“The Supreme Court’s pattern over the past two decades casts a cloud over innovation, even as technology has evolved in virtually every industry and every aspect of life.”
In 2001, the U.S. Supreme Court ruled for the first time that plants could be protected with utility patents. J.E.M. Ag Supply, Inc., v. Pioneer Hi-Bred International, Inc. 534 U.S. 124. This landmark decision, originating in the agricultural heartland of Iowa, was the last time the Supreme Court effectively increased patent protection for inventors and patent owners. Most, if not all, of the Supreme Court’s patent rulings in the past two decades have not been favorable to patent owners. Rather, these “recent” decisions have restricted patent rights and made it more difficult to enforce these rights against infringers.
SCOTUS’ Last Patent-Friendly Pronouncement
J.E.M. involved the question of patentable subject matter under 35 U.S.C. § 101. In particular, the issue addressed by the Court in J.E.M. was whether sexually reproducing plants, including crops and flowering plants, could be protected by utility patents. Historically, plants had been protected under the Plant Variety Protection Act (PVPA), 7 U.S.C. § 2321, and the Plant Patent Act (PPA, enacted in 1930), 35 U.S.C. §§ 161-164. The Supreme Court, in ruling in favor of utility patents for these plants, rejected the argument that the PVPA and the PPA were exclusive means for plant protection. Justice Clarence Thomas’ majority opinion noted that Congress plainly contemplated that patent laws be given wide scope, citing Diamond v. Chakrabarty, 447 U.S. 303 (1980). The Court stated, “As in Chakrabarty, we decline to narrow the reach of Section 101 where Congress has given us no indication that it intends this result.” The Court explained the subject matter provisions of the patent law have been cast in broad terms, to fulfill the constitutional goal of “promoting the Progress of Science and the useful Arts, with all that means for the social and economic benefit envisioned by [Thomas] Jefferson.” As further stated, Section 101 is a “dynamic provision designed to encompass new and unforeseen inventions.”
Festo and eBay and Medimmune, Oh MY
While the patent statutes are supposed to promote the progress of science and the useful arts, it seems that Supreme Court decisions since J.E.M. often have had the opposite effect. For example, in 2002, the Court broadened the application of prosecution estoppel, wherein the scope or coverage of a patent may be deemed to be surrendered in view of an amendment, such that the doctrine of equivalents for infringement was restricted. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002). This has led to hesitancies in patent application amendments which years later might be construed to preclude findings of infringement for arguably equivalent devices having very minor changes from the patented product.
A few years later, the Court effectively put a halt to the long-standing practice of permanent injunctions after a finding of infringement. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). Thus, even though a patent gives the owner the exclusive right to prevent others from practicing the invention (35 U.S.C §154), adjudicated infringers have avoided injunctions, absent the patent owner establishing the four factors for injunctions in non-patent cases.
Then the Supreme Court allowed licensees to challenge validity of patents for which they were paying royalties. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007). So, the licensee could have the benefit of a license but then recoup royalties if they prove that the patent was invalid for some reason.
From KSR to Oil States, the Trend Has Continued
In 2007, the Court also decided KSR, which made it easier for patents and patent applications to be declared obvious over the prior art. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). This often lengthens application prosecution due to weak or more frequent obviousness rejections, and potentially lowered the burden of proof of obviousness by infringers in litigation.
The Bilski case in 2010 related to subject matter eligibility and judicial exceptions to patentability. Here, the Supreme Court determined that a method of hedging losses in one segment of the energy industry by making investments in other segments of that industry was an abstract investment strategy, and thus not patentable. Bilski v. Kappos, 561 U.S. 593 (2010). Rather than limiting the holding to the specific facts of the case, Bilski has effectively raised the bar for software and business-related inventions.
The Court then followed with Mayo in 2012, which held that an invention for a method of treating a patient with drugs was not patentable since it covered a natural law. Mayo v. Prometheus, 566 U.S. 66 (2012). Then, in another case on patentable subject matter, the Court held that an invention directed to isolated DNA sequences was actually a naturally occurring DNA segment, and thus not protectable. Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013).
The much-maligned Alice decision in 2014 has led to a lot of critique with respect to abstract ideas not being patentable. Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014). One problem with the decision is the Court did not define “abstract,” and subsequent lower court decisions have struggled with consistency regarding the test for determining whether a claimed invention is merely an unpatentable abstract idea.
Then, in 2018, the Supreme Court concluded that patents are a public right, and more specifically, a public franchise, which the government can authorize and deauthorize to a private without intercession of an Article III court. Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 584 U.S. ___ (2018). Thus, patents, even as private property, are subject to the PTAB “death squad.”
The Supreme Court’s pattern over the past two decades casts a cloud over innovation, even as technology has evolved in virtually every industry and every aspect of life. It often takes investments of significant time, money, and other resources to do the research and development of inventions which have the potential to improve the current state of the art. Without a strong and predictable patent system, the incentive to make such investments disintegrates. Expanding patent protection can provide the motivation and rewards which the Constitution contemplates in promoting the progress of science and the useful arts, as provided by our founding fathers in Article I Section 8 | Clause 8.
Note: The J.E.M. case was argued by the author’s colleague, Edmund J. Sease of McKee, Voorhees & Sease.