Federal Circuit Rejects Due Process Challenge to AIA on False Marking Retroactivity

By Dennis Crouch

Ken Brooks v. Dunlap and US Government (Fed. Cir. 2012)

As expected, the Federal Circuit has rejected Brooks’ argument that the Leahy-Smith AIA’s retroactive elimination of his false-marking cause-of-action was unconstitutional. Brooks is a patent attorney operating out of northern California. He has no apparent relation with Dunlap other than his discovery that Dunlap’s guitar string winders were (allegedly) falsely marked with patent numbers that had expired and invalidated. Under the pre-AIA law, “any person” had standing to bring suit for false marking and collect 1/2 of any resulting fine (with the US government receiving the other half). 35 U.S.C. § 292 (2010). In response to a rash of several hundred false-marking claims, section 292 was amended to restrict private standing to only persons “who has suffered a competitive injury as a result of a [false marking] violation.” 35 U.S.C. § 292 (2012).

Brooks filed his lawsuit in September 2010 – one year before the AIA was enacted. However, the AIA includes a retroactivity clause stating that “[t]hese amendments . . . shall apply to all cases, without exception, that are pending on, or commenced on or after, the date of the enactment of this Act.” Based upon that change, the district court dismissed the case for lack of standing.

On appeal, Brooks offered a due process challenge — arguing that the Due Process Clause of the U.S. Constitution bars Congress from applying the AIA’s amendments to § 292 to pending qui tam actions. In general, there is no rule against changing the legal regime in a way that adversely affects particular parties who have conformed their actions to benefit from the prior rules. If the change constitutes a Fifth Amendment Takings then the government must provide compensation. And, the legal change would very likely be an improper ex post facto law if it criminalized past actions as felonies. Apart from these exceptions, a retroactive change in the law will be enforced so long as it passes the very low standard of rational basis review. As the Supreme Court wrote in 1984, the “burden is met simply by showing that the retroactive application of the legislation is itself justified by a rational legislative purpose.” Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717 (1984).

In considering the Congressional record, the Federal Circuit easily found a rational basis for the retroactive nature of the law, including eliminating “the perceived abuses and inefficiencies stemming from false marking claims that were initiated before the AIA was signed into law” and avoiding “a live question about the constitutionality of the then-existing qui tam provision.”

At bottom, Congress made a considered choice to modify the private cause of action in § 292(b) and apply that modification to pending as well as future cases. Given Congress’s legitimate concerns with respect to the cost and constitutionality of pending qui tam actions, we conclude that the retroactive application of amended § 292 to pending actions was a rational means of pursuing a legitimate legislative purpose.

Dismissal affirmed.

80 thoughts on “Federal Circuit Rejects Due Process Challenge to AIA on False Marking Retroactivity

  1. Well I posted a long comment, but it didn’t make it. In short I will be filing a petition for a write of certiorari. There are sever problems with the opinion, including a tacit overruling of Graham v. Deere by Eldred v. Ashcroft, at least according to the Federal Circuit.

  2. The long-standing interpretation was a mistake in legal jurisprudence.

    This has been analyzed in better places and is not up for debate.

    The courts’ job is NOT to see that a law wrongly interpreted is continued to be wrongly interpreted just because it would be ‘convenient’ to do so.

    The court did the right thing by recognizing what the law actually was. To say otherwise is to place your policy-type opinion above how the law actually works.

    The public benefit angle itself is separably debatable as the primary reason for Qui Tam was at one time thought to be expressly for the public’s benefit.

    I view your revisionist re-writing and coloring of law here with your own ‘opinion’ to be a dis-service to a discussion on actual law and its evolution. It’s one thing not to like Qui Tam and the effect that it opens the court system up to anyone who wants to bring suit; but its quite another to mangle the law, it s historyu and seek to impose some opinion as jurisprudentially “correct” when it is clearly not so.

  3. When it unwittingly creates a huge new troll litigation explosion with no public benefit by overuling long-standing prior interpretations of a statute it could have followed instead.

  4. And all I am telling you is that what Marshall was saying was meaningless to the case at point.

    What is it with you and meaningless things?

  5. 35 USC created a remarkable bubble inside of which the realities of human behavior

    Not just 35 USC – it’s the law, baby!

    As Pogo would have said, we have met the enemy, and he is us.

  6. Does it ever bother you that you miss all the jokes

    Why do you assume I miss all the jokes?

    Why would I need something imaginary to argue about?

    Don’t you get tired of the Calvinball facespikes?

  7. Let me just say that I find it amazing that you do not understand the problem encountered by the applicant in this case.  It was entirely due to the very bad attitude and abusive conduct by the attorney.

    I am beginning to suspect that at lease some of the problem with the long pendency of cases is due to representation.

  8. “If I were commish, I would have ordered Groves suspended from practice for contempt.”

    How do you get your head through the doorway each morning?

  9. Remind me again what section of 35 USC says the applicant is entitled to a patent unless the PTO finds applicant’s representative obstreperous

    Because 35 USC created a remarkable bubble inside of which the realities of human behavior are never, ever relevant.

  10. AAA, let me be a little more clear. If I were commish, I would have ordered Groves suspended from practice for contempt.

    I don’t think examiners should be abused the way they were abused by Groves. The commissioner owes a duty to the corps to see to it that licensed practicitions behave with a minimum of respect and decorum. Groves was way beyond the pale from the very first paper he filed.

    Then, after I had him suspended from the PTO practice, I would have referred the matter to his local state bar for further consideration. This guy should not be allowed to represent people. It got real ugly there for awhile.

  11. so the proper thing to do is bury anything that whiffs of “non-operative pseudoscience.”

    Yeah, that’s exactly what I said.
    Nice chatting with you.

  12. So any applicant whose claims are twice rejected who doesn’t appeal is guilty of gaming the system for extended patent term?

    Yeah, that’s exactly what I said. Nice chatting with you.

  13. e.g. Ray Niro, any lawyer from E.D. TX,

    LOLOLOLOL!!! Never underestimate the sensitivities of members of the overpaid bloviator class. Remember when that one toughguy lawyer dude cried on the stand? Too funny.

    I’m annoyed that it took the PTO 19 years to follow their own instructions and arrive at that conclusion

    We get it. In the meantime, the USPTO granted thousands of claims to transparently invalid b-lls–t which doesn’t seem to bother you in the least. Keep pounding the table and defending the creepiest table pounders. It’s what works for you.

    Any remaining reasonable doubt that you’re an examiner was just put to rest.

    LOL. It’d be a lot of fun to be an Examiner of one your applications. I think I’d like that a lot. But I’m not an Examiner. You seem to have that truly American lowbrow/paranoid mindset where people who disagree with you must be part of the “other tribe”, i.e., “the enemy.” Either you love every patent that was ever granted and embrace the “winners” of the patent lottery or … you’re an Examiner/communist/America-h-ter who wants to “destroy innovation”. Because a “real” patent attorney would never, ever take the positions I’ve taken. Or something like that.

  14. Says the guy who just posted that if was the Commissioner of the Patent Office he wouldn’t follow the law and would refuse to issue patents to any applicant’s whose representatives are obstreperous.

    And yes, I read the prosecution history.

    What is your response to my point that the claim ultimately allowed was nothing more than original claims 1, 3-5, 9 and 10 in independent form? Do you think it quite possible that the PTO could have communicated the allowability of such a claim to Mr. Groves in some time less than 19 years?

  15. AAA, the "term" replicator was unknown in the art. The spec. seemed to suggest that a replicator was something that captured and retained magnetic fields.  So, by claiming a replicator, he claimed every means for capturing and retaining magnetic fields.

    Now, we can all debate whether such a claim is clear.  But what the claim is not is particular, at least according to Morse, Perkins Glue, Wabash Electric and Halliburton.  The claim literally claim the subject matter to an abstraction, indifferent to materials or method.

    Not only does such a claim have 112, p.2, problems, it has 101 problems as well.

  16. AAA, have you read the prosecution history?  If so, you should see the problem.  If you don't see the problem, I think you should consider some other line of work than being an attorney, let alone being a patent attorney.

  17. ” If I were the commish, I too would have said something like, so long as he is the attorney of record, we are not going to allow anything.”

    Remind me again what section of 35 USC says the applicant is entitled to a patent unless the PTO finds applicant’s representative obstreperous.

    Do you let that glaring pettiness of yours affect the way you represent your clients?

  18. “My guess is that somebody decided early on that this was non-operative pseudoscience and buried it for that reason.”

    Right. Because the PTO screwed up by issuing the “keeping a severed monkey head alive” patent and the “breaking through the time-space continuum into the fourth dimension” patent, so the proper thing to do is bury anything that whiffs of “non-operative pseudoscience.”

  19. AAA, Groves would not back off the broad claim, and was as obstreperous as any human can be.   He was the problem, not the PTO.  If I were the commish, I too would have said something like, so long as he is the attorney of record, we are not going to allow anything.

    Groves is a posterboy for how not to prosecute patent applications.

     

  20. So any applicant whose claims are twice rejected who doesn’t appeal is guilty of gaming the system for extended patent term?

    Good to know.

    Of course, as I’ve posted quite frequently:

    Don’t file RCE’s. Appeal everything.

  21. “The claim as originally filed was basically just a preamble.”

    Lulz. Any remaining reasonable doubt that you’re an examiner was just put to rest. Do you send out 112, 2nd rejections on every claim that doesn’t have the magic words? Like the rejections under 112, 2nd that I get because the claim doesn’t include a “transition phrase”? Here’s a newsflash for you Examiner Mooney, there are no magic words that are required in a claim. It’s not required to have a “preamble” or not have a “preamble” nor is it required to have a “transition phrase.” The only requirement is that it be one sentence.

    “The other allowed claims are also arguably invalid.”

    More lulz. Feel free to provide the rejection(s) that invalidates them. Or provide some more YouTube links. You’re pretty good at that. On substance, you blow. But at least you keep us amused.

    “Remind me again why you love this patent so much? Oh, right, because it’s an example of how incredibly incompetent the USPTO is. Except when they grant patents. Then the USPTO is the most trustworthy administrative agency on the planet, apparently.”

    Did you miss the explanation I provided above? The wonderful claim that the examiner “drafted” for the applicant, that Ned loves so much, is nothing more than original claims 1, 3-5, 9 and 10 in independent form. Yeah, I’m annoyed that it took the PTO 19 years to follow their own instructions and arrive at that conclusion.

    And yeah, you’re gonna have to listen to me whine for the next 2 years about this. Just like the way we’ve listened to you whine for the last 5 years over any number of people and topics, e.g. Ray Niro, any lawyer from E.D. TX, or any lawyer who’s actually represented any inventor other than those who spend all day cloning protein fragments or DNA strands or whatever it is you allegedly do.

    “Great argument.” D#mn skippy it is. In fact, it’s irrefutable.

  22. I’m commenting from memory, so I don’t recall whether claim 3 was sufficient or not. The recited structure obviously has to have something to do with the novel, non-obvious aspects of the invention.

    But there was no doubt as to what applicant regarded as the invention, or what it covered.

    Well there’s no doubt as to what the patent attorney wanted to claim, but there’s considerable doubt as to whether the inventor was entitled to that much.

    So how come this poor oppressed applicant never appealed? His claims were rejected at least twice.

  23. 1. A transporter apparatus.

    But the following claim is definite?

    2. The transporter apparatus of claim 1, wherein the transporter apparatus is made out of wood.

    I’m not following the logic of that.

    Either am I. That’s because both claims are arguably indefinite. The term “transporter” is no less “functional” than “bulk field replicator”. The claim as originally filed was basically just a preamble. The other allowed claims are also arguably invalid. Remind me again why you love this patent so much? Oh, right, because it’s an example of how incredibly incompetent the USPTO is. Except when they grant patents. Then the USPTO is the most trustworthy administrative agency on the planet, apparently.

    there was no doubt as to what applicant regarded as the invention, or what it covered.

    Great argument.

  24. “The examiner should have said that claim 1 lacked any structure, but that claim 3 clearly had some.”

    Claim 3 had some? Why because it specified the material the replicator was made of?

    So using your example, the following claim is indefinite under 112, 2nd, for being “functional” or “lacking any structure”:

    1. A transporter apparatus.

    But the following claim is definite?

    2. The transporter apparatus of claim 1, wherein the transporter apparatus is made out of wood.

    I’m not following the logic of that.

    As was noted, original claim 1 of U.S. 7,667,562 was broad. But there was no doubt as to what applicant regarded as the invention, or what it covered.

  25. Just because the peanut butter can be anywhere in the JFET does not mean the claim is indefinite.

    Does it ever bother you that you miss all the jokes, or are you just that busy looking for something imaginary to argue about?

  26. I agree with you. The examiner should have said that claim 1 lacked any structure, but that claim 3 clearly had some.

    My guess is that somebody decided early on that this was non-operative pseudoscience and buried it for that reason. I have no idea whether they were right or not, but they certainly didn’t handle it properly.

  27.  Inchoate rights nevertheless can be vested.  If vested, they can be assigned.  I think Roche recognizes that invention can be assigned.  What does this mean?

    Sent from iPhone

  28. That claim is not functional at all. But we already know what a transistor.

    At the time of filing of the “magnetic field replicator” claim, however, we had no idea what one was. So the claim says nothing more than “A non magnetic, bulk thing that replicates magnetic fields.” Unless the applicant had a really convincing argument as to why his application necessarily disclosed all conceivable non-magnetic, bulk, things that replicate magnetic fields, then at least an enablement rejection is in order. Perhaps there is no law that a claim is indefinite because it is functional, but here the fundamental problem is that the applicant attempted to claim nothing more than a function.

    A better example would be:

    1. A transporter apparatus.

    My humble opinion.

  29. AAA JJ

    You are asking MM to do work or to provide an answer. You should be aware that whenever MM ventures forth into substantive territory he ends up self-defeating and humiliating himself and his agendas; hence, you are far more likely to merely receive insulting replies and questions instead of answers.

  30. Examiner Mooney, feel free to post your 112, 2nd rejection of original claim 1 of U.S. 7,667,562. I’d be glad to rip it to shreds for all to see.

  31. Whether a claim like that is enabled and novel and non-obviousness is another issue. But it is not “indefinite” because it is “functional.”

    Right. Just like Prometheus’ claims may have been obvious or non-enabled but they were not ineligible.

    Patent law is not as cut and dried as you seem to think it is. Section 112 especially. But go ahead and keep defending Groves. Someone must have declared Groves to be your poster boy so now we’re going to have to listen to you whine about him for the next two years.

  32. Broad is not indefinite.

    Just because the peanut butter can be anywhere in the JFET does not mean the claim is indefinite.

    As AAA JJ points out, you may have other issues with enablement, novelty or nonobviousness, but let’s leave out the “whatever” law.

  33. Claim 154, which was “written” by the examiner who ultimately allowed the case, was nothing more than essentially ORIGINAL claims 1, 3-5, 9 and 10 rewritten in independent form. MPEP 707.07(d) instructs examiners to indicate allowable subject matter as early in the process as possible, and to suggest amendments that would place claims in condition for allowance. So in 19 years nobody at the PTO involved in this case could follow that simple instruction?

    Compared to you, Groves is Clarence Darrow.

  34. 1. A peanut butter and jelly field effect transistor.

    While the JFET has existed for some time, it wouldn’t necessarily be clear where to add the peanut butter.

  35. “”1. A non magnetic, bulk, magnetic field replicator.”

    There is no 112, 2nd issue with this claim. It is clear and definite and particularly points out the subject matter that the applicant regarded as his invention. It’s no different than a claim:

    1. A peanut butter and jelly field effect transistor.

    Whether a claim like that is enabled and novel and non-obviousness is another issue. But it is not “indefinite” because it is “functional.”

  36. The subject case is a highly abnormal situation of the only “clients” being the attorneys bringing the case to try to make money collecting half of a fine solely for themselves. A fine that the Fed. Cir. had made huge only by one of its own recent ill-advised decisions.
    But the above comments have wandered off to an aspect of the draft AIA “technical corrections” legislation, namely giving pre-1996 applicants only one more year to get their 17 year pending patents issued. That is not really an AIA technical correction, and thus may well not get enacted.
    Also, the comments are not noting the firm legal principle that when a client retains an attorney or patent agent on a matter the attorney becomes the agent of the client and in general the client is stuck with whatever the attorney does or does not do for the client.
    Also, the comments have not noted that the client does have another recourse, which is a malpractice suit.
    Most people have sense enough to ask a roofer they are hiring if they are insured, and to get more than one bid. Yet clients rarely ask their attorneys if they have malpractice insurance, or get a second opinion.

  37. I think that if an inventor can demonstrate that he had a patentable invention that he at least be refunded his filing fees and his reasonable attorney fees. Regarding infringers, he might have even gotten money from being denied any exclusive rights.

    I agree with your suggestion that he should sue his agent for malpractice.

  38. Those “formalities” as you put it, make all the difference between inchoate and choate.

    If you are at inchoate, that is all that you have.

    Period.

  39. Well, I'll grant you this, Malcolm, that I agree that inventors do not have a right to a patent under the constitution.  Congress does have the right to specify the conditions for obtaining a patent.  If one does not comply with them, puff!  There goes your so-called right to a patent.

    But I am still not convinced that guys like the good professor should not received something back — at least their fees.  

  40. you as an attorney would know that Groves was the problem. But would the good professor?

    I don’t know. I would suggest that if you are incapable of knowing whether your patent attorney is competent or not, then you probably shouldn’t be playing the game.

    People do invent things all the time without filing patent applications. Most people, in fact, do not file patent applications on their inventions. You realize that, don’t you? Asking the government to grant you a patent is something people do purely voluntarily because they have a dream of making some money off their invention. Sort of like when someone files a qi tam claim under a poorly written statute. They want to make some money. Then the government fixes the mess it made and dumps ice water in your crib. Playtime is over, just like that.

  41. Malcolm, when a criminal is represented by the likes of Groves, he is granted a new trial.  The criminal is not charged with knowing that his attorney is blowing it.

    So, clearly, you as an attorney would know that Groves was the problem.  But would the good professor?  There is a difference.

  42. Try, Malcolm, to put yourself into the shoes of the good professor who had Groves as his attorney

    I have hired and fired attorneys before.

    Your violin is getting smaller by the hour.

  43. anon, I am not sure I even understand your position on this. You seem to suggest, following the logic of Standford v. Roche, that only the inventor (the first inventor) has a “inchoate” right to a patent, and that he can lose this if he fails to follow the requirements set by law to receive a patent, such as filing first.

    Is that right?

    But, so long as he is in the field, and so long as he is complying with the law, he has a right to comply with the procedural requirement and receive his patent. Is that about it?

  44. MM, the tax scheme patents ultimately were not patent eligible regardless of what congress said.  Not so with the like of the '562.

    Try, Malcolm, to put yourself into the shoes of the good professor who had Groves as his attorney and assume that his application was still pending when congress acts.  Who is to sue for his losses.  Groves?

  45. MM, listen.  The inventor of the '562 had a patentable invention and he did file for a patent.  The delays in the PTO were the fault of his high-horse patent attorney.  He paid his fees.  He paid his lawyer.  In the end, should he simply be denied any compensation?  

    I think that if an inventor can demonstrate that he had a patentable invention that he at least be refunded his filing fees and his reasonable attorney fees.  Regarding infringers, he might have even gotten money from being denied any exclusive rights.

  46. This is not about some rich dude gaming the system. But the fact that we license guys like Groves to practice patent law.

    It’s actually about putting an end to the legal existence of applications that should have expired a long time ago and the question as to why the applications are still pending in the first place is ultimately beside the point.

    I’m sure somebody’s fee-fees were hurt when their tax deferral invention were turned into t–let paper. Tough beans.

  47. Say, IANAE, did you have a chance to read the prosecution history of the ‘652 application brought to our attention by anon? This case is a poster child for the point I am making.

    There was a fundamental invention disclosed. The problem was that the inventor had, as his lawyer, one Groves.

  48. Malcolm, we both looked that the history of the ‘562 that for nearly 20 years claimed

    “1. A non magnetic, bulk, magnetic field replicator.”

    But there was a fundamental invention disclosed as witness by the fact that once Groves was placed to one side, the examiner drafted a claim for the inventor that actually claimed the invention disclosed.

    What we had here was not the failure of the application to disclose an invention, but the failure of the patent attorney to claim it.

    I am not quite sure the client should suffer because of the gross … (I cannot in that blank for obvious reasons) of his attorney. This is not about some rich dude gaming the system. But the fact that we license guys like Groves to practice patent law.

  49. John Marshall made the point in a case long ago that an inventor has a inchoate right to a patent that is subject to complying with administrative rules.

    Ah, the great John Marshall. I’m sure it was a long time ago.

    Funny, I don’t remember all this whining and crying about “takings” etc. when applicants with pending tax deferral “inventions” were given the shaft by Congress. If anything, the “rationale” for that change in the law was probably less compelling than the “rationale” for squashing the surviving pre-GATTs.

    Truly, I can not fathom why anyone who is not personally invested in maximizing the wealth of the pre-GATT application emperors would blink an eye at the prospect of seeing those applications poofed out of existence.

  50. Allowable claims or claims that were allowed?

    Claims that were indicated as allowable. Because you don’t get a patent until the examiner (or someone to whom his decision can be appealed) says so.

  51. John Marshall made the point in a case long ago that an inventor has a inchoate right to a patent that is subject to complying with administrative rules.

    That’s not a very defensible position, now that we don’t allow omnibus claiming. Sure, maybe the inventor could theoretically have been “entitled” to a patent, but it’s not like anybody can say with confidence what that patent would be. What compensation do you think is due an inventor who has not yet presented an allowable claim?

  52. MM, constitutional, I grant you. But a portion of the Brooks decision rested on the “fact” that until there is a final judgement, the plaintiff has no vested right.

    I am not so sure that that is the case with respect to inventions. John Marshall made the point in a case long ago that an inventor has a inchoate right to a patent that is subject to complying with administrative rules. (I am thinking here of a vested right subject compliance with formalities.)

    This would suggest that the applicant would seem to have a cause of action against the government in the Court of Claims (as stated in Brooks) for damages to the extent they can demonstrate they actually had an invention.

  53. I’m sure you bring this fact up on a daily basis when you discuss certain DC Villagers’ obesssion with “fixing” programs that will become underfunded ten+ years from now.

    Does anyone have a clue what this means?

  54. Wasn’t it Congress in the first place that placed the private cause of action in § 292(b)?

    Imagine that! Congress isn’t bound by the actions of a previous Congress.

    I’m sure you bring this fact up on a daily basis when you discuss certain DC Villagers’ obesssion with “fixing” programs that will become underfunded ten+ years from now.

  55. I’m not sure I get your point. Is it particularly unusual for Congress to undo law it had previously made?

  56. Wasn’t it Congress in the first place that placed the private cause of action in § 292(b)?

    Mulligan anyone?

    ANy other inconvenient law out there that we wish to mulligan?

    Perhaps the AIA itself?

  57. From the decision:

    “Provided that the retroactive application of a statute is supported by a legitimate legislative purpose furthered by rational means, judgments about the wisdom of such legislation remain within the exclusive province of the legislative and executive branches.” Id. at 729; see also United States v. Carlton, 512 U.S. 26, 30-31 (1994). This “‘burden is met simply by showing that the retroactive application of the legislation is itself justified by a rational legislative purpose.’” Carlton, 512 U.S. at 31(quoting Pension Benefit, 467 U.S. at 729-30 (1984)).

    I don’t think it’s very difficult to articulate a rational purpose for tossing the pre-GATT applications in the trash. One purpose would simply be to remove the unfairness to the public should these (allegedly) “foundational” patents be granted a quarter century into their lifetimes, and also to the end of the uncertainty that will surely arise if they continue to be prosecuted for years (which is surely what many of the owners would prefer, as long as they are eventually assured of a grant). Something like that.

    the legislative history suggests that Congress was particularly concerned with the perceived abuses and inefficiencies stemming from false marking claims that were initiated before the AIA was signed into law. In our view, this alone constitutes a rational legislative purpose.

    There you have it. I don’t think there is a “good” argument for finding the proposed “pre-GATT app killah” amendment to the AIA unconstitutional.

  58. That was pretty quick, Dennis. Nice write-up.

    3rd paragraph: “… Supreme Court wrote …”, not “… Supreme Court write …”.

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