Bits and Bytes on IP Law

  • Video Contest: IPO is again hosting its IP Video Contest – for entertainment value I like the LOTR and Cavemen skits. [http://www.ipvideocontest.com/?page_id=410]
  • Lighting Ballast: The Federal Circuit has denied a motion for another en banc rehearing in the longstanding lighting ballast case. Thus, the latest panel decision should stand that affirms the district court holding that the claimed “voltage source means” is not a means-plus-function case.  That outcome is largely based upon the appellate court giving deference to the lower court’s factual findings that were derived from expert testimony discussing the level of skill in the art.
  • Patent Reform: Senator Grassley’s PATENT ACT of 2015 (S.1137) has been placed on the Senate Calendar queue after having been reported out of committee in June.  The bill also includes a number of substantive amendments.
  • ShowerThoughts: Our objective system of judging obviousness almost always gathers more prior art than was actually known to the inventor at the time of the invention.  This means that (for valid patents) the inventor’s actual inventive-step (based upon what the inventor knows) is typically greater than what is required by law – perhaps significantly so.

99 thoughts on “Bits and Bytes on IP Law

  1. 9

    Ned: congress was given no power to regulate patents in the patent and copyright clause

    Say what? The Constitutional clause that grants Congress the power to create a patent system doesn’t provide Congress witht he power to regulate that system? That can’t possibly be the case.

    The point the government was making, it seems, that congress can regulate patent validity because they affect commerce. Get the bit about monopolies?

    That didn’t seem at all to be the government’s point. This is pretty close to a transcription of the government’s statement:

    As the Supreme Court has emphasized, a granted patent by its very nature is affected with the public interest because it affects every member of the public.

    To put a blunt point on this, the PTO could grant me a patent tomorrow on “Some method that everyone is doing but that is also non-obvious and useful.” That claim is plainly junk as everyone will admit … but wait! The claim is “presumed valid” because of the granting agency’s “expertise.” And everyone infringes it. The issue here boils down to whether it’s “unconstitutional” to permit the grandmother who is sued with that patent to petition the PTO to undue the mistake. Of course, in a sane system, the director would simply be able to snuff nonsense like that out with a stroke of the pen and a brief explanation for zero cost to the grandmother. But you’re telling grandma that because of some practices in England circa 1787 (?!) she has to fight with the patent owner in some district court in the banana republic of East Texas where she’ll first have to ask the judge for permission to file a subject matter eligibility challenged.

      1. 9.2.1

        link to ipwatchdog.com

        And there is reason to believe I’ll find accurate information at that link because …. why? That site has been wrong about pretty much everything important since forever. The only moments when it’s right about something are when it’s contradicting itself. Granted, it contradicts itself every other day but still might as well just flip a coin.

        The questions you raise have been repeatedly addressed – and answered – by the SCOTUS.

        The question is whether they’ve been “repeatedly addressed” in a coherent and consistent manner. We’re talking here about removing a long-respected critical backstop from a badly damaged and leaking system that needs all the backstops it can get.

        I will note for the record that even the worst case scenario here (i.e., that re-exams and IPRs are “unconstitutional” in view of the design of the present patent system) is fixable. But I can guarantee that the folks who are so concerned about the “means” being challenged here are going to like their “constitutionally correct” fix even less. Way, way less. But thinking ahead about the obvious ramifications of their desires never seems to cross the minds of most of those people (mainly because the one thing they are really skilled at is grabbing cash as quickly as they can before the cookie jar is sealed again).

        1. 9.2.1.1

          The content of the link has nothing to do with Mr. Quinn.

          Must you always be such an arse?

          question is whether they’ve been “repeatedly addressed”

          LOL – from the guy who has never squared the Supreme mess of 101, the irony is thick.

          is fixable

          Great. No one said otherwise. What has been said – and to this day remains standing with NO cogent reply is the fact that the Court cannot write law that Conress explicitly rejected for the AIA. You want to be the first to offer such an argument? Go ahead and try (you will need to make an argument though – not just mouth your “fix,” which is as ephemeral as the angels dancing on that head of a pin of yours.

          Spend less time denigrating (grabbing cash – how the F is that relevant?) and more time actually making a post with some substantive value.

        2. 9.2.1.2

          MM – my mistake, I should have explained what it is. It is merely a hyperlink to the reply brief filed in the 4th Circuit. It directly confronts the arguments raised by the USPTO (and parroted during oral argument before the CAFC).

    1. 9.3

      MM, “8: To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”

      There is nothing in this that even suggests that congress was granted the power to grant anything but Rights, exclusive rights, to a patent owner. The whole idea that they can grant gold stars, revocable privileges or the like is at war with constitutional grant of power.

      Under Marbury, one a Right has passed from the government to its owner, it is the property of the owner. It cannot be revoked by the government. This is Fundamental, MM.

      1. 9.3.1

        “There is nothing in this that even suggests that congress was granted the power to grant anything but Rights, exclusive rights, to a patent owner. The whole idea that they can grant gold stars, revocable privileges or the like is at war with constitutional grant of power.”

        Ned, I think IPR is very unfair and promotes a lot of reverse-trolling against legitimate (cash-strapped) inventors and startups due to the drastically disproportionate leverage that the patent challengers have.

        All that said, I’m having trouble with your constitutional argument, and though I rarely agree with what MM says, I’m now thinking back to property law class (a long time ago, admittedly…) and feeling like land rights can be sliced/diced and conditioned galore…and thus wondering what really stops Congress from doing the same thing with patent grants. I suppose I can’t think of a truly direct parallel for IPR with land, and perhaps there isn’t one and that’s what makes you correct (which I’d be delighted to conclude). But I’m just thinking about all the crazy-ass conditions that people can put in their wills about somebody doing X and losing their inherited property, etc., and it has me wondering why Congress can’t technically do the same – though I believe it’s very bad POLICY for them to do so.

        Now, I could definitely see how folks who were granted a patent before IPRs even existed can say that their property was never “encumbered” with that condition/limitation, but I’m having trouble seeing how new patents cannot simply be defined by the grantor so as to contain this inherent limitation.

        Is the argument simply that property rights (or, perhaps just this particular kind of right) can be encumbered in various ways, but such encumberances cannot include the possibility of administrative revocation? And is it meaningfully different from a general conditional grant – which is presumably OK for other sorts of conditions/limitations?

        1. 9.3.1.1

          Ken, property rights are subject to the general police power of states. The government of the US has limited powers.

          The commerce clause cannot be used to regulate patent rights. See, e.g., United States v. Lopez, 514 U.S. 549, 115 S. Ct. 1624, 131 L. Ed. 2d 626 (1995). link to scholar.google.com

      2. 9.3.2

        As I have tried to point out to you before Ned, Malcolm just does not care about the fundamental.

        At all. He is as anti-patent as they come. You really have to do something about that malady of yours (the “6-is-a-genius-because-he-agrees-with-me” malady).

    2. 9.4

      MM, On affecting the whole public — that was Thomas’s argument in Teva. Here is what Breyer said for the majority:

      “Statutes, in general, address themselves to the general public; patent claims concern a small portion of that public.” link to scholar.google.com at 840.

      Patents are not statutes, nor like statutes. They protect inventions. They affect infringers — just like trademark registrations protect trademark rights against infringement and copyright registration protects authors from infringement.

      Do you know that if the government is correct in its theory, all IP litigation, patents, copyright and trademark, can be withdrawn from the courts? No right to a court trial at all. No right to a jury trial. That is the nature of a public right.

  2. 8

    “anon” “Malcolm’s views on Marbury below should clue you in to his agendas – they are far more anti-patent

    Oh lookie, here’s Billy again with his “anti-patent” nonsense.

    Laws which permit junky patents that should never have been granted in the first place to be quickly expunged from the patent system are great for the patent system. You behave here as if you believe that everyone has forgotten the past twenty years and the series of unbelievable errors that are made.

    There is no doubt about this: the aspect of the IPR proceedings that are most troubling to “anon” and his unsatisfiable cohorts is that the IPR proceedings actually make it much more difficult to obtain massive settlements through the assertion of junky patents. In short, unlike most of the rest of the broken patent system, IPR proceedings actually work, just not to the usual advantage of the privileged class of rich b0ttom-feeders who have been skimming the system for decades.

    The foamy cheerleading for MCM’s position is fascinating to watch, just as was fascinating to watch 90% of the same folks (surprised?) cheerlead for the courts to fashion a completely toothless subject matter eligibility requirement. What do these people think happens next? Everybody who sees the gaping flaws in the system just lies down and walks away? LOL As if.

    Be careful what you wish for.

      1. 8.1.1

        Ends and means

        That’s right: just spew forth the same vapid, ineffective slogan that you’ve been flying up the flag pole since forever because you can’t write simple declarative sentences.

        1. 8.1.1.1

          It is not “spew”

          It is not “vapid”

          It IS short declarative sentences.

          You really blow at this, Malcolm.

  3. 7

    Ned,

    Maybe I missed it, but did you cite the statute itself at 35 USC 261?

    The only place I have heard that personal property is a public right is a place that Jane would love all of us to get on our knees and pray for.

    1. 7.1

      Anon, I didn’t cite the statute. Instead I cited Marbury v. Madison for the proposition that when the government grants a right, any right, to a person, it becomes his property.

      Even an appointment for a fixed period, as Marbury explained, can be a property right. The Marbury, the validity of that property right is exclusively a matter for the courts.

      1. 7.1.1

        Thanks Ned,

        I think it would have been a stunner to cap it of with a pithy, “When all else fails, read the statute ” quote, but as they say about hindsight…

        And I will also remind you that Malcolm’s views on Marbury below should clue you in to his agendas – they are far more anti-patent then you have allowed yourself to see – in no small part because of the “6-is-an-Einstein-because-he-agrees-with-me” malady you tend to suffer from. At the most fundamental levels, the points wherein we tend to agree are those that cherish the patent system. Cogitate on that for awhile!

        Now we can sit back and see if the torpedoes you launched find their mark below the waterline of the good ship AIA Titanic. I have saved you a deck chair to listen to the band…

        1. 7.1.1.1

          anon, I would agree that MM views the copyright and patent clause like the government views the commerce clause: infinite power of the government to do anything it wants.

          1. 7.1.1.1.1

            …and sort of like your view of the Judicial power…

            (you really should think about the things I put on the table of discussion)

            1. 7.1.1.1.1.1

              (I should clarify that the view on Judicial power is pretty selective, and is very much affected by your malady of aligning with your windmill chases)

        2. 7.1.1.2

          anon, the problem about quoting statutes when we are talking about the constitution is that statutes cannot override the constitution.

          That is why I have to quote Marbury.

          1. 7.1.1.2.1

            Not a bad point Ned – HOWEVER, the statute provision that I provided is key to the essence of what a patent is.

            Ig nore that, and you might as well be discussing angels dancing on the head of a pin.

            1. 7.1.1.2.1.1

              you might as well be discussing angels dancing on the head of a pin.

              Which is the worst thing ever … unless of course you are doing it to rescue some junky software patent.

              Now let’s listen to “anon” lecture everyone about “ends” and “means” again. Because he’s totally not a hypocrite.

    1. 6.1

      I asked Law360 to amend their article to read:

      “Sirs, in your 09/11/15 article on “Patent Owner Call IPR Process Unconstitutional…” by Jimmy Hoover,

      The paragraph beginning “Heller blasted” is not an accurate paraphrased of what I said. Consider this instead:

      “Heller blasted the notion, saying with public rights there is no right to a trial in an Article III court, calling the two, “public rights” and Article III rights, “mutually exclusive.” Similarly, there is no right to a jury trial. To find that a right was a public right because it was statutorily created, Heller said, would be to overrule three governing Supreme Court decisions that had recognized rights to a trial by jury regardless that the right was statutorily created. The cases include Dairy Queen for trademarks, Feltner for copyrights and Markman for patents.”

      1. 6.1.1

        To find that a right was a public right because it was statutorily created, Heller said, would be to overrule three governing Supreme Court decisions that had recognized rights to a trial by jury regardless that the right was statutorily created.

        Thankfully, all one needs to do in order to avoid overruling those cases is to make clear that a “right” can be deemed a “public right” for reasons other than mere “statutory creation.”

        And that assumes that for re-exams and IPRs to be constitutional, it’s first necessary to find that patents are “public rights”. That itself is a big assumption.

        I’m still waiting for someone to explain (1) how the fact that you can appeal an IPR or re-exam decision to an Article III court changes the “analysis” — it certainly can’t be irrelevant; and (2) how the fact that patent “rights” are granted with the possibility of revocation by the PTO “baked in” changes the analysis.

        Is it unconstitutional for a government agency to grant a “right” with conditions and provisos that may be instituted/effected initially by the agency (with subsequent Art III court review of those decisions)? I don’t see why that would be the case.

        1. 6.1.1.1

          MM, Congress can declare what the right is, i.e. what infringement is. Congress can regulate the courts and their procedure. But Congress cannot remove from the courts and delegate to legislative tribunals the determination of whether a right is valid.

          Regarding Article III, it really goes to what a court does – determine facts; apply a rule of law to those facts and render judgment. In appeal does not do this, particularly with respect to findings of fact, and so an appeal is not sufficient. You might want to read the discussion in Stern regarding Crowell v. Benson on this point.

          However, when one actually receives a de novo trial, and it renders judgment rather than an agency, then there is no Article III violation.

          The Supreme Court has also said that where there is an Article III right involved, that one cannot be involuntarily forced to litigate in an Article I court.

          1. 6.1.1.1.1

            When a claim is a private right, an Arricle I administrator can do more than render an advisory (i.e., proposed) opinion on questions of law.

            De novo review of IPR cannot cure the Article III infraction.

            This should – by now – be clear.

            1. 6.1.1.1.1.1

              David, I agree. One cannot be forced to litigate in an Article I court that provides final judgment subject to appeal to a district court.

  4. 5

    Listened to the oral argument. Some comments:

    First – Ned, I was cheering for you when the judges finally understood your point about the need to resolve the constitutionality issue first.

    HP’s and the PTO’s arguments about 315(b) are completely unconvincing. Cuozzo was about the PTAB’s discretionary power to institute or refuse an IPR; Versata is about the legality of the IPR proceeding itself. Time-barring is an issue of legal process. Of course legal process is reviewable! Statutes of limitations are not discretionary.

    Look at the statute:

    An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.

    This is not a gentle suggestion to the PTAB about how to wield its discretion: it’s a straightforward, statutory process rule.

    The PTO’s argument about public vs. private rights is also unconvincing. The judges seem to approach this issue by considering what public rights look like, vs. what private rights look like. The PTO’s response was that since (1) patents are created by statute and (2) the PTO is the sole authority for issuing patents, then by definition, the thing that it issues must be a public right. But that’s extremely difficult to swallow: driver’s licenses are strictly a product of statute and only available from the DMV, but are hardly “public rights.”

    Finally – Ned, the first five minutes of your response period were brilliant.

    1. 5.1

      Thanks, David.

      Paul Morgan is not going to be a happy camper after listening to the back and forth between the government attorney and me.

      1. 5.1.1

        Ned, I’m pleased your constitutional arguments at least got listened to, and that you had your day in court on this issue. I regret that my efforts early last year to at least get the IPO to consider filing an amicus brief were ignored. I gather that no one else, even in academia, took this issue seriously enough to do so either?
        But now lets wait for the decision and hope the issue actually gets dealt with in the decision itself. [Among other factors here, the Judges cannot be clueless to the huge economic and litigation consequences and the likely Congressional and Sup. Ct. reactions if they were actually to agree with you.]

        1. 5.1.1.1

          Paul, lack of interest may be one reason not to file a brief. Being heavily conflicted is another.

          IPRs are not universally popular among the companies that make up the IPO.

        2. 5.1.1.2

          BTW Ned, getting a novel argument out of left field like this must have been refreshing to Fed. Cir. judges likely to be bored with all the routine mere 103 arguments they normally get coming out of PTO proceedings.

            1. 5.1.1.2.1.1

              What an a$$hat.

              Oh lookie, “anon” is getting on somebody’s case for “implicit belittling.”

              But “anon” is not a total hypocrite. Nope.

              LOL

        3. 5.1.1.3

          Paul, regarding “pleased,” the judges only want to hear about the con law issue and about the appealability issue. When either side try to talk about the merits, they tried to get us to stop.

          And it is true, that counsel in other cases would drone on and on about an issue that the judges had no concern about, the judges would almost fall asleep. It was sad to see counsel not looking at the judges and getting a hint.

    2. 5.2

      DS: The PTO’s response was that since (1) patents are created by statute and (2) the PTO is the sole authority for issuing patents, then by definition, the thing that it issues must be a public right.

      The PTO did not say this. There is another key aspect of patents that the government noted was an important consideration in characterizing the nature of the “right”: what the PTO decides to grant affects the public at large. In other words, every Tuesday when the PTO erroneously hands out a patent to some guy who “innovated” a “new” way of deciding when to communicate a price “over the Internet” or how to think about the size of chunks in your dog’s food, the public’s rights — everybody’s rights — are adversely affected. This is important.

      But that’s extremely difficult to swallow: driver’s licenses are strictly a product of statute and only available from the DMV, but are hardly “public rights.”

      I’ve already pointed out that the analysis you are using isn’t the government’s proposed analysis. Why do you believe that driver’s licenses are “hardly public rights”?

      Note that the elephant in the room here is that the “public rights doctrine” is pretty much a useless mess of contradictory hoohaw. By comparison, contemporary subject matter eligibility jurisprudence is a model of crystal clarity.

      1. 5.2.1

        The PTO did not say this.

        This is a literal transcript:

        Judge: How can a patent right be exclusively a public right under Stern, if it involves the liability of one individual to another?

        PTO: As the Stern court itself put it – although the claim in Stern was deemed to be a claim that must be adjudicated in an Article III court, that was a clkaim that derived solely from common law; it was a state law claim for tortious interference. It did not originate from any statutory scheme, and it was not governed by an expert government agency.

        The court in Stern made clear that if the claim derives from a federal regulatory scheme, or if resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within that agency’s authority – then that is a public right. And here, a patent is solely a creature of statute.

        1. 5.2.1.1

          Hmmm, I note that Malcolm’s “very important point” is not actually in the transcript.

          Double FAIL (humbly)

          1. 5.2.1.1.1

            “anon” I note that Malcolm’s “very important point” is not actually in the transcript.

            It absolutely is in the transcript. David didn’t quote it, but it’s there.

            1. 5.2.1.1.1.1

              That’s correct – that part comes after. It was presented as justification for why determining private vs. public rights should be based on those two criteria.

              1. 5.2.1.1.1.1.1

                It was presented as justification for why determining private vs. public rights should be based on those two criteria.

                Right. There’s policy considerations bleeding all through this “doctrine.” It’s a creature of policy, pure and simple.

        2. 5.2.1.2

          David, patents, trademarks, copyrights and who knows what else meet this definition. If all are public rights, there are no rights to adjudicate in a court of law, nor is there a right to jury trial.

          The gov’t attorney made clear that this was exactly what he was arguing.

          1. 5.2.1.2.1

            I wish I had a few hours to go over this completely. But, I did listen to the oral arguments. The judges did seemed apprehensive. It appeared that they are worried (the threat of the SCOTUS seemed to cow them) about this and I’ll bet that they come up with a long reasoned argument. My bet is that they find a way to squash it.

            It seems to me their biggest argument is that this is just like a re-exam, but I don’t have time to figure out what twist they will use. Actually, you are probably lucky that you only got one Google judge. (The big picture is that the federal courts are way overloaded and they want patent validity out of the court system. And, we are in an era when judges feel free to commit acts of judicial activism. And, the SCOTUS and Fed. Cir. are probably aligned on this one. They both want patent validity to stay at the PTO.)

            Anyway, great job Ned! That is pretty cool that you did this. You should be proud of yourself. If only you could see that Benson is the root of all evi1 in patent law. Are you going to petition for an en banc hearing if you lose?

        3. 5.2.1.3

          PTO: The court in Stern made clear that if the claim derives from a federal regulatory scheme, or if resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within that agency’s authority – then that is a public right. And here, a patent is solely a creature of statute.

          Both of these factors have more nuance than your suggestion. A “federal regulatory scheme” is more than a “statute”. And being the “sole authority” is less than a requirement that “resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within that agency’s authority.”

          If determining whether a right is a “public right” requires nothing more than finding a statute and an agency with “sole authority”, then this issue would have been dealt with a long time ago. Who knows — maybe your formulation will end up being the test. That would be an improvement to the “doctrine” in certain respects.

          1. 5.2.1.3.1

            MM, “federal regulatory scheme” has a legal meaning, and it is not what the PTO is talking about.

            1. 5.2.1.3.1.1

              “federal regulatory scheme” has a legal meaning, and it is not what the PTO is talking about.

              What is the singular defined “legal meaning”, Ned?

              Note also the use of the term “or” by the government.

              1. 5.2.1.3.1.1.1

                Gibbons v. Ogden, 22 US 1 – Supreme Court 1824

                “We are now arrived at the inquiry — What is this power?

                It is the power to regulate; that is, to prescribe the rule by which commerce is to be governed. ” Id. at 196; United States v. Lopez, 514 US 549 – Supreme Court 1995 at 553.

                Regulatory programs are creatures of the commerce clause, MM.

                Also consider that Lopez held unconstitutional a statute where congress tried to control the possession of guns near schools. Did not “substantially” regulate commerce.

                “To uphold the Government’s contentions here, we would have to pile inference upon inference in a manner that would bid fair to convert congressional authority under the Commerce Clause to a general police power….”

                “We pause to consider the implications of the Government’s arguments. The Government admits, under its “costs of crime” reasoning, that Congress could regulate not only all violent crime, but all activities that might lead to violent crime, regardless of how tenuously they relate to interstate commerce. See Tr. of Oral Arg. 8-9. Similarly, under the Government’s “national productivity” reasoning, Congress could regulate any activity that it found was related to the economic productivity of individual citizens: family law (including marriage, divorce, and child custody), for example. Under the theories that the Government presents in support of § 922(q), it is difficult to perceive any limitation on federal power, even in areas such as criminal law enforcement or education where States historically have been sovereign. Thus, if we were to accept the Government’s arguments, we are hard pressed to posit any activity by an individual that Congress is without power to regulate.”

                The government is off to the races once more.

                1. The government is off to the races once more.

                  Gosh, Ned, I’m pretty sure there’s a big distinction between Congress’s power to create program to regulate patents, on one hand, and Congress creating a program to regulate guns.

                  Can you guess what it is?

                2. But, congress was given no power to regulate patents in the patent and copyright clause — they have the power to regulate commerce. The point is that the commerce clause cannot go so far as to regulate things that have very little to do with commerce.

                  The point the government was making, it seems, that congress can regulate patent validity because they affect commerce. Get the bit about monopolies?

                3. A patent being a negative right, it should be abundantly clear that a patent is not a monopoly (in the legal sense).

                  But we won’t have that level of inte11ectual honesty from Malcolm, now will we?

          1. 5.2.1.4.1

            Look up “regulate” in the Constitution. It has nothing to do with patents.

            Certainly true of the PTO during the last twenty years or so.

  5. 4

    Re: MCM v. HP, the summary of the oral arguments which follows is mostly paraphrased with numerous exact quotes. It’s worth listening to. The attorney for MCM is clearly very passionate about his cause. ;)

    ————–

    A bit of a rocky start with 5 minutes wasted on what appears to be a trivial point (that the standing issue needs to be decided first). I think all that the MCM atttorney was trying to do here was make the court aware of another Supreme Court case that was relevant but hadn’t been briefed …?

    Anyway, the gist of the argument is presented at 9:00: Under Stern v. Marshall (and other cases in the line), an action that was litigated at common law can not be removed by Congress to the patent office (or any other administrative tribunal). So the question is whether an IPR is like any of those ancient legal actions. The patentee’s argument is that a scare facia proceeding to invalidate a patent is such an action.

    For what it’s worth the panel was silent after MCM’s presentation.

    HP’s attorney was asked immediately by the panel to address the Constitutional standing issue. HP apparently left that work for the government to do (at least with respect to the oral argument). The gist of the HP attorney’s argument was that the same policy reasons that permitted re-exam permitted IPRs (and therefore the Patlex and Joy Technologies decisions apply equally to IPRs). One of the judges asked the HP attorney if the attorney was aware of a proceeding at common law in Britain in 1787 that resembled re-examination. The HP attorney deferred to the government, there was some quiet chuckling, and the judge said “Since they are laughing they probably don’t know [the answer to the question].” [much more laughter]

    Government’s position: inter partes re-exam is the same for the purposes of the constitutional issue at issue. MCM isn’t making a distinction between re-exam and IPRs but arguing that PatLex and Joy Technologies have been overturned by Stern.

    Question from judge: how can a patent right be exclusively a public right under Stern if it involves the liability one individual to another (and it must be a public right to escape the Article III court exclusivity).

    Government makes a distinction that the claim in Stern (which was deemed to properly adjudicated only by an article III court) arose solely from common law — a State law claim for tortious interference — and it did not originate from any “statutory scheme” and was not governed by a regulatory agency. In contrast, the government argues, a patent is solely a creature of statute.

    Judge responds: There’s a “very odd” situation here that hasn’t come up before in the public rights context. Under Lockwood, there is a jury trial right if validity is raised in an an Article III court, and yet validity can also be addressed by the PTO without a jury trial. If we had a situation in which the district court were statutorily authorized to refer the invalidity issue — in the context of an infringement suit — to the agency to adjudicate we’d have a real problem, wouldn’t we?

    Government responds: As the Supreme Court has emphasized, a granted patent by its very natures is affected with the public interest because it affects every member of the public. There’s two distinct questions (1) if Congress decides that a right is properly adjudicated by an adminstrative agency, the only relevant question is whether that right is a public right that can be adjudicated by a non-Article III court. But if Congress decides to send adjudication of a statutory right to a Federal court, that raises a 7th amendment question. The Supreme Court in Curtis v. Loether and Pernell found that the statutory schemes in those cases that authorized adjudication in an Article III court also required a jury trial but those cases made clear that nothing would have prevented Congress from authorizing those same cases to be adjudicated outside of an Article III court (e.g., by an administrative agency) without a jury. So the requirement that invalidity be tried by a jury in a patent case isn’t relevant to the Article III issue. There’s also no suppport for the contention raised by amicus that the different procedures in IPR and inter partes review are relevant to the question.

    [MCM’s rebuttal follows]

    Judge: There’s no question that Congress can allocate to a government agency the power to decide whether a claim can be granted as a patent in the first instance, so why can’t it provide for the reconsideration of that issue by the adminstrative agency?

    MCM attorney: Supreme Court has been consistent that once the administrative agency or government grants a right, there’s a property right in that and the only institution that can revoke that right is an Article III court. This goes back to Marbury v. Madison. If the patent is a public right, there is a consequence. Public rights and Article III jursisdiction rights are mutually exclusive. In that case, there is no “right” to trial in an Article III court at all. Similarly there is no “right” to a jury trial with a public right. Public rights and Article III court rights are mutually exclusive. Copyrights, trademarks and patents are all granted by statute. The Supreme Court has held that each of these rights has a right to a trial by jury in court. All these cases are going to overruled if you find patent rights to be public rights. Is the Supreme Court going to let that happen? I severely doubt it!

    ——————

    My only editorial comment is that — if we take the government at its word — Curtis v. Loether and Pernell would seem to undercut the force of MCM’s arguments with respect to the “jury trial” issue.

    And it does seem to me that Curtis v. Loether is consistent with the government’s characterization, i.e., the fact that a jury trial is required if a case is litigated in an Article III court — as authorized by Congress — is not dispositive as to the whether Congress can also authorize a government agency — with its expertise — to resolve the issue.

    See Curtis v. Loether (S. Ct. 1974) ([T]he Seventh Amendment is generally inapplicable in administrative proceedings, where jury trials would be incompatible with the whole concept of administrative adjudication [Footnote 8 — “[T]he concept of expertise on which the administrative agency rests is not consistent with the use by it of a jury as factfinder.” L. Jaffe, Judicial Control of Administrative Action 90 (1965)] and would substantially interfere with the [agency’s] role in the statutory scheme… But when Congress provides for enforcement of statutory rights in an ordinary civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies of the sort typically enforced in an action at law.)

    See Pernell (1974) (Block v. Hirsh (1921) … stands for the principle that the Seventh Amendment is generally inapplicable in administrative proceedings, where jury trials would be incompatible with the whole concept of administrative adjudication. See Curtis v. Loether, 415 U.S. at 415 U. S. 194. See also NLRB v. Jones & Laughlin Steel Corp., 301 U. S. 1 (1937).

    See Block v. Hirsh (1931) (“If the power of the Commission established by the statute to regulate the relation is established, as we think it is, by what we have said, this objection [lack of a jury trial] amounts to little. To regulate the relation and to decide the facts affecting it are hardly separable

    Note that Pernell and Block v. Hirsh both concern real property and the ability of government agencies to control how and when that real property may be occupied or used by the owner.

    1. 4.1

      Better than a transcript MM. And yes, the advocate cared about the issue and the court did not fall asleep or roll their eyes like they did earlier.

      In the recent case of Wellness v. Sharif link to scholar.google.com
      , the SC clarified that one can waive their Article III rights. So if the congress provides an alternative forum in a legislative court, the right holder waives his right to a trial in an Article III forum. The choice must be knowingly made, and completely voluntary.

      The older cases are thus reconciled.

      1. 4.1.1

        The PTO was holding on pretty tight to the argument that it was a matter of deciding whether the patent should have been issued in the first instance.

        1. 4.1.1.1

          Right, because it all turns on that: Is IPR an appellate process, or an extension of the examining corps?

          It would be a subtle question, except for the point that Ned raised at the start of his response period: Article I jurisdiction ends when the right in question is granted. At that moment, jurisdiction completely passes out of the executive agency and into the judiciary. The agency is barred from pulling it back into its own jurisdiction for reconsideration. The ship has sailed.

      2. 4.1.2

        one can waive their Article III rights

        I would humbly suggest that when you voluntarily take advantage of a statutory scheme that inherently describes your “right” as one that can be expressly re-examined and revoked by the granting agency, you have knowingly and voluntarily waived your “right” to have such decisions made exclusively by an Article III court.

        And let’s not forget: you can always appeal that decision to the Article III court.

        Nobody can dispute with a straight face that — for the last couple decades anyway — PTO applicants get far more due process than the public ever gets when the public’s rights are mistakenly trod upon by the PTO.

        1. 4.1.2.1

          Your humble suggestion totally ig nores the legal points Ned uses about the historical aspect and why patent rights must NOT be considered public rights.

          It’s kind of an important consideration that you should reflect upon (humbly, of course).

          1. 4.1.2.2.1

            MM, you would overrule Marbury?

            There is no overruling of Marbury because the “right” we are talking about expressly does not include “freedom from re-examination.”

            Congress has broad power to fashion “patent rights”, provided that they promote progress. If Congress rationally deems that those rights do not include “freedom from re-examination”, then those who voluntarily take advantage of the patent scheme also voluntarily waive whatever “Article III” rights they might otherwise have had.

            Note again: patentees are free to appeal the PTO re-exam/IPR decisions to an Article III court. That would seem to be an important fact here.

            1. 4.1.2.2.1.1

              Note again: patentees are free to appeal the PTO re-exam/IPR decisions to an Article III court.

              Not fully.

              As I have pointed out for a very long time now, one of the separate sticks in the bundle of property rights is NOT so situated.

              When the executive initiates the action, and removes the presumption of validity, that my friend is a taking without appeal or recompense.

              That would seem to be an important fact here.

              1. 4.1.2.2.1.1.1

                When the executive initiates the action, and removes the presumption of validit

                The “presumption of validity”, again, is something that applies to granted patents asserted in courts but not to patents that are re-examined by the granting agency. If you want your “presumption of validity,” simply assert your patent in court. Voila! Presume away!

                There is no reason for such a presumption to exist during re-exam or IPR where the agency has already made a decision that it’s granting was likely in error. Note that the requirement for such a decision to be made is itself a recognition of your beloved “presumption.”

                1. It is a stick in the bundle of patent rights that the Executive simply cannot take – at the moment they decide to take a GRANTED patent back into re-exam.

                  That’s kind of the point, Vinnie.

            2. 4.1.2.2.1.2

              MM, this is the crux of the problem – and was specifically addressed in Marbury. When one has been granted a right for a fixed period, it is his property. The government cannot revoke it for any reason. They too must sue in court.

              To say that Congress has the power to cancel Marbury by legislation, then Congress can effectively withdraw ALL matters from the courts, except perhaps, those specifically mentioned in the constitution.

              1. 4.1.2.2.1.2.1

                When one has been granted a right for a fixed period, it is his property. The government cannot revoke it for any reason.

                What if the “right” is expressly conditioned as a “revokable right”?

                1. Well, MM, a revocable right is not a right at all. It is a privilege — like a driver’s license.

                  But Congress has no power to grant privileges. Just Rights in connection with patents.

    2. 4.2

      Poor panel luck, perhaps, but on the plus side…if he wins there would be pretty low risk of reversal en banc.

    3. 4.3

      The rocky start seems to be more of an issue of adrenalin flowing (as opposed to content), but Ned blew the chance of properly giving me credit for our discussions as to the constitutional infirmity that he “recently became aware of.”

      Either way, the torpedoes have been launched and the government’s attempt to deflect was at bottom line excessively weak.

      (Whether or not the “public rights doctrine” itself is a “pretty much a useless mess of contradictory hoohaw,” that is not going to matter when you are going to be scrambling for the lifeboats of the good ship AIA Titanic)

  6. 3

    If you say “voltage source means providing…” it takes many years of litigation to decide what this is.

    It’s actually much worse than that. The way the law is being applied – if you use anything that looks remotely like MPF, the judges can drag it into 112(f) (and then throttle it under 112(b) if there isn’t spec support). Whether or not they will is totally within their discretion – as Lighting Ballast shows.

    All of patent law is devolving into this smell-test nonsense. 101 “signal,” 101 “abstract idea,” 101 “preemption” / “overbreadth” / “significantly more,” 112(b) definiteness (“bright star of ‘reasonable certainty!'”), 112(f) MPF, 102 “broadest reasonable interpretation,” 103 combinations… smell tests, the whole lot of them.

    Why does MPF suddenly mean what one skilled in the art would know is irrelevant?

    Because the test is not being applied for its own sake: it is being applied as a means (ha ha) to an end, i.e., the “patent quality” crusade.

    And, in the modern context, why is MPF even relevant anymore?

    Means-plus-function claims definitely have their uses, and some practitioners swear by them. And that’s perfectly fine! We should have many different legitimate claim styles, because innovation can be subtle, and calling it out succinctly can be extremely difficult.

    The problem is that the rules for when claims are and aren’t MPF are becoming so fluid as to be meaningless. If the courts really wanted to promote efficiency and consistency rather than their patent law agendas, they would clearly define some “magic” words” for MPF. “___ means/step for ___” worked fine for years and years – all the way until that Federal Register notice, when simple, “magic-words” types of rules were suddenly verboten.

    1. 3.2

      Also the holding that “module” is a nonce word despite the massive real evidence to the contrary is — well — we all know what is going on.

      1. 2.1.2

        Very tough panel for Ned’s argument: Judges Prost, Dyk, & Hughes

        Oof. Bad luck of the draw.

        Last year, I did a quick scorecard-like tally of where the Federal Circuit judges stood on 101. The data was scant, but even so, the results matched up with my general sense of the lay of the land: which judges sat where on Alice, etc. Hughes was at the extreme end, and I don’t think that was a sampling error.

        1. 2.1.2.1

          I listened – the argument was dominated by the Article III issue. Panel was very reserved, though seemed substantively interested.

          Perhaps most importantly, the USPTO re-iterated its position that, because the patent validity has been classified as a public right, Article I courts may conclusively resolve the claim. That is, per the USPTO now just before the CAFC, if Congress determines that the claim of patent validity should be resolved wholly and conclusively by an Article I court, it has the power to do so. The consequences of this this question are potentially enormous.

          Finally, the DOJ reiterated its position that because the right exists at federal statue, and because an expert administrative agency is involved, the right is a public right. This might pass muster where the refs are rooting for the home team, but the SCOTUS will destroy this line of reasoning. Interestingly, the USPTO has all but abandoned J. Newman’s mistake-based reasoning.

          On other note: Ned, you have balls.

          1. 2.1.2.1.1

            David, is a recording online, or was it only streamed live? Do you have a link?

            The brief is very solid, Ned. I have some critiques, but since it would be poor form to post them here, I’ll hold them in abeyance.

            I don’t know why the timing issue isn’t 100% controlling:

            Under 35 USC 315(b), an IPR is barred if the petition requesting the proceeding is filed more than one year after the date on which petitioner is served with a complaint alleging infringement of the patent that is the subject of the petition.

            On September 21, 2011, Pandigital was served with a complaint alleging infringement of US ‘549 (the “Texas Action”). HP was notified of the Texas ACtion shortly after it was filed. HP filed the present IPR on March 27, 2013, nine days after the ITC issued a limited exclusion order against Pandigital…

            So, that’s it, right? Q.E.D. Why did the IPR even proceed at that point? Did HP / Pandigital have some kind of argument about failure of service, or that the one-year requirement was tolled by the ITC, or… what?

            1. 2.1.2.1.1.2

              The Board decided that Taylor 2 privity may not be enough. It further required that HP control Pandigital’s defense, Taylor 4.

              We took that the Feds in a Mandamus, pointing out that Taylor decided that one could not balance “factors” in an equitable stew of factors, and that its various categories were exclusive.

              The government urged that the Feds deny the Mandamus because we had a right to appeal from a final decision, and this was an interlocutory decision. The Feds denied the petition, but without prejudice to our attempt to raise the issue on a appeal from a final written decision.

              When I said that, the CJ perked up and asked me to quote the exact words of the court.

              What did you think of the con law arguments of both sides?

              1. 2.1.2.1.1.2.1

                Ned: Thanks for the reply.

                Yes, even on the audio only, the judges’ question about what exactly they wrote in their denial had an interesting tone to it. I wasn’t entirely sure where you were going with that part of the argument at first, but it became clearer near the end.

                More substantive comments above at 5.

      2. 2.1.3

        Dennis, it was fun. Observers in the audience suggested that by the end, the panel understood the argument.

          1. 2.1.3.1.1

            Yeah, I think they got it. The government confirmed its view that patents were public rights because they are creatures of statute. They further doubled down and said that Congress could move litigation involving patents anywhere it wanted.

            Well…..

            How is that consistent with Dairy Queen (trademarks), Feltner (copyrights) and Markman (patents) where the SC has already held there to be a right to a jury trial regardless that these all are statutorily created rights?

            I can kick myself though for not talking about Wellness v. Sharif.

            1. 2.1.3.1.1.1

              How is that consistent with Dairy Queen (trademarks), Feltner (copyrights) and Markman (patents) where the SC has already held there to be a right to a jury trial regardless that these all are statutorily created rights?

              It’s consistent, Ned, because once Congress authorizes a matter to be resolved by an Article III court the question of whether a jury trial is required is no longer a “public rights” issue. That’s what Curtis v. Loether was about (“when Congress provides for enforcement of statutory rights in an ordinary civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies of the sort typically enforced in an action at law”).

              1. 2.1.3.1.1.1.1

                MM, the provision of an administrative forum is OK. So long as one is free to choose which forum, there is not violation.

                Schor.

                Welllness v. Sharif.

  7. 1

    The latest panel decision should stand that affirms the district court holding that the claimed “voltage source means” is not a means-plus-function case. That outcome is largely based upon the appellate court giving deference to the lower court’s factual findings that were derived from expert testimony discussing the level of skill in the art.

    To wit:

    “Everyone in the field knows that the term ‘voltage source means’ connotes devices that have a common structure. What structure is that? Why, it’s any device that provides voltage.”

    That’s practically verbatim from the opinion:

    The district court cited testimony from an expert for Lighting Ballast, both of whom testified that one of skill in the art would understand the claimed “voltage source means” to correspond to a rectifier which converts alternating current to direct current, or other structure capable of supplying useable voltage to the device.

    The district court determined that “while the ‘voltage source means’ term does not denote a specific structure, it is nevertheless understood by persons of skill in the lighting ballast design art to connote a class of structures, namely a rectifier, or structure to rectify the AC power line into a DC voltage for the DC input terminals.”

    The district court further noted that “it is clear to one skilled in the art that to provide a DC voltage when the source is a power line, which provides an AC voltage, a structure to rectify the line is required.” … We defer to these factual findings.

    smh.

    1. 1.1

      This just illustrates how messed up our rules are. The text at issue:

      “voltage source means providing a constant or variable magnitude DC voltage between the DC input terminals”

      If you say “a voltage source providing…”, it’s not MPF and explicit disclosure of the voltage source isn’t required. If you say “voltage source means FOR providing…”, it’s MPF, and explicit disclosure of the voltage source is required (even if one skilled in the art — or even not skilled in the art — would know what a “voltage source means” is; a first year EE would know). By contrast, if you say “voltage source means providing…” it takes many years of litigation to decide what this is.

      Why does MPF suddenly mean what one skilled in the art would know is irrelevant? And, in the modern context, why is MPF even relevant anymore?

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