so I can’t follow up on support that any of you might have provided in your own writings to get a better appreciation for some of your above comments, particularly Anon.

    BTW, I am aware that many of the arguments presented above are not necessarily new, and I think I acknowledge this in a short paper I wrote before Oil States was decided, and which appears at my ssrn account. I didn’t make reference to that fact in this paper because of space limitations, and because I did not include any footnotes.

    At any rate, I enjoyed writing the article, and I appreciate all of your thoughtful comments.

  15. Anon November 30, 2018 2:15 pm

    No problem Scott, many of the threads and discussions that I speak of have been on the blog pages here or other patent blogs (rather than in any type of location that a concentrated effort may have produced).

    Your efforts are not to be minimized, and my apologies if my comment came across in that manner.

Post a Comment

Respectfully add to the discussion.

Name *
Email *
Website

Our website uses cookies to provide you with a better experience. Read our privacy policy for more information.Accept and Close