Supreme Court Update: Extending the ITC’s Reach Beyond US Borders

by Dennis Crouch

Constitutional Challenge to Inter Partes Review: Although the Constitutional issues in Cooper v. Lee and MCM v. HP were law-professor-interesting, they were not substantial enough for certiorari.  The Supreme Court has now denied the Cooper and MCM petitions — leaving the IPR regime unchanged.  Although Cooper v. Square is still pending, its chances are slight. The Supreme Court has also denied certiorari in Encyclopaedia Britannica (malpractice), Gnosis (appellate review), and GeoTag (case-or-controversy).

A new 101 Challenge: In its first conference of the term, the Supreme Court denied all of the pending petitions regarding patent eligibility.  However, Trading Technologies has filed a new petition asking whether a new card game is categorically unpatentable so long as it uses a standard deck (rather than a novel deck) of cards.  My post on the case asks: Does the Patent Statute Cabin-in the Abstract Idea Exception?  That question references Section 100 of the Patent Act that expressly allows for the patenting of new use of a known manufacture.

Extra Territoriality of Trade Secrecy Law: On the trade secrecy front, Sino Legend has petitioned to review the Federal Circuit’s affirmance of the International Trade Commision’s ban on Legend’s importation of rubber resins used for tire production. The underlying bad-act was a trade secret misappropriation that occurred in China and the question on appeal asks: Whether Section 337(a)(1)(A) permits the ITC to adjudicate claims regarding trade secret misappropriation alleged to have occurred outside the United States.  A Chinese court looked at the same case and found no misappropriation.

Design Patent Damages: Oral arguments were held earlier this week in Samsung v. Apple. During the arguments, all parties agreed that (1) the statute does not allow for apportionment of damages but rather requires profit disgorgement; (2) the article-of-manufacture from which profits can be calculated may be a component of the product sold to consumers; and (3) the determination of what counts as the article-of-manufacture is a question of fact to be determined by the jury.   The only dispute then was on the factors that a jury should be considered and when the “inside gears” of a product should ever be included in the calculation.

Upcoming Supreme Court Oral Argument: SCA Hygiene (laches) on November 1; Star Athletica (copyright of cheerleader outfit) on October 31.

1. Petitions Granted:

  • Briefing: SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, No. 15-927 (laches in patent cases)
  • Awaiting Decision: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent damages calculation)
  • BriefingLife Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (Whether the Federal Circuit erred in holding that supplying a single, commodity component of a multi-component invention from the United States is an infringing act under 35 U.S.C. § 271(f)(1), exposing the manufacturer to liability for all worldwide sales.)

2. Petitions awaiting invited Views of SG: 

  • Exhaustion: Impression Products, Inc. v. Lexmark International, Inc., No. 15-1189 (unreasonable restraints on downstream uses)
  • BPCIA – Notice of Commercial Marketing: Sandoz Inc. v. Amgen Inc., et al., No. 15-1039 (Does the notice requirement of the BPCIA create an effective six-month exclusivity post-FDA approval?) (cross-petition asks for recourse on failure to dance)
  • Antitrust Reverse Payments: GlaxoSmithKline, et al. v. King Drug Company of Florence, Inc., et al., No. 15-1055 (antitrust reverse payment – appeal from the 3rd Cir.)

3. Petitions for Writ of Certiorari Pending:

  • Venue in Patent CasesTC Heartland LLC v. Kraft Food Brands Group LLC, No 16-341 (Does the general and broad definition of “residence” found in 28 U.S.C. 1391(c) apply to the patent venue statute 1400(b))
  • BPCIA – Notice of Commercial Marketing: Apotex Inc., et al. v. Amgen Inc., et al., No. 16-332 (effectively extending exclusivity to 12 1/2 years; complement to the Sandoz petition)
  • Eligibility: Trading Technologies International, Inc. v. Michelle K. Lee, No. 16-446 (Eligibility of new use of old manufacture – blackjack game)
  • Personal Jurisdiction: Mylan Pharmaceuticals, et al. v. Acorda Therapeutics, et al., No. 16-360 (does an ANDA filing create nationwide specific jurisdiction?)
  • Anticipation: Grunenthal GmbH v. Teva Pharmaceuticals USA, Inc., et al., No. 16-296 (OxyContin patent – when is an element ‘inherently’ disclosed by the prior art for anticipation purposes)
  • Obviousness: Purdue Pharma L.P. v. Epic Pharma, LLC, 16-289 (whether the circumstances of invention can help prove non-obviousness) (The Purdue and Grunenthal cases stem from the same Federal Circuit decision but involve separate patents owned by the respective petitioners)
  • Licensing: DataTreasury Corp. v. JP Morgan, No. 16-359 (appeal from 5th Circuit) (Whether a most-favored licensee (“MFL”) clauses in an intellectual property license agreement applies retrospectively to require refund if better terms are later given to another licensee?) [DataTreasuryPetition]
  • Extraterritoriality – Trade Secrecy: Sino Legend (Zhangjiagang) Chemical Co. Ltd. et al. v. International Trade Commission, et al., No. 16-428 (Whether Section 337(a)(1)(A) permits the ITC to adjudicate claims regarding trade secret misappropriation alleged to have occurred outside the United States.)
  • LachesMedinol Ltd. v. Cordis Corporation, et al., No. 15-998 (follow-on to SCA); Endotach LLC v. Cook Medical LLC, No. 16-127 (SCA Redux); Romag Fasteners, Inc. v. Fossil, Inc., et al, No. 16-202 (SCA Redux plus TM issue)
  • Post Grant AdminEthicon Endo-Surgery, Inc. v. Covidien LP, et al., No. 16-366 (separation-of-function – can the PTO Director delegate IPR institution decisions to PTAB); Same question presented in LifeScan Scotland, Ltd. v. Pharmatech Solutions, Inc., No. 16-377
  • Post Grant Admin: Cooper v. Square, No. 16-76 (whether IPRs violate Separation of Powers; two amici now filed in support); same question presented by Cooper in Cooper v. Lee (denied)
  • Post Grant Admin: Automated Creel Systems, Inc. v. Shaw Industries Group, Inc., et al., No. 16-108 (Achates redux – review of statute-of-limitations for filing IPR requests)
  • Design Patents: Systems, Inc. v. Nordock, Inc., No. 15-978 (design patent damage calculations – similar issues as Samsung v. Apple)
  • ITC Jurisdiction: DBN Holding, Inc. v. International Trade Commission, No. 16-63 (Does the USITC have jurisdiction over articles imported in order to infringe, but that do not themselves practice the invention at import).
  • Claim Construction: CSP Technologies, Inc. v. Sud-Chemie AG, No. 16-238 (unduly narrow claim construction)
  • Claim Construction: Google, Inc. v. Alfonso Cioffi, No. 16-200 (holding prosecution history against the patentee)

4. Petitions for Writ of Certiorari Denied or Dismissed:

  • Safe Harbor: Amphastar Pharmaceuticals, Inc., et al. v. Momenta Pharmaceuticals, Inc., et al., No. 15-1402 (scope of 271(e) safe harbor)
  • Post Grant Admin: MCM v. HP, No 15-1330 (separation of powers and right to jury trial)
  • Post Grant AdminCooper v. Lee, No. 15-955 (whether IPRs violate Separation of Powers; two amici now filed in support); same question presented by Cooper in Cooper v. Square, No. 16-76.
  • Post Grant AdminTrading Technologies International, Inc. v. Lee, No. 15-1516 (mandamus challenging CBM initiation)
  • Post Grant AdminGEA Process Engineering, Inc. v. Steuben Foods, Inc., No. 15-1075 (Flip-side of Cuozzo: Can there be no appeal when the PTAB exceeds its authority by terminating an instituted IPR proceeding?)
  • Post Grant Admin: Merck & Cie, et al. v. Gnosis S.p.A., et al., No. 16-125 (standard of appellate review of PTAB fact-finding in IPR proceedings)
  • Eligibility: Genetic Technologies Limited v. Merial L.L.C., et al., No. 16-188 (Sequenom redux; also question whether ineligibility is a proper subject of a motion to dismiss on the pleadings)
  • Arbitration: Neev v. Alcon Lensx, Inc., No. 16-48 (limits on arbitrator autonomy in patent cases)
  • Interference: Edward Tobinick v. Kjell Olmarker, et al., No. 15-1544 (question of procedure in interference case involving allegations of fraud)
  • Post Grant Admin: Pactiv LLC v. Lee, No. 16-205 (Does the “substantial new question of patentability” identified in a reexamination order limit the scope of the ex parte reexamination)
  • Eligibility: Essociate, Inc. v. Clickbooth.com, LLC, et al., No. 16-195 (please clarify the meaning of ‘abstract idea’ and ‘inventive process’)
  • Obviousness: MacDermid Printing Solutions, LLC v. E.I. DuPont de Nemours & Company, No. 15-1499 (is proof of a “reasonable expectation of success” necessary to combine references in an obviousness case against a claimed combination invention)
  • Jurisdiction: GeoTag, Inc. v. Google Inc., No. 16-268 (Whether a compulsory counterclaim can satisfy the case or controversy requirement under Article III of the Constitution if there was no case or controversy at the time the complaint was filed?)
  • Post Grant AdminJames L. Driessen, et ux. v. Sony Music Entertainment, et al., No. 15-1518 (Claim construction in IPRs – pro se case)
  • Appellate Review: Commil USA, LLC v. Cisco Systems, Inc., No. 15-1446 (appellate disregard of factual evidence)
  • Eligibility: Jericho Systems Corporation v. Axiomatics, Inc., et al., No. 15-1502 (Eligibility of Patent No. 8,560,836 under Section 101 – Abstract Idea)[Jericho]
  • Patent Attorney Malpractice: Encyclopaedia Britannica v. Dickstein Shapiro, No. 16-305 (Does the fact that the search-system is no longer patentable under Alice Corp excuse patent prosecutors from alleged prosecution errors made well prior to that decision – the patent).

5. Prior versions of this report:

93 thoughts on “Supreme Court Update: Extending the ITC’s Reach Beyond US Borders

  1. 8

    Thinking of the Supreme Court, here’s hoping that we do not actually need a ninth Justice anytime in the next four years, because Senate republicans are already making noises that they will block any candidate that Pres. Clinton might make to fill the vacancy. I suppose that this threat will be beside the point if the Democrats take the Senate (they will simply dispense with the filibuster at the start of the next Congressional term if that is what it takes to fill the vacancy), but if the Republicans hold the Senate, then it seems quite likely that no judicial vacancies will be filled until 2020 at the earliest.

      1. 8.1.1

        Scrubbed for the cencens:

        Did you get to the second paragraph Greg?

        McCain’s office walked his remarks back hours later,

        Or two more after that?

        Senate Republicans have maintained that the next president should have the opportunity to select his replacement

        Or even the one after that?

        Some congressional Republicans have poked holes in this unified message, however, arguing that they should be able to vote for Garland in a lame duck session if Clinton wins the election

        I feel that your post not only does NOT convey or confirm your prior stated position in our dialogue, the actual and full story at the link strongly supports my position on the matter.

      1. 8.2.1

        It is NOT in the time since, Greg.

        It was directly in the article that you provided.

        Rather tells me that you went by the headline and didn’t even bother reading the article (and you likely still haven’t).

        No wonder you have such a difficult time establishing any credibility in our discussions.

        1. 8.2.1.1

          … and no, the reality is not as bad as you wanted to portray it – just as I had impressed on you in our first conversation on this subject.

          You are welcome.

  2. 7

    The ITC sovereignty “reach” verbiage is itself a bit of a reach when one remembers that anyone prosecuted under the statute must have a presence within the US.

  3. 6

    Ned,

    If issued patents cannot properly be held invalid except by an Art. III court, does that mean that interferences involving issued patents have always been in violation of the Constitution?

    The Board of Interferences (and later the BPAI) was never an Art. III tribunal, and no one ever pretended that it was. It has long exercised authority, however, to invalidate claims in granted patents when it found that some other inventor had priority of invention. If it really is a constitutional violation to have an Art. I tribunal pass on the validity of a granted patent claim, then surely IPRs are not the first instance of this alleged impropriety.

    1. 6.1

      No, Greg. When Congress allowed interferences between patents and patent applications in the patent office, they also provided de novo review in a court.

        1. 5.1.1.1

          Yep – will be interesting (when the item is available).

          Thanks though for keeping on top of this. Curmudgeons otherwise might be prone to easily swatted misstatements.

      1. 5.2.1

        Many PTAB lawyers are former prosecutors and/or reeexamination lawyers, and their books of business detonated with the rapid ascenion of IPR. PTAB lawyers have obvious financial incentive to criticize any challenge to the PTAB’s adjudicatory power, and McKeown is no exception.

        With that being said, we might be watching a “zombie docket.”

        1. 5.2.1.1

          That ardor would describe Paul Morgan (aka Patently O’s most vocal cheerleader of the IPR) to a T.

        2. 5.2.1.2

          [W]e might be watching a “zombie docket.”

          Perhaps the Court will include this case in the orders list on Halloween?

      2. 5.2.3

        It is interesting how McKeown seems to think that the issue turns on whether IPR are like reexaminations or not. That assumes that reexaminations are constitutional.

        Until the AIA amended the law, 35 USC 306 allowed a disastified patent owner a de novo trial in a district court. I always thought that this was sufficient to preserve the constitutionality re-examinations; and the Supreme Court held in Executive Benefits just a couple of years ago that de novo review did in fact cure an Article III and Seventh Amendment violation where an agency had statutory, but not constitutional, authority to decide an issue.

        The important issue is not the procedures involved, but the of ultimate cancellation of claims from the patent. Even the Federal Circuit recognized that its holding in Lockwood that patent validity had a Seventh Amendment right to to a trial by jury necessarily overruled Patlex. Why? Because a re-examination cancels claims in an issued patent for invalidity and doing so necessarily denies the patent owner a right to a trial by jury before his claims are revoked.

  4. 4

    This is mostly off-topic, but as long as we are discussing in this thread the constitutionality of IPRs, I thought it worth noting something that I discovered tonight while I was looking something up in Title 35. On the very first page of Title 35, it says that “[i]f any provision of Title 35, as enacted by section 1 hereof, is declared unconstitutional or is held invalid, the validity of the remainder of this title shall not be affected.”

    There has been talk elsewhere on this blog that somehow if IPRs were declared unconstitutional, then the whole rest of the AIA would go down with them. As you can see, this is not the case. The AIA was nothing more than (as it says at 125 Stat 284) “[a]n Act To amend title 35, United States Code…” If you read the AIA text, it is nothing but a long list of mark-ups showing where this or that provision in Title 35 is to be amended. It is, in other words, not a free standing legal text, but merely a set of amendments to a pre-existing legal text. The AIA cannot be understood apart from—and has no legal effect apart from—the pre-existing Title 35. Therefore, the fact that there was not an additional severability clause in the AIA is beside the point. There was already a severability clause in Title 35, so another one would have been merely superfluous.

    In summary, Title 35 already says that if any one provision (such as IPRs) is held unconstitutional, then no other portion of Title 35 (e.g., first-to-file) is to be affected. Therefore, an infirmity in any one portion of the AIA will only affect that portion of the AIA.

    1. 4.1

      You mistake the section of Title 35 with the passage of an Act of Congress.

      It would be the Act itself that would fail – not Title 35.

      1. 4.1.1

        Just because it is a law that was passed to be integrated into the existing Title does NOT mean that it was somehow not a free-standing item.

        All this means is that ALL of the portions of the AIA rise and fall together. No different than what I have always maintained.

        It’s rather humorous that you read with the intent to “disprove” me, rather than read with an intent of objective understanding.

        Maybe you should try more of the latter. You would most likely find yourself agreeing with me considerably more.

        1. 4.1.1.1

          There is a great “School House Rock” episode (iirc, “Just a Bill”).

          Maybe you should start at that level.

    2. 4.2

      I wrote my above post late last night, and re-reading it this morning, I see it could be more clear. What I mean to say was that, if one imagines that the Court takes Cooper v. Square and rules that 35 U.S.C. §§ 311–29 are unconstitutional, then the Court must decided how much else (if any) of Title 35 goes down with §§ 311–29.

      The rule for this decision is that “[u]nless it is evident that the Legislature would not have enacted those provisions which are within its power, independently of that which is not, the invalid part may be dropped if what is left is fully operative as a law.” Alaska Airlines v. Brock, 480 U.S. 678, 684 (1987). In other words, the Court must ask itself whether Congress wants the rest of Title 35 to stand independently of §§ 311–29, or whether Congress wanted all of Title 35 to stand or fall as a package deal.

      So, has Congress expressed any preference on that point? If so, the Court’s job is fairly easy. It needs merely give effect to the expressed preference. Well, it turns out that on the very first page of Title 35, we see an expressed preference (“[i]f any provision of Title 35, as enacted by section 1 hereof, is declared unconstitutional or is held invalid, the validity of the remainder of this title shall not be affected”). So, done and dusted. We can all go home, because the outcome is that the rest of Title 35 stands unaffected by the fall of §§ 311–29.

      1. 4.2.1

        Greg,

        You are simply trying way to hard to come to a place where you can disagree with what I have posted.

        Title 35 is not what you need to be looking at.

        The AIA was an act of law all unto its own.

        Yes, that single law was integrated into Title 35, and Title 35 (itself) has the severability clause – but THAT severability clause does not flow down to the laws passed by Congress that are then separately integrated into the Title.

        It is beyond amusing watching you try so very hard – and get these things so very wrong.

        1. 4.2.1.1

          Think of it this way, Greg.

          The law that was passed at one point – the AIA rises and falls together.

          If (when 😉 ) the AIA falls, ALL of the AIA falls.

          But not all of Title 35 falls.

          Only those parts of Title 35 that belonged to the AIA.

          (it’s ok to come to the same conclusion as what I have long posted – you should try to put any emotions off to the side and not let your emotions get in the way)

    3. 4.3

      The AIA… is… not a free standing legal text, but merely a set of amendments to a pre-existing legal text. The AIA cannot be understood apart from—and has no legal effect apart from—the pre-existing Title 35.

      As I look at this, the claim is clearly too strong. Many part of the AIA do have a free-standing legal effect (AIA §14, for example, creates new law regarding tax avoidance strategies without amending any previously existing portion of Title 35).

      However, my broader point still stands. The part of the AIA that establishes IPRs/PGRs (AIA §6) merely constitutes a set of amendments to existing Title 35 text. Therefore, the IPR & PGR code sections are covered by the pre-existing severability clause in Title 35. That is to say, when evaluating whether the fall of 35 U.S.C. §§ 311–29 might take down any other statutory provision in Title 35 (such as the first to file amendments to § 102), it is clear enough that those aspects of the AIA would survive.

      I suppose that the open question concerns what to do with AIA pieces (such as §14) that are not integrated into Title 35, and therefore do not enjoy the benefits of the pre-existing Title 35 severability clause.

      1. 4.3.1

        However, your broader point does NOT still stand.

        You may not like that, but what you like is simply not dispositive on the matter.

      1. 3.1.1

        I was not aware that expert qualifications were required to opine around here. If so, these threads should be about ten times less active than they are.

        1. 3.1.1.1

          Greg, I took it for the attempted slight that it was.

          curmudgeon just took offense at being taken behind the woodshed on his very incorrect post below.

    1. 3.2

      My qualifications are that I am a trained attorney willing to think critically AND objectively.

      Thanks for asking.

      1. 3.2.1

        …and a return question or two for you, Curmudgeon,

        How is the question about my qualifications related to any of the incorrect statements that you made below (for which my corrections are accurate and on point)…?

        Or is asking for qualifications nothing more than kicking up dust?

  5. 2

    Dennis, your above short and to the point summary of the Samsung v.Apple oral argument on design patent damages is by far the best yet.

  6. 1

    Congratulations to Ned Heller for the excellent work on the Article III issue, and for fighting the good fight.

    Also, it ain’t over until it’s over.

    1. 1.2

      anony, thank you too.

      Roberts could no vote on MCM, and Cooper v. Lee did not properly raise the con law issue, which explains its dismissal in favor of Cooper v. Square. Roberts can vote in Cooper v. Square. Let is all hope that his vote is enough.

      1. 1.2.1

        Well, only ~35% of relisted petitions are denied, and the Court relisted MCM and Cooper. Additionally, it requested a brief from Square (after waiver).

        It seems to me that after Tuesday’s denials, only two reasonable conclusions can be drawn:

        1. The Court determined that the Article III issue is not worthy of review, and the post denial Square briefing is an expensive “whoopsie,” or

        2. The Court selected Square as its vehicle.

        1. 1.2.1.2

          Your 1. is difficult to accept on its face. The basic nature of the property right that is a patent is at stake – ALL patents (for ALL art units).

          It is difficult to see that anyone would consider such “not worthy of review,” especially considering that Congress explicitly refers to the patent right as personal property, but the courts have left this in a state of muck.

          1. 1.2.1.2.1

            Anon – I agree. The ramifications of classifying patents as public rights are sobering, to say the least. The Interdigital amicus brief dug in on this point.

            Nonetheless, we do not sit on the Court, do we?

            1. 1.2.1.2.1.1

              You have put your finger on the only reason why I am half-way hoping that the Court does take this case. I do not wish to see IPRs struck down as unconstitutional, but I am very uncomfortable with the “public rights” rationale by which they were sustained.

              It seems to me that the real reason that IPRs do not pose a separation-of-powers problem is that the Art. I tribunal (PTAB) is supervised by an Art. III tribunal (CAFC). That is enough to solve the separation of powers problem, because power to invalidate the claims is vested ultimately in the judicial branch, so no harm no foul. If this fact is not enough to solve the alleged separation of powers problem, then the whole examinational patent system is unconstitutional, and the IPRs merely sit atop a rather large and problematic iceberg.

              I suppose, however, that if the Court needs some extra cover to make IPRs pass constitutional muster, it can pull a Blonder Tongue maneuver and declare that the PTAB decision is not legally effective until it is confirmed (in a purely ministerial fashion) by an Art. III court.

              1. 1.2.1.2.1.1.1

                Your “supervision” argument does not reach.

                Especially for the separate institution decision point at which a takings occurs.

                Greg, just because you don’t want to admit that the situation exists, won’t change the fact that the situation DOES exist.

                In fact, if you are an attorney involved in obtaining patent rights for your clients it is rather blame-worthy to try to ig nore the situation.

              2. 1.2.1.2.1.1.2

                Your Blonder Tongue argument also does not reach.

                There is simply TOO MUCH legislation by Congress for the Court to re-legislate the IPR system.

                There can be no doubt that Congress meant to employ the Chaebol effect with the AIA

              3. 1.2.1.2.1.1.3

                Finally, your effort to lump in the entire examination system also fails for the reasons I provided to you previously.

                The examination system is what turns the inchoate right into a legal right.

                You glossed over that point in our last conversation. Please do not attempt to gloss over it again as if you have never heard of it. That’s rather disingenuous of you.

              4. 1.2.1.2.1.1.4

                On the (perhaps unwarranted) supposition that someone might actually care about my assertion that “the whole examinational patent system is unconstitutional” if IPRs present a separation of powers problem, I wanted to take a moment to unpack that statement.

                Basically, everything that is allegedly problematic about IPRs vis-à-vis separation of powers is also true of ordinary examination. That is, in both cases the applicant/patentee (“a/p”) starts out the process with a valuable property right, but by the end of the process the PTAB leaves the a/p with something less valuable (a set of unenforceable claims), without any sort of consideration having been paid to the a/p to compensate the loss.

                When I have previously aired this point, it was urged that examination and IPRs are not really analogous because the IPR concerns a (supposedly) “concrete” right, while the examination process concerns a (supposedly) “inchoate” right. It seems to me that this point merits two responses:

                (1) Claims in examination are no more “inchoate” than an unvested reversionary interest in a profit à prendre in real estate. In both cases, you have a right whose final contours are as-yet unknown. Nevertheless, due-process and takings principles apply when the government extinguishes the (thoroughly “inchoate”) profit à prendre, so I am not sure why the “inchoate” nature of an ungranted patent claim would make a PTAB rejection in an examination appeal any less of a “taking.”

                (2) While some ungranted claims might be “inchoate,” many others are not even arguably “inchoate.” If you file a set of claims and never amend them, then the claims themselves are just as definite as any granted set of claims. Nothing “inchoate” about them at all.

                Indeed, you can collect damages on these unamended-but-ungranted claims (35 USC 154(d)), which is about as real and choate a property right as can be found. Similarly, these ungranted claims can be assigned, or licensed, or made part of a settlement to a lawsuit. In many respects, the ungranted claims are just like granted claims.

                I will happily concede that a patentee has more sticks in the bundle from a granted claim than an applicant has in the bundle from an ungranted claim, but even the applicant, as shown above, has many sticks in the bundle. If it can be said that the PTAB (an Art. I tribunal) in an IPR impermissibly deprives a patentee of property rights in usurpation of the exclusive authority of the Art. III courts, then it is unavoidably also the case that the same PTAB is also impermissibly depriving applicants of property rights in ex parte appeals following PTO rejections.

                In other words, if there really is a constitutional problem with IPRs, then that is as much as to say that the only constitutional option is to have a registration-only patent system in the U.S.

                1. Basically, everything that is allegedly problematic about IPRs vis-à-vis separation of powers is also true of ordinary examination.

                  Not so – as already pointed out.

                  Inchoate versus actually earned patent right.

                  (1) Claims in examination are no more “inchoate” than an unvested reversionary interest in a profit à prendre in real estate

                  Not so. that is not what inchoate means.

                  Further – you then state PTAB, when the focus is on examination – you are mixing apples and oranges.

                  Examination appeal is not on an earned patent right. You are still dealing with an inchoate item.

                  If you file a set of claims and never amend them, then the claims themselves are just as definite as any granted set of claims. Nothing “inchoate” about them at all.

                  Once again, you miss the timing and function of what examination brings. Examination is what makes the inchoate into a full legal right. Your “not amended” – attempt ot focus on “definiteness” has nothing to do (in the present context) with the status of a completed examination and the power that the action of granting a patent brings.

                  Indeed, you can collect damages on these unamended-but-ungranted claims (35 USC 154(d))

                  As already pointed out – only if you first achieve the status of grant, and then that section of law provides the backwards collection. This has more to do with the trade-off made for publishing the item prior to grant than it does with the focus on inchoate brought to be full legal by way of examination.

                  IF you never achieve grant, THEN you never have this route.

                  I explained this previously – and yet you continue to ig nore the points provided to you as if they never were provided to you.

                  What you “concede” is just not material since your concession has not integrated all the facts nor the full extent of the law into consideration.

                2. Claims in examination are no more “inchoate” than an unvested reversionary interest in a profit à prendre in real estate. In both cases, you have a right whose final contours are as-yet unknown.

                  That should have said “[i]n both cases, you have a right that is not yet enforceable, that may never become enforceable, and whose final contours (should they ever become enforceable) are as-yet unknown.”

                3. that may never become enforceable,

                  That is a rather important distinction that belies your
                  other posts.

                  What you offer as “sticks” are not so until after the point of the item changing form inchoate to full legal.

                4. In other words, it is certainly true that as-yet ungranted patent claims may never become enforceable, but that is also true of unvested reversionary interests. Still and all, before reversionary interests in real estate can be extinguished—even unvested reversionary interests—due process of law must be had and compensation must be paid.

                  So, if IPRs are just like the taking of real property without due process of law in an Art. III court, that is fine. But then, by the same token, the rejection of ungranted claims by the PTAB in an ex parte appeal is just like the taking of an unvested reversionary interest without due process of law by an Art. III court.

                  In other words, to the extent that you really want to say that patent claims are just like real estate, you will find that no part of the PTO is constitutionally sustainable. The ability for even examination to pass muster depends on the idea that patent rights are meaningfully distinguishable from real estate, and once you grant that premise, the rest of the separation of powers argument sinks with it.

                5. Your “compensation” angle runs afoul because you refuse to recognize how patent law is set up and the mechanism involved in turning the inchoate into the legal (a power granted to the Legislative branch through the Constitution).

                  You are missing a very key and necessary condition in your ruminations.

                6. “Basically, everything that is allegedly problematic about IPRs vis-à-vis separation of powers is also true of ordinary examination. That is, in both cases the applicant/patentee (“a/p”) starts out the process with a valuable property right, but by the end of the process the PTAB leaves the a/p with something less valuable…”

                  But couldn’t you take that and go back even further? After all, an inventor who has not yet even filed a patent application (but could) may have a right of some value. Or, go even further back yet – a person who has begun the process of inventing but not yet even succeeded could nevertheless have some “potential” right having some nonzero value…

                  The point of all this being, we generally don’t recognize the mere “request” for rights to a government entity as being the trigger for an actual legally recognized right – at least no more so than “pre-application” status, since anyone can file an application.

                7. But couldn’t you take that and go back even further?

                  Imagine that you did take it and go back further. How would that impact on the separation of powers argument being advanced. I am not clear on the point you are trying to make.

                  The point of all this being, we generally don’t recognize the mere “request” for rights to a government entity as being the trigger for an actual legally recognized right…

                  Whether we usually do so or not, in this case Congress has provided that we must.

                  35 USC 261

                  Subject to the provisions of this title, patents shall have the attributes of personal property. The Patent and Trademark Office shall maintain a register of interests in patents and applications for patents and shall record any document related thereto upon request, and may require a fee therefor.

                  Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing. The applicant, patentee, or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent, or patents, to the whole or any specified part of the United States.

                  Applications are assignable and licensable. Those are property rights. You cannot assign a mere idea to someone else, but you can assign a patent application. That is what Congress has provided in the statute.

                  Moreover, Congress provided (35 USC 102) that “[a] person shall be entitled to a patent unless… .” In other words, the default outcome once you lodge your application is that you are going to get a patent. The PTAB has to act (in an ex parte appeal) to cut off that right. Just as the PTAB is acting in an IPR to cut off your rights. It is essentially the same action by exactly the same Art. I tribunal, just at two different points in the life-cycle of the limited-duration property right.

                8. But couldn’t you take that and go back even further? After all, an inventor who has not yet even filed a patent application (but could) may have a right of some value. Or, go even further back yet – a person who has begun the process of inventing but not yet even succeeded could nevertheless have some “potential” right having some nonzero value…

                  NOT AT LAW.

                  We are talking about the very basics of patent law here guys…

                9. Applications are assignable and licensable. Those are property rights.

                  Inchoate property rights.

                  and remains so IF and until examination is complete and the grant is made.

                10. Moreover, Congress provided (35 USC 102) that “[a] person shall be entitled to a patent unless… .” In other words, the default outcome once you lodge your application is that you are going to get a patent

                  Unless WHAT?

                  You stopped short of the critical thinking needed here – that critical thinking is what I supplied to you the last time we had this conversation.

                  Stop avoiding the necessary piece that I have already given to you.

                11. You might want to review Marbury v. Madison and Perry v. Sindermann, 408 U.S. 593, 92 S. Ct. 2694, 33 L. Ed. 2d 570 (1972)(tenure is a form of property) link to scholar.google.com.

                  The property right granted is the right to exclude for a fixed period. Before grant, once the invention is published, the inventor should have a property right in the expected patent sufficient for due process. However, the only property rights that have Article III rights are those which are the stuff of the Courts of England prior to 1790, an these include the common law courts, Chancery and Admiralty.

                  And, of course, patent validity was litigated in those courts prior to 1790.

                12. Thanks, Ned. I am going to read Perry right now. As ever, you are a wealth of worthwhile information.

                13. [T]he only property rights that have Article III rights are those which are the stuff of the Courts of England prior to 1790…

                  What is your best case for this proposition? I confess that I do not see anything in either Perry or Marbury that really speaks to this particular point. This seems rather a bold claim to be sitting there unsubstantiated with any particular authority.

              5. 1.2.1.2.1.1.5

                Greg, while the ultimate conclusions of law are can be reviewed by a court, the facts cannot be. Who decides the facts, decides the case — and this is why simple appellate review has never been enough to satisfy Article III.

                “To apply these principles to the case before us, we say that, though a suit may be brought against the marshal for seizing property under such a warrant of distress, and he may be put to show his justification; yet the action of the executive power in issuing the warrant, pursuant to the act of 1820, passed under the powers to collect and disburse the revenue granted by the constitution, is conclusive evidence of the facts recited in it, and of the authority to make the levy…”

                Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 285 (1856).

                1. There are all sorts of administrative actions with rights of appeal straight to the CADC (do not pass Go, do not stop in the D.D.C., e.g. 47 USC 402). Why do these not present a separation of powers problem? Or do they, and no one has noticed yet?

                  Also, do I understand you to mean, then, that the alleged infirmity with the IPR statute would be cured if there were a right of appeal to the ED Va, just as there is with ex parte PTAB appeals?

                2. Greg, “de novo.” Any facts found by the PTAB would not be binding on the court.

                  Executive Benefits Ins. Agency v. Arkison, 134 S. Ct. 2165, 573 U.S., 189 L. Ed. 2d 83 (2014).

                3. I follow what you are trying to say, Ned, but I wonder if “de novo” is the right choice of words for what you mean to convey. The CAFC reviews conclusions of law “de novo,” which means that (for the most part) they are not reconsidering findings of fact.

                  Come to that, however, the PTAB’s fact findings in an IPR are not conclusive on the CAFC, as was the case in Murray’s Lessee. The CAFC can overturn a PTAB fact finding if it lacks substantial evidence. To say that it is hard to get a new fact-finding by the CAFC is not to say that it is impossible.

                4. Greg, a “substantial evidence” review only means that the conclusions the PTAB drew were based on substantial evidence. Otherwise, the PTAB would be acting lawlessly.

                  But, if there is evidence, the findings of the PTAB are currently binding on appeal. Not so in a de novo review per Executive Benefits.

                5. Does the fact that IPR decisions are (in some instances) subject to APA attack in the ED Va at all affect the distinction that you are trying to draw between courts as arbiters of law and courts as finders of fact?

                6. subject to APA attack in the ED Va

                  As of yet, this has not happened, has it?

                  (and certainly not yet for the separate institution decision event, eh?)

                7. …and I will also note that another path to challenging the institution decision – as pointed out by the courts – is the route of a constitutional challenge.

                  A topic that you have “turned your nose up” at, and refused to engage on the merits.

                  Kind of funny how that works out, eh Greg?

            2. 1.2.1.2.1.2

              Anony,

              “Sitting on the court” – believe it or not – is not the final say as to what the law is.

              Please do not tell me that you believe that the Court is right no matter what (especially if you are an attorney – to which I would add that you need to read again exactly what your oath states).

      2. 1.2.2

        Welcome back Ned.

        Nurse those wounds and just realize that your lack of appreciation that the separation of powers doctrine affects all three branches (including the judicial branch and especially the Supreme Court), as well your inability to fully grasp basic property law (sticks in a bundle) for the takings issue just means that you were not the right person to champion this cause.

        That being said, I do not have faith that Cooper is the right person either, given his DOA suggestion for the Court to restructure IPRs as a purely advisory abction (far beyond any authority the Court has for that extent of a legislative change.

          1. 1.2.2.1.1

            anon, thanks.

            Regarding army pay, clearly being paid with booty made the members of a conquering army rich. That was a primary reason why one wanted to join the army and work for an able proconsul on the march.

            Augustus changed everything when he became commander in chief. While there were conquests made after Augustus took over, they were nothing like what had occurred under the Republic. Furthermore, the Romans left unconquered very powerful enemies at the gate: Germans, Picts, Persians. These, together with the Goths, Huns, Arabs and Turks, in the end, would undo everything the Romans had accomplished.

            Now why did the Roman Republic set about conquering? They found early on that if they did not conquer their enemies, they would be in constant warfare with them. Thus, instead of repeatedly beating them, they conquered them and made them Roman. That policy is the reason the Roman Republic grew and grew and became so big and powerful. And it was the change in this policy that doomed it to eventual destruction.

    2. 1.3

      Yes, it IS over. The Supreme Court has now refused to even consider (denied cert petitions) for both MCM Portfolio LLC v. Hewlett-Packard Co., 15-1130 and Cooper v. Lee, 15-955. Both were challenging the constitutionality of IPRs [AIA PTO inter partes reviews] even though those arguments had been unanimously rejected in Fed. Cir. decisions below. They had no support from genuine recognized constitutional legal scholars either.
      Unfortunately, some readers of these and other blogs have been misled for some time by numerous blog comments promising that IPRs [or anything else personally disliked] could be ignored because it is going to be held unconstitutional and thus go away. One hopes that blog readers will learn to ignore such dangerously unrealistic advice, and that these comment blogs will thereby become less clogged with personal fantasies.

        1. 1.3.1.1

          Most of the time I cannot bear to listen to Prof. Epstein. He usually strikes me as such a self-important and tendentious know-it-all. The one exception is when he talks about intellectual property, at which point I find him to be unusually insightful. I cannot decide whether this says more about me or about him.

          1. 1.3.1.1.1

            He usually strikes me as such a self-important and tendentious know-it-all.

            Not unlike yourself, Greg.

            Isn’t that something great about opinions? Anyone can have them.

            Informed opinions on the other hand (when one DOES know what one is talking about – even if people like Greg don’t want to consider the points put on the table…..)

          2. 1.3.1.1.2

            I meant this post in a light and humorous spirit, which I hope is clear from the last sentence. As I re-read it after hitting “submit,” however, I cannot but regret the unnecessarily abusive tone of the second sentence. I really did not mean it to sound so mean as it reads. Prof. Epstein is a fine scholar, and knows more about the law than I ever will, even if I usually disagree with him on public-policy disputes. In the unlikely event that he reads this, I hope he will accept my apologies.

            1. 1.3.1.1.2.1

              Tone IS very difficult to control in posts.

              I appreciate your attempt here to moderate your own post (even if it is not to me)

      1. 1.3.2

        1) It is NOT fully over. You indicate merely two of the three cases that were available for this path.

        2) your statement of “They had no support from genuine recognized constitutional legal scholars either.” is simply false.

        3) I do not recall ANYONE ever saying anything to the effect of “ have been misled for some time by numerous blog comments promising that IPRs [or anything else personally disliked] could be ignored because it is going to be held unconstitutional and thus go away.” NO ONE said that the presence of this avenue in the here and now could be ig nored. This too is simply false.

        4) Which all leads to your OWN personal fanatasy of “One hopes that blog readers will learn to ignore such dangerously unrealistic advice, and that these comment blogs will thereby become less clogged with personal fantasies.” being itself dangerously unrealistic.

        Trying to curb the VERY realistic possibilities according to the actual laws of this country on your mere say-so…..

        I think a different moniker than “curmudgeon” would be in order.

            1. 1.3.2.1.1.1

              yeah i read that one just now. I’m telling you guys it should be every man/woman on deck vs these elites. But theyve successfully got enough people worried about people saying mean things etc. that none of them care that theyre being used for these elites ends.

              1. 1.3.2.1.1.1.1

                What you call “elites” I call the Big Left.

                Combine that with the CRP from the Big Right (multinational Big Corp) and that is why you see the sorry state of patent law today.

                1. “What you call “elites” I call the Big Left.”

                  Did you hear that it was actually the “Big Right” that released the tape of Billy Bush talking to Trump about his bragging about getting with womens?

                  Yeah, it was all Romney/Old Bushes right there. Since they couldn’t get their boy Jeb in and they still want to import huge amounts of cheap labor etc. they apparently figured just blow up his candidacy (and nearly the whole republican party while they’re at it).

                  “Big Right (multinational Big Corp) ”

                  Oh it isn’t just multinational Big Corp that compose “Big Right”. And Big Corp is hugely on the Big Left’s side this year. Even traditional Big Right sponsors like the Kochs didn’t even kick in for the right this time.

                2. Well the Big Left and the Big Right have both been aiming to weaken patents (albeit for different philosophical goals).

                3. Since they couldn’t get their boy Jeb in… they apparently figured just blow up… the whole republican party…

                  !פון דיין מויל צו גאָט ‘ס אויערן

      2. 1.3.3

        cur, while the court did not take the cases, Roberts was recused from MCM and Scalia, another big supporter of Article III rights was no longer on the court. That may be the only reason the court did not take MCM since at least some justices were interested enough to relist the case.

        Since the court did not summarily rule on Cooper v. Square, which the would if there were no possibility of receiving four votes. I am thinking, like anony, that the Court has chosen that vehicle because Roberts is voting and because it is a better vehicle that Cooper v. Lee.

        And, as others have reported, major constitutional scholars did support the petitions in both cases that were denied. Your statement to the contrary is like anybody trying to silence debate by pejorative labeling of the other side.

        Silencing the debate. That is what you and others that support IPRs have been about even as article after article is published showing just how devastating IPRs have been to American innovation. The patent system with IPRs, in the words of many, is fundamentally crippled, and the AIA, five years out, a disaster.

        1. 1.3.3.1

          Ned – ever notice how much the AIA and IPRs are liked by those with certain Ends in mind?

          Ever notice how those Ends always align with weaker patent rights?

          Ever wonder who exactly benefits with weaker patent rights?

          Ever wonder why the exact same people that so heavily pushed the AIA happen to be the exact same people who benefit from weaker patent rights?

          None of this is a coincidence, by the way.

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