Supreme Court: TTAB Decisions Create Issue Preclusion for Later Litigation

by Dennis Crouch

In B&B Hardware v. Hargis Indus. (2015), the U.S. Supreme Court involved a trademark opposition running in parallel with a trademark infringement lawsuit over the mark SEALTITE/SEALTIGHT.  The general holding is that a final decision by the US Patent & Trademark Office’s Trademark Trial and Appeal Board (TTAB) can serve as issue preclusion to collaterally estop a court from re-judging already-decided issues.  The particular issue being precluded here is the likelihood-of-confusion between the two marks, and the Supreme Court held that the TTAB’s final decision on likelihood-of-confusion could preclude that issue from being later litigated in the collateral action between the parties.

A court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met.

Here, the “ordinary elements” of issue preclusion are that “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Restatement (Second) of Judgments §27.

In its decision, the Supreme Court recognized (1) that the TTAB is an administrative agency and not an Article III court; (2) that a right to a jury trial would exist in the infringement action absent preclusion; (3) that the details and procedures associated with the TTAB judging likelihood-of-confusion were somewhat different (but not fundamentally different) than that applied in the 8th Circuit; and (4) that – had the TTAB decision been challenged – it was not appealed.

And it is undisputed that a civil action in district court would entail de novo review of the TTAB’s decision. Ante, at 5.

Going forward, the court is clear that many TTAB decisions will not have preclusive effective — but that is because they fail the ordinary elements of preclusion and not simply because the TTAB is an administrative agency or because the TTAB usually decides cases in a certain way.

The 7-2 decision was penned by Justice Alito with a concurring opinion by Justice Ginsburg.  Justice Thomas wrote in dissent and was joined by Justice Scalia.  The dissent argued that the court should not simply presume that Congress intended agency decision to have preclusive effect.

= = = = =

For patent attorneys, the case will have an obvious impact on the interplay between the Patent Trial and Appeal Board (PTAB) and parallel district court litigation.  The same reasoning that led the Supreme Court to its decision in B&B will apply equally with determinations made during inter partes and post grant review proceedings.  Importantly, issue preclusion applies to individual decisions of fact or law and thus may be important for sub-issues such as claim construction, scope and content of the prior art, level of skill in the art, etc.

Although B&B focused on traditional mutual issue preclusion, there is should also apply to defensive non-mutual issue preclusion that might arise when the defendant in an infringement action was not one of the parties in the IPR/PGR.

An important caveat: The Supreme Court recognized that issue preclusion won’t apply to agency decision when Congress so indicates. Here, there is an argument that the estoppel provisions in the IPR/PGR statutes suggest that Congress has opted out of the issue preclusion arena for these decisions.

= = = = =

One of the most interesting lines from the opinion: “federal law does not create trademarks.” For that line, the court cited Trade-Mark Cases, 100 U. S. 82, 92 (1879) (“This exclusive right was not created by the act of Congress, and does not now depend upon it for its enforcement. The whole system of trade-mark property and the civil remedies for its protection existed long anterior to that act, and have remained in full force since its passage.”).

 

131 thoughts on “Supreme Court: TTAB Decisions Create Issue Preclusion for Later Litigation

  1. Anon and Ned ,

    I finally got around to reading USPTO response to constitutionality of PTAB trial for MCM Portfolio LLC v. Hewlett-Packard Company.

    The gist of the brief is

    Patent claims are “Public rights” and we can do whatever we want. (No Jury Trial for you :)

    The way the brief described patent claims as “public rights” is pretty absurd .. if you take USPTO analogy then every right we have is a public right !

    5 things for Ned

    1. Ned should ask if ALL Patent claims are “Public Rights” why is “standing” a requirement for patent cases at CAFC ?
    For Example : Standing issue during PTAB appeal of – Consumer Watchdog v. Wisconsin Alumni Research Foundation
    If it was not the case “Consumer Watchdog” would have been alowed standing. (As is the case with other public rights matter and ACLU..etc)

    2. Constant Rule changing at the tribunal vs Jury Trial for (Public or Private rights) : the Necessity for the 7th Amendment for public or private right.

    PTO keeps on changing the “PTAB Trial Rules” at the Article 1 Tribunal.

    Now what happens to ALL the Invalidated claims that were before the rule changes? Will everyone get a new shot at “Motion to Amend” ?

    Who is the check the Abuse of Power at PTAB

    One big reason to have a jury trial is the Administrative Agency Keeps changing their own rules and who is to say pendulum will nto swing the other way some time in the future ?

    Patent reform is being pushed by Google today and they had 100 meeting at the White House to push “Patent Reform” agenda and they are bragging about it on their blog
    link to googlepublicpolicy.blogspot.com
    And Now Ms Lee is the Head of USPTO.

    Can we let one company or a group of Individuals eviscerate our “Public” or “Private” rights by Lobbying ? and take away our 7th Amendment rights ?

    Can we really have Article 1 Admin body doing final decision on someones rights .. when the rules of that body keep changing ? Or should we trust our Jury System …

    3. Absolute power corrupts absolutely : Raise some of the points raised by David Boundy

    link to patentlyo.com

    Also as Obama Immigration order was blocked because of some Arcane Rules for Rule-Making because the policy makers failed to follow federal rules for drawing up new guidelines.

    Try to find something similar for the AIA law / PTAB.

    4. How ex parte is very different than the new PTAB.

    Lay out the differences between ex parte review and AIA trials .. and article 3 court is required because of adversarial nature of the AIA.

    No examiner is involved
    No real right to amend
    Expert testimony
    Harassment of patent owner by putting up 49 different invalidation theories in the petitioner brief.
    Potential for Bias of the judges reviewing the institution and writing the final decision

    5. Distric Court vs PTAB : “You can’t have your cake and eat it”. The brief mentions congress created this for efficiency : then point out the differences in standards BRI issue , presumption of validity. If AIA PTAB is supposed to be a more efficient way for the congress to address the invalidity of the patent then the PTO should have same standard of review.

    1. Brian,

      Thanks for the “Gist,” as well as the recommendations.

      If I may ask a favor though – wipe clean the end result that you know that you want to reach and step through the Government’s argument a step at a time.

      Yes, I do recognize that the Government’s argument can be overly-employed and turn ALL private rights into publics rights.

      I get that.

      But look at the structure of their argument: they look at (only) the government side of the balance of the Quid Pro Quo. How does that differ from the many who look only at “the public” when looking at the reason why the patent system exists? How is this view then (the view that patents exist FOR the public) separable? Note too, that the government has that subtle arguement that some private rights still fall into the “public rights” doctrine. If you do not effectively overcome Patlex and Joy Technologies (which the Government merely accepts at face value, do not argue and merely assert that Ned had failed to overcome), then – and this seems critical – then even the fact that Congress has designated patents to be private rights (being personal property), may not of that accord be the deciding factor.

      Please do me the favor and step (slowly) through that argument if you can.

      1. Anon and Ned I read this again,

        I think Ned need to attack this in 3 fronts.

        USPTO argument structure is :

        Steps 1. Patent rights are public rights
        Steps 2. Patlex and Joy Technologies ruling about “re-examination” applies to PTAB
        Step 3: just like for re-examination proceedings , Jury trial is NOT required for patent invalidity

        ======================
        Ned can attack patent is NOT a public right. BUT I think there is enough evidence that that will NOT be successful, but in his brief he has to and should force and expand that issue

        The “ 1st MAIN” focus should be

        Ned would have to lay out the very clear distinction between “re-examination” VS PTAB proceedings

        And the reasons why Patlex and Joy Technologies does not apply to IRP / PTAB.

        Highlight the Differences between IPR vs Re-examination with some examples:

        1. Re-exam proceedings were between USPTO and Patent Owner : As illustrated and solidified by the “Right to Appeal Final Decision” for re-exam Only patent owner may appeal; Petitioner could not appeal as they were not part of the controversy. The issue was between USPTO and PO.

        In IPR the “Petitioner CAN appeal” and the controversy is not JUST between USPTO and PO.

        Patlex and Joy Technologies applies toward correcting a USPTO Mistake , but NOT towards adjudicating a controversy between two private parties.

        2. USPTO Standard for Granting Request

        In Re-exam : since the issue was between USPTO and the PO ONLY , the standard was “Substantial new question of patentability”

        BUT in IPR the standard is different because the Issue is NOT between USPTO and PO but between PO and Petitioner and hence the difference in language of the standard of granting the request for IPR ie “Reasonable likelihood that petitioner would prevail with respect to at least one claim.” The granting request does not say the USPTO will prevail but the petitioner will prevail.

        Patlex and Joy, re-exam applies towards the controversy between USPTO and PO. Not between two independent parties.

        3. De novo review of the patent in re-exam VS NO de-novo review of the patent in IPR. Again Patlex and Joy does not apply to IPR because UPPTO is not correcting its previous mistake by examining the patent with fresh eyes. In fact there is NO examiner present in the IPR Proceedings, hence no examination.

        4. Third Party Requester Right to Participate:

        re-exam : Limited to initial request and a reply to the patent owner’s statement; No right to participate in substantive reexamination.

        IRP : May brief issues and submit declarations of supporting evidence and opinions; Right to oral hearing.

        5. Relying on 3rd party expert declaration, testimony, depositions are used in IPRs. BUT they are NOT allowed and NOT used in re-exam . In re-exam 3 CRE’s paid by USPTO “examine” the patent without biased opinions.

        6. Adjudicate vs re-exam : Patlex and Joy was decided for re-exam for USPTO errors by Examiners. Not for adjudicating a controversy between two parties with two different experts testimony.

        7. Discovery and interest of “Justice” : in re-exam there was NO Discovery.

        In IPR Discovery is made

        a. Depositions of declarants
        b. Initial disclosures
        c. Production of cited exhibits
        d. Production of inconsistent info
        e. May move for additional discovery ‘in the interests of justice’

        More importantly in Patlex and Joy case there was “NO JUSTICE” it was about a MISTAKE of the USPTO and Patlex does not apply for IPR. Because the proceedings are very different and not about correcting the mistake the USPTO made but the deliver “JUSTICE” to a party in the controversy

        8. Hearing : In re-exam NO Interviews were Permitted, because it was an Independent determination by 3 Examiners. But in case of IPR there are Oral Hearings and with new proposed rules it might have Live testimony also. Patlex does not apply because IPR is not an Independent RE-Exam of the patent application but a adjudication of a controversy between two opposing parties.

        9. Federal rules of evidence (FRE) : for re-exam FRE DO NOT Apply because it is correcting a Mistake USPTO made. In IRP FRE is applies because it IPR is a controversy between two parties and FRE is there to Protect constitutional right (adversary system). Hence Patlex and Joy does not apply to IPR.

        10. Requester Anonymity : In Re-exam the requested can remain anonymous. Because the Patent validity is an issue between USPTO and PO. BUT for IPR one has to “Identify the real party in interest” because IRP is about the controversy between two parties and about the Mistake USPTO made. Patlex does not apply.

        The “ 2nd MAIN” focus should be Due Process and Fairness for Patent Owners. And High light the fact that Both congress bills GoodLatte and Strong Act recognize that USPTO has Gone off the rails with BRI. And Both competing bills recommend that USPTO application of BRI should be changed for IPRs.

        1. Brian,

          First, thank you for taking the time to do this. I want to read your full post in a thoughtful and deliberate manner.

          Second, the quick first impression that I have is that you may have missed a subtle – but important – distinction of the government, in that your Step 1 needs to be modified to be:

          Steps 1. Patent rights are public rights – or at least are private rights that fall into the scope of treatment of public rights.

          I do not think that the Government believes that its argument falters at all if one can show that technically patents are private rights. After all, Congress has been explicit to define the patent right as private in that patents are to have the attributes of personal property.

          I will probably have more comments tomorrow.

          1. Still not framing the issue correctly.

            The correct question is whether the *claim* of *patent validity* qualifies as a *public right?” In other words, does the *claim* historical antecedent either at common law or equity?

            That is straight out of the SCOTUS case law.

        2. Apologies Brian, as this has fallen out of my bandwidth.

          Since Ned won’t be joining the conversation anyway, let’s place a rain check until further developments occur in the real case.

          Thanks again for your post.

  2. While Ned has a(n admitted) bias against the CAFC in view of the USSC, I recommend the link below for Ned (and even Mr. Morgan, should he deign to drive by again) to contemplate why the focus on separation of powers is critical when it comes to discussions of statutory law and the express Constitutional grant of power to write that law in the explicit domain of patents.

    One should not make the mistake of thinking that Common Law is a “bad thing” so much as to recognize that the power of Common Law writing is purposivefully constrained in certain areas, and the abrogation and ig noring of the separation of powers by the branch of the government usually being the one to make sure that such does not happen is especially pernicious.

    See: link to patentdocs.org

    (In a true checks and balances system, NO one branch is above the others – the adulation of the Supremes is a supreme error)

    1. I sense a direct attack on Marbury v. Madison.

      Who is this Kevin Noonan?

      If the district court judge got it wrong, there is the appeal.

      1. Attack…?

        Absolutely not. This is NOT a call to place a different branch in “supreme power,” as it is a call to recognize that the judiciary does not have a place “Above the Law.”

        Your point then Ned, of “if wrong then appeal (up)” runs foul when the the wrong is occasioned at the Supreme level.

        Instead of this knee-jerk “protect the Supreme” deference reaction, I invite you to read the piece once more.

        Slowly.

        Carefully.

        Thoughtfully.

        Dwell on the arguments a bit, then, and only then, come and share your views.

      2. The district court might have got this one wrong, though it was a preliminary injunction hearing so it’s not entirely statutory.

        But in either case, I’m not a fan of sweeping the entire judiciary in one broad stroke. Sometimes the statute is not clear. One thing you’ve never answered for, anon, is that, if the Supreme Court got 101 wrong, why didn’t Congress touch 101 in the AIA.

        Ned, we were having such a thoughtful discussion below before the mod machine stopped you. Can you try reposting your last response?

        1. J,

          I don’t remember you asking that question, but I will tell you that I posted directly on that point over on the Hricik side of the blog awhile back.

          Bottom line is that Congress did in fact – post Bilski and pre-other SC cases touch on 101, specifically in light of business method reviews and did so in a manner so as to preclude the Court from taking a negative view subject matter wise on the AIA business review elements.

          Beyond that, what Congress does or does not do is simply NOT a straight forward matter based on the ineptitude of that body.

          I think that you think the “control” mechanism is easier than it is in reality. In truth, because the mechanism is so often such a cluster, we should pay more attention when the judiciary violates the separation of powers – not less.

          1. I remember you mentioned business methods before in the AIA. But, the language of the statute explicitly state that the section has no bearing on patent eligibility.

            Section 18(e): Nothing in this section shall be construed as amending or interpreting categories of patent-eligible subject matter set forth under Section 101 of title 35, United States Code.

            1. J,

              It is more subtle than that – as I discussed in great detail on the Hricik side of the blog. The language reflects the debate of the day and how Stevens’ view wanted to change the words of Congress – Congress did NOT want that type of judicial monkeying and reading any anti-business method patent “intent” into the subject matter discussion.

              1. anon, your view of things is askew. Truly.

                However, 4 is not 5, and the Supreme Court changed the law.

                I have previously explained to you, because I was involved, what really happened with 273.

                1. And, if you did not notice, Congress repealed 273 as then read to remove business methods for the statute. This is a clear message to the 5 that they were wrong and Stevens was right.

                  Regardless, subsequent events have vindicated Stevens.

                2. Ned you are in full blown denial here. Stevens was not in the majority. Stevens was the 4, which in Alice has now waned to 3.

                  And it is I that have previously explained this to you.

                  And you do know (hint: separation of powers, remember that?) that the Court does not have the authority to re-write, to change patent law, as your desire for a different ends would have it.

                3. The AIA cemented that in place Ned – that’s why the statement is there that this action of review does not indicate a change.

                  You wish to pervert this to be the plain opposite, but if that were to be, then NO mechanism for review of a certain subset would be necessary. Your logic fails of its own accord. Your view is simply internally inconsistent.

              2. Maybe you can take the opportunity at another to time to restate your argument. I don’t know where you last explained this.

                Please tell me what AIA section “touched” 101? And why should the Supreme Court overturn a line of cases interpreting 101 because Congress of that section, when 101 itself remains unchanged.

                1. J,

                  The archives are there on the Hricik side. I will leave it to you to explore – for now. Should the time permits, mayhap I will assist. If I recall correctly, the thread was one of the relatively few with more than 20 posts.

                2. J,

                  If I had the link I would surely give it to you. My apologies as I have not “faved” the page, and I do not have the bandwidth at the moment to go looking for it.

      3. Ned,

        As the government’s brief points out, your “Marbury is under attack” response is a bit conclusory and unsupported.

        I look forward to your official response and do hope that during this process that you recognize the limitations of your Belieb system and your over-adulation of the Court as somehow not being in a truly balanced Check and Balanced system (and that it is Congress that has been solely given the authority to write patent law).
        Perhaps we will see that you show (in case law decisions) the rescission that you claim that the author of Patlex has undergone….

  3. Ned, Anon, and other members of the tribe …

    I just saw this news ..

    “AIA Reviews Are Constitutional, USPTO Tells Fed. Circ”

    “the USPTO on Monday shot back that MCM’s argument is foreclosed by”

    link to law360.com

    Can someone post a link to USPTO brief ?

    I would like to read it.

    Thank you.

        1. Brian, why don’t you direct this request to any of

          NATHAN K. KELLEY, Solicitor, SCOTT C. WEIDENFELLER, Associate Solicitor, USPTO, or

          BENJAMIN C. MIZER, Acting Assistant Attorney General
          MARK R. FREEMAN, or WILLIAM E. HAVEMANN, USDOJ.

          All these folks are on the brief.

          You can get their contact information by accessing pacer.

    1. Brian,

      Any luck with your pursuit?

      I will note that what may be troubling Ned is that his argument on the public/private point is in trouble.

      On another thread, the topic of the duty of candor is being explored in light of indefinite claims. You may want to read 37 CFR 1.56 in its entirety.

      The tie to this sub-thread though can be found in the very first two lines of that rule during the prosecution of applications:

      A patent by its very nature is affected with a public interest. The public interest is best served, and the most effective patent examination occurs when, at the time an application is being examined, the Office is aware of and evaluates the teachings of all information material to patentability.

      Keeping in mind this is from the CFR as opposed to the USC, as well as the focus here is not on a granted patent that has not yet obtained the title of being (personal) property, one does need to contemplate the basis of this duty that does exist.

      The government’s brief leans heavily on supposing that Patlex and Joy Technologies are correct, and points out that Ned has not in fact vitiated those cases in his references to cases prior to them.

      Read alone, the government’s brief compels a loss for Ned (and hence, his reluctance here).

      1. Oops – typing too quickly may have left that post a little unclear in one important spot:

        Third to last paragraph, the distinction is between a patent that has “earned” a title of property and an application (to which the rule applies) which has not – I missed a clause stating that the application (not the patent) is the item that has not yet obtained title. The important takeaway though is that pre-title item has this duty because the post-title item DOES affect the public (and at the CFR level, the Office does view this as a “public right,” at least to the extent that the government brief captures when it states that sometimes even private rights can fall into the treatment of a “public rights” doctrine.

        1. Brian,

          Let me hasten to add as well that since this is very much a “live” case that Ned may be precluded from actively taking part in the discussion here.

          That’s is a real, albeit unfortunate risk of using a real name on a live matter – the constrainted effort may in fact cause more damage (at least in the eye of those in the public) to Ned’s case than he may be able to contain.

          It does create a problem for full dialogues and is probably one of the good reasons why the blog rules on posting here is that all comments are supposed to be only of a private and personal opinion nature.

          1. Anon,

            You misstate the public rights analysis.

            Whether a particular claim is “affected with a public interest” has nothing to do whether that claim is a public right. Virtually any law ostensibly implicates a public interest, and if this was the mode of reasoning, separation of powers would have little to no meaning.

            Instead, and as repeatedly explained by the SCOTUS, including its recent Stern v. Marshall decision, a particular claim – irrespective of whether currently existing at federal statute – is a public right only where it created exclusively by the legislative / executive braches for the legislative / executive branches. Where a particular claim had / has a historical analogue existing at common law or equity, then that claim is a private right and can only be resolved with finality by an Article III court. This goes to the core structuring of our government.

            For example, the question before the SCOTUS in Thomas v. Union Carbide was, in part, whether a claim arising out of a federal statute requiring data sharing between pesticide producers could be resolved exclusively by an Art I admin officer. Because such a claim obviously has no historical analogue existing either at common law or equity, it was a public right.

            Compare now with patent validity, and its centuries-long history either in law or equity.

            1. No,

              I was not making a final pronouncement nor even giving my own particular views. Rather, I was reflecting on the government’s brief and their views on the subject.

              I was doing this because that brief has not been linked to and (as far as I know) still only available through PACER.

              Your point of not only “by” but ALSO “for” is a distinction that the government glossed over, and kind of “fudged” in only dwelling on the half of the Quid Pro Quo equation that deals with the side for the government (or at least, for the government’s stated purpose – which I may be so bold as to say is indeed different than something that is strictly FOR the government).

              The government states its case that the actions under consideration are most definitely a shade different than any person to person battle that infringement or a defense to infringement per se would be geared to.

              1. The USPTO cites to Newman’s Patlex and Joy decisions, and but has abandoned her reasoning articulated there. In the Cooper case, the USPTO built its opposition around Schor, but appears to have dropped its reliance upon that case here. The USPTO’s opposition thus far has been incoherent and, at times, contradictory.

                1. no,

                  Please note the post above to Brian and walk through the government’s argument as they lay it out.

                  I would truly appreciate your views on such an exercise.

      2. Anon,

        I finally got around to reading it .. the gist of the brief is

        Patent claims are “Public rights” and we can do whatever we want. (No Jury Trial for you :)

        The way the brief described patent claims as “public rights” is pretty absurd .. if you take USPTO analogy then every right we have is a public right !

        5 things for Ned

        1. Ned should ask if ALL Patent claims are “Public Rights” why is “standing” a requirement for patent cases at CAFC ?
        For Example : Standing issue during PTAB appeal of – Consumer Watchdog v. Wisconsin Alumni Research Foundation
        If it was not the case “Consumer Watchdog” would have been alowed standing. (As is the case with other public rights matter and ACLU..etc)

        2. Constant Rule changing at the tribunal vs Jury Trial for (Public or Private rights) : the Necessity for the 7th Amendment for public or private right.

        PTO keeps on changing the “PTAB Trial Rules” at the Article 1 Tribunal.

        Now what happens to ALL the Invalidated claims that were before the rule changes? Will everyone get a new shot at “Motion to Amend” ?

        Who is the check the Abuse of Power at PTAB

        One big reason to have a jury trial is the Administrative Agency Keeps changing their own rules and who is to say pendulum will nto swing the other way some time in the future ?

        Patent reform is being pushed by Google today and they had 100 meeting at the White House to push “Patent Reform” agenda and they are bragging about it on their blog
        link to googlepublicpolicy.blogspot.com
        And Now Ms Lee is the Head of USPTO.

        Can we let one company or a group of Individuals eviscerate our “Public” or “Private” rights by Lobbying ? and take away our 7th Amendment rights ?

        Can we really have Article 1 Admin body doing final decision on someones rights .. when the rules of that body keep changing ? Or should we trust our Jury System …

        3. Absolute power corrupts absolutely : Raise some of the points raised by David Boundy

        link to patentlyo.com

        Also as Obama Immigration order was blocked because of some Arcane Rules for Rule-Making because the policy makers failed to follow federal rules for drawing up new guidelines.

        Try to find something similar for the AIA law / PTAB.

        4. How ex parte is very different than the new PTAB.

        Lay out the differences between ex parte review and AIA trials .. and article 3 court is required because of adversarial nature of the AIA.

        No examiner is involved
        No real right to amend
        Expert testimony
        Harassment of patent owner by putting up 49 different invalidation theories in the petitioner brief.
        Potential for Bias of the judges reviewing the institution and writing the final decision

        5. Distric Court vs PTAB : “You can’t have your cake and eat it”. The brief mentions congress created this for efficiency : then point out the differences in standards BRI issue , presumption of validity. If AIA PTAB is supposed to be a more efficient way for the congress to address the invalidity of the patent then the PTO should have same standard of review.

        1. Brian, thanks for the ideas.

          I am not going to comment on the government brief at this time.

          Our reply brief is due on April 6. If it accepted, it should be available for the public on April 7. But, one never knows.

          1. Ned,

            Good Luck to you and your team.

            Hope others can chime in and give you more ideas.

            I understand you cannot comment, but I think to fight this we need to crowd source ideas for this uphill battle you have.

          2. Ned I read this again here are some more ideas,

            I think you need to attack this in 3 fronts.

            USPTO argument structure is :

            Steps 1. Patent rights are public rights
            Steps 2. Patlex and Joy Technologies ruling about “re-examination” applies to PTAB
            Step 3: just like for re-examination proceedings , Jury trial is NOT required for patent invalidity

            ======================
            You can attack patent is NOT a public right. BUT I think there is enough evidence that that will NOT be successful, but in his brief he has to and should force and expand that issue

            The “ 1st MAIN” focus should be

            Ned would have to lay out the very clear distinction between “re-examination” VS PTAB proceedings

            And the reasons why Patlex and Joy Technologies does not apply to IRP / PTAB.

            Highlight the Differences between IPR vs Re-examination with some examples:

            1. Re-exam proceedings were between USPTO and Patent Owner : As illustrated and solidified by the “Right to Appeal Final Decision” for re-exam Only patent owner may appeal; Petitioner could not appeal as they were not part of the controversy. The issue was between USPTO and PO.

            In IPR the “Petitioner CAN appeal” and the controversy is not JUST between USPTO and PO.

            Patlex and Joy Technologies applies toward correcting a USPTO Mistake , but NOT towards adjudicating a controversy between two private parties.

            2. USPTO Standard for Granting Request

            In Re-exam : since the issue was between USPTO and the PO ONLY , the standard was “Substantial new question of patentability”

            BUT in IPR the standard is different because the Issue is NOT between USPTO and PO but between PO and Petitioner and hence the difference in language of the standard of granting the request for IPR ie “Reasonable likelihood that petitioner would prevail with respect to at least one claim.” The granting request does not say the USPTO will prevail but the petitioner will prevail.

            Patlex and Joy, re-exam applies towards the controversy between USPTO and PO. Not between two independent parties.

            3. De novo review of the patent in re-exam VS NO de-novo review of the patent in IPR. Again Patlex and Joy does not apply to IPR because UPPTO is not correcting its previous mistake by examining the patent with fresh eyes. In fact there is NO examiner present in the IPR Proceedings, hence no examination.

            4. Third Party Requester Right to Participate:

            re-exam : Limited to initial request and a reply to the patent owner’s statement; No right to participate in substantive reexamination.

            IRP : May brief issues and submit declarations of supporting evidence and opinions; Right to oral hearing.

            5. Relying on 3rd party expert declaration, testimony, depositions are used in IPRs. BUT they are NOT allowed and NOT used in re-exam . In re-exam 3 CRE’s paid by USPTO “examine” the patent without biased opinions.

            6. Adjudicate vs re-exam : Patlex and Joy was decided for re-exam for USPTO errors by Examiners. Not for adjudicating a controversy between two parties with two different experts testimony.

            7. Discovery and interest of “Justice” : in re-exam there was NO Discovery.

            In IPR Discovery is made

            a. Depositions of declarants
            b. Initial disclosures
            c. Production of cited exhibits
            d. Production of inconsistent info
            e. May move for additional discovery ‘in the interests of justice’

            More importantly in Patlex and Joy case there was “NO JUSTICE” it was about a MISTAKE of the USPTO and Patlex does not apply for IPR. Because the proceedings are very different and not about correcting the mistake the USPTO made but the deliver “JUSTICE” to a party in the controversy

            8. Hearing : In re-exam NO Interviews were Permitted, because it was an Independent determination by 3 Examiners. But in case of IPR there are Oral Hearings and with new proposed rules it might have Live testimony also. Patlex does not apply because IPR is not an Independent RE-Exam of the patent application but a adjudication of a controversy between two opposing parties.

            9. Federal rules of evidence (FRE) : for re-exam FRE DO NOT Apply because it is correcting a Mistake USPTO made. In IRP FRE is applies because it IPR is a controversy between two parties and FRE is there to Protect constitutional right (adversary system). Hence Patlex and Joy does not apply to IPR.

            10. Requester Anonymity : In Re-exam the requested can remain anonymous. Because the Patent validity is an issue between USPTO and PO. BUT for IPR one has to “Identify the real party in interest” because IRP is about the controversy between two parties and about the Mistake USPTO made. Patlex does not apply.

            The “ 2nd MAIN” focus should be Due Process and Fairness for Patent Owners. And High light the fact that Both congress bills GoodLatte and Strong Act recognize that USPTO has Gone off the rails with BRI. And Both competing bills recommend that USPTO application of BRI should be changed for IPRs.

  4. It appears that our friend Mr. Morgan has joined the Drive-By Monologue club…

    That’s some dream of his own, but to dampen that fantasy, Paul might first want to adress (properly) the comment at

    link to patentlyo.com

    (and while the concept of nondelegation is usually applied in the legislative-executive exchange, it applies between the legislative-judicial exchange as well)

  5. Interesting. This case may support a future decision that will turn the PTAB into a de facto national patent court for validity based on patents or printed publications. (On sale, public use, etc. are currently beyond the scope of IPR/PGR proceedings.) The Federal Circuit’s Baxter decisions have already taken a step down that path.

    The Seventh Amendment wasn’t properly raised in this case, so it remains an open question. However, a petitioner arguably waives a jury by election. A respondent, on the other hand, should not be compelled to forego a jury in the PTAB — especially if it files a civil action that is stayed in favor of a PTAB proceeding.

    1. steve — the last point about the involuntary nature of being hailed into a non Article III court to have one’s patent cancelled with no right to a jury trial is salient. Ultimately, this is the reason the Federal Circuit or the Supreme Court will decide that de novo review at a minimum is required.

      The Supreme Court actually reserved this question in Executive Benefits as to whether an involuntary statutory procedure was constitutional at all.

  6. The sockpuppet calling itself “No!!!” (a sorry name for a sockpuppet) says that “patent validity” is a “private right”, in spite of the fact that the public’s ability to act freely is bounded by the millions of patent claims issued by the PTO.

    What’s the best support for the sockpuppet’s proposition (legally and as a matter of common sense, to the extent the latter concept can ever be applied to US patent law)?

    1. The term “private right” is from the public rights jurisprudence – the term is idiosyncratic, and dictates whether a particular claim may or may not be determined with finality before an art I tribunal.

      In other words, whether a claim is a “public right” or a “private right” is something that this particular to separation of powers. The analysis required to resolve this question is complicated, so read up. I will tell you this much: “the public’s ability to act freely is bounded by millions of patent claims” has absolutely nothing to do with the question.

      1. The analysis required to resolve this question is complicated

        More “complicated” than subject matter eligibility?

        Because that subject is so super super dooper “complicated” that most folks here have absolutely no clue about what it means or how to apply it — even in the simplest cases. That’s not true of everyone of course. It may not be true of you (it’s not true of me).

        Maybe instead of “complicated” you mean to say “half-baked” or “highly unsettled” or “rapidly evolving”.

        Back to my question, sockie (and feel free to choose a new nym because I’m not going to call you “No!!!”): what’s the best support for your proposition (i.e., “patent invalidity is a private right”)?

        1. MM,

          Standing issue during PTAB appeal of – Consumer Watchdog v. Wisconsin Alumni Research Foundation

          Might help you realise : As of today Patent Validity is a “private right” issue.

          If it was not the case “Consumer Watchdog” would have been alowed standing. (As is the case with other public rights matter and ACLU..etc)

          Slides 14-17 might explain more on standing

          link to media.straffordpub.com

          Court held that the Board’s denial of Consumer
          Watchdog’s requested action did not confer standing

          Not enough that 35 U.S.C.§315(b) allows a third-party
          requester to appeal decisions favorable to patentability. A
          statutory grant of a right to appeal does not eliminate
          requirements of Article III.

          Consumer Watchdog had not “identified a particularized,
          concrete interest in the patentability of the ’913 patent, or
          any injury in fact flowing from the Board’s decision.” Slip
          Op. at 8.

      2. sockie: “the public’s ability to act freely is bounded by millions of patent claims” has absolutely nothing to do with the question [of whether a right is deemed “public” or “private”

        And you know this because …?

        1. MM, the issue of whether a patent affected the public at large was argued between the majority (Breyer) and Thomas in Teva. Guess what the majority held? That Thomas was wrong. You could expect this.

          But, what was Thomas’s position?

        2. MM :

          Standing is rooted in a “private law” theory

          Here is a relevant text from a paper that says as of today Patent Validity is treated as a “Private rights” issue. But the Paper is arguing for your side that it should be changed.

          link to scholarship.law.edu

          In the past few years, organizations like the ACLU and Public Patent Foundation (“PUBPAT”) have initiated large-scale litigations pursuant to the Declaratory Judgment Act challenging the validity of controversial patents relating to human genes in Ass’n for Mo-lecular Pathology v. PTO (Myriad), 3 2 and genetically modified seed in Organic Seed Growers & Trade Ass ‘n v. Monsanto Co. 3 3 Yet, like many private plaintiffs before them, these advocacy groups have discovered that the Federal Circuit’s patent declaratory judgment jurisprudence makes it very difficult, if not impossible, to challenge invalid patents
          In patent declaratory judgment actions, plaintiffs must satisfy two “jurisdictional bedrocks” in order for the case to proceed on the merits: standing and personal jurisdiction.
          Article III of the Constitution provides that federal courts may only hear actual “cases” or “controversies,” fiom which courts have extrapolated the standing requirement, while the Due Process Clause serves as the basis for the personal jurisdiction doctrine. Even though these threshold jurisdictional requirements emanate from distinct constitutional provisions, the Supreme Court has consistently held that both ought to be assessed according to flexible, totality-of-the- circumstances standards.

      3. I will tell you this much: “the public’s ability to act freely is bounded by millions of patent claims” has absolutely nothing to do with the question.

        Correct.

        What gets the knickers twisted for the anti’s is that forever and a day effective patent systems have used BOTH the elements of carrots AND sticks; both the reward to those willing to use the system and a weapon to beat those who chose not to use the system. Pretty much up to the PUR of the AIA “the public” always was faced with what Malcolm is whining about here. The risk was always there if you wanted to NOT share that someone (even later) would share and would preclude you from doing what you had been “freely” doing before. This has always been a bedrock notion of patent law. Pretending otherwise simply is not helpful.

    2. So, NO!! gets on here and elevates the discussion to real case law and citations and you respond with ad hominine attacks, MM. Google bucks at work.

    3. (a sorry name for a sockpuppet)

      LOL – as if sockies like “Vivika M” or “Friend(s) of the Court” – or any of the dozen or so that Malcolm uses over at Dr. Noonan’s place are any better…

      More of the same (banned) acronym from Malcolm.

      Go figure.

    1. From the link:

      In the absence of a presumption, [the dissent] saw no basis for finding the TTAB proceeding preclusive. Ironically, the sharp dissent underscoring the Court’s treatment of that question probably solidifies the finality of the Court’s analysis in this case.

  7. Should the reverse be true, i.e. should a final judgment in an Article III court have preclusive effect on the USPTO?

    1. After, B&B, there seems no doubt.

      In fact, I would thing that a court could stay IPRs if validity was at issue between the parties in court before the IPR was filed.

      1. That could provide a radical turn of events if issue preclusion prevents an IPR petitioner from obtaining a litigation stay.

  8. […] Supreme Court: TTAB Decisions Create Issue Preclusion for Later Litigation Here, the “ordinary elements” of issue preclusion are that “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a … Read more on Patently-O […]

  9. Some commentators here keep expressing their dream that the entire AIA statute [which has numerous independent and unrelated provisions] is going to be struck down by the Supremes because it does not contain an express severability clause if IPRs are held unconstitutional. To dampen that fantasy, here is some text from a GA Law Review article on that subject:
    “Just as a court cannot rewrite a statute, a court cannot ignore a statute. To refuse to enforce a statute’s constitutional provisions, as well as its unconstitutional provisions, would violate the court’s obligation to give effect to the commands of a statute to the extent the Constitution allows.” As the Supreme Court has explained, “whenever an act of Congress contains unobjectionable provisions separable from those found to be unconstitutional, it is the duty of [a] court to so declare, and to maintain the act in so far as it is valid.”
    Indeed, courts have adopted the contracts approach: the severability of an unconstitutional statutory provision depends on its importance in the “legislative bargain.”
    … Regan v. Time, Inc., 468 U.S. 641, 652 (1984) (plurality opinion) ([A] court should refrain from invalidating more of the statute than is necessary.”); (Brennan, J., concurring in part and dissenting in part) (tracing derivation of severability doctrine to “general rule of construing statutes to avoid constitutional questions”).

    1. Further on this point, since Ned’s unconstitutional argument for recent reexaminations, IPRs, PGRs and CBM is based on the statutory removal of the [alternative] appeal to de novo civil proceedings in the D.C., would not the above case law dictate only overruling THAT statutory act, and leaving the rest of the AIA reexaminations, IPRs, PGRs and CBM statutes intact?
      That de novo D.C. civil case could add years of delay to IPR finality [as it already does to quite a few interference decision finalities, and Gilbert Hyatt applications]. But what percentage of patent owners losing claims in IPRs at the PTAB have even appealed to the Fed. Cir.? My impression is that it is surprising small, but a statistical study would be valuable. Thus, how many patent owners would feel they have strong enough new evidence to justify a D.C. trial from an IPR decision that would convince a judge the PTAB was wrong, PLUS a Fed. Cir. appeal?

      1. Well, no matter what, having an appeal de nova to a dist. ct. would remove any Constitutional questions.

        I think the focus should be on CBMs. They seem to present the most pure form of the argument.

        1. I think the question would be is: how can the SCOTUS worm out of this. If there is a way, they will probably take it.

          1. Night, Thomas and Scalia appear to be hardliners against moving private right litigations outside of the court system. Alito, Kennedy joined Roberts who wrote the opinion in Stern v. Marshall. They did not raise any objections in B&B.

            Breyer, Ginsburg, Sotomayor and Kagan seem more supportive the administrative state and dissented in Stern v. Marshall.

            In contrast, Thomas also said in Teva that a patent was like a statute, but Breyer disagreed — that it only affected a small number.

            Interesting times.

            But I doubt it will go to the Supreme Court if the Federal Circuit follows Stern v. Marshall and does not try to overrule it.

        2. You guys do not understand the public rights rule of law.

          Go back, re-read the cases, and *then* formulate your opinions.

          Where a claim is a private right, then an Art I admin ADJUNCT can only operate in the role of a LIMITED fact-finder whose determinations are subject to DE NOVO review. Where the claim of PATENT VALIDITY is a private right, the Art I admin ADJUNCT canNOT rule on the validity of an ISSUED patent with FINALITY.

          Where the claim of patent validity is a PRIVATE right, the Art I admin adjunct can merely issue ADVISORY opinions. Are you now seeing the significance to these challenges? If successful, the PTAB would be relegated to issuing ADVISORY opinions per the mandate of SEPARATION of powers.

          HENCE, in order to save REEXAM the first time around, the CAFC had to designate patent validity as a PUBLIC RIGHT. BUT FOR this designation as a PUBLIC RIGHT, patent validity cannot be revisited AFTER issuance of the PATENT by the Art I admin agency.

          The AIA drafters relied upon the designation by the CAFC of patent validity as a PUBLIC RIGHT in the context of REEXAM to create the PTAB / IPR.

          THUS, if patent validity is re-classified by the SCOTUS (an issue the SCOTUS has NEVER considered before) as a PRIVATE RIGHT (which is what it is), then there will be implications for BOTH IPR and reexam.

          1. Mr. No, it does seem somewhat clear that the folks have not actually read Stern v. Marshall or Executive Benefits or for that matter Schor.

            1. The rulings of the PTAB cannot result in a final decision.
            2. A court must enter order cancelling the patents claims.

            However, in Executive Benefits, the court upheld the ruling on summary judgment as no new evidence was introduced.

            But that said, the Court might still allow a patent owner to consent to the PTAB ruling. See, B&B. But that was a reserved question in Executive Benefits.

            1. I’d be somewhat surprised if a SCOTUS majority adopts consent as a means for curing separation of powers defects. This is an institutional safe guard, and the prior panels (including Schor) have held that the private litigant cannot be expected to protect it.

              Scalia concurred in part in Stern for the express purpose of not ratifying consent / waiver, and instead included a discussion of accepted historical practice.

              I’m not convinced that his shared dissent with Thomas in B&B indicates that he is now on board with the consent approach.

              All the same, consent did receive the support of 4 justices in Stern. Perhaps n the next public rights case it gets the 5 that it needs.

          2. Mr. No, Patlex declared a patent to be public right because validity was a public concern and because a patent could only be created by statute.

            1. Correct, but the CAFC’s chosen mode of public rights analysis did not have support in the SCOTUS jurisprudence. Stern was a reminder of that, hence the pending challenges (and B&B dissent).

              1. Mr. No, to be generous to the Federal Circuit, the public rights analysis took a major turn after Granfinanciera, followed by Lockwood (see Nies’s dissent from in banc — Patlex is overruled by our decision here), by Schor and now by Stern v. Marshall.

                1. The Patlex decision followed the Northern Pipeline decision. It was not until the Schor decision (which post dated Patlex) did the SCOTUS attempt to “broaden” the public rights exception.

                  Schor still today represents the broadest reading of the public rights rule, and is likely the case that the USPTO will rely primarily upon wrt to your (and other) challenges.

                2. No!! But Schor critically depended upon the voluntary choice of forum — and upon the fact that a court had to enforce the ruling of the agency.

                  A patent owner hailed into the PTO against his will does not have a choice. Schor does not support that.

                3. Northern Pipeline was a case that did not have a clear majority. Stern has adopted the plurality opinion, and added Rehnquist’s limitation all in one.

                  Northern Pipeline could be read to the effect that State causes of action could not be tried in non-Article III courts. That is the way Patlex construed the case.

                  But the implications were always there for a broader construction of the “negative” line of authority.

                  Granfinanciera held the doctrine extended to Federally created statutory rights and causes of action. This undermined Patlex.

                4. I’m not sure why you think Schor is inapposite, and I can all but promise you that you will be confronted with it as the USPTO stands up to your challenge.

                  Your counterargument should be that Schor represents the broadest interpretation of the public rights rule of law, and O’Connor’s view did not survive later rounds of SCOTUS decisions addressing the topic. In fact, in the very next public rights case, O’Connor *dissented.*

                5. Stern on Schor:

                  “A customer filed such a claim to recover a debit balance in his account, while the broker filed a lawsuit in Federal District Court to recover the same amount as lawfully due from the customer. The broker later submitted its claim to the CFTC, but after that agency ruled against the customer, the customer argued that agency jurisdiction over the broker’s counterclaim violated Article III. Id., at 837-838, 106 S.Ct. 3245. This Court disagreed, but only after observing that (1) the claim and the counterclaim concerned a “single dispute”—the same account balance; (2) the CFTC’s assertion of authority involved only “a narrow class of common law claims” in a “`particularized area of law'”; (3) the area of law in question was governed by “a specific and limited federal regulatory scheme” as to which the agency had “obvious expertise”; (4) the parties had freely elected to resolve their differences before the CFTC; and (5) CFTC orders were “enforceable only by order of the district court.”

                  Look it 4) and 5).

                  One cannot pick 1), 2) or 3) out of the mix and argue only those points.

            2. Ned,

              Regarding your statement of “because a patent could only be created by statute.

              Is it a minor nit to note that any actual patent is created by the Executive branch through its application of the patent laws, written by the Legislative branch and interpreted by the Judicial branch?

              A (any particular) patent then is not analogous to a “new private law” created by Congress (Justice Thomas’s analogy is simply – and f@tally -flawed).

              1. Whether the right currently exists at federal statute is irrelevant. If this was the determination, any private right previously at common law could be rendered Art I admin by creation of a parallel federal statute – in very simple terms, this is what J. Newman relied upon first in Paltex, and, later, in Joy.

                For a helpful explanation of this concept, see Thomas v. Union Carbide. 473 U.S. 568.

          3. I admit this is the one area of patent law I really don’t know much about. But, the SCOTUS must have at least refused to grant cert a few times for this issue on the re-exam.

      2. Paul, under Hyatt v. Kappos, de novo review is not simply on the record of the patent office.

        Since an issue patent is involved, the rules of construction of district court’s would pertain – unless somehow the Federal Circuit screws this one up as well.

        But I am not so sure about the presumption of validity. I assume the statutory command of 316(e) might still pertaining court.

        But what is also clear there is a requirement for constitutional standing. Meretricious interlopers will be excluded from the process.

        Also, there will be a right to a jury trial.

        And then there is a complication if there is a trial underway for invalidity in another district court in which the very same issues are involved. Consolidation? One stayed while the other is decided? Which is preferred and why – one has a standard of clear convincing evidence the other does not?

        And what if the patent owner sues in the same district court for infringement against the petitioner?

        It gets very complicated.

        Given that the snake pit of the PTAB is now invalidating patent claims at the rate of 90 to 95%, who wouldn’t seek de novo review because as it stands a review directly from the patent office that the Federal Circuit the findings of fact by the patent office only reversible when they are not based on substantial evidence.

        What seems clear is that IPRs are not well thought out. Is almost like some patent attorneys who refused to consult constitutional lawyers came up with a scheme the first place.

        1. > Is almost like some patent attorneys who refused to consult >constitutional lawyers came up with a scheme the first place.

          Ned, don’t be ridiculous. The “scheme” was devised by the anti-patent movement of non-patent attorneys.

          1. Actually Night, I think it was a special committee of the AIPLA.

            But if the AIPLA is controlled by anti-patent types, and I think it is, then you might be right.

        2. Given that the snake pit of the PTAB is now invalidating patent claims at the rate of 90 to 95%, who wouldn’t seek de novo review

          Someone faced with a decent patent claim.

        3. the PTAB is now invalidating patent claims at the rate of 90 to 95%,

          And every one of those claims deserved to be tanked.

          The system is working.

    2. Simple question for Mr. Morgan:

      Why would the separability amendment even be proposed (said amendment not being added) for the AIA during its congressional passage?

      If, as you seemingly incessantly propose that the court is free to dissect any type of legislation to save only those parts that pass constitutional muster, then the very idea of having a separability clause is quite meaningless.

      I am so looking forward to your thoughtful response. It will be interesting for all legislators to take note and no longer have to care about such clauses.

      1. ou seemingly incessantly propose that the court is free to dissect any type of legislation to save only those parts that pass constitutional muster,

        That’s not what Paul proposed.

        Learn to read.

        1. That’s not what Paul proposed.

          Unless you are going to actually point out the difference (maybe using those short declarative sentences you are always on about), your mere Red Queen edict is just not availing.

          Let’s let Mr. Morgan answer the question, shall we?

  10. This doesn’t seem to implicate patents except maybe giving some support for the estoppel provisions in the AIA and maybe adding some guidance on interpreting the AIA estoppel provisions. Big for Trademarks, though. Going to have to put on a bigger show at the PTO.

  11. Your missing something, Dennis. The dissent raised the constitutionality of an executive agency deciding facts that are preclusive in a subsequent litigation that involves core private rights — citing Crowell v. Benson and Stern v. Marshall.

    The majority did not address the issue because it was not raised — but it did observe that losing party had a right to trial de novo in an Art. III court that was not taken in this case.

    In contrast to trademark oppositions, IPRs and other PGR are not subject to trial de novo. I would suspect the constitutional issues to become acute if someone were to attempt to apply collateral estoppel to a PTAB ruling outside of the statutory provisions and even then, Stern would seem to preclude such, because that case held that statutory jurisdiction to decide a private right dispute was nevertheless a violation of Article III, and there was no collateral estoppel effect to such a judgement. Executive Benefits, however, held that if there was in fact a de novo review, the Article III problem vanished.

    Fireworks ahead. The Supreme Court seems primed.

    1. Thanks Ned.

      Yes – the Supreme Court appears ready for the Article III argument. In some ways the IPR/PGR offers a better vehicle for challenging since there is no option for filing a civil action with de novo presentation of facts. On the other side, however, there may be a distinction that can still be drawn between federally-created patent rights and the TM rights at issue here.

        1. I don’t the argument formalized, but here is the general idea: If we start with the Trade-Mark cases, the court found it relevant and important that TM really stems from a common law private right. As a federal statutory beast, patents are different and in the scheme of private rights may have a somewhat lesser provenance. The result being that – maybe the Article III problem would be greater in TM than in patents.

          1. I think that you have that backwards as the Adticle III nature of patents being stronger, not weaker exacerbates rather than alleviates the infirmity.

          2. Dennis, we do not write on a blank sheet.

            The Supreme Court already held in Markman that patent infringement actions have a right to a trial by jury. This negatives that patents can broadly be public rights because if they were, congress could move all adjudications involving patents anywhere it wanted, to equity courts, to administrative tribunals, etc. Anywhere.

            That leaves us with looking at particular kinds of actions and remedies, as in actions where only an equitable remedy is sought by the patent holder.

            The Feds have already held that DJ actions for invalidity have a right to jury trial — that excludes invalidity actions from being assigned to an administrative body.

            As well, scire facias actions to revoke a patent for double patenting, fraud and invalidity were tried at common law and had a right to a jury trial.

            Just how IPRs may be constitutional at all is a wonder.

            Now, a right of appeal to a district court with a trial de novo seems to cure the constitutional defects. Kappos, bless him, was extremely adverse to trial de novo’s. See, Hyatt v. Kappos. We know where the exclusion of trial de novo’s came from. If the AIA falls because of this, we know who to blame.

            1. If the AIA falls because of this, we know who to blame.

              There is one – and only one – place to lay the blame, Ned.

              Congress.

              Congress wrote the law.

              Congress gambled with the too-big-to-fail Chaebol effect of NOT including the separability amendment.

          3. Ned,

            I appreciate you pointing me to a case and a brief, but it doesn’t quite help me. I need a much more general overview, like a comprehensive history of courts interpreting and handling public and private rights. Because cases usually limit their discussion of history only insofar that it supports a particular opinion on how a current problem should be resolved.

            Because here is my question. Unlike copyright, trademark, or real property law, if 35 U.S.C. is repealed, there is no cause of action of infringement. Patents would just disappear. Doesn’t that indicate public right, not private right?

            1. J, the negative line of authority prevents adjudications of cause of action in non Article III courts if actions were tried in the courts of England in 1789.

              So, regardless that patents are a creature of statute, neither infringement, validity or cancellation action be tried elsewhere because such actions were tried in the courts of England at common law.

              See, e.g., Markman.

            2. Ned,

              Were there not actions of infringement in both common law courts and equity courts, both in the United States and England? If they were in equity, then they didn’t have juries to determine things such as novelty.

              Also, say there were Supreme Court cases in the 1910s that held that patent rights do not have the same “bundle of sticks” as property rights… does that undermine your argument?

              1. J, The Supreme Court seems to assume that there was no right to a jury when an equitable remedy was sought. However, 1800, the equity courts in England did not independently assess disputed facts, but also called a jury a Kings bench.

                However the practice United States historically was that if one sought only an equitable remedy there was a right to a jury trial.

                Regardless a number of the bundle of sticks, the real question is whether the protection of patents involves liability one individual to another under the law. Clearly patent infringement actions do involve such liability – and that settles the matter. Patent infringement actions cannot be withdrawn from Article III courts, therefore patents cannot be public rights.

                This does not mean that specific forms of action not known at common law cannot be created and assigned to non-Article III tribunals. ITC actions are one such, were patent validity and infringement are adjudicated without constitutional violation. The form of action is the government acting in its traditional constitutional capacity to control imports. This is well within the traditional notions of public rights.

                The Supreme Court has also ruled that actions against the government and by the government itself against others are public rights. Thus there is no right to a trial in Article III court with respect to a patent infringement action against the government. That is why, for example, the federal Claims Court is an Article I court.

                The question of whether an IPR is a form of action that that must be tried in Article III depends on whether it is analogous to actions tried in the courts of England at common law. And of course we know that actions to cancel patents for double patenting, fraud, and invalidity were known. For this reason, IPRs cannot be withdrawn from the Article III courts.

                1. Ned,

                  Patents / public rights have not been addressed within the framework of the ITC, and there the CAFC has merely held that Congress did not intend ITC determinations wrt to patent validity to carry preclusive effect. In essence, the ITC issues advisory opinions on issues of patent validity.

                  Those of us, however, who have (1) litigated patent validity before the ITC, and (2) re-litigated that same claim before an Art III Dist. Ct., know that those ITC advisory opinions present a high hurdle which is almost always rubber stamped by the Dist. Ct. judge. This is what the future of IPR potentially looks like.

              2. Ned,

                U.S. Courts sitting in equity courts would panel a jury for determination facts, but I always thought that was because of the nature and politics of equity generally, not because of the nature of patent rights.

                Thats why I’m struggling with your argument. For these patent cases, setting aside those before 1900, it seems that the Court is saying, “once you are in an art. III court, the court has to act this way because that’s how art. III courts always act.” But it’s not the same as, “act this way because that is the nature of patents.”

                I see your point regarding infringement as imposing liability, and therefore a private right. But at issue in infringement matters includes both the right of the patent owner AND the rights of the Defendant. That is, the question of whether D. has done X is ancillary to whether P. has properly patented X under 35 U.S.C. The latter, by itself, is at issue here.

                1. Absolutely. A defendant has a constitutional right of due process to assert that the patent is invalid in defense of a claim for infringement. I don’t understand how anybody can seriously consider divorcing validity from infringement in patent cases. The whole idea, to create a system like they have in Germany, where validity is tried in the patent office and infringement is tried in courts, is clearly unconstitutional in the United States.

                  The people behind us do not understand and do not care about the United States Constitution. They assume they have the power to do anything they want and get away with. So long as the Federal Circuit was their ally and the Supreme Court was looking the other way, they could get away with this kind of stuff. But no more.

                  Stern v. Marshall is a great case. It seems to restore the balance. It indicates that Supreme Court is actively involved in this area of jurisprudence where the balance of power between the administrative state and the right to have one’s case litigated in court and to a jury has now come to the forefront of the Supreme Court agenda.

                2. Ned,

                  Everyone is entitled to Due Process, but that begs the question. One may find due process in either an art. I or art. III tribunal. The question is which one is appropriate.

                  I am sympathetic to your case insofar that the PTO should not have deference to its legal determinations…

                  But I don’t get the Constitutional argument. I might not have made my last point clear: the past decisions of the Court regarding the 7th amendment and patent cases is because those cases were, ultimately, whether a company can sell item X without being liable to another. That is something different than revoking a patent, because in the cases in front of the PTO there is no question of liability, but the right to have a patent. Being in a common law court and the court to act according to Constitution is different than having the Constitutional right to be there in the first place.

                  If I may back up a little bit, and this will answer anon’s question below…

                  In every single writing that I have read about patents as a private right in the last 24 hours, there is an analogy to other property rights. But I think that this is wrong, and I don’t think the Supreme Court will agree with you.

                  The fact is that there is not the same rights in patents as property rights. The Supreme Court has not said that since Henry v. A.B. Dick in 1912. After that, the doctrines of patent misuse and patent exhaustion began developing and has not been interrupted since. This started with Bauer & Cie v. O’Donnell in 1913 (and notice that the dissent composed of justices that signed on to the opinion in A.B. Dick), continuing on Straus v. Victor Talking Machine (1917) and Motion Picture Patents v. Universal Film Mfg. Co. (1917).

                  There is no right to place restrictions on patents like there is restrictions to chattel in other forms of property, or else there is no such thing as patent misuse or patent exhaustion. Doesn’t that indicate it isn’t a private right?

                3. I would like a list of what I should avoid typing to avoid the moderation filter.

                  Since I am double posting, let me rephrase my last sentence because it was a double negative:

                  Does this indicate that patents are not a private right?

      1. Bottom of page 2: “Instead, consistent with principles of law that apply in
        innumerable contexts, we hold that a court should give
        preclusive effect to TTAB decisions if the ordinary elements
        of issue preclusion are met. “

      2. Yes, as the decision notes, trademark rights existed long prior to, and were not created by, the Constitution and its empowerment of Congress to pass statutes therefor [like patents and copyrights]. The federal trademark statutes depend on the modern expansive view of the Constitutional interstate commerce clause. Whereas patent rights have always required some kind of statutory sovereign creation throughout history. [Whether that makes a difference or not to the constitutionality an IPR, CBM, or PGR is another whole topic.] It may be more important constitutionally that a Reexamination, IPR, CBM, or PGR is not a suit for damages?

        1. Paul, indeed.

          But the negative line of authority bars removal of a cause of action from the courts if an analog cause of action were tried in the courts of England in 1789.

          That is where scire facias actions emerge. These actions were for cancellation of a patent for double patenting, fraud and invalidity. See, Mowry v. Whitney, 81 U.S. 434 (1872) for details. When validity was the ground for cancellation, a petition had first be made to the attorney-general, who, if he thought it had merit, authorized the action in the name of the King.

          The Supreme Court has already held that in scire facias actions in the US for cancellation of a patent for invalidity, the was a right to a jury trial because the common law writ had a right to a jury trial. ex parte Wood & Brundage, 222 U.S. 603, 604-605, 607, 615 (1824)

          Also relevant is the vacated decision of the Federal Circuit in Lockwood. That case held that DJ actions has a right to a jury trial if the patent owner did not limit his remedy to an equitable remedy by his choice. Nies, in dissent from in banc, argued that the panel holding overruled Patlex, and in banc review was required.

          1. It does seem like if you had (have) a right to trial by jury for invalidity that an administrative agency can’t invalidate the patent. This is actually a very powerful argument.

            Hmmm. I would have to read the cases, though. How come the reexaminations held up all these years? I admit I don’t know much about this area of patent law. Also, I wonder too whether or not the PGRs can’t be lumped into the process of getting patent since they are time limited. Actually, the most vulnerable part of the AIA would be the CBR section which grants an automatic stay in the Dist. Ct. and then you go to the PTO. That seems like the by far the most vulnerable part of the AIA to these arguments.

      3. My question: Even if the other elements of issue preclusion are met, if IPR claim construction is based on broadest reasonable interpretation, do we have the same issues as in an Article III court or is it like the top of page 16 where: ““[m]inor variations in the application of what is in essence the same legal standard do not defeat preclusion.””

        1. For patents (and this can be directly contrasted with trademarks), the loss of the presumption of validity alone (coupled with the new standard of BRI) is not – and cannot be – considered a “minor variation.”

          These are very different legal standards.

          1. Right – We have some major differences (BRI; Presumptions; etc.) that have so-far been sufficient for courts to believe that preclusion does not apply. The question will be whether this case changes that mindset.

            1. The question will be whether this case changes that mindset.

              I don’t think a “court mindset” can overcome the differences in Constitutional moorings. If anything, at first blush, those differences are being magnified.

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