Posts Tagged: "property rights"

The Supreme Court has agreed to hear a petition for Certiorari in Oil States Energy Services v. Greene’s Energy Group, which will result in the Court addressing the constitutionality of post grant proceedings… The impact of the resulting decision in this case may affect patent dispute outcomes not just moving forward, but possibly spanning 5 years into the past… At a (very) high level, there are three possible outcomes arising from the Supreme Court decision that is expected in 2018 that will impact the IPR process: no change, some change, major change.

An exclusive right is more than a mere right of remuneration – it is the right to control the use and disposition of one’s property, and to deny others access to it. Without the fundamental attribute of exclusivity, we lurch toward a system of compulsory licensing, or a private right of individuals to take another’s property on the promise of mere monetary compensation. Under our Constitution, and particularly the Fifth Amendment, or the Takings Clause, even the government does not possess that right except that it be for some demonstrable public – rather than private — use. Thus, to be true to the express language of our Constitution, and respectful of the limits imposed on the Fifth Amendment, the rights inherent in intellectual property necessarily must include a right to exclude others from the enjoyment of that property.

Several of the briefs address the absurdity currently being advanced, claiming patents are so-called “public rights.” This novel notion — more in line with Karl Marx than John Locke — is a direct assault upon the very essence of private property rights… The Cato-ACUF brief reasons “public rights” into a sniveling lump: “Ultimately, the implications of the argument that merely because a right to particular property flows from a statutory scheme, such rights are ‘public rights’ and that disputes over them can be withdrawn from Article III courts are staggering. Such a conclusion would mean that anyone who derives his land title from the Homestead Act can be forced to have any disputes over that property be resolved by a bureaucrat in the Bureau of Land Management. Under this view, Congress could require that a dispute between an individual and a private financial institution over a mortgage or a student loan be heard before an official in the Treasure Department on the theory that the relevant loans were made pursuant to a federal statutory scheme. The government enacts statutes affecting property rights all the time, but that does not convert the rights that trace their roots to such statutes into ‘public rights.’”

A quiet title seems an absolute prerequisite to the enjoyment of an exclusive right guaranteed by the Constitution. Unfortunately, a quiet title in a patent today simply does not happen if you are actually lucky enough to have obtained a patent on a commercially valuable innovation… The problem with patents in the post-AIA era is the system and judges that implement the system do not apply basic property laws, despite the fact that the statute says that patents are to have the attributes of property. Title in patents never seem to quiet any more – ever. Indeed, it is particularly difficult, if not impossible, to quiet title now thanks to the existence of inter partes review (IPR), a type of post grant challenge to the patent that can literally be brought at any point in time during the life of the patent.

A group of private companies, professional associations, conservative policy organizations, and investors/commercializers sent a letter to Commerce Secretary Wilbur Ross urging the Trump Administration to pick as the next Director of the United States Patent and Trademark Office someone who “recognizes the value of patents in connection with growth of the U.S. economy, and grasps the fundamental fact that a patent secures a property right.” Headlining this coalition is the American Conservative Union, Conservatives for Property Rights, Eagle Forum Education & Legal Defense Fund, and IEEE-USA.

For the first 220 years of United States black letter law and precedent based directly on the U.S. Constitution, patents are property rights. Even the Republican Party Platform states that patents are property rights. Issa disagrees with all of that. Issa seems to believe that patents are instead some sort of public entitlement like food stamps as is evident in his bill, the America Invents Act, and his continuing actions even last week. Issa’s hypocrisy is so blatant, so obvious and so up front that I’m not sure he even understands what he just said, which is a very dangerous problem. So long as Darrell Issa remains in key lawmaking position in the Republican leadership in Congress, venture capital, patenting, new technologies, startups and jobs will continue to flee from the U.S. to China.

The Supreme Court has long stated patents are property rights, and the statute says they are to be treated as they are property rights. Taking property rights away with such a fundamentally flawed process is practically un-American… It is absolutely essential for the President to pick someone who believes patents are private property rights, not public rights. The next Director should also believe that as a property right title in a patent must at some point quiet in order for ownership to be certain and investment to be property incentivized, because without ownership questions resolved only a fool would invest the sums necessary to take most paradigm shifting, game changing innovation to market.

Above all, LES recommends appointing a Director dedicated to protecting intellectual property, generally, and patents in particular, as the private property right our nation’s founders envisioned. The founders saw great value in rewarding individuals who toil to bring forth from commonly accessible resources useful products and processes by granting to those individuals an enforceable property right. They recognized that such a property right would, in the fullness of time, work a substantial benefit to the public by encouraging innovation and disclosure. We must honor that philosophy. It contributed substantially to America’s rapid ascendancy from agrarian economy to industrial powerhouse, and can be traced to America’s first patent act of 1792. In affording that private property right, we reward and empower the archetypal American innovator, the individual daring to risk all to bring forth the next big thing, and thereby challenge market incumbents who benefit from stasis and the status quo.

The Supreme Court granted certiorari only on the first question, whether inter partes review violates the U.S. Constitution by extinguishing private property rights through a non-Article III forum without a jury… The grant of certiorari in this case is particularly noteworthy given that the United States was asked by the Supreme Court for its views and opined in its brief that the petition should be denied… Over the last several years 8 of the 9 Supreme Court Justices have signed on to an opinion that has recognized that a patent confers either an exclusive or valuable property right.

An ideal candidate for the next head of the USPTO would be someone who understands that patents are property not public rights, that issued patents are valid until otherwise proven invalid, and that recent changes in patent law and decisions from the Supreme Court have significantly diminished the historic strength of the US patent system. The candidate should pledge to make the US patent system strong again by working to correct the wrongs that have enveloped the patent system during the past few years, particularly the PTAB panels. The UIA would support someone that who considers independent inventors, innovators and entrepreneurs valued USPTO shareholders and a cornerstone for economic growth.

As you read about the truly mind-numbing stupidity coming from decision makers, whether it is MRI machines declared to be abstract ideas or diagnostics for various forms of cancer not being patent eligible, realize that the overwhelming bulk of this stupidity relates to inventions you cannot touch or operate in any real world sense. While America’s patent remains adrift, shift innovation into the real world if you are interested in a U.S. patent. Truly groundbreaking advances in computer technologies and in the life science sector should only be undertaken if you have a global patent strategy that does not require obtaining useful patent protection in the U.S.

The experts in attendance reminded us of the insanity of the compulsory licensing system that now pervades the U.S. patent marketplace, which when explained in terms of real estate is obviously absurd. A man came home from work one day to find a strange family living in his dining room. He wanted to have them evicted but was told he would have to spend five years and millions of dollars proving in court that he owned the room where the invaders had pitched their tent. A judge finally found that indeed he owned his dining room. But instead of ordering the family’s eviction she ordered the invaders to pay rent to the homeowner in an amount hypothetically determined by calculating what he and the squatters would have agreed to before his unwelcome visitors moved-in.

Former Cisco CTO, Charles Henery Giancarlo, explained that it was understood that individuals would not be able to manufacture and would need to license their rights to others. “It was specifically contemplated that this would engender a licensing industry with respect to patents.” Indeed, Phelps would later point out that 70% of early U.S. inventors did not even graduate high school. Thus, the founding fathers purposefully set up a system that had unique attributes: “it was cheap so everyone could use it,” Phelps explained. And the founding fathers also knew that the patent system they were creating would lead to individuals obtaining patents on their inventions and those individuals would not be able to manufacture, but would instead license those rights to others. But today “patents are suddenly pro-competitive only if you are a manufacturer,” Self explained.

The beauty of the patent troll narrative was it took little time to absorb and instantly painted a pejorative picture in the minds-eye of the listener. It became easy to repeat. Its bumper-sticker simplicity lead to widespread usage, which ultimately (and quickly) became accepted as fact without much, if any, critical thought. Most important, the strategy by-passed the arcane complexity of its convoluted subject matter by shifting the burden of Congressional persuasion to its victimized and under-resourced opponents… Expect big tech and its leftist bed-fellows to exert more effort to “de-propertize” patents on Capitol Hill and in the courts… Expect proponents of reform to mischaracterize patent reform as a step towards tort-reform, which is nearly comical given that the tortfeasor in the equation is the party that is trampling on the property rights of patent holders through infringement, which is many times purposeful and willful.

For more than two centuries, the U.S. Constitution, black letter law and precedent construed a patent as a property right. This is important because it is the nature of property rights that enables investment in early stage startup companies, especially those with cutting edge technologies in highly competitive fields like pharmaceuticals, biotech, smart phones, enterprise software, internet, semiconductors and other technologies critical to our infrastructure, military and much more… The same agency that takes inventor money to grant patents takes infringer money to destroy them. This creates an appearance of double dealing, and inventor belief that the USPTO is breaching the “grand bargain” of the patent system. Inventor confidence is at an all-time low because inventors are lured away from using trade secrecy protection, but then given nothing in return for disclosure. The effect of PTAB on inventors is devastating. Since institution of PTAB, over 50% of inventors simply quit rather than suffer the financial and stressful indignation of post grant invalidation.