Posts Tagged: "Takings Clause"

A Tennessee district court judge on Monday granted a number of former U.S. Patent and Trademark Office (USPTO) officials’ motion to dismiss a case brought by Martin David Hoyle and B.E. Technology alleging violation of the plaintiffs’ constitutional right to due process under the Fifth Amendment. Hoyle filed the suit in the Western District of Tennessee’s Western Division in August 2021 against former USPTO Director Michelle Lee and a number of other former USPTO officials for allegedly depriving the plaintiffs “of their valuable property rights in quasi-judicial administrative proceedings before the USPTO’s Patent Trial and Appeal Board (‘PTAB’).” The complaint further claimed that PTAB proceedings have been “tainted by various improprieties and underhanded tactics, designed to stack the deck against [plaintiffs] and in favor of their far more powerful opponents.”

The petitioner in a case challenging the U.S. Court of Appeals for the Fifth Circuit’s ruling that affirmed a Texas court’s dismissal of copyright claims over Texas A&M’s unauthorized reproduction of portions of his manuscript filed a reply brief Monday, arguing that the opposition provides “no escape hatch… for states’ particularly egregious intellectual property violations.” Michael Bynum, a sports writer and editor, and publishing company Canada Hockey L.L.C., doing business as Epic Sports, said that the Texas Attorney General’s August 19 brief in opposition was “bristling with aggressive and controversial legal positions” and that the Fifth Circuit’s decision “undermines federal copyright protection from state predation.”

Following a denial of rehearing en banc by the U.S. Court of Appeals for the Fifth Circuit in February, publishing company Canada Hockey L.L.C., doing business as Epic Sports, and Michael Bynum, a sportswriter and editor, have now filed a petition for writ of certiorari with the U.S. Supreme Court in their appeal of a copyright case against both Texas A&M University and a pair of school officials. The petition claims the Fifth Circuit’s decision leaves copyright holders “at the mercy of state infringers.” In their petition, the plaintiffs argue that the Fifth Circuit’s ruling affirming the Southern District of Texas’ dismissal of copyright claims over Texas A&M’s unauthorized reproduction of portions of Bynum’s manuscript on the nearly 100-year history of the famed “12th Man” tradition at Texas A&M erred in failing to find constitutional violations of both the Fifth Amendment’s Takings Clause and due process under the Fourteenth Amendment. The Texas ruling followed the U.S. Supreme Court’s March 2020 decision in Allen v. Cooper, which declared that Congress’ abrogation of state sovereign immunity under the Copyright Remedy Clarification Act was unconstitutional.

On February 21, Houston, Texas-based professional photographer Jim Olive filed a reply brief with the U.S. Supreme Court in defense of its petition for writ of certiorari asking the nation’s highest court to grant an appeal in Olive’s copyright infringement suit against the University of Houston System. This case is one of two separate suits seeking to hold Texas public universities accountable for copyright infringement; while sovereign immunity defenses have staved off liability thus far, a recent Takings Clause decision by the Supreme Court has created a path forward for these and other IP owners looking to hold state entities accountable for their IP infringements.

One of the greatest attributes of copyright law is the never-ending abundance of exciting new developments, including those in Congress, the courts, and at the Copyright Office. On the surface, copyright seems straightforward in that it advances the public good by securing property rights to authors. But underneath this simple veneer lies centuries of debate about how best to balance the rights of authors with the public interest, where each distinct issue presents a veritable rabbit hole of metaphysical distinctions. For the copyright connoisseur, keeping up with the latest events can be an exhausting endeavor, though the thrill of solving new puzzles makes it intellectually rewarding. Thankfully, one need not be a member of the copyright cognoscenti to appreciate the major developments in copyright law this past year. From the Supreme Court’s decision in Google v. Oracle to the implementation of a small copyright claims tribunal to attempts to rein in state infringements, 2021 has certainly provided many wonderful events worth highlighting.

On November 15, Houston-area aerial photographer Jim Olive Photography filed a petition for writ of certiorari asking the U.S. Supreme Court to take up an appeal from the Texas Supreme Court, which had denied Olive’s copyright claims against the University of Houston System on sovereign immunity grounds. In the petition, Olive requests that the Supreme Court simply grant certiorari, vacate the lower decision and remand for reconsideration of the issues in light of the Court’s decision this summer in Cedar Point Nursery v. Hassid, which was issued just a few days after the Texas Supreme Court ruled against Olive.

On September 22, publishing company Canada Hockey L.L.C., doing business as Epic Sports, and Michael Bynum, a sportswriter and editor, filed a petition for rehearing en banc in their appeal of a copyright case against both Texas A&M University and a pair of school officials. In their petition, the plaintiffs argue that the original panel decision erred in failing to find constitutional violations of both the Fifth Amendment’s Takings Clause and due process under the Fourteenth Amendment for Texas A&M’s unlawful reproduction of the plaintiffs’ copyrighted work regarding the history of the legendary 12th Man at Texas A&M.

On July 20, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a non-precedential decision in Siegler v. Sorrento Therapeutics, Inc. in which the appellate court affirmed a series of rulings on motions in a copyright and trade secret lawsuit filed in the Southern District of California. Although the Federal Circuit panel in the case “[understood] that Siegler feels unfairly treated as a result of the events she outlines, she was treated more than fairly by the district court,” said the CAFC, and the court did not err or abuse its discretion in reaching decisions to deny several motions for default judgment and reconsideration, as well as dismissing a pair of amended complaints filed by Siegler.

Last week, in Golden v. United States, the Federal Circuit again rejected the argument that the cancellation of a patent in an America Invents Act (AIA) post-grant proceeding violates the Fifth Amendment’s Takings Clause. Just as it did in other cases raising Patent Trial and Appeal Board (PTAB)-related Takings Clause issues, the appellate court in Golden relied on its July 2019 decision in Celgene Corp. v. Peter (931 F.3d 1342 [Fed. Cir. 2019]), rejecting the Takings Clause argument on the merits. See Collabo Innovations, Inc. v. Sony Corp., 778 F. App’x 954, 961 (Fed. Cir. 2019); Enzo Life Sci., Inc. v. Becton Dickinson & Co., 780 F. App’x 903, 911 (Fed. Cir. 2019). But unlike these previous decisions, the Federal Circuit’s analysis in Golden also included discussion and resolution of an important threshold jurisdictional question—an issue that, as we argued in a November 2019 IPWatchdog piece, should have precluded the Federal Circuit from reaching the merits of the Takings Clause argument in Celgene in the first place.

Nearly four months ago, the Federal Circuit for the first time addressed the applicability of the Takings Clause of the Fifth Amendment to IPRs, holding in Celgene Corp v. Peter “that the retroactive application of inter partes review (IPR) proceedings to pre-America Invents Act (AIA) patents is not an unconstitutional taking under the Fifth Amendment” Celgene Corp. v. Peter, 931 F.3d 1342, 1362 (Fed. Cir. 2019). Since then, the court has continued to reject similar Patent Trial and Appeal Board (PTAB)-related Takings Clause claims on the merits. E.g., Collabo Innovations v. Sony Corp., No. 2018-1311 (Fed. Cir. Aug. 5, 2019). Unsurprisingly, Celgene filed a request for an en banc rehearing, and the government has just this week filed its response. Both Celgene’s en banc petition and the government’s response address the merits of Celgene’s constitutional claim—but as we hinted at in an earlier article analyzing the Celgene decision, there is a serious question whether the Federal Circuit should have even reached the merits of the Takings Clause issue in its panel opinion. In light of Supreme Court Takings Clause precedent, the Federal Circuit may want to either request supplemental briefing to decide whether it should have addressed the constitutional question in the first place, or potentially even revise the panel opinion and leave this issue to be decided in another case.

Since the Supreme Court upheld the constitutionality of inter partes review (IPR) a little more than a year ago in Oil States, several patent owners have brought other constitutional challenges to America Invents Act (AIA) trial proceedings. These cases have been slowly percolating at the Patent Trial and Appeal Board (PTAB), the U.S. Court of Federal Claims, and the U.S. Court of Appeals for the Federal Circuit. In many cases, however, the Federal Circuit has declined to address these constitutional claims on the merits, finding them unnecessary to resolve or insufficiently developed by the parties. But early last week, the Federal Circuit for the first time addressed the applicability of the Takings Clause of the Fifth Amendment to IPRs, holding in Celgene Corp. v. Peter, Case No. 18-1167 (Fed. Cir. 2019) “that the retroactive application of IPR proceedings to pre-AIA patents is not an unconstitutional taking under the Fifth Amendment.” While the court’s holding may appear on its face to forestall current and future Takings Clause challenges to AIA proceedings, its analysis leaves some questions unanswered, and may even provide a narrow path forward for future takings claims. Furthermore, given the Supreme Court’s predilection for addressing both AIA and Takings Clause issues, the Federal Circuit panel’s decision may not be the last word on this interesting issue.   

Advanced Audio’s petition for writ of certiorari notes, all five patents were filed with the U.S. Patent and Trademark Office prior to the enactment of the America Invents Act (AIA), which established the PTAB. Prior to Congressional passage of the AIA, Advanced Audioe didn’t need much litigation of its patent rights to license its patents and achieve most of its revenue. After the AIA passed, Advanced Audio began having to again file suits against those who were practicing its patented technology without a license. The patents invalidated by the PTAB were asserted by Advanced Audio in cases against Amazon, HTC and Pantech Wireless all filed in the Northern District of Illinois. Those cases are stayed in district court pending the resolution of this case, which has created significant costs through attorney fees and significant loss of royalty revenue.

On Wednesday, May 9th, Oklahoma-based patent owner Christy Inc. filed a class action complaint in the U.S. Court of Federal Claims against the United States seeking just compensation for the taking of the rights of inventors’ and patent owners’ patent property rights effectuated by the Patent Trial and Appeal Board (PTAB). Members of the proposed class would include all owners of patents which were deemed by the U.S. Patent and Trademark Office to include patentable subject matter which were later invalidated by the PTAB.

A 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.