“The Supreme Court has brazenly admitted it is not following Congress’ statutory instructions on patent eligibility in several cases. And it has carried out virtually none of the required statutory construction. It is judicial activism in the extreme.”
Sherry Knowles is one of the best known patent attorneys you will find. She is a former Vice President and Chief Patent Counsel for GlaxoSmithKline, where she led the charge on behalf of the industry to fight back the claims and continuations rules package the United States Patent and Trademark Office made final in October of 2007. Since gaining industry renown for her efforts, she has been identified as one of the top 10 most influential people in the intellectual property world, one of the top patent attorneys in the world, one of the top patent strategists in the world, and the accolades go on and on.
Knowles, never afraid to take up the good fight, has turned her focus on the ongoing patent eligibility debate. She and co-author Dr. Anthony Prosser have just published an article in the John Marshall Intellectual Property Law Review arguing that the Supreme Court’s patent eligibility test is unconstitutional. See Unconstitutional Application of 35 U.S.C. §101 by the U.S. Supreme Court, 18 J. Marshall Rev. Intell. Prop. L. 999 (2018) by Sherry M. Knowles and Anthony R. Prosser, Ph.D. It’s an article I find particularly persuasive because, as I have often written, there is no support anywhere in the Patent Act or Constitution for the Supreme Court to add layers to the patent eligibility inquiry beyond those specifically and literally defined by Congress.
Before anyone decides to dismiss Knowles’ article as interesting, but legally impractical, it is worth noting a potential opening surprisingly presented by the Supreme Court. While the Knowles article has been pending for months, just days before its publication earlier this week, the Supreme Court in Henry Schein, Inc. v. Archer & White Sales, Inc. concluded that there is no statutory authority for judicial exceptions under the Federal Arbitration Act. “The Act does not contain a ‘wholly groundless’ exception, and we are not at liberty to rewrite the statute passed by Congress and signed by the President,” wrote Justice Kavanaugh for the unanimous Court.
Could courts become persuaded that judicial exceptions to statutes are now disfavored by the Supreme Court as being outside the authority of the Judiciary? See A New Court and a New Fix for Alice. That is what the Supreme Court said in Schein. It needs to be argued. Schein provides a roadmap, and so does this important article by Knowles.
I had the opportunity to speak with Knowles on the record on Monday, January 14th. Below, without further ado, is our conversation.
QUINN: Sherry, congratulations on the publication of your article today. I know you are busy so let’s jump right into the conversation. Why did you take the time to write a law review article?
KNOWLES: When anything gets as messed up as patent eligibility is in the United States the best thing to do is to go back to the basics, and that’s what we tried to do. The basics in this case is the U.S. Constitution, which grants Congress the sole right to promote the progress of science. The Constitution does not tell Congress what kind of advances should be promoted. And the Constitution does not grant ANY power to the U.S. Supreme Court to either create or modify Congress’ means to promote science. So, we did two things: we tracked the wording of Congress’ patent eligibility statute starting from the enactment of the U.S. Constitution to the present day and we compared it to the development of SCOTUS’ parallel inconsistent case law, which has become common law.
The first paragraph of the report gives our finding- “A or B” is inconsistent with “A not B”, which is why the application of 35 USC 101 by the U.S. Supreme Court is unconstitutional. There have been many articles on 101, but none have clearly called a spade a spade with the factual research to prove it— SCOTUS has developed its own common case law that is insolubly inconsistent with the U.S. statute, and by doing so it is acting illegally. There is no other way to describe it.
QUINN: I think you’re right. The statute itself comes from the Constitution and the only place in the Constitution the word “right” is used is in conjunction with the famous Art. I., Sec 8, Clause 8. And this requirement gets translated by Congress into Section 101, which in its very basic terms is supposed to allow those people who invent or those people who discover to obtain a patent as long as other things are satisfied. And those other things are as long as it’s new, not obvious, it’s useful and you can describe it. This was so well understood to be correct it’s hard to imagine that the Supreme Court has changed everything.
KNOWLES: Yeah. The U.S. Supreme Court has stated that early congressional enactments give “contemporaneous and weighty evidence” of the Constitution’s meaning. Well, the very first Patent Act of 1790 used the disjunctive “invented or discovered” in the first clause of the patent eligibility statute and except for a few early years, this disjunctive description has been used consistently over about 230 years through over 30 amendments to the Patent Act.
Our research confirmed that there has been very intense interest by Congress in patent eligibility since the Constitution was enacted in 1787, and the repeated recodifications of the disjunctive “invents or discovers” in the patent eligibility statute shows a crystal-clear intent. Interestingly, in the 1952 Patent Act, a major overhaul of the patent statute, Congress did something that was remarkable, and of course, we don’t see judicial opinions referring to it. Congress not only maintained the eligibility of inventions and discoveries in the disjunctive, it actually added a definition of invention into Section 100 of the Act. Congress’ definition states that an invention is an invention or a discovery. So instead of removing the scope of patent eligibility for applied discoveries, it went in the opposite direction and emphasized the intent that discoveries be patent eligible by adding a definition to Section 100.
QUINN: Right, right. Now I know what the answer to this question is, Sherry, but can you for the record explain why is it that the word “discovery” matters so much to you?
KNOWLES: Well some of the most important innovations in America have been based on applications of how things in nature work and in part we can say that since we live in nature, everything is an application of the law of nature. And as you know and I have said before, I am a breast cancer survivor and I owe my life to inventors who brilliantly discovered the anti-cancer activities of certain isolated natural products. In particular I am referring to doxorubicin and taxol. I tracked down the inventors of doxorubicin who were from a start-up company in Milan, Italy named Farmitalia. I wanted to thank them— I think more people should identify the inventors of drugs that have changed their lives. Unfortunately, they had passed, but I met a colleague of theirs who told me that the inventors would never have done the research to discover doxorubicin if they thought they couldn’t get a patent on the discovery in the U.S. for commercial sales. Wow. That is why the framers of our Constitution included Art. 1, Sec 8, Clause 8 and why Congress for the last almost 230 years has insisted that the United States promote the progress of science by rewarding discoveries.
QUINN: It is shocking that a large portion of the life sciences industry has been so negatively impacted by the Supreme Court’s decisions and then the Federal Circuit’s interpretation of those decisions over the last five or six years, correct?
KNOWLES: For sure. In our article, we trace SCOTUS’ 101 cases and what we find is that there is virtually, and typically literally, no statutory construction analysis. The Supreme Court knows how to carry out statutory construction, and historically cases have turned on the placement of a comma, phrase or wording. Where the Constitution gives sole authority to Congress, the Supreme Court’s only job is to understand the literal terms of the statute as presented and then apply that statute to the facts at hand, whether they agree with the statute or not. If anyone can identify a SCOTUS statutory construction analysis of the first four words of 101 — whoever invents or discovers — we will give them a prize. A safe bet because it doesn’t exist.
QUINN: Yeah, I think that’s probably true. And that leads me to a question that I’m starting to ponder. I wonder as I look back through these cases, whether the Supreme Court is more to blame or whether the Federal Circuit is more to blame. And at the end of the day it doesn’t really matter who’s to blame, we’re in this current state of things. Direction Iancu has called it the “101 morass”, but I just think that along the way there has been a hesitancy to do the right thing. For example, in the life sciences area you see the invention that was at issue in Sequenom v. Ariosa and everybody thought it was a truly meritorious innovation, including Judge Linn, but it goes down as patent ineligible. At what in point in time is the Federal Circuit supposed to stand up for good jurisprudence? I think the Supreme Court is supposed to paint with a broad brush and then the Federal Circuit is supposed to come in and pain with a much more refined brush. We are starting to see the Patent Office do that, but it’s taken too long.
KNOWLES: I do believe the Federal Circuit is in a bit of a bind. It is an inferior court. It has to issue decisions that are consistent with the Supreme Court whether it likes them or not. We would like to see more dissenting concurrences, which say we don’t think this is right but we’re bound by it.
I talked before about our legal research that tracked every amendment to the patent eligibility statute since the enactment of the Constitution. We then laid beside the legislative history the Supreme Court cases applying the statute. And what we found was pretty shocking. The Supreme Court has brazenly admitted it is not following Congress’ statutory instructions on patent eligibility in several cases. And it has carried out virtually none of the required statutory construction. It is judicial activism in the extreme. When a court cites to its own prior cases as controlling precedent instead of the controlling statute, it is the bellwether sign that it has crossed over into creating common law. For example, in Gottschalk v. Benson, the only reference to the wording of 35 USC § 101 is relegated to a footnote. The opinion relied on SCOTUS’ own earlier case law, and an un-adopted recommendation from a Committee to the President in the Executive Branch. In Parker v. Flook, Justice Stevens said, referring to Gottschalk, “The holding that the discovery of that method could not be patented as a process forecloses a purely literal reading of 101.”
KNOWLES: It is pretty disturbing.
QUINN: It really is. And I wonder, are you familiar with the case that just came out from the Supreme Court a few days ago? Henry Schein, Inc. v. Archer & White Sales, Inc.? Justice Kavanaugh wrote the opinion. It was a case dealing with the FAA, but the question was whether or not there was an exception – a judicial exception to the statute. Kavanaugh wrote that “the Act contains no ‘wholly groundless’ exception and we may not engraft our own exceptions onto the statutory text.” So I wonder—
KNOWLES: That is a wonderful example Gene. We see in Diamond v. Chakrabarty that SCOTUS begins to institutionalize its “judicial exceptions” to patent eligibility. We have researched this issue deeply and we have found no basis in the U.S. Constitution or source of U.S. law that grants the Supreme Court the power to make a judicial exception to any federal statute. Where is the basis for this power? I urge it doesn’t exist.
In Mayo v. Prometheus, the text of 101 was used only as an introduction to the judicial exceptions. The Supreme Court wrestles with the exceptions when it gets to Bilski v. Kappos where Kennedy says that any suggestion that the Court’s case law deviates from the terms of the Patent Act has only been for an “explanation for the exceptions”…and that these judicial exceptions don’t give the Court carte blanche to impose other limitations that are inconsistent with the text and the statute’s purpose! It is almost hard to unpack that. Kennedy seems to be saying the court has made a few unauthorized exceptions to a federal statute but we promise not make any more? And Breyer admits in Mayo v. Prometheus that too broad an interpretation of the unauthorized judicial exceptions might eviscerate patent law, in other words, we are off the map but we have to stop before we destroy the law altogether?
KNOWLES: Everyone talks about the judicial exceptions to patent eligibility like it’s a mantra, like it’s a given. When are we gonna stand up and say that it is not a given. Not only is it not a given, it’s not even authorized by the U.S. Constitution or any other U.S. law. It’s unconstitutional. It’s not a mantra.
QUINN: Well right. And now we have this case from the Supreme Court which was unanimous. Maybe there’s new hope here that things will be different. I totally agree with you and think your analysis is spot on. I’ve called these exceptions extra-statutory. I don’t like calling them judicial exceptions because I think that sanitizes them.
QUINN: What they are is they are extra-statutory. In addition to the statute. The Supreme Court has decided in their wisdom that the statute is not enough so they have come up with two additional requirements that get added on top of the statute and I, like you, don’t see anywhere in the law where that is allowable. That’s not the role of the Supreme Court. It never has been, although they do try and take that power from time to time.
KNOWLES: No. The only reason why I like the words “judicial exception” to the statute is because they are a massive admission against interest that the Court is acting unconstitutionally.
QUINN: Right. They admit that it’s not in the statute.
KNOWLES: Yes, it’s a classic admission against interest.
QUINN: It is. I couldn’t agree with you more. I like your article, I hope everybody reads it. So, perhaps the only remaining question is where do you think we go from here? It seems to me for the first time in a long-time people are talking about this in a different way. I think in part of that has to do with the Director talking about it in a very open way and testifying to Congress that he doesn’t know what’s patent eligible. And I think he’s just being honest, because if we’re all honest we really don’t know what’s patent eligible unfortunately until we see the door open and the three judges on the Federal Circuit walk in. And then we’ll know. It’s that kind of arbitrary.
KNOWLES: This discussion has to go to Congress where it belongs. I hope that the legal research we have done can inform those discussions. Congress will be able to see the 230 year history of the scope of patent eligibility in the disjunctive of ‘inventions or discoveries’ going all the way back to the founding fathers and the Constitution. That is awe inspiring and should not change. It is part of the fabric of what made the United States the great leading innovator that it has been and must stay. Congress should be reminded that it added a definition of invention in Section 100 in 1952 to unambiguously include discoveries.
Congress should also be advised that somewhere the Supreme Court took a left turn and decided to create a parallel case law on patent eligibility that is inconsistent with the statute. That gets us back to the first paragraph of our article that the recent Supreme Court cases are unconstitutional because “A or B” is inconsistent with “A not B.” “A or B” comes from the first four words of 101 “whoever invents or discovers”. “A not B” is best illustrated in the statement of Justice Thomas in the Myriad case that “groundbreaking, innovative or even brilliant discovery does not by itself satisfy the 101 inquiry (i.e., an invention cannot be a discovery). As we indicate in the article, it is hard to imagine a more unconstitutional statement than that discoveries cannot be patented when the statute the Court is applying states that any invention or discovery can be patented.
QUINN: I agree all around. I think over the next several years that things will change but we’ll have to continue to be vigilant.
KNOWLES: One of the points that we make in this article goes back to the famous case of Marbury v. Madison where the Supreme Court ruled it can review the constitutionality of federal statutes. Well who oversees the constitutionality of the U.S. Supreme Court decisions? I think that’s a really important question. The course correction is to go back to Congress and get another statute passed that tells the Supreme Court to get back in line. There is no private right of action and the time it takes to go to Congress to pass another statute is of the length that one wonders if that’s actually a remedy. It points out a kind of a dark spot – maybe even a hole– in our tripartite form of government. There is no short-term solution to unconstitutional behavior by the U.S. Supreme Court.
QUINN: I agree, and certainly when you’re dealing with an area as important as fast-moving technology, these answers need to be handled much faster than what they are. Slowly responding to matters of great importance to innovators powering a technological economy is a recipe for falling behind in the global marketplace. And we have seen the U.S. slip in the annual U.S. Chamber IP rankings, which is very concerning.
KNOWLES: I’m glad to hear that the Schein case is consistent with and even supportive of our legal research. And we very much appreciate IPWatchdog for giving our article some attention. It is now open source legal research and we hope folks will use it in their briefs, give the copies to Congress, and maybe even the Supreme Court. Let’s get this conversation started.
QUINN: Well thank you very much Sherry, I really appreciate it.
KNOWLES: My pleasure Gene. And I would like to thank my co-author Anthony Prosser, Ph.D. for all of the weekend hours of legal research he contributed.