By Jason Rantanen
Next Friday, October 2, the Iowa Intellectual Property Law Association will hold its annual conference. This year’s conference is being held at the Boyd Law Building at the University of Iowa, and is being co-sponsored by the Iowa Innovation, Business & Law Center. We’ve got a great lineup of speakers, including Profs. Dennis Crouch (Missouri) & Herb Hovenkamp (Iowa), Dr. Christal Sheppard (USPTO), Gene Quinn (IPWatchdog), Bernie Knight (McDermott Will & Emery) and David C. Hilliard (Pattishall, McAuliffe, Newbury, Hilliard & Geraldson).
Here’s the registration page.
On this issue, the mantra “Be careful what you wish for” comes to my mind. I mean, suppose that the entire IPR structure is found to be ultra vires or unconstitutional or whatever. Will the consequence be that the USPTO will adopt a mindset of granting a patent (with the clear and convincing presumption that it is not invalid, with all the consequences that carries in its train) only when to the PTO the patentability of each and every claim is beyond any reasonable doubt? Is that what readers (inventors, applicants, their investors and attorneys) really want?
Or will you just “deal with it” if and when it happens?
Or has it happened already?
Maybe you should read what the law says….
(the consequence of the grant is separate from the directive of the grant – you appear to be imputing a “reasoning” that just is not there to the Executive branch agency)
“Emory University professor Timothy Holbrook said he would be stunned if the Federal Circuit accepted that argument. The court doesn’t recognize a Seventh Amendment right for decisions on patent validity, he said. A declaratory judgment action on validity doesn’t trigger a jury trial right, for example, if a patent holder is seeking an injunction. “It’s sort of a Hail Mary is what it feels like,” he said.
Read more: link to therecorder.com”
It is almost as if the good professor never read Granfinanciera:
The legal action in question is a action to revoke a patent for invalidity. That action was known at common law. It was legal. It had a right to a jury trial.
Even if historically at EQUITY, the result is necessarily the same. Conflating the public rights analysis with the 7A analysis is a false correlation. Instead, the historical narrative featured in the CAFC’s 7A cases may be “borrowed” in order to demonstrate that the claim of validity was historically resolved either at law or equity. This is how you establish checkmate.
Stated differently, the 7A analysis can be outcome determinative wrt the PR exception. Where historically at law, then there is a jury trial right — and the PR exception cannot apply. The PR exception cannot apply not because there is a jury trial right per se, but because the claim was historically resolved at law. The distinction is important.
Now, what happens where there is no jury trial right as the claim was historically resolved at equity? One can argue that the pure claim of patent validity was historically resolved at equity. Therefore, there is no jury trial right. No 7A right, therefore a public right? No. Claims – such a patent validity – historically resolved at equity may not be public rights. The PR exception looks to see whether the claim is a novel creation of the legislative or executive branches.
The CAFC in Patlex and Joy did not embark in the mandatory analysis under the PR exception. Instead, it raised the mistake-based rationale, which has been abandoned by the DOJ. The CAFC’s 7A analysis can be borrowed and applied under the PR rubric. Do not make the mistake, however, of assuming that the modes of analysis are necessarily linked. A finding that there is no jury trial right for the claim of patent validity does not necessarily mean that it is a public right.
Professors Lemley and Holbrook — and to a lesser degree, Crouch too — have made their views clear that they do not believe that the claim of patent validity is a public right. None, however, have dared to provide any substantive explanation as to how it meets constitutional muster. Anyone can summarily conclude anything, and their input here is essentially meaningless. With the soul of the nation’s patent system at issue with the PR fight, perhaps they are too busy researching other undoubtedly more important issues.
Ned — why do you cite Lemley in your PR argument? In the paper that you refer to, he repeatedly declares that patent validity is a public right. Note that his statements are not accompanied by rationale or support.
Ultimately, it does not matter what the academics have to say — the issue is now being briefed by the DOJ’s best lawyers, and they cannot articulate how the delegation of the claim of patent validity to an Article I tribunal for resolution with finality is permissible under the separation of powers. The DOJ declined to cite that relevant standard in its last brief – it is not looking good for the PTAB. The SCOTUS will protect the separation of powers, and IPR will become advisory. For those paying attention, Horne was significant.
The 4th Cir. oral argument has the potential to be very noteworthy.
David, Ned — why do you cite Lemley in your PR argument?
I cite Lemley because he demonstrates that actions scire facias were filed on the law side of Chancery and had a right to a jury trial. This makes them legal actions. This is significant both from an Article III aspect and from the aspect of whether actions to revoke a patent for right to a jury trial.
I know Lemley wants to stop jury trials regarding validity. But he never really gets into a discussion of the public rights doctrine and what it means. Lemley never cites Murray’s Lessee. Lemley never cites Crowell v. Benson. Lemley never cites Stern v. Marshall. Lemley has no clue about public rights. None whatsoever. His article is completely unreliable on the topic he is discussing.
Ned Heller: Lemley has no clue about public rights.
LOL
Nobody has a clue about “public rights”. Maybe accept that fact and start from there.
MM, you might be right on that. The Supreme Court does use deliberately murky language at times. Kennedy seem the Supreme architect of the meaningless phrase.
David, With the soul of the nation’s patent system at issue with the PR fight, perhaps they are too busy researching other undoubtedly more important issues.
Well said.
I would welcome some law professor who is not of and beholding to the patent profession to weigh in on this topic because it appears that every law professor that is of and beholding to the patent profession is compromised. The case law is so clear on public rights, including the seminal case of Murray’s Lessee, that it is a wonder that no “patent law” professor has actually discussed what a public right is and what a public right is not. They start with the premise, it appears, that a patent is a public right and go on from there. That of course is the position of the Federal Circuit in Patlex and in Joy Technologies; and it is all but laughable if it were not so tragic.
The position of the government is that a patent is a public right because it is a creature of statute and because it affects the public interest. But this could be said of any legal right created by the government. Any. If this theory were correct, it would end the right to a jury trial for every federally created right. Every one. And this would include trademarks, copyrights, and patents. No right to a jury trial because when something is a public right there is no right to a trial in Article III court and no right to a trial by jury. Public rights and Article III (jury trial) are mutually exclusive.
You’re right, the USPTO grossly misstates the relevant analysis. Consider the downstream consequence of the DOJ’s proffered rule: so long as (1) the right in question is at federal statute, and (2) an “expert” administrative agency is created to resolve the right at statute, the right may be resolved with finality by an administrator. Well Congress can put any parallel cause of action at statute, and couple it with any expert admin agency of its own creation. This standard (which is a complete misrepresentation of the PR rule of law) would be the end of days for Article III. Not to worry, the CJ Roberts Court would never ratify such a rule.
To the DOJ’s credit, it is not shying away from spelling out the ramifications associated with identifying a particular cause of action as a public right. The DOJ said it in briefing, and it said it again to the CAFC during oral argument: where a claim is a public right, Congress may determine whether the judiciary participates at all. We are talking about tremendous power at stake here. You don’t think Congress is paying attention to what the DOJ is saying? If the courts double down on Patlex, and confirm that the claim of patent validity is a public right, you don’t think that Congress will eventually take that power? Can you name one cause of action that is more powerful and influential than patent validity in terms of the nation’s economic future? These PR lawsuits directly implicate the balance of power between the three branches of government.
It is stunning to me that the likes of Crouch, Quinn, and others have declined to report on this aspect of the dispute. As far as I am aware, Law 360 is the only outlet to have reported on it thus far:
link to law360.com
(and by “Congress,” I mean oligarchs)
David,
Quinn has touched upon this.
And of course, you know who (me) was the very first to point this out!
of course, you know who (me) was the very first to point this out!
Please please please David be sure to credit “anon” prominently in your briefs!!!
LOL
David, Yeah, Rothwell has been very instrumental into bringing the why Patlex is so dangerous to the very structure of our government. This is not just about a so-called low-cost alternative to patent litigation. It is about congress’s ability to erase the judiciary from civil litigation involving federally created rights.
His article on this topic is a must read.
link to ncjolt.org
And, as I pointed out, if the government is right here, there may be no right to a jury trial for any federally created right. Patents, the government said a oral argument, affect the public because they create monopolies. Therefor they are public rights: created by statute and affecting the public. But what then about antitrust litigation itself? Is that too important to be left to the courts?
We already see the government trying to move all securities litigation into administrative tribunals. Two courts have ruled this to be unconstitutional, but due to a technicality. The defendants already admitted that the public rights are involved so that they have no real complaint about losing a trial in a court and to a jury.
David, regarding “regulatory program,” these are creatures of the commerce clause. Patents, trademarks and copyright are not regulatory programs regardless that they are examined to comply with the law before they are registered/granted.
The ITC, however, is an example of a regulatory program. Ditto the FDA. Thus H-W litigation itself might be moved to an administrative tribunal. But it must be clear that the result of such agency litigation not have any collateral estopped effect — just as ITC rulings on validity and infringement do have not such an effect. Otherwise, there may be a constitutional violation of a right to have infringement/validity tried in a court of law and to a jury.
Can you name one cause of action that is more powerful and influential than patent validity in terms of the nation’s economic future?
LOL. Sounds like a great reason to make sure that the reams of invalid patents out there are easily expunged from the system before it becomes even more of a broken joke than it already is.
Or do you think that the IPR decisions that have been made thus far are overwhelmingly in error? Let everyone know, David.
Oh wait — maybe David’s argument is that those junky patents that have been tanked so far are super dooper important to the “nation’s economic future”?
Did I miss the part where people stopped obtaining patents and asserting them because it became modestly easier to invalidate them? Let everyone know, David.
The case law is so clear on public rights
LOLOLOLOL
C’mon Ned.
MM, the problem is that one has to read a lot of cases to understand what the most recent cases are talking about. Mostly, these issues were important in the 1800s-1940s and lead up to the Administrative Procedures Act. Most of us never studied the rise of the Administrative State in law school and constitutional issues surrounding this.
But Congress did a lot of things in the late seventies and early eighties to upset the status quo that had existed for a very long time forcing the Supreme Court to again begin looking at what Congress had done from a constitutional point of view. This led to the finding that the bankruptcy reform was unconstitutional in Northern Pipeline. That set off a series of cases that help define the nature and scope of the public rights doctrine. But the topic was seemingly of interest only to people who were dealing in bankruptcy cases.
The Federal Circuit seem to brush aside the idea that there was any limit on Congress’s power to create administrative tribunals, thinking that issue had been well settled. But that thinking soon will change.
David, if you recall, we made this point both in our briefs and at oral argument as well that trying to set this up as a 7th amendment issue alone will not solve the problem if actions to invalidate a patent were known at common law and they were. Is whether they have a right to a jury trial is completely irrelevant to the Article III analysis.
My point here is that Prof. Holbrook doesn’t even understand 7th amendment analysis. He presumes that if a legal claim is presented in a court of equity it necessarily loses his right to a jury trial. The Supreme Court has said bollix on this theory. I know the Federal Circuit agrees with him. But this is the Federal Circuit and not Supreme Court – and they have expressed an entirely different view.
Of course, in reality, if IPRs are unconstitutional then so is Alice.
Alice clearly incorporates 102 and 103 in the analysis of whether a claim is abstract. It would be like in criminal law the SCOTUS decided there was this new crime and as part of determining if you were guilty it incorporated other crimes that required jury trials.
I am still trying to understand why Pharma wants a carve out unless it is because IPRs are basically unfair to patent owners.
1. Generic files ANDA — gets 180 day exclusive.
2. Generic asserts invalidity.
2. Generic files IPR immediately. (DJ’s are forbidden until after 45 days.)
Patent owner must file suit for infringement within 45 days. Invalidity is an affirmative defense under 282.
Now, if the PTO institutes trial (up to 6 months later), the court could stay pending the outcome of the IPR. So, it is the PTO deciding validity, not the court. But why is this a problem for Pharma?
Reverse payments? Still available to settle both the IPR and the court proceedings.
I see nothing in this that is truly inconsistent with Hatch-Waxman unless it is the unfairness of IPRs.
Reverse payments will NOT settle an IPR.
anon, IPRs can be settled.
As well, I presume a generic an be offered a license.
Maybe I am not understanding something here. Please help.
This one I think is me…
I had forgotten about 35 USC 317
(a) IN GENERAL.—An inter partes review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed…
… If no petitioner remains in the inter partes review, the Office may terminate the review or proceed to a final written decision under section 318(a).
What is interesting here is that it appears that if BOTH parties want (i.e., collude) to remove the IPR, they will be successful, but if only one wants to drop out, the Office may continue the re-examination.
The appearance of Collusion continues in 317(b): “At the request of a party to the proceeding, the agreement or understanding shall be treated as business confidential information, shall be kept separate from the file of the involved patents, and shall be made available only to Federal Government agencies on written request, or to any person on a showing of good cause.”
Not how I read the Section anon. If the petitioner and owner agree, it’s over for that petitioner. If no petitioner remains, the Office can continue to a decision. Same as with opposition at the EPO in fact.
“Not how I read”
LOL – that is a punchline in and of itself.
You do realize that your “ If the petitioner and owner agree, it’s over for that petitioner. If no petitioner remains, the Office can continue to a decision.” is exactly what I said, right?
Are you always this automatically reflexive to disagree when you see the word “anon”…?
Agreed, Max. So if the brand patent owner settles with the first ANDA filer, the PTAB can nevertheless still decide the patent is invalid based on the petition or whatever the petitioner filed after institution — which they will do if the political mood at the White House favors generics. There is no real mootness with IPRs like in court.
So, herein lies the problem — and why Brand Pharma wants the carve-out.
Ah, but doesn’t human nature kick in? If no more third party requester – no one demanding an outcome, no one to counter the patent owner’s arguments – and still lots of work to do for writing an opinion that will certainly be appealed to the CAFC. Why not dismiss the IPR if early in the process – e.g., before any substantive examination on the merits?
You argue that an elected official will put pressure on the APJs to rule, if at all possible, against any branded drug patents? Yeah – a potential for abuse is present. I don’t see an issue if the substantive law is present and correct in the 102/103 argument of the APJs. If IPRs are constitutional, then the PTABs discretion (“the Office may continue the re-examination”) is not a legal problem. It certainly appears to be a justice/equity problem.
Pressure the PTAB? I think it is the Director’s/Whitehouse’s decision. The PTAB has nothing to do with that decision.
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