Constitutional Challenges to IPR Continue

by Dennis Crouch

Respect for property rights has always been a core American principle.  That respect generally means that a government grant of a property rights cannot be cancelled or annulled outside of judicial action.  In a set of 19th Century cases, that principle was repeatedly upheld, including in the patent law context (both patents for land and patents for inventions).

See, e.g.:

  • McCormick Harvesting Mach. v. Aultman, 169 U.S. 606 (1898) (“[W]hen a patent [issues], it has passed beyond the control and jurisdiction of [the patent] office, and is not subject to be revoked or cancelled by the President, or any other officer of the Government. It has become the property of the patentee, and as such is entitled to the same legal protection as other property.)
  • Iron Silver Mining v. Campbell, 135 U.S. 286 (1890) (“[Patent validity] is always and ultimately a question of judicial cognizance.”)
  • US v. Stone, 69 U.S. 525 (1864).

In his 4th Circuit appeal, Carl Cooper now argues that inter partes review proceedings under the AIA violate these principles and are therefore unconstitutional. (Cooper v. Lee) In addition, Cooper argues that IPRs violate patentees Seventh Amendment right to a jury trial on questions of patent invalidity.

Cooper v. Lee began as a lawsuit after Cooper’s patents were challenged in a set of inter partes review proceedings.  Rather than awaiting the outcome of the IPR, Cooper quickly filed a civil action in district court arguing that the regime is unconstitutional. However, the district court dismissed the case – finding that it lacked jurisdiction. In particular, the district court held that the AIA provides for particular appellate review and that Cooper must first exhaust the administrative process before raising an external constitutional challenge.

As it did at the lower court, the USPTO largely avoids the merits but instead argues that the appellate court has no jurisdiction over the case – both for the reasons given by the district court and because the case should have been heard by the Federal Circuit rather than the 4th Circuit.  [PTO Brief in Cooper v. Lee]. Meanwhile, in May 2015, the USPTO PTAB issued a final order cancelling the challenged patent claims and setting-up a direct Federal Circuit appeal to be filed this month. See IPR2014-00156 (May 14, 2015); IPR2014-00157 (May 14, 2015); IPR2014-00158 (May 8, 2015).

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Incredibly important and difficult Constitutional issues here.

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Briefing appears now complete in the parallel case of MCM v. HP that I previously discussed:

 

 

 

219 thoughts on “Constitutional Challenges to IPR Continue

  1. 23

    Perhaps not touched upon with enough paeticularity below (but definitely identified in previous discussions) is the fact that the challenge is timely for no other reason then more than item out of the granted patent’s property rights (there are several sticks to that bundle) are “at play.”

    Whether or not the final adjudication on the merits of the patent itself are exhausted through the extant process is separate from – and this is critical – the institution decision, which in and of itself both is not appealable, and constitutes a taking by executive action (the removal of the property stick of presumed validity, as well as the re instituted application of BRI).

    This is not (directly) saying that Congress is prevented from makin a law with such a taking, but if that taking violates the constitution, then the law as written fails.

    Shall we then again attach the inevitable and necessary result of the choice by Congress to reject the possibility of separability as yet another below the water line hole is blown into the good ship AIA….?

    1. 23.1

      Anon,

      These are good points, and there is no substantive reason as to why the 4th Circuit can’t address the constitutional question on the merits. Congress cannot “channel” the question of whether the administrative grant of Article III power is or is not constitutional to a court (or bureau) of its choosing (the underlying logical fallacy should be clear). I thought eCharge pointed this out in the reply; the various Supreme Court and CAFC decisions (i.e., Patlex) addressing the public rights exception demonstrate that these challenges may proceed through a number of potential routes (irrespective of what the statute may or may not say about the matter).

      Personally, I’d be disappointed if the 4th Circuit passed on addressing the issue on the merits (perhaps out of a sense of owed deference to a sister circuit?). The CAFC had its opportunity, and both the Patlex and Joy decisions pretty clearly indicate that the CAFC is not interested in taking the issue (or the SCOTUS’s view of it) seriously. It is time that a court explains to the nation how the resolution of IP patent validity claims with finality before an Article I administrator meets constitutional muster. If this is truly an administrative claim, some court needs to explain why.

      The USPTO’s aggressive advocacy in terms of avoiding the merits plus pushing the dispute back onto its “home court” seems to suggest that it itself does not have confidence in the underlying congressional delegation of power. If this is clearly constitutional, why all the squirming?

      I’m interested in hearing more about your arguments regarding separability. In all honesty, the issue is not my bailiwick, but I do know that the Supreme Court has previously recalibrated a number of otherwise unconstitutional admin mechanisms (the most recent example being Stern) in the past without the roof caving in. Perhaps the AIA is truly its own animal, however.

      1. 23.1.1

        The reasoning on the separability issue is quite simple and has to do with the manner in which the AIA became law.

        Given the recent Supreme Court ruling reaching into “intent of Congress,” I cannot see a way that the Court could divide out any single constitution-offending portion. It was Congress’es intent – for whatever reason** – to build its huge ship without compartmentilized bulkheads. It is simply an historical fact now that the idea of making the law separable was considered and rejected by Congress. There just is no possible way to “interpret” your way to the exact opposite result.

        I asked Ned Heller to come up with some cogent way of doing this. Not surprisingly, the dialogue went silent.

        You have shown yourself to be a fairly thoughtful commentator. Perhaps you can reason a way that a court can rewrite a statutory law to include separability when the history of that particular statute clearly shows the intent to reject separability.

        I am all ears.

        ** I have shared my own cynical views as to why such a self-destruct mechanism was included (it has to do with making the special interest groups come back to Washington once more with their wallets)

        1. 23.1.1.1

          … by the way, the very day the separability amendment was rejected, I noted the implications for the then-bill right here on this blog.

          To this day, I have seen zero rebuttals to my view that can survive even the lightest critical evaluation.

          Surely, if someone can pull off the magic trick of re-writing the AIA and un-rejecting the separability amendment, we would have seen it sometime in the last four or so years, eh?

          The silence screams volumes.

          1. 23.1.1.1.1

            Anon,

            By rejecting the separability amendment, Congress appears to be playing a dangerous game of chicken — in addition to doubling down on its impermissible usurpation of Article III power. If the AIA will in fact tank as a result of a particular provision being identified as violative of separation of powers, it will take real guts from at least 5 Justices to stand up for the interests of the judicial branch.

            In my view, CJ Roberts and others saw this coming. Alice and others weren’t about weakening the patent system; those decisions were about empowering the Article III judiciary to handle the fallout from the pending capitulation of IPR.

            Nonetheless, I will review how prior SCOTUS decisions impacted unconstitutional (statutory) delegations of Article III power in the public rights framework and will provide an update.

              1. 23.1.1.1.1.1.1

                That is laughable.

                See the recent Supreme Court case on “intent of Congress.”

                You just cannot say that you need a clause stating “this bill is separable” when Comgress unequivocally acted to the contrary by REJECTING (you know, taking a vote to explicitly say “that is NOT what we want”) the idea of separability.

                You cannot get more cut and dried here – or more direct and simple. There is just NO room for “spin” here (and hence the screams of silence from my usual petty detractors).

            1. 23.1.1.1.1.2

              If Congress really wanted to play a game of “chicken,” they would disband the CAFC, remove the appellate authority on patent cases from the Supreme Court and and create a new Article III inferior court that truly can be the last word on patent law.

              Let the Supreme Court try to overcome Congress’es constitutional authority to do that!

              (And yes, that is another original anon legal insight)

              1. 23.1.1.1.1.2.1

                Congress would not do that, the people would have their heads. Perhaps, not metaphorically.

                Second, the Supreme Court would rule any such creation of a second supreme court unconstitutional.

                1. It would NOT be a second Supreme Court Ned – clearly.

                  You need to brush up a bit on the applicable doctrine and the fact that even the Supreme Court is a court of limited powers (patent appeals just are NOT a matter of original jurisdiction, are they Ned?)

                  Such as I have laid it is FULLY within the writings of the Constitution and abides by Marbury.

                  If you want to try to poke holes – go right ahead, but please none of the Ned-IMHO fantasy stuff.

                2. You know, anon, you like to use different words for the same thing so as to hide the ball.

                  A court of a last resort is what, anon?

                3. Not at all Ned.

                  Read up on “jurisdiction str1pping.”
                  Read again Marbury and see that it is NOT that the Supreme Court must jar review, but merely that and Article III court must have review.

                  Your adoration of the Royal Nine blinds you (yet again) as to what is actually written in the Constitution.

                  As I also said – if you have an actual legal point, backed up with more than just your mere belief, let’s hear it. I am perfectly willing to be persuaded (corrected even – though that won’t be possible here because I know of what I talk).

                  Your turn Ned – do something substantive with it.

                4. Anon and Ned,

                  The SCOTUS in Stern did not strike the bankruptcy statute conferring power to the Article I bankruptcy court to rule with finality on a common law counterclaim.

                  Instead, the SCOTUS ruled that “the Bankruptcy Court below lacked the constitutional authority to enter a final judgment on a [common law] counterclaim;” “the bankruptcy court’s exercise of jurisdiction” was unconstitutional. Thus, the rulings on counterclaims became advisory as opposed to final.

                  As explained by the SCOTUS in Stern, Congress may attempt to revise the statute (as it did post Northern Pipeline), but the statutory provision itself does not fall per the initial SCOTUS determination of unconstitutionality. See also the many Article III land patent cases, and the decades long battle that went on between the legislative and judicial branches regarding the power to adjudicate issued land patents.

                  Thus, the public right cases demonstrate that where a statute impermissible grants Article III power to an administrator, the remedy is a judicial curtailment of the constitutional authority to rule with finality. As applied to IPR – the statute would remain, and the decisions would become advisory.

                  If there is a public rights case that says otherwise (and maybe there is), I’d like to see it. Ned, what say you?

                5. No, but there was “consent” in Stern –and there was a right of de novo review by a district court.

                  In contrast, patent owners are involuntarily hailed into a bureaucrat court, where by statute there is no right of de novo court review at all.

                  I don’t see how Stern fits this framework.

                6. Consent applied to the proof of claim only, and, in any event, was approved of (of course, pre Wellness) by only 4 of the 9.

                  De novo review in Stern was completely immaterial to the question of whether the adjudication of the counterclaim was or was not constitutional. The SCOTUS flat out said that non-advisory determination of the counterclaim violated Article III.

                  You remain in over your head. Less time blogging, more time with head in the casebook.

                7. No, I am done talking with you as you have become one more a hole. Where do you think you get off, you p r * ck?

                8. Ned – I apologize. I was merely trying to make the point that if you are going to argue this in front of the nation’s most important judges, there is work to be done.

                  Maybe Northern Pipeline is helpful as well. There, the SCOTUS held that (1) unconstitutionality was not retroactive in application, and (2) though the statutory provision was unconstitutional, Congress was given a multi-year STAY to correct the legislation before the judgment went into effect. In the present case, the SCOTUS could do something very similar – i.e., fix the AIA before the IPR provision falls per the expiration of the SCOTUS stay.

                  Either way, I think it’s safe to say that we can put anon’s “the AIA will tank” argument to bed. Perhaps anon disagrees.

                  From Northern:

                  “Having concluded that the broad grant of jurisdiction to the bankruptcy courts contained in 28 U.S.C. 1471 (1976 ed., Supp. IV) is unconstitutional, we must now determine whether our holding should be applied retroactively to the effective date of the Act. 40 Our decision in Chevron [458 U.S. 50, 88] Oil Co. v. Huson, 404 U.S. 97 (1971), sets forth the three considerations recognized by our precedents as properly bearing upon the issue of retroactivity. They are, first, whether the holding in question “decid[ed] an issue of first impression whose resolution was not clearly foreshadowed” by earlier cases, id., at 106; second, “whether retrospective operation will further or retard [the] operation” of the holding in question, id., at 107; and third, whether retroactive application “could produce substantial inequitable results” in individual cases, ibid. In the present cases, all of these considerations militate against the retroactive application of our holding today. It is plain that Congress’ broad grant of judicial power to non-Art. III bankruptcy judges presents an unprecedented question of interpretation of Art. III. It is equally plain that retroactive application would not further the operation of our holding, and would surely visit substantial injustice and hardship upon those litigants who relied upon the Act’s vesting of jurisdiction in the bankruptcy courts. We hold, therefore, that our decision today shall apply only prospectively. 41

                  The judgment of the District Court is affirmed. However, we stay our judgment until October 4, 1982. This limited stay will afford Congress an opportunity to reconstitute the bankruptcy courts or to adopt other valid means of adjudication, without impairing the interim administration of the bankruptcy laws”

                9. No, given Lockwood, given Granfinanciera, there is no way that people could reasonably rely on Patlex to support IPRs.

                  As to a remedy, are you suggesting that the courts could simply provide that PTAB final decisions are not final and any decision adverse to the patent owner would have to be taken by the petitioner to district court for enforcement?

                  What about standing? What you are suggesting is that the petitioner would have to file a DJ action for invalidity where the PTAB decision would only be advisory. Is that what you see as a possible remedy?

                10. Recall also, No, that the government does not have standing in court to challenge the validity of an issued patent. So, if the petitioner drops out, that ends it.

                11. Ned,

                  Agreed re Patlex. The discussion was whether there was validity to the AIA-will-tank fear mongering. There is not.

                  Also, Joy, not Patlex, represents the latest iteration of the CAFC’s view on the public rights rule (so don’t overlook it). Without question, it is the broader statement.

                  In terms of your questions, I will tell you what is constitutionally permissible:

                  Any party make seek an advisory opinion at the Article I level. As you have correctly pointed out, where private (or public) rights are involved, Congress may not legislate around constitutional requirements governing the operation of the Article III judiciary. Thus, where no standing, no enforcement of the advisory opinion. This of course will impact the significance of IPRs moving forward.

                  In any event, consider this my retirement. Best of luck to you, keep fighting the good fight.

                12. Goodbye, no.

                  Congress has power under Article I to establish bankruptcy courts. Congress has no power under the constitution to establish courts to adjudicate the validity of an issued patent for the purposed of revoking it. See, e.g., McCormick Harvesting.

                  I do not understand how congress could validity create even statutory jurisdiction for IPRs. They do not have the power to do so.

                13. No,

                  You get short an criticize Ned…? All you have done is hand wave – you have offered NO sustainable logic. Your position boils down to “well, other things were not deemed unconstitutional and were separated, so therefore the AIA must too.”

                  Wrong.

                  Find one of the bmakruptcy laws that discussed, debated and voted to be inseparable, and then you might begin to have a case. You also cannot conflate a land patent issue for the same reason – this law (the AIA) was formed in a particular manner and you know this (as witness by your wondering above what was Congress doing). You do NOT get to simply close your eyes and ignore that fact. You also do NOT get to rewrite the law and make the decisions of the PTAB merely advisory, as that too is clearly not what Congress did. Such can only be termed extreme legislation from the bench.

                  You STILL have not addressed the critical issue before you.

                  Maybe it is you that needs both better blogging AND more time in the case books – but let me tell you now, you will not find a case to support what you want the outcome to be. In fact, as I have already indicated, the latest case from the Supreme Court regarding “the will of Congress” works directly against what you want.

                  You retired much too early as your hand waving has been rejected.

  2. 22

    With respect to IPRs generally, In re Cuozzo was decided today and the CAFC affirmed the use of BRI in the proceedings. Petition to rehear en banc was denied.

    More here: link to patentlyo.com (comments 4 and 4.1)

  3. 21

    Here is brief filed by Robert regarding : “Cooper reply to the USPTO”

    Would be interested in everyone’s views.

    link to docdroid.net

    Hi Dennis,

    May be you can download both the documents I have uploaded on “docdroid” and put them as a link in your article itself from. Folks won’t have to search for all of them in the comments section.

    Like you did for MCM.

    thx

    1. 21.1

      Brian,

      The more I think about this, the more I become convinced that there are only two foreseeable outcomes resulting from this challenge(s):

      (1) either patent validity is again designated a public right and becomes a purely administrative claim over time;

      [the implications for Article III aside]

      (2) or patent validity is designated as a private right by either the 4th Circuit, CAFC, or SCOTUS, and IPR and reexamination are recalibrated (per the requirements of a private right before administrative agencies) as advisory bodies.

      It appears that the nation’s patent system is a major crossroads — but perhaps others see it differently.

      A potential third option would be: (3) patent validity is again identified as a public right, and the balance between the PTAB and the Article III courts remains status quo.

      It seems to me that once Congress figures out that the claim is purely administrative per the public rights definition, the balance will tilt.

      1. 21.1.1

        Your rather constrained outcome set does not even come close to contemplating the most likely – and largest – impact.

        What’s up with that?

        1. 21.1.1.1

          (4) the entire AIA tanks because anon is convinced it is the necessary result sans severability clause?

          1. 21.1.1.1.1

            I just noticed this, so my apologies for the delay.

            If you want to be glib about the necessary implications of Congress having before them a separability amendment – and rejecting it, that is your business. But please stay away from the obnoxious fallacy of trying to make the issue merely one of “anon says.” That is a C R P deflection, unworthy of your usual thoughtful inputs.

          1. 21.1.2.1.1

            How is the claim of patent validity currently before the PTAB if not previously identified as a public right by the CAFC?

          2. 21.1.2.1.2

            No, Patlex declared a patent to be a public right for two reasons:

            1: Patent validity was a public concern; and
            2. Patents were created by statute as opposed to the common law rights involved in Northern Pipeline.

            Everyone involved in this issue is now on board with this interpretation of Patlex.

            This broad declaration sweeps the whole of patent litigation under the control of Congress. Obviously, the Federal Circuit didn’t understand the public rights doctrine.

            But, let us assume arguendo, that patent validity and patent infringement can be divided in two like the babe in the Solomon tale. Do you think that the Supreme Court would approve of forcing patent validity litigation into the USPTO, thereby ignoring the statutory presumption of validity, the high burden of proof, and the constitutional right to a jury trial — viz Lockwood? I hardly think so. But that is where we are with IPRs.

            If one looks at it this way, the whole point of IPRs is to strip patent owners of rights, to lower the burden of proof, to use BRI and to deny a right to jury trial.

    2. 21.2

      Wow, that brief is great. Without question, you should win, if (big IF these days) the Fourth Circuit decides to uphold the Constitution. A couple of thoughts:

      Star chamber. I would mention that the Patent Trail and Appeal Board – is more political favor factory than administrative court – because the Commission herself (and two hand picked lackeys) is the Board. See link to law.cornell.edu. So even if the Court wants to save the IPR – it should not save THIS IPR – with the star chamber court.

      PTO is Rouge. All other administrative courts resolve the overlapping jurisdiction question (putting aside the 7th amendment argument) by strict application of administrative estopple – tax court, court of fed employee, contract court, etc etc, so PTO is rouge. The rouge agency argument always appears to resonate with the non-patent type judges – like SCOTUS. Even PTO started out this way with In re Perne and Wichardly.

      You Should Be Ashamed to Call Yourself a Judge. Of course Hayburn’s Case. This hybrid beast created by the AIA – cannot stand. IPR’s make a mockery of the Art III courts. If this gets thru ‘Katie bar the door’ all the Agencies will make a run for this power.

      You might find FCC V. NEXTWAVE PERSONAL COMMUNICATIONS INC. (01-653) 537 U.S. 293 (2003) of interest. Here the FCC was attempting the ‘correcting a mistake’ argument to get jurisdiction over a spectrum license won by Nextwave (technically issuing a ‘new’ license to another party). SCOTUS dismissed that ‘we are not touching the Nextwave license’ agency reasoning and slapped them back.

      Having read Patlex over the years – I wonder if sub silento 35 USC 145 – was the Constitutional safety valve that allowed it thru. With 145 in place at the time, one could argue that PTO, if the patent owner sued out the patent after an adverse board decision in district court – would have de novo review – and the board decision would be merely advisory to the court. That might have passed muster. Of course 145 does not apply in IPR, and i think it was repealed, at any rate. If this were the case then you could say the holding of Patlex is moot, 35 USC 145 have been repealed and it is a now a case of first impression. But i suppose it was affirmed in lockwood.

      Best of luck.

      1. 21.2.1

        iwasthere, on the de novo review point, we address that in our reply brief.

        The Patlex district court decisions upheld reexaminations because of de novo review. I have no idea why the Feds ignored this and went off on a lark, overruling McCormick Harvesting, and making a hash of the public rights argument.

        Had they done so a the time, IPRs would have been created with a de novo review opportunity, if at all.

        1. 21.2.1.1

          Ned,

          De novo review only works where the underlying adjudication on the legal question is advisory in nature. You cannot have one without the other. An Article I administrator cannot rule on a private right with finality provided that de novo review remains discretionarily available to the potential appellant. The advisory opinion is merely that, and it must be reviewed by an Article III court de novo. If you believe otherwise, please provide the relevant public rights SCOTUS case with pincite.

          1. 21.2.1.1.1

            Note: Article I FACT-FINDING may be resolved with finality provided that de novo is available. See the distinction? Questions of law (e.g., patent validity) relating to private claims must be advisory subject to de novo review; fact-finding may be entered with finality provided that de novo remains available.

            Suggesting that IPR can exist status quo provided that its decisions are reviewed de novo is misleading. Compare with Stern, and its holding that the private right counterclaims must become advisory — subject to waiver by the individual litigant. As with the “Stern” counterclaims before the Article I Bankruptcy court, findings of law on private rights before the Article I PTAB must also become advisory.

            1. 21.2.1.1.1.1

              A big problem with IPRs is lack of standing for a petitioner and with the government intervening if the petitioner drops out.

              Now we know from cases like McCormick Harvesting that the government has no standing to challenge an issued patent. Where do they get standing to even be present on an appeal?

              So, I think a good restructure would be for the court to assume full control over IPRs, such that the petitioner would file in court, the court would rule on preliminary matters, e.g., 315(b), determine whether there is a reasonable likelihood of success and whether there is a real case and controversy, refer the matter to the PTAB for their 1yr trial, and then assess whether there is new evidence or not for a trial de novo on return of the case. This way we can get the opinion of the so-called experts, three senior patent attorneys.

              If there is a demand for a jury trial, the court could simply keep the case itself.

          2. 21.2.1.1.2

            B&B Hardware.

            I know Roberts, Scalia and Thomas are hardliners on this issue. But Roberts fell into dissent in Wellness.

            B&B Hardware suggested that de novo review was sufficient. But I do agree that Stern v. Marshall suggested otherwise.

            1. 21.2.1.1.2.1

              Ned – I saw the discussion regarding de novo review in B&B as well. However, B&B was not a public rights case, it was a collateral estoppel case. Stern establishes the rule – any discussion to the contrary is pure dicta.

              As an aside, it’s interesting that the Quinnbots did not raise Article III issues in the TTAB / Redskins cancellation case. After B&B, that challenge seems preordained.

  4. 20

    The consumer electronics association just put an ad on my pandora telling me to contact my local representative to have him pull the plug on trolls. Where they state that trolls extort more than 80 billy a year from the econ. Seems like an idea.

    Idk if NWPA’s thinking this is all google is quite right tho.

    1. 20.1

      There are definitely multiple parties that want to end patents or turn them into the sport of kings/queens.

      I think we could solve about 90% of our problems with better searches at the PTO.

      1. 20.1.1

        Maybe they could contract a company who built their business on doing searches to design a search system for them?

        *ducks and runs*

        (Sorry, couldn’t resist the irony, given the content of the thread)

        1. 20.1.1.2

          Well, under our new realm of the Royal 9, maybe the problem is that we have to entice a huge monopoly to write the software for the PTO. Maybe we are becoming like Europe with little or no software industry because they don’t allow patents.

          Just unbelievable stuff. Who needs a Congress when we have the Royal 9.

          1. 20.1.1.2.1

            Not really sure that follows.

            The government has been contracting for software since the first computer was built. I’m sure they contracted someone to write the current search software they have, if any. I would expect them to contract out any revamping of the system as well.

            I would expect the three companies to have the qualifications to bid on this to be Google, Microsoft, and Yahoo (in alphabetical order). If the PTO announced they wanted to revamp their search system, I don’t see any of these 3 not bidding on it. It would be a very high profile kind of project, plus all three would have a vested interest in making sure any search system at the PTO worked as well as it could.

            1. 20.1.1.2.1.1

              MDT, I am not sure who would be the best contractor. But, if you were in another country that didn’t allow software patents, you would most likely have to contract it out to a U.S. firm or a firm that uses U.S. software. That is the point.

              But, besides that, it is mind boggling that the PTO has billions of dollars and they have not focused in on creating better software tools for their examiners to do their job and have not created a competitive system for doing office actions.

              Ridiculous. But, then when the likes of Lee who never did any prosecution is put in charge of 8,000 people that do examination it is not a surprise. It indicates that political agendas take precedent over the actual work. Lee is probably working her best to burn it down.

              1. 20.1.1.2.1.1.1

                I’ll disagree with you on the statement [i]if you didn’t have patents you’d have to contract to a US company[/i] because I don’t think patents have jack all to do with people accepting money to write software, anymore than people who are paid to design a car care about the patent, or the people who are paid to build your house care about patents. The people that end up owning those patents, most of the time, are corporate entities, not the guy who spent 90 hours with a clay block sculpting the new car’s look. While there may be some people caring about it, if your country doesn’t have software patents, then those companies there are working for contract pay, and don’t care about patents.

                Now, I do agree it’s outrageous that the PTO doesn’t have a state of the art search system.

                1. MDT, there are some big picture reality checks like how come the U.S. has the most advanced software industry in the world by a factor of 10 and has software patents?

                  I write software patents for start-ups that then receive millions in financing from VCs that look very carefully at the applications I’ve written.

                  But, MDT, the reality is that you have to educate yourself. There is so much to this issue including disclosure, funding, copying, etc. I know it may seem like they have nothing to do with it, but the more you work in this industry the more you realize they do.

                2. I think you miss my point.

                  Posit 1 : Country has no Software Patents
                  Posit 2 : Country has software programmers

                  Programmers in that country don’t care about patents, because they don’t use them. It would be insane for them to care about patents. It would be like me worrying about screen acting credits when I cook dinner. I’d be insane to bother with worrying about it.

                  EPO does not issue patents on Software Programs, and has a very developed software industry (I know, I’ve actually worked there).

                  I am not saying that software patents have not become a big commodity in the US.

                  I am saying that if they didn’t exist, people would still write software because they make money doing it. People will always do a job that they get paid to do if enough money is sent toward them. If not, nobody would work on radioactive contamination cleanup.

                  Besides, in my experience in the industry, they’d be more likely to go contact a software shop in India before they contracted with a US company if they wanted to build something whole cloth. That’s especially true after all the Snowden leaks. I know most of the companies I work with in the US export work to India.

                3. MDT,

                  You have deluded yourself, losing the view that “per se” and “as such” have In fact NOT prevented the EPO from having software patents.

                  Your foundation is wrecked. Your edifice crumbles.

                4. (and I do “get” your other point that things exist without a patent system – but that point rests fully on the “but for” canard. Patent systems simply do NOT exist for this “but for” condition. Yes, the “but for” is one of the reasons to have a patent system, but much like Ned and Malcolm’s malinformed manipulations of single options of various claim forms (Jepson, ALL objective physical structure), portraying the option as “the only” is simply engaging in a fallacy.)

                5. There are a lot of delusions in the thread.

                  History will decide who is delusional. :)

      2. 20.1.2

        Even if we had perfect search – and only the most meritorious patents on the books – you would still have the same complaints – trolls – broken system – must be reformed – etc etc. Because that is in the infringer’s (google, China, Inc., etc.) economic interest. To be sure, it would be easier to make that point if PTO took some pride in their work product.

  5. 19

    Received a PACER alert that the eCharge reply has been filed in the 4th Circuit. Appears to put the dagger in IPR.

    1. 19.1

      Clean shot beneath the water line of the good ship AIA…?

      Which reminds me, does anyone know how much was spent on the half dozen or so years leading up to the AIA?

    2. 19.2

      Paul, to those who now understand the law in this are a bit better thanks to Dennis’s blog, the eCharge brief should be easy to understand.

      The government position is non existent. Principally, they defend Patlex which as most here can see is all but indefensible. The wealth of Supreme Court jurisprudence in this area since Patlex, together with Lockwood, all but seals the deal.

  6. 18

    BTW, a key reason IPRs are so strongly disliked by many patent attorneys is their high % of negative outcomes* [with more than 1000 killings of litigation attorney fee billings already]. IF IPRs are erroneously over-killing claims with petitioners newly presented prior art, then IPRs must logically be getting lots of Fed. Cir. reversals on the appeals from those PTAB IPR decisions, right? In fact, PTAB IPR decisions have reportedly had a continuous record of some 30+ Rule 36 summary affirmances, and, only recently, one single reversal. [That sole reversal was for over-broad claim construction in the inter partes review, sending it back to the PTAB for reconsideration. Microsoft v. Proxyconn.] Compare that Fed. Cir. reversal rate to the much higher Fed. Cir. reversal rate of D.C. claim validity or invalidity decisions!

    *That is, a high percentage rejection of the relatively LOW percentage of the TOTAL number of patent claims in all pending patent suits in which defendants found better patent or publication prior art than the examiner did and presented it in an IPR petition which got accepted for PTAB trial.

    1. 18.1

      Be fair, though, and mention the different standards, preponderance and BRI, and the fact the patentee can’t amend the claims. IPRs are in effect another round of prosecution with $200K spent on a search and with no claim amendments.

      1. 18.1.1

        IPRs are in effect another round of prosecution with $200K spent on a search

        Here’s a great idea: spend a thousand dollars on a search before you file your application, and hire a competent attorney who isn’t going to blow sunshing up your behind to tell you what your chances of obtaining an enforceable patent really are.

        1. 18.1.1.1

          Actually, $1,000 is unlikely to do it. And, how about stop trying to shift the burden of patentability from the PTO to the applicant.

          1. 18.1.1.1.1

            stop trying to shift the burden of patentability from the PTO to the applicant.

            Stop ignoring reality and stop expecting people to respect the junk patents you file and obtain after you “appeal appeal appeal!!” silly procedural issues that would never have arisen in the first place if you had an ounce of integrity.

            1. 18.1.1.1.1.1

              >>“appeal appeal appeal!!” silly procedural issues that would never have arisen in the first place if you had an ounce of integrity

              Now you are just fabricating nonsense, which is not worth responding to–what a surprise from you.

              Fact is what I wrote is right. Searches outside the PTO are ridiculously expensive and difficult to obtain good results. The IPRs are essentially a burden shifting mechanism. It boils down to we are very close to a registration system and what you are advocating is a registration system. You are saying, applicant find all the relevant art and then write your claims to be non-obvious over the relevant art. That is a registration system.

              The PTO needs to be the ones to find the art. It just doesn’t work for applicants to find it. It is too expensive and too error prone.

              1. 18.1.1.1.1.1.1

                Searches outside the PTO are ridiculously expensive and difficult to obtain good results.

                Depends on the claims.

                I can tell you that for nearly all of the junk invalidated in IPRs a “good result” could be achieved for peanuts.

                Of course, you won’t be able to file your junk patent after that … unless you hire an attorney willing to scriven around the statutory requirements and kick dust in the PTO’s face. That costs money, too. As does “appeal appeal appeal!!”. But if you live and breathe to monetize junky patents because you can’t find anything productive to do with your life, then those costs are easily justified.

                1. MM, as well you know, I work with large tech corporations and start-ups. The only time I’ve been involved with “junk” patents is as a defense attorney.

                  Searches are hard. I have lots of real world experience working with real corporations that aren’t interested in filing a patent unless it makes sense. They file many applications and don’t want junk patents. They see patents as a way to motivate their employees and only want to spend the money if it is a non-obvious invention that may actually get built.

                  That is the real world—I know in great contrast to your pretend world of propaganda.

                  It is very hard to get good searches–very hard.

                2. NW: The only time I’ve been involved with “junk” patents is as a defense attorney.

                  That’s nice.

                  I have lots of real world experience working with real corporations that aren’t interested in filing a patent unless it makes sense. They file many applications and don’t want junk patents. They see patents as a way to motivate their employees and only want to spend the money if it is a non-obvious invention that may actually get built.

                  Again: that’s nice.

                  That is the real world

                  It may be part of the real world but it’s certainly not the only part.

                  Let me put in clear terms for you: if you helped your company obtain patents similar to the patents that the CAFC just tanked in IV v. Capital One, then you are part of the problem. That’s the “real world”.

                3. >>Let me put in clear terms for you: if you helped your company obtain patents similar to the patents that the CAFC just tanked in IV v. Capital One, then you are part of the problem. That’s the “real world”.

                  Seems authentic. MM, the problem is that whether or not something is “junk” or not needs to be determined during examination. There just isn’t another model that would work. Judgments by you or a judge as to whether a claim is valid based on a sniff test just aren’t OK.

                4. Night Writer,

                  You are wasting your breath because without a doubt Malcolm will move the goalposts (again).

                  He is on record as saying that ALL software is junk.

                  ALL.

                  What he wants is a different set of actual laws, one according to his Belieb system. And that is why Malcolm does not engage in an inte11ectually honest discussion of what the law as written by Congress means.

              2. 18.1.1.1.1.1.2

                “The PTO needs to be the ones to find the art. It just doesn’t work for applicants to find it. It is too expensive and too error prone.”

                Could have both doing it…

                But you’re right that 1000$ doesn’t buy much in the way of searching. You supply the search facilities and I’ll get ya a full 2 days of searching for 1,something$. As to whether it’s too expensive, well, you may have to decide which are your important apps.

      2. 18.1.2

        Yes N.W, there is no question that, as you note: “$200K [or so] spent on a [prior art] search and with no claim amendments” [not to mention good claim charts and inter parte rather than ex parte proceedings] logically leads to far more final claim rejections in IPRs than in most original application examinations, where an examiner has only a few hours of prior art searching and examination time.
        But almost all of that would have occurred anyway in the parallel patent suit that triggered the IPR, plus vastly more being spent on discovery costs re alleged infringements, and various other issues, all of which become moot if the claims in suit are proven invalid in the IPR.

        1. 18.1.2.1

          The great irony, of course, is that some (not all) of the folks who rail agasint IPRs also rail against getting rid of the junk patents (and corresponding junk patent lawsuits) on the pleadings or in any manner that doesn’t involve massive discovery costs and paid “experts” talking about technological advances that appear nowhere in the claims.

          Until the junk that was put into the system is expunged, there is no practical possibility of “going back” to the patent-worshipping scheme for patent enforcement that evolved to coddle the interests of the well-heeled but tiny crowd of patent attorney “innovators” and/or their similarly ignoble clients using the patent system to “get rich off the Internets” or whatever other content-providing technology is “hot” at the moment.

          1. 18.1.2.1.1

            Again the unexplained dichotomy of the few but very rich versus the obsession against a form of innovation MOST accessible to the average person.

            Why is it (really) that Malcolm has such venom for software patents?

            You know Malcolm, the offer is still on the table for you to simply abstain from any innovation that you do not think protection should be afforded to under our current law as written by Congress.

    2. 18.2

      The PTO should refund all your fees if you patent claims are invalidated with an IPR with different art than cited by the examiner.

      1. 18.2.1

        Surely not. The only fee that could be reasonably argued as refundable in such circumstances is the issue fee. Any other fee you paid (e.g., application fee, search fee, RCE fees, petition fees, etc.) is part of the risk of going through the patent process.

    3. 18.3

      The evidence that the patents being tanked in IPRs should never have been granted in the first place is overwhelming.

      That is why people who don’t like IPRs are drumming up this Constitutional challenge.

      Never mind the Constitutional issues associated with the government handing out licenses for one party to sue another because the second party is transmitting/storing/”processing” unpatentable information using generic computer technology that the first party had zero role in developing.

      1. 18.3.1

        >The evidence that the patents being tanked in IPRs should never have been granted in the first place is overwhelming.

        More accurately, evidence that prior art should have been found during examination in the first place.

        There I corrected your mistake. Your blog post has been invalidated since you are not permitted to amend it.

      2. 18.3.2

        You want to use an inherency argument against any particular claim, by all means use the correct section of law, and explain how “old box” has a claimed capability that was not there previously. Or in your imaginary world are all future improvements “already in there” – like my Big Box of electrons, protons, and neutrons?

    4. 18.4

      Notice the shifting of the burden of whether a claim is patentable. The PTO should see it as a great failure each time a claim is invalidated with an IPR with different art than cited by the examiner.

      Think about it. If you send in a patent application, the examiner says it is patentable. Then an IPR is filed with different art and the PTO says it isn’t.

      The fault is with the PTO. They need to do a better job of examination. Now IPRs are trying to put the patentability burden on the applicant just like Dudas tried to do.

      1. 18.4.1

        The PTO should see it as a great failure each time a claim is invalidated with an IPR with different art than cited by the examiner.

        The PTO is a government agency that was run for many years by a money-grubbing patent attorney named Dave Kappos. Dave Kappos had radical and completely discredited ideas about what a patent system should be promoting and how it should function. Basically, Kappos took a giant dump on the patent system and it’s going to take years to clean up the mess. That’s where we’re at now: in the middle of the clean up.

        I’m sure “the PTO” does feel embarassed by what’s happening. “The PTO” should feel embarassed by what’s happening. But the people in charge right now are doing a better job than Kappos ever did. And the next generation is going to do an even better job yet.

        Watch and see.

        1. 18.4.1.1

          >>Dave Kappos had radical and completely discredited ideas

          This is a ridiculous statement. 1) Kappos was not the director for very long. 2) Kappos had little affect on the rules or MPEP.

          Just more propaganda spewing forth from the never ending well of Google bucks…

          1. 18.4.1.1.1

            1) Kappos was not the director for very long.

            Long enough.

            Kappos had little affect on the rules or MPEP

            It seems to me he was greatly admired around here by the folks around here who really love the lowest forms of patents. Presumably that wasn’t a coincidence.

            1. 18.4.1.1.1.1

              So, I will take your post as an admission that he didn’t affect the rules and wasn’t around very long.

              1. 18.4.1.1.1.1.1

                he didn’t affect the rules

                Right, he just chose not to apply them in a sensible manner because his “clients” liked it that way.

                And then immediately after he left he attempted to “monetize” his own debacle. Well played, Dave!

                1. And that “quality = reject” was working soooo well before Mr. Kappos….

                  /off sardonic bemusement

    5. 18.5

      Paul, under the APA, PTAB findings of fact are reversible for lack of substantial evidence. They are given essentially the same deference as the findings of fact by jury. How do you expect the Federal Circuit overturn the PTAB unless they make an error of law or an error of claim construction?

      With this level of deference to findings of fact, the PTAB’s decisions are virtually unreviewable.

      Compare that when a judge makes findings of fact, his findings are reviewable on a much lower standard.

      This is simply another reason why patent owners are not being given due process.

      At least if one had a right to a trial de novo, a review of the judge’s findings of fact would be under the lower standard and not the higher standard. So the whole procedure doesn’t make much sense.

      Moreover, and I assume this to be the case, that in such a trial that the burden of proof for invalidate a patent would be by clear and convincing evidence. I hardly think that a lower standard would be justifiable.

      All this goes to show is that what the patent office is doing with IPRs is basically, and fundamentally, wrong.

      No matter what one thinks about junk patents, it does not justify stripping patent owners of fundamental rights. The end does not justify the means.

      1. 18.5.1

        Ned, even if I accepted your premise that PTAB IPR decisions “are given essentially the same deference as the findings of fact by jury” by the Fed. Cir, there are ample decisions demonstrating that the Fed. Cir. has exhibited no such inhibition in frequently overruling jury patent validity decisions. Furthermore, IPRs are based on authenticated printed contents and drawings of prior patents and publications, which the Fed. Cir. considers itself capable of reading itself, as they just demonstrated again in their first ever IPR reversal that I just cited, not some flaky disputed evidence.

        1. 18.5.1.1

          I suspect then all that expert testimony is given no weight at all? Just a big waste of time?

    6. 18.6

      “Compare that Fed. Cir. reversal rate to the much higher Fed. Cir. reversal rate of D.C. claim validity or invalidity decisions!”

      Sounds like the PTAB is much better at their job than the DC.

  7. 17

    INTELLECTUAL VENTURES II LLC, v CAPITAL ONE
    (CAFC 2015)

    Judges Dyk, Reyna, Chen

    A great result today as this CAFC panel tanks a truly desperate attempt by Intellectroll Ventures to “monetize” some of the worst patents ever granted.

    Try to believe these claims:

    A method comprising:

    storing, in a database, a profile keyed to a user identity and containing one or more user-selected categories to track transactions associated with said user identity, wherein individual userselected categories include a user pre-set limit; and

    causing communication, over a communication medium and to a receiving device, of transaction summary data in the database for at least one of the one or more user-selected categories, said transaction summary data containing said at least
    one user-selected category’s user pre-set limit.

    Got that? It’s called using a computer to assist with budgeting. Tanked as ineligible.

    The other claim falls into the vast category of junky “it’s personalized information on a compooter!” claims that the PTO seems to have granted with a rubber stamp over the past fifteen years:

    A system for providing web pages accessed from a web site in a manner which presents the web pages tailored to an individual user, comprising:

    an interactive interface configured to provide dynamic web site navigation data to the user, the interactive interface comprising:

    a display depicting portions of the web site visited by the user as a function of the web site navigation data; and

    a display depicting portions of the web site visited by the user as a function of the user’s personal characteristics.

    It’s truly gratifying when the CAFC shows that it actually understands what’s going on. In this opinion, at least, the court seems a couple years ahead of some of the head-in-the-sand faux “experts” out there who continue to rail against subject matter eligibility jurisprudence as “too confusing.” Of course, it’s also quite a few years behind the insights about information-processing and/or “content providing” methods that were articulated in the comments of this blog and elsewhere.

    There is no dispute that newspaper inserts had often been tailored based on information known about the customer— for example, a newspaper might advertise based on the customer’s location. Providing this minimal tailoring— e.g., providing different newspaper inserts based upon the location of the individual—is an abstract idea….

    Tailoring information based on [for example] the time of day of viewing is also an abstract, overly broad concept long-practiced in our society. There can be no doubt that television commercials for decades tailored advertisements based on the time of day during which the advertisement was viewed. For example, a television channel might choose to present a commercial for children’s toys during early morning cartoon programs but beer during an evening sporting event…..

    Requiring the use of a “software” “brain” “tasked with tailoring information and providing it to the user” provides no additional limitation beyond applying an abstract idea, restricted to the Internet, on a generic computer.

    And thus another junk patent bites the dust, along with the enforceability of a great many junk patents exactly like it. Hooray! Let’s continue to dredge the swamp and get this junk out of the system.

    1. 17.1

      Actually, this is a terrible opinion. This would have met the technological standard at the EPO.

      This is more Alice nonsense where there is no law.

    2. 17.2

      MM, I was uncertain just how far the courts would go with well-known concepts – one of the reasons given and Bilski for invalidating the claims there. But it does appear that if the novel subject matter in the claim is old and notorious, then the courts seem willing to invalidate the claim under 101. I think the legal basis for this is that there is nothing truly “new” in the claim.

      I would add a point of caution though that both these claims seem to have an abstract idea at their core – essentially a method of doing business. The newness in the claim has nothing to do with technology, but with some business concept.

      And I also agree that the Federal Circuit now seems fully on board with the Supreme Court on 101 issues.

      1. 17.2.1

        Ned: The newness in the claim has nothing to do with technology, but with some business concept.

        Yup. And all of those non-technological “business concepts” are ineligible for patent protection.

      2. 17.2.2

        The “Gist/Abstract” sword has no limits.

        Don’t be so smug gents. Your spin won’t help you when it is your backyard.

  8. 16

    I have a question: How could the AIA be changed the least to most accommodate the current way in which IPR/CBMs/PGRs are handled?

    My guess is that validity is going to stay at the PTO even if the AIA has to be revised and re-passed. The federal courts (and Roberts) do not want the patent cases. They have made that very clear. Their attempts at creating magistrate judges that specialize in patents is/was a failure. Validity is going to stay at the PTO.

    1. 16.1

      And, the PTO has spent years building a team of patent judges. But, maybe the thing to focus on is how to change the IPR/CBM/PGRs so they are more fair to the patentee and Constitutional.

      But, you can be sure, that there is no way all of the crxp is going back to the federal courts.

      1. 16.1.1

        Night,

        There has to be standing.

        The final decision must be by a court.

        There must be a right to a trial by jury.

        Why waste everyone’s time with an advisory decision that is going to be ignored in court.

        As to all those patent attorneys at the PTAB who can no longer do IPRs — let them work on the very large backlog of appeal that are pending. Obviously, though, a large number of them will bolt and join firms.

        1. 16.1.1.2

          Doesn’t sound like that much of a change.

          Standing can be changed. Make it advisory that district courts will rubber stamp. Make it so you can appeal to a district court.

          Keep the big picture in mind. Even if IPRs are held to be unconstitutional, I guarantee you that the PTO is going to keep validity questions in some form of post-grant proceeding.

          1. 16.1.1.2.1

            PGR’s can be constitutional if they are kept pre-grant so that the exclusive term begins after the opposition is over.

            Reexaminations need standing for the petitioner, consent of the patent owner and de novo review by a court.

            IPRs are a waste of time.

        2. 16.1.1.3

          Spoiler alert: scratched record comment coming

          The solution, and probably the only solution, is a system of IP trial courts that are ancillary to the USDCs, roughly in the same model as the BR courts. Or, Congress could establish them as separate “inferior courts” under Art III and dispense with the whole Art I v Art III yada, in which case they would have the powers and standing of USDCs but limited, and exclusive , subject matter jurisdiction.

          The judges would be required to be registered w/ the PTO as a way of insuring their bona fides. If organized under Art I, the judges would be chosen by either the district courts or the FedCir; they would have to be supervised by the Art. III courts, perhaps the DC DC or maybe directly by the FedCir.

          They would adjudicate, inter alia, post-grant validity issues, Sec 145 challenges to PTAB decisions, infringement, inventorship. Perhaps appeals could be taken directly to FedCir, but I’m not sure that would be permissible in order to maintain their necessary structural integrity with the Art III courts necessary to avoid the separation of powers issues being raised now. Perhaps appeals could go through a single USDC, like the DC DC.

          Maybe it would be sufficient to have one such court in each circuit; one per state seems excessive.

          For 8 years I’ve been beating this drum and I still haven’t been elected to Congress or gotten a single like on my FB page, but I’m going to keep trying. Or maybe the Republicans could use another entry – one with a very limited platform and no money – in their stable of deluded, megalomaniac presidential candidates.

          1. 16.1.1.3.1

            I guess that makes sense. Babelboy.

            Like bankruptcy courts. I guess they could just appoint the patent judges over at the PTO. Probably wouldn’t be that great a transition.

            But, the biggest change is the preponderance of the evidence and BRI.

          2. 16.1.1.3.2

            For 8 years I’ve been beating this drum and I still haven’t been elected to Congress or gotten a single like on my FB page, but I’m going to keep trying.

            Seems like an interesting and worthwhile drum to beat.

    2. 16.2

      The cleanest way…?

      Repeal 35 USC entirely.
      Create new item – let’s call it tnetap rights.
      Make it a non-property right, revocable at will by a new Executive Branch Agency called the USTTO.
      Do a massive text-search-replace and re-pass the AIA.

      Guaranteed NOT to happen as anything even remotely like this minimizes the opportunity for our Congress critters to be “entertained” by the legion of (well-spending) special interests groups – which, by the way, was the real reason why the good ship AIA was designed to sink with one shot below the water line (i.e. with the separability amendment rejected).

      It’s all about the political feeding…

    3. 16.3

      N.R., by far the most serious complaint about IPRs has the difficulty patent owners have had in amending claims to distinguish the prior art cited by the IPR petitioner. The PTAB is already responding to that, and the pending legislation may also.
      But there has to be a time limit on how long the patent owner can wait to change its claims in an IPR. Otherwise the whole point of IPRs – providing a fast way to reduce high litigation costs in the parallel D.C. patent litigation when there are good prior art patents and publications – will be defeated.
      There have also been many complaints about the IPR BRI claim scope interpretation. The new legislation will probably change that to what D.C.s are supposed to use [the Fed. Cir. confused and panel-inconsistent interpretations of their en banc In re Phillips decision]. However it has yet to be shown that there are actually any significant number of IPR decisions where changing from BRI to that would have changed the outcome. Furthermore that would be inconsistent with BRI still being used in reexaminations, reissues and other post-grant proceedings.

      1. 16.3.1

        Might be the “biggest” – don’t know as I have seen no stats on that – but it sure as heck is not the most problematic.

        Then again, since you’ve been the Infringer’s Right’s kind of guy reveling in the decimation, you always tried to NOT discuss the more interesting legal issue, huh Paul?

    1. 15.1

      >Remember that most people capable of coming up with a patent are employed by one company or another. So this is further centralisation of patent power, almost abolishing the notion of so-called ‘independent inventors’.

      Wow, this guy is really closing the loop. Weaken the patent system and make it more and more expensive and then attack the patent system for only being for the corporations. It would be funny if it weren’t so sad. The propaganda machine of Google marches on.

      1. 15.1.1

        …and let’s not miss the AccuseOthersOfThatWhichMalcolmDoes meme – it is the “pro-patentists” that are engaging in propaganda, because, you know “IPR is a propaganda term.”

        The schlock factor is extraordinary.

        1. 15.1.1.1

          …and let’s not miss the AccuseOthersOfThatWhichMalcolmDoes meme – it is the “pro-patentists” that are engaging in propaganda, because, you know “IPR is a propaganda term.”

          What on earth are you raving about now, Billy?

          Looks like it’s time to get those meds adjusted. Again.

          1. 15.1.1.1.1

            Maybe you want to trying reading instead of just blandly and blindly responding off of your short script (again).

            What a chump.

      2. 15.1.2

        Let’s be honest Night Writer, how many independent inventors had the means to then enforce? Largely none, so then the independent inventors have to sell their rights to someone else so that usually a corp can make money off of it. All because of the outrageous expenses.

        1. 15.1.2.1

          That’s a different problem 6 – and you best be careful in getting what you wish for if you want the cost of enforcement to come back down to earth, as then you would see FAR FAR FAR more than the less than 1/2 percent of possible suits that you have the anti’s whining about now.

  9. 14

    Ned, as you noted yourself, the reason the PTO was held to not, before the enactment of the reexamination statute, revoke erroneously issued patents itself was simply because Congress had not then provided the PTO with statutory authority to do so [not for lack of Constitutional authority].

    1. 14.1

      Paul, Marbury was constitutional.

      Pat lex agreed that McCormick Harvesting was constitutionally based.

      If Congress has the power to revoke an issued patent, identify the provision of the Constitution the grants them that power.

      1. 14.1.1

        Article I, Paragraph 8, Clause 8?

        “The clause is both a grant of power and a limitation. … The Congress in the exercise of the patent power may not overreach the restraints imposed by the stated constitutional purpose.”

        Graham v. John Deere Co.

        I would posit that Congress has enacted reexamination to address “overreach” some have perceived in the granting of certain patents.

        Such would not be the grossest example of Congress testing the “elasticity” of Constitutionally granted powers.

        Just a layman’s thoughts on the subject.

        1. 14.1.1.1

          Dobu, the power to establish courts and regulate their jurisdiction falls under Article III, because the Article I power to establish “tribunals” specifically refers to the Supreme Court and the word “inferior.” There is no general power in the Constitution to establish non-Article III courts.

          The public rights doctrine often refers to “regulatory programs” which Congress has the power to authorize. Congress has the power to “regulate” interstate and foreign commerce. But Congress does not have the power to regulate patents. It instead has the power to “secure for limited Times” the exclusive Right to their… Discoveries.”

          It also has the power to make laws that are “necessary and proper” for carrying into execution the powers granted to it. But there is no clear authority in the power to secure for limited times any implication that Congress has the power to revoke, i.e., unsecure, a previous grant. Rather, the power would seem to be within the scope of the inferior tribunals, which directly refers to Article III.

          1. 14.1.1.1.1

            Ned,

            I would suggest you take a look at Golan v. Holder and Eldred v. Ashcroft.

            From Golan:

            Our decision in Eldred is largely dispositive of petitioners’ limited-time argument. There we addressed the question whether Congress violated the Copyright Clause when it extended, by 20 years, the terms of existing copyrights. 537 U.S., at 192-193, 123 S.Ct. 769 (upholding Copyright Term Extension Act (CTEA)). Ruling that Congress acted within constitutional bounds, we declined to infer from the text of the Copyright Clause “the command that a time prescription, once set, becomes forever `fixed’ or `inalterable.'” Id., at 199, 123 S.Ct. 769. “The word `limited,'” we observed, “does not convey a meaning so constricted.” Ibid. Rather, the term is best understood to mean “confine[d] within certain bounds,” “restrain[ed],” or “circumscribed.” Ibid. (internal quotation marks omitted).

            Granted, you’re coming at this from the opposite perspective: that once granted, can’t be taken away. And this is a significant distinction, no doubt, and I would think would be enough to push this argument aside.

            But it looks like the Supreme Court doesn’t agree with you on how limited Congress’s powers are under the progress clause.

            1. 14.1.1.1.1.1

              Oops — forgot to close a tag — starting with “Granted”, that’s not from Golan.

              1. 14.1.1.1.1.1.1

                Jane,

                I have previously attempted to hold Ned’s hand through the Golan line of cases.

                Such does not fit within his “alignment.”

          2. 14.1.1.1.2

            Ned,

            But there is no clear authority in the power . . . .

            I do not disagree, but your inclusion of the word “clear” demonstrates that you understood my meaning in mentioning Constitutional “elasticity”.

            Congress has seldom been shy about relying on “unclear” authority when their goals required such.

        2. 14.1.1.2

          Dobu,

          As Ned suggests, I would be cautious about relying upon that statement by the Royal Nine in Graham as it is complete dicta. Also, as Professor Adam Mossoff astutely points out in his article entitled “Who Cares What Thomas Jefferson Thought About Patents,” the Royal Nine should be relying less upon what Thomas Jefferson “thought” and more upon what James Madison wrote, including Federalist Paper No. 43, as to what the Patent Clause means and what limits it imposes on Congress’ power.

          1. 14.1.1.2.1

            EG,

            Acknowledged, the Graham quote is not binding precedent, but I think ignoring it is probably not prudent, either. At a minimum, the quote demonstrates a mindset in the panel that a petitioner must attempt to overcome if he or she wishes to sway a future decision in his or her preferred direction.

  10. 13

    From cornell law dictionary.

    ““public” rights are, strictly speaking, those in which the cause of action inheres in or lies against the Federal Government in its sovereign capacity, the understanding since Murray’s Lessee. However, to accommodate Crowell v. Benson, Atlas Roofing, and similar cases, seemingly private causes of action between private parties will also be deemed “public” rights, when Congress, acting for a valid legislative purpose pursuant to its Article I powers, fashions a cause of action that is analogous to a common–law claim and so closely integrates it into a public regulatory scheme that it becomes a matter appropriate for agency resolution with limited involvement by the Article III judiciary”

    1. 13.1

      “In essence, the public rights doctrine reflects simply a pragmatic understanding that when Congress selects a quasi–judicial method of resolving matters that ‘could be conclusively determined by the Executive and Legislative Branches,’ the danger of encroaching on the judicial powers is reduced.” Thomas v. Union Carbide Agric. Products Co., 473 U.S. 568, 589 (1985) (quoting Northern Pipeline, supra, 458 U.S., 68 (plurality opinion))

      1. 13.1.1

        Agree in principle.

        Thus congress has the power to regulate interstate commerce. It can effectively impose an exclusion order on a respondent at the behest of a petitioner. Court review is substantially limited to jurisdictional facts and the law.

        The problem is Congress has no power to revoke an issued patent – none is given it in the Constitution.

        Second, since its inception in Murray’s Lessee, the Supreme Court has been careful to exclude from the public rights doctrine matters that were litigated in the courts of England at common law, these can include the common law courts, courts of equity and Admiralty. Certainly, any cause of action that was litigated in the common law courts or the law side of equity also had a common-law right to a jury trial disputed facts. Thus if a cause of action is analogous to one of these actions actually litigated in England at common law, they are excluded from the public rights doctrine.

        It is sufficient to note here that patent infringement actions, invalidity defenses and actions to revoke a patent for invalidity were all known at common law and all had a right to a trial by jury.

        Moreover, the Supreme Court United States is already ruled that patent infringement actions have a right to a trial by jury, that actions to revoke a patent have a right to a trial by jury, and the Federal Circuit in Lockwood has ruled that the declaratory judgment for invalidity have a right to a trial by jury.

        Judge Nies in dissent to en banc in Lockwood observed that the holding of the court in that case necessarily overruled Patlex because by determining that validity had a right to a trial by jury, assigning administrative revocation actions to the PTO would essentially deprive patent owners of a right to a trial by jury before their patents were revoked.

        Of course Judge Nies was right.

        1. 13.1.1.1

          IMHO. It all depends on how the issue is framed. If we assume that once a patent is issued, it becomes a right held by an individual party that must be handled in an article III court, than it is fairly clear IPR is unconstutuonal.

          But what if the govt argues that all patents are valid subject to a validity determination at the PTAB? All of a sudden we are not talking about patent validity, but rather an ex ante limitation on the scope of patent rights. This would potentially mean no patent can be considered valid until declared as such by the PTAB.

          1. 13.1.1.1.1

            Tocpe, are we to now play fast and loose with the constitution itself?

            Exclusive rights. Limited Time.

            As well, have you even read Marbury v. Madison?

            The government has jurisdiction until it issues the patent. Thereafter it has no power in the constitution to revoke the patent. Sly arguments are not going to make headway against a wealth of Supreme Court precedent to the contrary.

            We have three branches of government for a reason. The Supreme Court has finally come to grips with what that reason was. See, Roberts dissent in Wellness v. Sharif, decided just a few weeks ago.

            1. 13.1.1.1.1.1

              ave three branches of government for a reason.

              Loses its zing coming from your mouth and your inability to constrain your homage placing the Supremes above the law…

            2. 13.1.1.1.1.2

              Ned I both support IPR’s in practice and your position in theory.

              Maybe it needs to work like this: The government has jurisdiction until the patent is asserted in an Article 3 court. Once that happens, then only an Article 3 judge can approve or disapprove the starting of an IPR.

              It seems the government should be able to correct a mistake before a court is involved. The grant happens now exactly how and when the government says it does. I don’t think there is anything Constitutionally special about the moment of “grant” while there is Constitutional importance at the moment of assertion against another party.

              1. 13.1.1.1.1.2.1

                Mr. Snyder,

                You are at your most correct by abbreviating your statement to: “I don’t think.”

                The moment the patent is granted – the moment it becomes property – is the point in time that Ned’s view (that you appear to want to accept) becomes pertinent. By your wanting otherwise, you appear to not understand (at all) the legal reasoning behind Ned’s position. You want an “ends” that is completely disassociated from the legal “means” to arrive there.

                1. ICTE, but there is a question of whether those patent owners who do not complain of lack of constitutional jurisdiction will not have waived their rights. There is a legitimate debate on that issue given Wellness v. Sharif.

              2. 13.1.1.1.1.2.2

                For 200 years the Supreme Court has ruled that the government has no standing to correct its own mistake.

                I wonder at times just how the Justice Dept. ever approved of reexaminations given McCormick Harvesting and a large number of other cases that held, clearly held, that the government had no standing to sue to revoke, and could not unilaterally revoke, a patent even for its own mistake.

                What were they smoking?

                1. Ned,

                  Are you forgetting the aspect that the patentee herself voluntarily surrendered ownership?

    2. 13.2

      tocpe, note “regulatory program” and “pursuant to Article I” power. “Regulate” is a word used in connection with interstate and foreign commerce, not with respect to issued patents.

      The power to establish tribunals is exclusively associated with Article III.

      1. 13.2.1

        The power to establish tribunals is exclusively associated with Article III.

        That is put rather poorly.

        The tribunals may be of Article III nature, but Congress fully had constitutional authority to set inferior court (establish) authority as it sees fit.

        Further, even the Supreme Court is a court of limited original jurisdiction, so Congress CAN set up an inferior Article III court and strip appellate jurisdiction from the Supreme Coury and rest its SOLELY in an inferior Article III court of its own establishment.

        It is time to do just that: remove the Supremes and their political and philosophical agenda from the picture and set up a true court that will not be beaten down by the threat of an over bearing Supreme Court.

    1. 12.1

      Lisa, good Article. But I read in vain any discussion of the “which the Congress has the power to enact” in connection with a “regulatory scheme” that is mandatory for the public rights doctrine to apply when private rights are adjudicated.

      While Congress may have the right to regulate interstate and foreign commerce, it does not have the right to regulate issued patents. It only has the power to secure for limited times exclusive rights to discoveries. It does I have the power to unsecure previously granted exclusive rights to discoveries.

  11. 11

    As we all know, and Wikipedia states: “The history of patents and patent law is generally considered to have started with the Venetian Statute of 1474 and the 1624 English Statute of Monopolies.[1]” The latter inspired our Colonial, and later our Constitutional and legislative patent provisions which together authorized patents to be sued on in Federal Courts. So I have difficulty understanding the legal arguments that patents are a creature of “common law”and would be interested in hearing more about that?

    1. 11.1

      Paul, Murray Lessee held that public rights do not extend to actions litigated in the courts of law, equity or admiralty at common law. This is not quite the same thing as a common law right.

    2. 11.2

      Paul, I also think that Newman made the same mistake you did in Patlex – conflating actions that took place in the courts of England in 1789 with common law rights, which are understood to be rights develop in the law courts of England. I think this is because she never read Murray’s Lessee.

      Justice Scalia has continuously expressed the view that the trials of all legal rights has to take place in Article III courts. Regardless, even new statutory rights like antitrust causes of action involving damages have a seventh amendment right to a jury trial and must be tried in Article III courts.

      1. 11.2.1

        Paul, one also has to consider that because patents were litigated and revoked at common law, their trial all enjoyed a right to a jury trial on disputed facts. Moving adjudications from the courts to agencies would also violate the 7th Amendment.

        Thus the interpretation of Murray’s Lessee to encompass all actions litigated in the courts of England would necessarily also preserve their right to a jury trial.

        1. 11.2.1.1

          Reexaminations and IPRs do not adjudicate damages. Patent suits solely to obtain an injunction do not require jury trials either.

          1. 11.2.1.1.1

            Paul, if a patent is a private right as so held by Patlex because it is a right created by statute, then even patent infringement lawsuits can wholly be withdrawn from the courts.

            1. 11.2.1.1.1.1

              Ned, since that has not ever happened, except for patent suits against the U.S., and Congress has no intention of doing so, and no PTO post-grant system ever decides infringement, I don’t see how that moot academic question alone makes IPRs unconstitutional?

              P.S. I gather that your arguments here are based on your assumption that what is Constitutional or not is controlled by your interpretations of 150 to 200 year old Supreme Court cases. There is now, of course, a large list of old Supreme Court cases that are clearly no longer valid law, in numerous fields. Many expressly overruled by the Supreme Court since the late 1930’s and others simply ignored.

              1. 11.2.1.1.1.1.1

                Paul, if a patent is a public right then there is no right to a jury trial even for patent infringement actions. It is not whether Congress actually withdraws patent infringement actions from the courts. It is whether they have the power to do so.

                The argument is made by the government that because a patent is a public right adjudications regarding patents may be located anywhere Congress chooses. Furthermore, because a patent is a public right it is argued that there is no right to a jury trial. The government makes no distinctions between the form of action, because the premise is that patents are creatures of statute. That is what makes him a public right.

                Regarding “old” case law, the action to revoke a patent for invalidity was repealed in the patent act of 1836. The right of action to repeal a patent existed in the patent law from the patent act of 1793 through the patent act of 1836. Thus a Supreme Court case occurring in that period of time is not “old” in the sense you state it. It is not been superseded by subsequent case law regarding the issue of revocation actions because revocation actions no longer existed after 1836.

              2. 11.2.1.1.1.1.2

                Paul – your point is a good one. Assume that, in a hyper technical vortex, IPR implicates the issue of patent validity and patent validity alone. Per the USPTO’s reasoning, the sole consideration of the claim of validity does not implicate a jury trial right under the 7th Amendment. There is some merit to this point of view. However, it is not persuasive in the public rights context as true claims of patent validity (that its, unaccompanied by a claim of infringement) were historically resolved at equity. There is CAFC case law saying as much. A claim with antecedent either at law or equity may not be a public right – so, pick your poison.

                1. No, until 1800, even Chancery called juries to try disputed issues of fact.

                  From our brief at notes 21 and 22.

                  21 John Paxton Norman, The Law and Practice Relating to Letters Patent for Inventions (London: Butterworths, 1853) at 194 (Google Books); Holdsworth, William Searle. A history of English law. Vol. 1. Methuen, 1922, at 452 (Google Book).

                  22 J. P. Norman, supra at n.15, at 203: “The Chancellor, though a common law judge, has no power to summon a jury. Therefore, if there are issues in fact, the Court of Chancery cannot try the issues, but the Lord Chancellor delivers the record by his proper hands into the common law Court … to be tried there.” See also, Chesnin, Harold, and Geoffrey C. Hazard Jr. “Chancery Procedure and the Seventh Amendment: Jury Trial of Issues in Equity Cases Before 1791.” Yale LJ 83 (1973): 999 (PDF) where the author demonstrates that prior to 1800, all issues of fact arising in Chancery were tried to juries at Kings Bench.

          2. 11.2.1.1.2

            Secondly, patent revocation actions were known at common law. They had a right to a trial by jury. The Supreme Court has already accorded them a right to a trial by jury in ex parte Wood & Brundage.

  12. 10

    The constitutional issues here really are fascinating. I need to dig into the pleadings but on the post and comments so far I have to admit the concept that IPR may be unconstitutional took me a bit by surprise. I don’t recall anyone on this blog raising the issue in the run up to the AIA, or since, but I haven’t been a regular lately so I probably missed it. Nor am I aware of any such USSCt challenges of the “old” ex parte or inter partes reexaminations, although at comment 1.2 discusses the FedCir case of Patlex. If PTO has no power to invalidate, I don’t see how even the patent holder could initiate an attack on his own patent in the PTO.

    I mean, if a patent, once granted, can only be invalidated by a court, then all of the reexamination-based invalidations are null and void as ultra vires.

    Ned anticipated this discussion in the thread on the Kessler Doctrine where he asked: “Babel, under what provision of the constitution does Congress draw its power to revoke issued patents on its own motion, or to authorize the PTO to do so?”

    I responded with an insightful “Duh’ I dunno’ ” (paraphrased) and asked Ned when the last time the USSCt invalidated any patent statute as unconstitutional. He has not come up with anything as of this writing. That may be significant as he has the entire historical US patent jurisprudence dedicated to memory. Might be a good time to ask the question again in more specific terms.

    When has the USSCt ever invalidated any patent statute as being ultra vires viz the Constitution?

    As for the 4CA, I posted a comment as to my experience in the 4CA in the previous thread but Dennis axed it. Will clean out all the filthy words and try again. Is “plsssed-off” a problem?

    1. 10.1

      BabelBoy, McCormick Harvesting held that the patent office could not revoke an issued patent as a matter of constitutional law — citing cases that relied on Marbury v. Madison for their authority.

      What is one to think if Congress authorizes the patent office to revoke a patent as a result of an involuntary proceeding? That it is constitutional? How?

      The public rights doctrine has always excluded actions that were litigated in the courts of England in 1789. Obviously, patent infringement and patent revocation cases were litigated in the courts of England in 1789 and therefore cannot be public rights. The government briefs strenuously try to ignore this aspect of the public rights doctrine.

      There are ways to structure patent reexaminations to make them constitutional. Placing them under the authority of the court system such that one must file a petition to a court in the first place, and have the court make the final decision, is constitutional. Not only with this procedure ensure constitutional standing, an essential requirement for Article III, but it also sure that the court makes the final judgment. If there are disputed facts after the case gets back out of the patent office into the court, the court can order a trial de novo and to a jury.

      But, looking for the big picture, why would Congress authorizes a procedure? Patent reexaminations take forever and all the while patent term is wasting. At some time congress has to begin thinking about justice and the rights of patent owners once again.

    2. 10.2

      Babel, regarding “null and void,” see Wellness v. Sharif. link to supremecourt.gov

      Artile III rights are waivable, just as are 7th Amendment rights.

      So unless one actually objected to the jurisdiction of the PTO, one is up sh*t creek without a paddle.

      And this goes to every patent holder currently in a reexamination or an IPR or a CBM or a PGR. If they do not assert their rights, they are gone.

      If they do not assert their rights now, or get a client waiver, and we win, then they are going to have to answer to their clients in court when they are sued for malpractice.

      1. 10.2.1

        Ned, not so sure the waivability issue is that straight forward.

        For instance wavier generally has to be informed, and I’m not sure that following (an unconstitutional?) federal reexam statute would be considered a valid, informed waiver. I mean just b/c thousands of gay couples followed unconstitutional laws saying they couldn’t get married — and ditto thousands of black/white couples before them — doesn’t mean they waived their constitutional rights.

        Or. . .telling the cops where you hid the body is a waiver of the right to remain silent only if the cops told you you have that right. I don’t think a state or the feds can pass an unconstitutional law and then claim that by following the law the person waived the constitutional right the law vitiated.

        The real issue is whether the reexam/post-grant statutes are ultra vires. If they are and if they are unconstitutional, I can’t see that there would be a waiver issue. PTO can’t say: Well, as long as everybody went along with the bogus statutes, we’re good. Or maybe they can — I’m raising questions more than advocating for a position.

        1. 10.2.1.1

          Babel, your argument here sounds very much like the Chief Justice’s dissent in Wellness v. Sharif link to supremecourt.gov.

          Why don’t you look at that case and then give me your views one more time.

        2. 10.2.1.2

          Ned, I’ve read Sotomayor’s opinion in Sharif. It offers nil support that I can see for the proposition that proceeding in reexam/post-grant review in PTO acts as a waiver of the right to an Article III adjudication of the validity of a patent.

          Bankruptcy courts are not analogous to PTO courts. BR judges are an integral part of the district courts. The judges are chosen and supervised by the DC judges. According to Sharif, citing Stern, waiver of Art. III adjudication only works where the Art. I court is an integral part of the Art. III structure.

          And even where waiver is permissible and even if it is not explicit, it must be informed. That just ain’t the case with the PTO reexam/IPR system, which seems to be the product of unconstitutional statutes that force patent holders into the PTO court.

          Some will say that under section 145 the patentee has access to the USDC just as the debtor can appeal BR ruling to USDC, but if the patentee has to pay the PTO lawyer’s salaries in order to access the USDC as the 4CA ruled in the TM case, then that is a sham.

          Thanks for the cite.

          1. 10.2.1.2.1

            Babel, Shor held that even though one might waive their Article III rights as a personal matter, one might still challenge the proceeding under Article III as a structural matter as it goes to jurisdiction.

  13. 9

    I agree with the arguments that the IPR is unconstitutional. I also agree that patents issued by the PTO should have a presumption of validity in the court system. The problem is that there are tens of thousands of software patents that have been issued that are now obviously invalid. In my opinion all software patents are invalid and always have been. So the IPR has been set up in an attempt to clear out tens of thousands of invalid software patents one by one.

    In obedience to the law of unintended consequences the IPR has adversely affected patents in all patentable fields. Other than software patents there is no patentable field which has a major problem with invalid patents.

    I think that the solution to the IPR problem is to abolish all software patents once and for all. Then abolish the IPR.

    What will software use for IP law if software patents are abolished? Copyright law has always protected software and done it well. It continues to do so in spite of the immense cost and problems created by software patents. Abolishing software patents entirely and only using copyright law will be a vast improvement for the software industry.

    —————————–
    Steve Stites

    —————————
    Steve Stites

    1. 9.1

      Steve, IPRs cannot address 101. Courts can and are now invalidating business method patents on the pleadings.

      I think the plague of business method patents is over.

      1. 9.1.1

        3, the new 4, is still not 5 – notwithstanding Ned throwing back on his blinders as to separation of powers Constitutionality issues and his “if-you-align-with-me-you-must-be-an-Einstein” shtick.

  14. 8

    Since the stock market and the bond market are not doing well lately, there is an excellent investment opportunity here to make large wagers with AIA-haters who really think the Sup. Ct. is really going to declare highly bi-partisan legislation unconstitutional, increase litigation costs on invalid patents, thereby also encourage more lucrative PAEs, and throw into question the scope of authority of all other Federal agencies.
    What in any recent [and usually unanimous] decisions of the Supreme Court, especially KSR and 101 S.J.s, leads these patently Don Quixote’s to think that the Supreme Court thinks that all PTO patents issued in only a few hours of examination by a single non-lawyer examiner deserve a presumption of validity which can only be challenged by a lay jury?

    1. 8.1

      P.S. IPR professional associations and others are apparently not even taking these repeated reexamination, and now IPR, constitutional challenges seriously enough to even file amicus briefs, which I think is a serious mistake on their part.
      [However, I distinctly remember some IPR professional associations that also failed to file amicus briefs in the widely important Lemelson Fed. Cir. prosecution laches appeals, for reasons, in my view, of law firm rather than client or public interests.]

      1. 8.1.1

        cur, on IPR professional associations not filing amicus briefs, perhaps they have nothing to say of substance.

        The Supreme Court decided in McCormick Harvesting that the executive had no power to revoke an issued patent as a matter of constitutional law (citing cases that stemmed all the way back to Marbury v. Madison.)

        The Supreme Court has been clear on the public rights doctrine that that doctrine cannot extend the cases that were litigated in the courts of England in 1789. Clearly patent cases were litigated in the courts of England in 1789.

        There is a constitutional right to a jury trial for patent infringement cases as decided by Markman. If patent is a public right, then there is no right to a jury trial.

        The Supreme Court is already ruled that an actions to revoke a patent that the patent owner has a constitutional right to a jury trial. See ex parte Wood & Brundage. If a patent is a public right, the Supreme Court was wrong in this case as well.

        I would like to understand what these IPR associations would actually say to sustain the validity of patent revocation proceedings in the patent office. They were unconstitutional from the get-go.

        Did you read Judge Nies dissenting opinion in Lockwood from denial of en banc? She said that if there was a right to a jury trial for declaratory judgments of invalidity then Patlex was necessarily overruled. She was right. Lockwood overruled Patlex.

        So what are these IPR associations going to say?

        You know why no one has raised the constitutionality issue for a long time? The patent bar is a closed community of like-minded people. They either do not think about constitutional issues, or if they do and they are in law firms, they are not going to raise the issue in court because to do so will put them in conflict with major clients.

        There’s another reason – and that is the Federal Circuit. This court for a very long time simply ignored the Supreme Court on issue after issue. After a series of unanimous reversals the last few years, I think the Federal Circuit has finally gotten the message their days of anarchy are gone. I think they are actually now trying to do work within the system as oppose to being an island apart.

        Furthermore, given the active consideration by the Supreme Court of issues involving the relationship between the courts and agencies/bankruptcy courts in the resolution of private right issues, and even if the Federal Circuit might be willing to ignore the constitutional issues, the effort probably will be rewarded at the Supreme Court level justifying the effort and the expense.

        This is hardly like the Madstad case where the issue of first to invent versus first to file was never before the court before in any case. The issue of whether an agency has the constitutional right to finally decide a private right issue is under active consideration by the Supreme Court.

        IPR associations are fools if they think they can ignore this issue and everything will turn out okay for them. Trust me, IPRs are doomed.

    2. 8.2

      Should we step through your comments Cur, and dismantle the ranting, or should we just ask you to back up wha you say without all the emotional conflations?

      For example: investment opportunities always abound no matter the legal point at hand – so why exactly do you lead in with that? (Damm G-g-g-grifters meme is old and stale, thanks)

      For another example, whether or not you dislike the AIA for any of its parts is no reason to ignore the fact that our system of laws does have safeguards, and that Congress could have quite easily protected the good parts (whatever that means) by including the proposed separability amendment. Instead, we had a “too-big-to-fail” gambit that is likely (if the Rule of Law is not to be per verted) to fail. Whining about people pointing this out is rather ludicrous.

      For yet another example, it appears that your real issue is with a part of the law that was not changed in the AIA: the presumption of validity. Yet, all you do on that point is kvetch that it “just shouldn’t be.” It is. The way to deal with it is decidedly NOT to trample on what a property right entails. It’s kind of important in law discussions to recognize these types of distinctions.

    3. 8.3

      Cur,

      The patent system is of small importance in comparison to the larger constitutional issues at play here. Since Northern Pipeline, there have been a relatively large number of cases decided by the Supreme Court in this area. Just the last few years, we have Stern v. Marshall, Executive Benefits last year, and Wellness v. Sharif this year.

      The issue of whether an agency has the power to finally decide an issue for collateral estoppel purposes was raised sua sponte by the Supreme Court in B & B Hardware. The issue is under active review by Supreme Court as to the power of executive agencies to finally decide issues of private right.

      What I’m trying to say here is that the problems of the patent system are not going to control the outcome of the constitutional challenge at the Supreme Court because the issues are much bigger than the patent system’s short-term problems.

      1. 8.3.1

        Ned, if I understand your comment correctly, yes, any lower court holding any Federal legislation unconstitutional, especially if relating to the decision making power of federal agencies, is clearly an issue with vastly higher than the usual 300 to one odds that the Sup. Ct. will take cert, so this is indeed not just a patent law issue. But the odds of cert are not so high if the decisions below consistently hold the legislation constitutional and a majority of the Court does not want to tangle with it, for whatever reason.

        1. 8.3.1.1

          Paul, it depends on what they say in the lower court, does it not? Also, the issues here are at the center of a storm that is under active consideration by the Supreme Court, so much so that they are sua sponte raising the con law issues themselves. See, B&B Hardware.

          The wild card here is that the Federal Circuit and 4th Circuit are both looking at the issue. The problem is that Cooper is not arguing the public rights issue. He seems to concede that Patlex was properly decided. That concession may doom his appeal.

          1. 8.3.1.1.1

            Re: “The problem is that Cooper is not arguing the public rights issue. He seems to concede that Patlex was properly decided. That concession may doom his appeal.”
            Is not the most logical reason for that a conclusion of the Cooper attorneys that it would be a losing argument? Including requiring the unlikely refusal of comity to a decision of the fellow appellate court normally having jurisdiction over such decisions, and setting up a conflict between circuits?

            1. 8.3.1.1.1.1

              Our Cooper briefing does not concede that Patlex was properly decided. Distinguishing Patlex (as we do) does offer a separate rationale that could, in theory, leave Patlex intact to avoid a circuit split.

            2. 8.3.1.1.1.2

              Paul, if I understand his attorney’s post at 7.1.1, Cooper’s strategy was to wait until reply brief to address the public rights issue. His brief is due tomorrow.

              The strategy somewhat make sense – assert McCormick Harvesting, the government responds with the public rights argument, Cooper responds with a rebuttal.

  15. 7

    For those interested in what Cooper Filed at the 4th circuit
    Below is a Link to his document and the USPTO request for transfer of venue.
    Copper original complaint start from page 8. But it interesting to read USPTO request as well. (Page 1-8)

    link to docdroid.net

    I would be interested in any new thoughts you guys have after reading this document.

    here is a short link

    link to docdro.id

    thx

    1. 7.1

      Brian, Cooper might have a problem because of the posture of his case. Cooper contends that his case does not present the question of whether a patent is a public right, solely relying on McCormick Harvesting, etc.

      Plaintiffs’ assertion that this case does not present the question whether patent rights are “public rights,” see Pls. Op. 10-12, only underscores the substantial patent-law question at issue. The government contends that patents implicate quintessential public rights that Congress may authorize the PTO to adjudicate. Plaintiffs, by contrast, contend just the opposite.

      Lee Reply Brief at 5.

      One has to recall the holding of Patlex. Patlex held that a patent was a public right because validity was a public concern. Patlex held in addition that a patent was a public right because they are “new” statutory rights created by Congress as opposed to common law rights.

      The government now contends that because patents are created pursuant to statutes that are clearly within the constitutional powers of Congress, and because they implicate public concerns, that Congress can move adjudications regarding patents anywhere it chooses under the public rights doctrine.

      Assuming arguendo that the government is correct and that a patent is a public right, the public rights doctrine permits Congress to withdraw from the courts all adjudications regarding patents – not only patent validity, but patent infringement and move them into legislative courts. It is the nature of a public right the Congress has plenary power over that right. With a public right, there is no right to a trial in an Article III court. Nor is there right to a trial by jury even in infringement cases.

      So the issue of whether a patent is a public right is paramount to the resolution of whether IPRs are constitutional.

      Thus I am forced to agree with the government that the issue of whether a patent is a public right or not has to be addressed.

      One cannot ignore, in my opinion, the issue of public rights. It is my view that the only way forward is for the courts to hold that patents are not public rights.

      Since Cooper appears to not even argue that patents are not public rights, I worry that he may not prevail in the Fourth Circuit.

      1. 7.1.1

        Brian Smith,

        Thanks for posting the docs. And thanks to Dennis for writing about our Cooper case. Just one factual correction — the district court ruled on administrative exhaustion grounds, not jurisdiction.

        Ned is correct that we left it for the Government to explain itself in connection with “public rights” doctrine. We knew they would try in their opposition brief. This doctrine is an exception, and analytically is a rabbit hole that can be avoided by the decision makers. McCormick Harvesting (and others) already set out the rule, and the Government made several missteps (we think) in its attempt at describing the exception.

        Our upcoming Reply will show this. As just one instance, the Government brief touts — 2 or 3 times — that Justice Thomas has already called patents a “public right.” In fact the citation shows him calling the pool of Government land prior to its disbursement in a land patent a “public right.” They are enormously different concepts. It’s easy to grasp that publicly-owned land, pre-distribution, is a “public right.” But the analogy to invention patents (inchoate ideas that rest in the inventor’s mind) paint a different picture. We cite authority showing that the Framers well understood inchoate ideas as the fruits of the inventors’ intellectual labor, and about the farthest thing from a “public right” that any political theorist can imagine. The Reply will attack the “public rights” exception head-on, and show it cannot apply.

        Our opening brief did, though, explicitly call patent validity adjudication a private right. Our first substantive heading was, “The Supreme Court has Always Treated Patent Invalidation, Whether for Land or Invention Patents, as Solely Subject to the Judicial Power under Article III.” Our second substantive heading was, “Adjudications of Validity are Seventh Amendment-Protected Private Rights.”

        That said, Ned’s briefing in the MCM case is excellent. Our main difference is that MCM asks the CAFC panel to overrule Patlex in view of intervening Supreme Court decisions, and our Cooper briefing shows the 4th Circuit how to distinguish it (if creating a circuit split is too big a pill to swallow).

        We might file our Reply as early as this Monday, two days from now. For those who want a teaser — it looks like this text will open the brief:

        Chief Justice John Roberts wrote this year:

        The Framers understood this danger [of slight Article III encroachments creating new boundaries from which legions of power can seek new territory to capture]. They warned that the Legislature would inevitably seek to draw greater power into its “impetuous vortex,” The Federalist No. 48, at 309 (J. Madison) . . . . In response, the Framers adopted the structural protections of Article III, “establishing high walls and clear distinctions because low walls and vague distinctions will not be judicially defensible in the heat of interbranch conflict.” Plaut [v. Spendthrift Farm, Inc., 514 U.S. 211, 239 (1995)]. As this Court once put it, invoking Frost, “Good fences make good neighbors.” Id., at 240.

        Wellness Int’l Network Ltd. v. Sharif, (S. Ct. May 26, 2015) (Slip Op. _) (Roberts, C.J., dissenting). The USPTO’s arguments on appeal rend vast holes in this Article III fence. This Court should stem the encroachment by reversing.

        1. 7.1.1.1

          Godspeed, Bob. I look forward to reading your reply brief.

          And, I agree. Roberts laid out the policy grounds for our position so well that the courts cannot simply laugh this off as of no importance. It is of major importance.

          Quoting the Chief Justice is going to be persuasive.

  16. 6

    Kudos to Pr. Crouch for addressing this.

    Happy 4th of July – from the Federalist Papers, two apropos quotes from James Madison:

    “What is to be the consequence, in case the Congress shall . . . exercise powers not warranted . . . the success of the usurpation will depend on the executive and judiciary departments, which are to expound and give effect to the legislative acts . . .”

    “An elective despotism was not the government we fought for; but one in which the powers of government should be so divided and balanced among the several bodies of magistracy as that no one could transcend their legal limits without being effectually checked and restrained by the others. “

  17. 5

    The government’s main defense of IPRs is Patlex, the Federal Circuit decision authored by Judge Newman, that a patent is a public right because patent validity is a public concern.

    To understand what a public right is, the doctrine began and was limited by Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 15 L. Ed. 372, 15 L. Ed. 2d 372 (1856) link to scholar.google.com ,where Supreme Court gave us the big picture in the following passages,

    To avoid misconstruction upon so grave a subject, we think it proper to state that we do not consider congress can either withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty; nor, on the other hand, can it bring under the judicial power a matter which, from its nature, is not a subject for judicial determination. At the same time there are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determination, but which congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper. Equitable claims to land by the inhabitants of ceded territories form a striking instance of such a class of cases; and as it depends upon the will of congress whether a remedy in the courts shall be allowed at all, in such cases, they may regulate it and prescribe such rules of determination as they may think just and needful. Thus it has been repeatedly decided in this class of cases, that upon their trial the acts of executive officers, done under the authority of congress, were conclusive, either upon particular facts involved in the inquiry or upon the whole title. Foley v. Harrison, 15 How. 433; Burgess v. Gray, 16 How. 48; ____ v. The Minnesota Mining Company at the present term.

    It is true, also, that even in a suit between private persons to try a question of private right, the action of the executive power, upon a matter committed to its determination by the constitution and laws, is conclusive. Luther v. Borden, 7 How. 1; Doe v. Braden, 16 How. 635.

    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; that though no suit can be brought against the United States without the consent of congress, yet congress may consent to have a suit brought, to try the question whether the collector be indebted, that being a subject capable of judicial determination, and may empower a court to act on that determination, and restrain the levy of the warrant of distress within the limits of the debt judicially found to exist.

    Crowell v. Benson, 285 U.S. 22, 52 S. Ct. 285, 76 L. Ed. 598 (1932) further discusses what a public right is:

    Thus the Congress, in exercising the powers confided to it, may establish `legislative’ courts (as distinguished from `constitutional courts in which the judicial power conferred by the Constitution can be deposited’) which are to form part of the government of territories or of the District of Columbia,[12] or to serve as special tribunals “to examine and determine various matters, arising between the government and others, which from their nature do not require judicial determination and yet are susceptible of it.” But “the mode of determining matters of this class is completely within congressional control. Congress may reserve to itself the power to decide, may delegate that power to executive officers, or may commit it to judicial tribunals.” Ex parte Bakelite Corp., 279 U.S. 438, 451. Familiar illustrations of administrative agencies created for the determination of such matters are found in connection with the exercise of the congressional power as to interstate and foreign commerce, taxation, immigration, the public lands, public health, the facilities of the post office, pensions and payments to veterans.

    Critical to a public right is constitutional power to legislate in a particular area, and the list is given as examples. The ITC is an example where Congress exercises power in regulating interstate and foreign commerce. Such an agency may consider the validity of a patent, but that agency cannot revoke it because Congress’s power does not extend revoking patents but to the regulation of foreign commerce.

    Is sufficient to note here that actions for infringement for patents, defenses for invalidity, and actions to revoke patents for invalidity were all litigated in the courts of England prior to 1789 and thus under Murray’s Lessee cannot be public rights.

    1. 5.1

      I think Ned you need public policy arguments. The Royal 9 stopped worrying about the Constitution years ago. Probably get 9 belly laughs if you say something isn’t Constitutional.

      1. 5.1.1

        What’s sad is that I am beginning to agree with you that the Supreme Court care less about what the law is and cares more about being politically correct.

        1. 5.1.1.1

          The reap-what-you-sow effect of placing the Court above the law (and outside of the actual balanced system for all three branches of the government).

          Sorry Ned if that Kool-aid you are swigging has a bitter almond after taste.

    2. 5.2

      And, Ned, ask yourself: could Congress create these things called “patents” without the express authority in the Constitution? I think they could as part of “promote the general welfare.”

      There is too much wiggle room for the 9 who have no respect for our Constitution.

      Frankly, Ned, your arguments are laughable. The Royal 9 could care a less. You will only win if you can convince it is a good public policy. They are despots that think they know best for all of us.

  18. 4

    All the PTO would have to do is issue “provisional grant”(s) until the period of IPR has tolled. Upon tolling the provisional grant becomes becomes enforceable.

    Of course, the PTO would probably have to abandon the ridiculous name given to “provisional applications” in order to avoid utter chaos in administrative terminology. That way they could undo their other ridiculous mistake of calling utility patents “non-provisionals”. Idiots.

    1. 4.1

      Um, you think the executive branch can pass a law like that…?

      That’s pretty substantive (see Tafas).

  19. 2

    Something weird is going on. I think IPRs are unconstitutional if you take into consideration English common law prior to the adoption of the Constitution, but if you do not then the meaning of a patent probably can be put under a public right as one could say the meaning of a patent is nothing until Congress and the SCOTUS give it a meaning.

    So, we have a game going on. SCOTUS says our common law still applies despite the 1952 Patent Act, but English common law does not despite it being adapted and not overturned.

    So, again, we are in the realm of the Royal 9 where they do whatever they want.

    1. 2.1

      Night, to be a public right, congress must have the constitutional power to act in the first place.

      Where does it get the power to revoke issued patents? Where?

      1. 2.1.1

        Ned, it just depends on what you mean by a patent. I understand the Constitution only says grant and not revoke, but it doesn’t define patent.

        If you take a definition of patent from English common law, then I think you are right. If you say there is no definition of patent and the SCOTUS and Congress can define it anyway they want, then I think you are not correct.

        You see? What is it they are granting? It depends. I think there can be no question but that the definition of patent came from English common law. But, we have seen repeatedly that the SCOTUS could care a less about the law or the Constitution. You are dealing with a unified legislative and judiciary branch. So, you are going to loose. They are going to do whatever they think is the right public policy. Just listen to oral arguments at the SCOTUS. They are overwhelming dominated by public policy talk of what the Royal 9 should do with little real discussion of the Constitution and the law.

        This is just another sad example of their abuse of their power. Not sure what would fix it. My guess is we are heading for a reset of the entire country.

        1. 2.1.1.1

          Night, see Marbury.

          A legal right for a fixed period is property.
          Under
          Marbury, only courts may revoke the grant for invalidity.
          This is that fundamental.

          1. 2.1.1.1.1

            Problem is Ned without English common law we don’t know what a patent is. The Royal 9 can just say it is whatever they want.

            1. 2.1.1.1.1.1

              Night,

              In the public rights context, the question of whether a particular claim (note: whether the claim currently exists at federal statute is irrelevant) may be resolved with finality by an administrative tribunal (i.e., is a public right) depends on whether that claim has *antecedent or analogue* at common law or equity (admiralty is not relevant here).

              Where there is no such antecedent, the law is purely a creation of executive or legislative branches, and those branches retain full discretion as to how the claim is resolved. There is no requirement or obligation that the Article III courts participate in such a claim at all. J. Newman — the merits of the Patlex decision aside — identified patent validity as a public right. Per this designation, and as explained in SCOTUS cases such as, e.g., Murray, Thomas, and others (and as recently acknowledged by both the USPTO and DOJ in the 4th Cir. rebuttal brief), the resolution of patent validity disputes may occur wholly and conclusively (i.e., without any Article III involvement at any stage) before an Article I administrative agency.

              The involvement of Article I administrative activity in the resolution of patent validity disputes has already gone beyond what J. Newman intended in that Patlex decision (as evidenced by her numerous dissents in the last 1-3 years addressing the issue either directly or tangentially). However, a particular claim is either a public right or a private right. There is no in between, and either the 4th Circuit, the CAFC, or the SCOTUS will have to determine whether the Article III judiciary is prepared to hand over the claim of patent validity to the executive or legislative bodies for good.

              IF patent validity it is reclassified as a private right, then reexamination and IPR must become advisory in function. Both mechanisms will per se be precluded from ruling on patent validity with finality. Thus, these institutions may remain, albeit in an advisory role.

              Perhaps this may seem draconian, but the SCOTUS has shown a willingness to recalibrate Article I involvement in recent year — Stern v. Marshall represented a significant shift in terms of how the Article I Bankruptcy Courts conducted their business.

              The claim of patent validity is an exceptionally powerful and important one (this is particularly true where the American economy has recalibrated itself around technology and innovation as the mainstay). Where Congress may assume complete control of this claim, it is likely to do so — either now or in the future. This is the threat, and is why this question presents as an issue far larger than one merely of the patent arena — may a claim with centuries of history either at law or equity be resolved with finality by an Article I administrator? There is no precedent for it, and such a ruling would represent a monumental shift in the nations’ separation of powers jurisprudence.

              1. 2.1.1.1.1.1.2

                Love the critical thinking, No.

                Care to venture a guess as to the impact to the AIA as a whole if IPR is found unconstitutional?

                1. Hard to say. Provided that it remained quick, affordable, and convenient, IPR would likely finds its place in a reasonably successful advisory role.

                  Stern v. Marshall was not the end of days for the bankruptcy courts. The bankruptcy courts issue advisory opinions on Stern claims (sans consent), which are largely rubber stamped by the Article III district courts.

                2. That would take new legislation – what then of the automatic void created by the sinking of the good ship AIA?

                  Let’s not forget just how much is in the cargo hold, everything from the change in marking to the establishment of satellite offices (except Detroit) and the whole configuration of the PTAB – all of which is immediately illegal and without force of law.

                  All of which could have been easily avoided with the mere acceptance of a single amendment.

                3. Anon – the honest answer is that I’m not certain.

                  However, I am not convinced that new legislation would be required. With respect to IPR, the SCOTUS would merely strike the provision identified as unconstitutionally violative of separation of powers under the public rights rule of law — that judgments on patent validity are final (as opposed to advisory).

                  Prior to Stern v. Marshall, a federal statutory provision allowed for the consideration of counterclaims before the Article I Bankruptcy Court. In Stern, the SCOTUS held this delegation to be unconstitutional per public rights law — the provision was not struck down, nor was new legislation required. Instead, the judgments were converted from final to advisory and business continued as usual.

                  (additionally, all judgments at the Article I level prior to the SCOTUS ruling were not undone . . . )

                4. There is to be NO – and can be NO – “scratching out” because that option was contemplated – and expressly rejected – by Congress.

                  Even the Court won’t do what Congress expressly chose NOT to do.

                  That is the point that for some odd reason no one wants to grab ahold of. It is a simple and direct result of how the AIA was purposefully built.

              2. 2.1.1.1.1.1.3

                No, if anyone still wants the PTO involved in validity after their performance over the last couple of years, they could allow a court to refer specific questions to the PTO for their views.

                But, really, how is the PTO any better than a court-appointed technical expert?

                Personally I think it be a cold day in Hades before we experiment any further with the PTO.

                1. You guys are asking whether some legislative reshuffling is sufficiently inconvenient to legitimize this obvious Article III violation – well, if it gets that far, Alito and Kennedy will likely to be the ones to provide the answer!

                2. No, I suspect that I am going to be asked this question — about the whole AIA, during oral argument. However, I have no “interest” in preserving the balance of the AIA. It is the government that has that interest. It is there argument, not mine, that if IPRs go down, the IPR provisions sould be severed.

                  Since they have not raised that argument yet, I am not going to reply to it yet.

                3. No, what I think is that after looking at the big picture, congress will not want to get the PTO involved again in validity. It is just a waste of time and resources.

              3. 2.1.1.1.1.1.4

                How does the fact that the IPRs have appeals to the federal circuit cut?

                Also, I noticed that Stern was only 5-4 with the 4 saying pretty much what I predicted that it would be good for public policy reasons to allow Article I courts to do whatever the Congress said. The court has shifted a bit to the left.

                I don’t see this as a slam dunk. I admit I haven’t read enough of the cases to see how the various judges think about this.

                Still, note that one of the drivers of this is that the Roberts doesn’t want the federal courts clogged with patent cases. One big picture item is that the federal courts are swamped and they are continually finding ways to alleviate that at the cost of justice.

                And note that the federal courts contemplated magistrate judges for patents and did that to some extent, but it is too messy having them at each federal district. That just wasn’t working. The PTO is going to get the validity questions even if the AIA has to be re-written.

                1. Night, appeals are not sufficient. Trial courts decide facts.

                  Roberts is a hawk. Just three weeks ago he dissented to the majority’s holding that Article III rights are waivable.

                  Wellness v. Sharif

                  link to supremecourt.gov

      2. 2.1.2

        Ned, the undefined broad right given by the Constitution to Congress to enact patent legislation has always been construed as patents having a conditional grant. That is, patents have always been subject to termination [retroactive to their grant date] by subsequent proof of invalidity of the patent, especially, proof of lack of novelty or originality.
        Thus, that does NOT answer your quite different question, which is whether or not that uncontested power inherently given to Congress to terminate patents is limited to only Article III Courts [since no such limitation is in the Constitution]. That is, can Congress lawfully enact additional limited alternative administrative judicial proceedings to terminate patent grants solely for lack of novelty over prior patents or publications.

        1. 2.1.2.1

          Ned, further on that point, as I have pointed out before, and not seen rebutted, for more than 100 years the PTO has, per similar Congressional statutory authorization, been invalidating granted patents in PTO interference administrative proceedings run very much like IPRs.
          [Yes, a PTO interference decision can be optionally appealed to a D.C. to present new evidence before going to the Fed. Cir.. But the D.C. must give credence to, and rarely overrules, the PTO interference decision. Nor has the PTOs authority to cancel issued patent claims in interferences ever been successfully challenged.

          1. 2.1.2.1.1

            Paul, the results of patent interferences have always been subject to a trial de novo in a district court. That “kind” of procedure was approved in Crowell v. Benson and recently in B&B Hardware as a solution to the Article III problem.

            Until the AIA, reexaminations were also subject to a trial de novo. The lower court in Patlex upheld the constitutionality of the reexamination statute on the basis that a right to a trial de novo existed.

            Recently, in Executive Benefits, the Supreme Court ruled that the constitutional violation that had occurred was cured when the complaining party had actually received a trial de novo.

            Regarding whether the trial court must give deference to the findings of the patent office in a trial de novo, that issue was decided in Hyatt v. Kappos. If there is new evidence, it is received and the findings of fact of the patent office are no longer “binding” on the trial court.

        2. 2.1.2.2

          Paul, the question is not whether patents can be invalidated, question is by whom, and whether there is a right to a trial by jury. Even Marbury held that invalidation must be by a court.

          But” invalidation” actions were known at common law. They had a right to a trial by jury. Under Murray’s Lessee and Granfinanciera, actions to invalidate must be conducted in court and with a right to a jury trial. But Supreme Court has already ruled that the be the case in ex parte Wood & Brundage.

  20. 1

    Odd that the PTO defends the IPR regime, until one realizes that it is now invested in these proceedings, having spent countless hours setting up the mechanism by which to handle them, and having hired hundreds of APJs to deal with them. Otherwise, I can’t see a particular reason why the PTO would want to assert it has jurisdiction to nullify granted patents.

    1. 1.1

      Cheobal effect (too big to fail), and the express history of the AIA and the rejection of the separability clause…

      How many lifeboats are there on the good ship AIA?

    2. 1.2

      This all began with Rene Tegtmeyer, a now deceased friend of mine. He was, in the late 70s and early 80s, the deputy commissioner. He told me the following story:

      Because one had to allege an error or mistake to file a reissue in order to re-examine a patent in face of newly discovered prior art, he began to allow no-fault reexaminations by rule. The idea became so popular that Congress passed the reexamination statute in order to allow patent owners to re-examine their patents in face of new prior art. But the reexamination statute also allowed others to petition for reexamination – and this really open a can of worms.

      The constitutionality of the statute was soon challenged in Patlex. The Federal Circuit upheld the constitutionality of re-examinations by a effectively ignoring McCormick Harvesting, and by declaring a patent to be a public right because patent validity was a public concern. The Federal Circuit did not consider Murray’s Lessee and its limitations on the public rights doctrine. Had the Federal Circuit considered that case, it probably would have not held a patent to be a public right. Perhaps the reason it did not consider the case was a failure of advocacy. But clearly, Patlex was decided in error.

      1. 1.2.1

        To establish a public right

        1. Congress must have the power to legislate in an area, or it must be a function inherent in the executive branch – supervising its employees or making political decisions.

        2. The matter cannot be the subject of suits in the courts of law, equity or admiralty at common law.

        1. 1.2.1.1

          Ned, U.S, patent suits were handled in Federal Courts of EQUITY until the merger in the late 1930s, with no juries.

          1. 1.2.1.1.1

            Paul, Murray’s Lessee held, and Supreme Court recently affirmed its holding in Stern v. Marshall, that matters that were litigated in the courts of England in 1789, and these included matters that were litigated in the courts of law, the courts of equity and the courts of Admiralty, are not subject to the public rights doctrine. It is a non sequitur to say that because patents might be litigated in equity they are public rights.

            Also, a patent owner chooses to sue in equity. By doing so he voluntarily waives his right to a jury trial with respect to validity – although that is a question that has yet to be decided by the Supreme Court. Moreover, the Supreme Court held in Granfinanciera, SA v. Nordberg, 492 U.S. 33, 109 S. Ct. 2782, 106 L. Ed. 2d 26 (1989) that Congress had no power to force the litigation of a legal claim into the courts of equity against the consent of the right owner.

    3. 1.3

      One good reason is that absent the present statutory availability of PTO Director-requested reexaminations the PTO would have no vehicle to revoke its publicly embarrassingly erroneously granted patents, like: tarragon as an antiseptic, religious soap, fur lined keyholes, perpetual motion machines, how to play with a cat using a flashlight, how to swallow a pill, how to swing on a swing, etc., etc. [No, I did not make up those actual examiner allowances and their issuances.]
      Of course the PTO also has to respect any statute that mandates them to do something unless and until it actually no longer exists, which is very unlikely in the case of reexaminations or IPRs. [CBMs will automatically expire in a few years.]

      1. 1.3.1

        Paul, you are absolutely right that the PTO has no vehicle to revoke a patent it granted where it should not have done so. The Supreme Court repeatedly held, repeatedly held, that the government was without standing to sue for repeal of a patent granted by mistake. The last such case occurred in the 1970s, just prior to Congress authorizing reexaminations.

        How is this possible: The Supreme Court repeatedly holds, from Marbury to McCormick Harvesting, that as a matter of constitutional law the government has no authority to revoke an issued patent – that being the exclusive province of the courts. The Supreme Court further holds that the government has no standing to sue in court for revocation. And yet Congress has the power to authorize what the courts have repeatedly says they had no power to authorize? And the justification for this is what? Policy arguments? After 200 years of consistent precedent to the contrary, suddenly we can ignore all this precedent because of fresh policy arguments?

        Constitutional rights are not subject to short-term policy arguments. The structure of our Constitution, dividing our government into three independent and coequal branches is there for good purpose. If you read what Roberts wrote recently about this, the blurring of the courts/executive/legislative branches was a major problem that the founders were trying to fix.

        Congress does not have the power to revoke issued patents. Congress is not have the power to authorize the PTO to revoke issued patents. It is beyond their constitutional jurisdiction to do so.

        Moreover, people who own patents have a constitutional right to have the validity of their patent adjudged in an independent court of law where the judges have life tenure and their salaries cannot be changed. The executive and Congress are both political institutions. As such one cannot get a fair and unbiased hearing from them. It is literally impossible. No matter how much you can argue that these a APJs individually might be honest, they are pursuing agendas as an institution. They are political. We cannot as patent owners ever expect to receive completely unbiased and fair judgment from that organization.

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