Posts Tagged: "constitution"

Supporters of the Patent Trial and Appeal Board (PTAB) continue to claim that the facts and figures showing the PTAB is overruling Article III federal district court adjudication on patent validity is fictitious. Ignoring the truth doesn’t make the truth any less correct. Still, in some circles the fiction spewed by those who champion the patent killing fields of the PTAB continues to be persuasive… More alarming, in many of the cases where the PTAB has overruled district court adjudication of the patents there were findings of willful infringement, meaning the defendants (and ulitmately the IPR petitioners) knowingly and intentionally infringed the patents adjudicated to contain valid claims. Notwithstanding, the PTAB, dutifully complied with their role as executioner of patents.

The Oil States v. Greene’s Energy Group case heard by the U.S. Supreme Court Nov. 27, 2017, has generated much ink, analysis and opinion. Rightly so, given the profound consequences for the security of exclusive private property rights of limited duration in patents. Among the worthy and constructive reflections, conservative experts and leaders have contributed a fair share… Heritage Foundation legal scholar Alden Abbott, whose background includes service at the Federal Trade Commission and as a senior corporate IP counsel, has summed up the shortcomings of PTAB “patent death squads.” Abbott suggests how the Supreme Court should rule in Oil States: “The best option to fix the Patent Trial and Appeals Board is to get rid of it. There is a powerful legal case that board review violates the U.S. Constitution, and therefore is invalid.”

It is that time once again when we look back on the previous year in preparation to close the final chapter of 2017 in order move fresh into the year ahead. 2017 was a busy year in the patent world, although change was not as cataclysmic as it had been in past years, such as 2012 when the PTAB and post grant challenges began, in 2013 when AIA first to file rules went into effect, or in 2014 when the Supreme Court decided Alice v. CLS Bank. It was, nevertheless, still an interesting year… To come up with the list below I’ve reviewed all of our patent articles, and have come up with these top 10 patent stories for 2017. They appear in chronological order as they happened throughout the year.

In re Brunetti, the Federal Circuit reversed a Patent Trial and Appeal Board (“Board”) decision affirming a refusal to register the mark “FUCT” because it comprised immoral or scandalous matter under 15 U.S.C. § 1052(a) (“Section 2(a)”). While the Board properly relied on substantial evidence to support its conclusion, the bar against registering immoral or scandalous marks was held to be an unconstitutional restriction on free speech.

After Tam was decided without expressly finding Section 2(a) unconstitutional in its entirety, the Federal Circuit requested additional briefing on the impact of Tam to Brunetti. The government argued that Tam did not resolve the constitutionality of the immoral and scandalous provisions “because the disparagement provision implicates viewpoint discrimination, whereas the immoral or scandalous provision is viewpoint neutral.” While expressing its doubts, the Federal Circuit did not find it necessary to resolve that issue because regardless of whether the immoral and scandalous provisions discriminate based on viewpoint (which requires strict scrutiny), they clearly discriminate based on content (which requires intermediate scrutiny) and the provisions could not survive either level of review.

An expanded panel of the PTAB, in a majority opinion authored by Chief Judge David Ruschke, agreed with the University of Minnesota that an IPR proceeding is an adjudicatory proceeding of a federal agency from which state entities may be immune. Nevertheless, the PTAB ruled that the University of Minnesota had “waived its Eleventh Amendment immunity by filing an action in federal court alleging infringement of the patent being challenged in this proceeding.”

After oral arguments were held on Monday, November 27, 2017, I again asked a number of industry insiders what thoughts and predictions they now have after having the benefit of hearing the Q&A that took place between the Justices and the attorneys representing the petitioner, respondent and federal government. Their answers follow, and show that there is little agreement among those watching this case with respect to what the likely outcome will be.

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… 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.

Justice Gorsuch seems the most likely, based on his questions, to support the petitioner’s position that there is a constitutional infirmity surrounding IPR proceedings. Chief Justice Roberts also seemed to have substantial concerns with respect to IPR proceedings. Perhaps somewhat predictably, Justice Breyer and to a lesser extent Justices Sotomayor and Kagan, seemed through their questions to view IPR proceedings as just another opportunity for the Patent Office to make sure the correct determination has been reached at the time the patent was granted by the Patent Office. Justice Kennedy overall seemed more in line with the thinking of the liberals on the Court, Justice Ginsberg asked difficult questions and seemed difficult to predict how she might rule. Justice Thomas characteristically remained silent, although his judicial philosophy would be typically in line with Justice Gorsuch. Justice Alito asked only a few questions of the petitioner’s counsel, Allyson Ho, which focused on whether the Constitution requires a Patent Act and whether Congress could put limitations on the grant of “these monopolies.”

The United States Constitution grants to the Congress the power to grant patents. The relevant portion of the Constitution is Article I, Section 8, clause 8. This clause uses of the word “Right” and is the only place in the Constitution the Founding Fathers actually used the word “Right.” Yet today the Supreme Court is poised to determine whether this most fundamental of all rights, a right deemed so important that it was the only right specifically mentioned in the Constitution itself, is a private right or a public right that can be stripped with proceeding in an Article III federal court.

The United States Supreme Court will hear oral arguments in Oil States v. Greene’s Energy Group on Monday, November 27, 2017. This case will give the Supreme Court its first opportunity to address the constitutionality of the inter partes review procedures created by the America Invents Act (AIA). In advance of this much anticipated hearing, I reached out to a number of industry insiders with a simple question: What are you thoughts and predictions on Oil States in advance of Supreme Court oral arguments? Their answers follow… As for my thoughts — I’m going to go out on a limb this time with my prediction that the Supreme Court will find IPRs unconstitutional.

Only Article III courts can provide a fair, neutral and unbiased forum for assessment of patent validity. For over two hundred years, patent validity, patent infringement and patent damages have been consolidated to be heard in federal district courts. Federal courts supply impartial judges that are immune from influence by the executive or legislative branches. Furthermore, federal courts supply jury trials that enable a fair application of due process rights in the hearing of a patent dispute. Patent validity review is only a single component of patent infringement cases and it is efficient to have this component of the matter reviewed in a single matter.

The PTO systematically administers a collection of procedures in IPRs to unduly harm patent holders and benefit big tech company infringers. The data show that the plain result of PTAB procedures appears to benefit infringers with a clear bias against patent holders. PTAB cancels challenged claims in 76% of instituted patent reviews, a rate that is 2 ½ times greater than in the federal district courts. The reason is that PTAB employs a set of procedures that stacks the deck against patent holders. There is clear bias at every step of the process of reviewing patent validity. However, there are several components of PTAB procedures that are particularly onerous and problematic and that go to the heart of the due process issues that infect IPRs.

Due process is an essential condition for a fair proceeding involving a matter in which property rights are in dispute. Unfortunately, there is no interpretation of PTAB procedures under which due process applies. PTAB omits due process and is fundamentally unfair. As a consequence, the PTAB conclusions, and the structure and process of PTAB determinations, are unconstitutional.

The argument that patents are private rights is supported by over two centuries of jurisprudence. Patent rights derive from Article I, section 8, clause 8 of the U.S. Constitution, which empowers Congress to promote progress by creating laws involving patents and copyrights. The patent bargain exchanges disclosure of new and useful inventions for a limited term exclusive right. The public benefits from the patent bargain in two ways. First, the disclosure enables others to build on the invention. Second, after a twenty year period, the public receives the benefits of the invention for free as the rights flow to the public domain. The patent bargain stimulates incentives to invent, to invest in innovation and to take ex ante risks.