In a provocative new article called “Taking Patents,” 72 Wash & Lee L. Rev. (forthcoming 2016), Gregory Dolin (Baltimore) and Irina Manta (Hofstra) argue that the Federal Government effectuated a taking through its creation and implementation of the inter partes review mechanism. Below, Camilla Hrdy and Ben Picozzi summarize the main points of their recent response to Dolin and Manta, “The AIA Is Not a Taking: A Response to Dolin & Manta,” 72 Wash. & Lee L. Rev. Online 472 (2016).
Gregory Dolin and Irina Manta argue in a forthcoming article that the Leahy-Smith America Invents Act (AIA) effectuated a Fifth Amendment “taking” by enhancing the mechanisms for challenging issued patents in administrative proceedings. Initial data do indicate that patents are more likely to be found invalid in the new inter partes review (IPR) and covered business method review (CBMR) proceedings than in district court actions or through the IPR and CBMR’s administrative predecessors. Patentees’ have even complained that the filing of individual IPR petitions has affected their stock prices.
Has the AIA made it too easy to invalidate a patent? Have patentees been treated unfairly? Maybe. Maybe not. But one things is clear: Dolin and Manta’s argument that the AIA is a taking faces serious legal hurdles.
First, Dolin and Manta’s premise that patents are property rights protected by the Takings Clause is far less clear than they contend. While the Supreme Court has recently suggested that patents, like land, “cannot be appropriated or used by the government itself, without just compensation,” see Horne v. Department of Agriculture, 135 S. Ct. 2419 (2015) (quoting James v. Campbell, 104 U.S. 356, 358 (1882)), both that statement, and the statement it quotes, are dicta. More recent decisions express greater ambivalence regarding patents’ status under the Takings Clause.
In contrast with trade secrets, the Supreme Court has never held that patents are property under the Takings Clause. In Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999), the Court held that Congress can’t abrogate states’ sovereign immunity from patent infringement claims. In reaching this conclusion, the Court stated that patents are “surely included within the ‘property’ of which no person may be deprived by a State without due process of law.” Id. at 642. But the Court declined to rule on patents’ status under the Takings Clause. See id. at 642.
Most recently, in Zoltek Corp. v. United States, 442 F.3d 1345 (Fed. Cir. 2006) (per curiam), vacated on other grounds, 672 F.3d 1309, 1314–22 (Fed. Cir. 2012) (en banc), the Federal Circuit held (rightly or wrongly) that 28 U.S.C. § 1498 is the only means of recovery for patentees whose patents are infringed by the U.S. government. Patentees can’t bring claims for compensation under the Takings Clause. Although the court eventually vacated that decision, the court never repudiated the reasoning behind its constitutional holding.
Dolin and Manta try to get around Zoltek by arguing that, unlike government infringement—which is like a forced permit and leaves all the rights of a patent intact—the AIA “changed the scope of patent rights themselves” by subjecting issued patents to more stringent post-issuance review. However, courts have not endorsed that argument, and analogs are difficult to find.
Second, even if we accept the argument that government can potentially take patents by altering their scope retroactively, courts are unlikely to view post-issuance review proceedings as the kinds of government actions regulated by the Takings Clause. Courts assessing constitutional challenges under the Fifth or Fourteenth Amendment tend to distinguish actions intended to “cure” defects in government administrative systems from incursions on property rights. In Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985), the Federal Circuit rejected a very similar challenge to IPR’s predecessor based partly on this distinction, noting that reexamination statute belonged to “the class of ‘curative’ statutes, designed to cure defects in an administrative system[,]” and that such statutes are treated more favorably for Fifth Amendment purposes even when they devalue property rights. We see little reason that a court would reach a different conclusion today.
Lastly, even if a court decides it is possible for the government to take patents by subjecting them to more stringent post-issuance review, Dolin and Manta’s argument almost certainly loses as a matter of takings doctrine. To determine whether a particular governmental action effectuates a taking, courts assess “the character of the governmental action, its economic impact, and its interference with reasonable investment-backed expectations.” See Penn. Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978). Thus, even assuming we accept that the AIA significantly devalued all patents (a big “if”), whether this constitutes a taking depends on whether patentees should have anticipated that Congress would amp up administrative review, given the existing regulatory background.
Dolin and Manta argue the AIA’s enhanced IPR and CBMR proceedings interfered with patentees’ “reasonable investment-backed expectations” by increasing the likelihood that their patents would be found invalid in administrative proceedings utilizing patentee-unfriendly rules such as “preponderance of the evidence” standard for invalidation and “broadest reasonable construction” with limited opportunity to amend. But, as Dolin and Manta concede, the AIA was enacted against a background of federal statutes and regulations that authorize challenges to patent validity. IPR and CBMR review are only the latest in a series of administrative procedures authorizing parties to offensively challenge the validity of issued patents. To us, it seems highly unlikely that the question of whether the Takings Clause applies to the creation of new IPR and CBMR review could turn on such small differences as whether or not patentees have a full opportunity to amend their claims during review.
Also, it is worth noting that beyond third party challenges to patent validity, numerous federal regulatory statutes limit patentees’ ability to exploit their inventions for purposes of health and safety. For example, various regulatory review statutes, such as the Food, Drug, and Cosmetic Act (FDCA), the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), and the Toxic Substances Control Act (TSCA), practically reduce effective patent lifetimes by prohibiting patentees from commercially marketing or using protected products prior to regulatory approval. Yet none of these statutes fully compensate patentees for their losses.
Are these actions all takings as well? This conclusion has troubling consequences. Does Congress really need to compensate patentees every time it passes a statute that significantly affects the value of issued patents? Could Congress pass regulations for the purpose of restraining bad-faith enforcement of patents that have already been granted? What about judicial actions that reduce the value of patents? Do they intend for Congress to compensate patentees in these cases or to take fewer actions limiting patent rights, simply due to the fear of effectuating a taking? This seems like a dangerous basis on which to formulate patent policy.
In any case, we think that, given this regulatory backdrop and the existence of administrative review proceedings for over thirty years, patentees could foresee—or reasonably should have foreseen—that the government would continue to actively regulate patent rights without “just compensation.”
Together, these arguments persuade us that the AIA is not a taking. Nevertheless, the authors’ article is a thought-provoking and educational analysis of the constitutional implications of Congress’s recent efforts to reform the patent system. We thank them for reopening the door on this area of scholarship.
Well sort of interesting discussion concerning the takings clause. Of course, as we all know, administrative and regulatory takings – long ago eviserated the takings clause. Indeed, philosophically speaking, the entire ‘modern’ administrative state is build upon that premise. So at least IMHO, getting the AIA recognized as a ‘taking’ is a very long shot. To be sure, there is a distinction when the AIA star chamber invalidates the ‘title’ to a patent vs the EPA declaring your back 40 a ‘wet lands.’ In the first case, the entire property is dedicated to the public as void ab initio and in the second case you still have ‘title’ to the land albeit with an unremunerated EPA open air easement for the ‘greater good.’ So even if the old SCOTUS cases support the patent takings argument, which I am sure they do, there is just too much ‘administrative state’ water over the dam at this point to unring that bell. Just my 2 cents.
To me, the strongest case against the AIA, is the ordered liberty – framework argument. And of course the very purpose of the 7th amendment. At least this doctrine still has some life. CAFC, will not recognize it – because its’ special – but maybe SCOTUS or the 4th Circuit will.
As I recall, there is a SCOTUS land patent case exactly on the first point. Under our constitutional frame work you simply cannot have this scenario:
1. A first commissioner (executive department) granting a ‘property right’ – meaning a ‘right’ that can be adjudicated by the courts (second department). Ergo, pension benefits (Hayburn’s case), spectrum (Nextwave), land patents (that SCOTUS case, the Comstock load?), copyrights, patents, etc, etc.
2. Having an election – political – and then having the new commissioner ‘take’ back the right granted by his predecessor. To be sure, this is done under the guise of ‘mistake’, new evidence, reexamination, or some other contrivance. But, the hard truth remains – one political appointee granting a right and another political appointing voiding that right. On that I would hope we could all agree – is the game of thrones – in which the very purpose of the Constitution is to eliminate. And that of course, is the very purpose of the 7th Amendment. Indeed, the 7th takes that function a step further in providing a jury even more removed than the life time appointed (independent branch) federal judge.
The AIA’s new twist, of course, is that it’s administrative court (I call it the star chamber) purports to independently adjudicate issued patent validity, the ‘right’ granted by a predecessor commissioner, and claims Constitutional muster because it’s adverse orders are reviewed, with deference, by CAFC. I call the AIA court the star chamber because the AIA permits the commissioner herself to seat herself as a ‘judge’ (and pick the other two judges!) on the AIA ‘court’. It’s hard to imagine a more crony system than that. Just fantastically picture, for example, google picking the Commissioner to preside in this star chamber over patents that are asserted against google. Do you think that a significant patent would survive that political hatchet?
Isn’t it ironic that the most political administrative court, the AIA, gives the least comity to the Art III courts? Is there another administrative court that allows, by statute mind you, the commissioner herself to seat herself as a judge on that court? Surely not Tax Court, the grand dad of all administrative courts, or any other court I can think of. In fact, all other administrative courts, accept ‘administrative estoppel’ – an administrative form of res judicata – to humble and compartment themselves with the Art III courts. In contrast, the AIA court is openly hostile to the Art III adjudications – I know, I know, because AIA uses the BRI standard (what a contrivance). Meh, what a world.
Interesting thoughts – thanks
You are welcome. Thank you for reading. And thank you for your tireless efforts against the paid shills on this blog.
I confess, it is difficult to stay optimistic about overturning the constitutional abomination that is the AIA star chamber. Albeit unintended, the creation of the special court – CAFC – probably, and inevitably under public choice theory, created the Constitutional anomaly that is now the US patent system under the AIA. There must be some latin maxim about complexity being the evil bane of justice. Anyways, as you know, this type of frame work argument falls on the Art III courts to police, not optimistic about CAFC – because it is so special.
I will disagree that the creation of the special court – CAFC – created any Constitutional anomaly and in fact ask you to consider that that creation simply did not go far enough.
Consider:
By this I mean that the current ANY disarray that can be attributed to the CAFC is largely brought about by the browbeating of that special court by the unmitigated fingers in the wax nose of statutory patent law of the Supreme Court.
Consider also:
The US Supreme Court is a court of limited jurisdiction (as are all courts).
The US Supreme Court does NOT have original jurisdiction over patent appeal cases.
The Congress has the Constitutional authority of creating special “lower” Article III courts.
As long as it is an Article III court that has review power, the directive from the Marbury v Madison case is satisfied (that case does NOT require that the review power be with the Supreme Court).
The Congress has the Constitutional authority to employ what is called “jurisdiction stripping,” which is, they can limit what the Supreme Court has jurisdiction over.
When they created a special court to bring order and direction to the statutory laws of patent law, the Congress just did not recognize their own history (read the history of the Act of 1952), and did not do enough to shield that specialty court from the grasping fingers of the Supreme Court.
Now think about the possible solution to the Supreme Court induced vagary and wax nose mashing: set up a specialized court that actually recognizes and understands innovation and the benefit and clarity of strong patent rights without having to kowtow to the Supreme Court ideological intrusions.
Interesting idea to limit the jurisdiction of SCOTUS.
My CAFC is ‘special’ knock, is my lame attempt at blog shaming CAFC – as just so precious and special. My point being that CAFC would decide the AIA is invalid if another court had jurisdiction of AIA IPR appeals – and it had only trial court appeals. CAFC is a ‘results oriented’ court – and that is not a compliment. Only a wonk could perform the intellectual gymnastics needed to square the 7th amendment, trials and the AIA star chamber. With every AIA appeal, you see the intellectual contrivance getting further and further from the simple truth – the AIA is a political hatchet of the current commissioner over the ‘rights’ grant of the prior commissioner.
iwathere, anon and others who do not understand that the Federal Circuit is a major problem for patent law because it has a monopoly and is therefor a court that looks out for its own interests and does not care to follow the law when it does not want to. There simply is no way, for example, that one can read 314(d) to exclude from appeal whether the PTAB exceeded its authority in an institution decision. Yet, that is what the court held.
Respectfully Ned – that is exactly the path of the wrong question.
I understand FULL WELL what your opinion is concerning the Federal Circuit.
I understand FULL WELL your own lack of critical thinking as to both the time before we had the unifying Federal Circuit AND the deleterious influence of the Supreme Court – which is the real bad egg in the judicial branch – and one that you absolutely refuse to recognize for its overriding role.
I understand FULL WELL that you are not seeing that the Federal Circuit has gladly jumped at answering the actual (wrong) question put TO them. Read again what the question asked of them was!
Lastly, your view of what 314(d) – as written by Congress – means is dangerously wrong, given how close you are to appearing before the Supreme Court in your own case.
I suggest that you seek counsel of someone else not so blinded as you are. Someone who can inform you of the statutory construction principles at work and who can remove your inane view that somehow part (d) and section 314 is the sum total limitation – as written by Congress – on the reviewability question of that initiation point.
Then I would suggest that you perform the rather easy and direct comparison of the sticks in the bundle of property rights of granted patents from before the institution point to directly after the institution point.
Until you actually verbalize that you have done so, and that you understand the consequences involved in that purely political-body executive decision, you will remain UNABLE (and seemingly unwilling) to even recognize what the right question is, and your continued posts on the matter only highlight the inadequacy of you serving has champion of the matter.
Correction:
“somehow part (d) and section 314 is the sum total limitation”
should read:
“somehow part (d) and section 314 isNOT the sum total limitation“
“My CAFC is ‘special’ knock, is my lame attempt at blog shaming CAFC”
It is easy to get upset with a symptom, and not the cause.
Look deeper – and see the effect of the brow beating of the Supreme Court. One only has to look at the CAFC level and L O N G writing as regards Alice to recognize that the CAFC has gone spineless in view of what the Supreme Court is doing.
They, the CAFC, have very much relinquished their mantle and forsaken their purpose of being the defining light for clarity in patent law – but in the opposite sense of what Ned would proclaim. It is more than telling that Ned refuses to put blame where blame belongs and instead seek out a scape goat to further his own desired ends.
As for the CAFC not “overturning the constitutional abomination that is the AIA star chamber,” they have not been asked the right question – and the CAFC has been so brow beaten, and now lacks any sense of true leadership, that they will only too eagerly answer the wrong question asked of them.
Someone has to ask them point blank about the parts of the AIA that Congress (not the PTAB) enacted that are not in accord with other Constitutional protections of property.
That means, for example (and not the only example), recognizing:
– that the post grant review process has a first step – separate from ANY decision on the merits of that review process – and
– that that first step has been set up – by Congress – to NOT be reviewable by an Article III court – and
– that that first step engages in a taking of sticks from the bundle of sticks in the property rights of a granted patent – and
– that that taking is done by an Executive agency (read that as politically connected) agent – and
– that that first step that results in a taking provides ZERO recompense to the patentee.
Some people – and people who currently are in position to ask the right question – simply refuse to understand these points.
There is a simple question to be answered to illustrate this taking at the point of initiation. Ask yourself why someone would refuse to follow the following:
a) Take a granted patent right and recognize its full bundle of sticks in its property right.
b) Take that same granted patent right and recognize how the sole act of initiation changes what sticks in that bundle remain immediately (and NOT later after any decision on the merits – let’s not muddle the focus here) AFTER the executive agency agent (a non-Article III government actor) decides – and note that this initiation decision itself is NOT reviewable by an Article III judge.
c) compare the bundle of sticks of b) with the bundle of sticks of a).
Does this loss of a number of sticks diminish the value of the property?
The interesting point from the recent oral arguments in drawing a distinction that the post grant review process, while perhaps meant as an alternative to the judicial path through Article III land, is that this difference (which Justice Breyer it was IIRC) would have been a slam dunk for Cuozzo) makes the case that the loss is real and substantial at the point of initiation decision.
Because this different path is NOT a true mirror of a judicial proceeding, the taking of sticks at the beginning of the executive process is a substantial loss no matter what the outcome of that executive review process.
Thus, any “right question” (for this particular travesty) to be posed to the court needs to point out and directly draw the court’s attention not to any “further down the line” final decision on the merits, but instead at the taking by an executive agency agent, without review and without recompense of any kind of sticks in the bundle of property rights that have a substantial impact on the value of the property.
Some, no doubt, will attempt to clench their eyes even tighter.
Some, no doubt, will not bother to actually read the substantive points here and will ONLY sling baseless ad hominem.
But some others will take note.
And just because the person who currently has a shot of asking the right question seems intent on not asking that question, it does not mean that that question cannot be asked in a subsequent matter.
And when that “right question” is finally asked, and when the Court (or court) is confronted with a single item from the AIA that must be deemed unconstitutional, THEN we can perhaps have others actually engage in a discussion of just what it means for this law – the AIA – to have directly considered – and directly reject – the notion of separability (which of course means, that the courts are foreclosed from ANY “fix” that would effectively do what Congress has expressly rejected).
I have read, here and in the past, your thoughts on the two step process – the step of declare IPR and the step of administrative adjudication. You make a profound point both in fact, law and practice. It is axiomatic that a patent is a waisting right since it has a fixed term, and the commissioner’s IPR declaration itself – which by statute is exclusivly the political appointee – the commissioner – is the original – ‘stay’ of the right (even if the patent owner ultimately prevails at the administrative trial), and is, therefore, the ‘taking.’ Isn’t it clever how PTO has deemed the commissioner can delegate that political hot potato – to the APJ panel? Just imagine yourself the commissioner and you have pen in hand hovering over an IPR institution concerning a major multi-tens-of-millions dollar patent suit . . . gulp. Appearance of impropriety? – I call thee AIA.
anon, “sticks in a bundle.”
Name the stick.
Asked and answered Ned.
I want YOU to walk through the simple analysis.
WHY ARE YOU NOT DOING SO?
Please compare the full bundle of sticks in your patent property between the point after grant (when you have that property) and prior to the initiation point AND immediately after the initiation point.
WHY ARE YOU NOT DOING THIS?
anon, stop playing your games.
Name the stick.
Ned,
You are the one playing the game – the game of running away.
Comply with the very easy item that I ask of you.
Why are you fighting this so fiercely? What are you afraid of?
anon, it is clear that you don’t even know what a stick is.
It is clear that you are a Fn coward.
Now that the mutual admiration society has weighed in,
WHY DON”T YOU DO AS ASKED OF YOU?
It is a simple comparison Ned – this is not really that difficult. It comes down to whether or not your property rights remain intact (and complete) or whether they do not.
What was that Ned that you posted today? Something about a lawyer answers the question….?
Where is your answer?
Walk through the comparison – what are you afraid of?
This is probably the most difficult issue in this argument – the type of harm (harm in practice to be sure, but not the ultimate result if you just happen to prevail?) that judicial conceit could gloss right over. I can see a judge conflating the uncertainty of Art III adjudication – with something similar in administrative adjudication. That’s why I happen to think the frame work argument has the best chance of knocking out the AIA. A facial challenge of the statute providing the commissioner a seat on the IPR trial board. That’s untenable in my view.
iwasthere, agreed. That does cross a line, but a different line than we are arguing to the Supreme Court. Political officers of executive branch being judges on issued patents.
But if we really want judicial independence in our PTAB judges, why not make them Article III judges in the first place, empowered to issue judgments, empowered to issue subpoenas, empowered to empanel juries? I think Congress can provide for special courts. It just cannot strip patent owners of their constitutional rights.
Yes, to be sure, Congress could create an Art III trial court of special jurisdiction. That would eventually have its own issue of expert capture, but that is a policy and practice issue, not a frame work defect. Along the same lines – you could cite the Taft report on the patent system – the recommendation of making PTO an independent agency. As an independent agency – and with fixed appointments of APJ’s – like tax court – you could at least have an argument that the IPR court was sound, because historically tax court’s overlapping jurisdiction with Art III courts has been found valid (but see the point above, tax court applies an expansive standard of administrative estoppel to compartment itself with the findings of fact and law in an Art III court. Indeed, this administrative estoppel is even broader than the Art III court applies to itself – collateral issues adjudicated in one tax year by an Art III court will be applied to other tax years in tax court but not the converse). And even perhaps, Congress could take patent jurisdiction from the Art III court altogether and give it only to administrative courts, but probably not under the 7th Amendment.
These alternatives scenarios, that may pass Constitutional muster support, of course, the facial challenge of today: The commissioner herself, the unitary executive department, cannot impanel herself and the other 2 political appointees and adjudicate the IPR, because an Art III final judgment becomes void ab initio in that scenario. It is giving the executive himself a de facto obviation over Art III final judgments. That standard has always been enforced in practice, in other words, mistake, public policy or other contrivance – has mattered not.
iwasthere, Murray’s Lessee made it clear that tax collection falls under the public rights exception. There may and probably is not right to a trial in an Article III court at all.
It tells one something that the PTO maneuvered the IPR special court to be part of the PTO. They are into empire building.
How exactly did the PTO “maneuver” that Ned?
You are pretty quick at name-calling- and pretty quick at chasing odd windmills.
Maybe you want to think about asking the right question?
(and please, if you are not interested in taking easy steps of comparison, then you have ZERO room to crab about “what is the right question?”)
Well PTO did maneuver the AIA legislation. The PTO solicitors office worked with the hill staff to create the IPR’s. That’s a fact not open to debate. I don’t call myself iwasthere for nothing. I just happen to think the staffers overlooked the vestiges of the policy aspects of the original PTO administrative court – the commissioner being able to appoint themselves as a judge – and make Procedural Policy when they created IPR’s which creates Substantial Judgments. You might be able to have one or the other – but not both. And that is why a facial challenge has the best chance of defeating the AIA.
Substantive judgments – sorry.
iwathere, you need to file your amicus brief.
iwasthere, you need to file your thoughts in a amicus brief to the Supreme Court. You have to May 31. MCM v. HP, 15-1330.
Well according to SCOTUS counsel , since i am not in the SCOTUS former solicitors or clerks club, SCOTUS will not read my Amicus. Where is the cert grant in MCM v. HP – is that your case?
Yes it is. It is at the petition stage.
In principle, it is not a bad idea to have a court that does invalidity and is specialized for that. But the way IPRs are done is not good. Should be that the D can go to the special court and then that’s it for litigating validity.
The problems with IPRs are no standing, endlessly ability to continue to file IPRs, not much estoppel in federal court. The other issues with amendment and BRI have more to do with what are the rules for invalidity and probably don’t matter as much as the other rules.
And let’s be real too–what is happening if you are a small company/person? A big company can come along and blast you with IPRs that cost you $300K minimum to fight. So, what does that mean? The patent you get from the PTO isn’t worth much.
Game of kings….
Just like Big Corp wanted.
A big company can come along and blast you with IPRs that cost you $300K minimum to fight. So, what does that mean?
Learn how to innovate something worth patenting, and learn how to write a decent patent.
Most of the patents asserted by “small” people (<–aka rich people with too much time on their hands) against "big companies" are horrific piles of junk. That's because most of those patents are computer-implemeneted junk of one sort of another that the PTO is pretty much incapable of examining without someone holding its hand.
Everybody knows this.
You antagonize people MM with these ridiculous responses.
these ridiculous responses.
What’s “antagonizing” you is the lack of “ridiculousness” in my responses, particularly when compared to your own comments.
You speak as if suddenly all incentives to acquire a patent have disappeared. Because it’s cheaper to challenge them and more costly to defend them! That’s not only ridiculous from a hypothetical viewpoint, but completely at odds with reality where record-breaking levels of patents are still being sought and granted.
When these “big companies” that you endlessly obsess about start filing upwards of ten thousand baseless IPRs a year, carpet-bombing every potential competitor in sight, I might start paying attention to the whining. Until then: it’s just whining. Really loud and really annoying whining from people who, objectively, have very little to whine about.
And lastly I’ll remind you and everyone else again: I have no love for any of these “big companies.” They’re mostly horrible, they file tons of junk patents themselves, and if it were up to me I’d make it even easier to get rid of those patents and I’d increase their tax burden at least ten times higher than it is now. But if you want to talk about “ridiculous”, cheerleading for a rich class of b0ttom-feeding patent lawyers and their “innovative” methods of leeching off those big companies (and everybody else in the process) pretty much takes the cake.
NWPA: A big company can come along and blast you with IPRs that cost you $300K minimum to fight. So, what does that mean?
News flash: companies or entities with a lot more money than you are always at an advantage. Why? Because they have more money! If they feel that it’s in their interest to “blast you”, they’ll do it. Welcome to America. IPR don’t change any of that because re-exams of granted patents aren’t new. The bigest difference is that IPRs move quickly, making them much more attractive to everybody (the public, judges, etc) who is interested in resolving questions about a patent’s validity (and let’s face it: there are millions of junk patents out there).
There are several ways for patentees to address the “problem” created by IPRs. The two major ways are (1) stop asserting junk; (2) substantially lower your expectations about what a reasonable license looks like.
This is was the intent behind creating the IPR regime, by the way. Most of us could see this fix coming a hundred miles away. And there’s more to come! There has to be more, becasue the patent bubble is filled with junk and the PTO still hasn’t stopped issuing it.
MM, so long as one has access to a court and to a jury before his patent is revoked, Congress can do a lot to address trolls, bad patents, etc.
One of the things it should do is call for the FTC or some such to study the problem of business method patents, functional claiming, indefinite claims and claims that do not specifically point out, etc., specifications that simply recited embodiments with no effort to describe what, if anything is new, and why all this happened.
The finger ultimately will be pointed at the CCPA and the Federal Circuit, of course, that went out of its way to undermine the Supreme Court decisions in these areas. The solution to the problem of the Federal Circuit has been proposed by the CJ of the 7th Circuit.
Wow Ned’s true colors appear. We live in the information age Ned. I have cited to technical books that expressly say they speak in functional terms to refer to known solutions.
Ned, again, I think you are unethical. You are pushing positions that are against science. You are attempting to say that software is something different than hardware when we all know that is not true. They are equivalent. The fact is that a/d converters make almost any circuit software and any software can be hardware. And information processing is a physical process.
Sheesh. Just shameful that you push your nonsense.
You are attempting to say that software is something different than hardware when we all know that is not true. They are equivalent.
This is more zombie silliness that was put to bed years ago but up again it rises. The issue being discussed is invalid patent claims.
Software and hardware are indisputably distinct things. Nobody disputes that. That’s why people gave the things two different names. Shrieking “they’re equivalent!” a zillion times a day without stating the specific context in which “they’re equivalent” is just vapid shrieking. It’s nonsense and nothing more than nonsense.
You can’t get a valid claim to new hardware by claiming it functionally at the point of novelty without providing objective distinguishing structure at that point (and, no, that’s not a “canard” — just a fact). Software, however, thanks to a legal fiction created out of thin air by activist judges, is excepted from that requirement. Why? Because some judge decided he like it that way. And the “stakeholders” rushed in and now they feel entitled. Because they’re rich and important and if they don’t have their way, we’ll all be just like the Amish and nobody will write new software! After all, they told us so! And they’re rich and super important. And anyone who disagrees with their fabulous story is “against science” and “unethical.” Yes, they’re very serious people.
Equivalent is not to be mistaken for being equal, or the same things.
The one shrieking, Malcolm, is you.
“Go figure Folks”
Equivalent is not to be mistaken for being equal,
Super deep stuff! Very insightful.
Neither “super” nor “deep,” and yet rather important to the discussion and something that you seem to perpetually misrepresent.
Now why is that?
Neither “super” nor “deep,” and yet rather important to the discussion
Sure it is! It’s super important and super serious.
Your reply is empty and very much what you accused others of: “zombie silliness”
(and yes, you again make an issue by attempting to have one optional claim format be more than just an option)
Your reply is empty
Oh, I left out the part where I say “This is rather important to the discussion” without explaining why.
That changes everything.
Do you really need to have the difference (actual) between “equivalence” and “the same as” explained to you….?
If so, you have no business in the patent world.
Do you really need to have the difference (actual) between “equivalence” and “the same as” explained to you….?
When did you stop beating your wife?
Your response is nonsense.
Try differently.
Ned: The solution to the problem of the Federal Circuit has been proposed by the CJ of the 7th Circuit.
Specifics?
MM, You might want to search on her speech/article. But briefly, the Federal Circuit is not the exclusive jurisdiction for patent appeals. She also proposes specific rules to prevent the historic forum shopping problem.
Lulz, I find it deeply suspicious that the only part of the the patent system these authors took issue with is the part that helped to clamp down on “invalid” patents.
Isn’t that what every “outside stakeholder” wants???
Oh, my mistake, I misunderstood, it’s that the only invalid patent is your competitor’s patent. Until I see a company with an equally over-broad patent step forward and expressly invalidate their own patent, all this talk is just mephitis in the wind.
Davis: ask yourself whether Obama and Google want to improve patents by appointing Lee a person that knows nothing about patent prosecution and now is in charge of 8,000 people that do patent prosecution. I would bet that you could sit her down with 100 file wrappers and she couldn’t make heads or tails of them. Simply a national shame that Obama appointed her to run the PTO. She should resign in shame.
As to your other statements, consider that all of these problems come from one simple problem–when a patentee files a law suit often the accused infringer has to spend millions in the first months to adequately defend themselves. (Often all your invalidity and unenforceability contentions have to be made up front with good cause to change them which mean no way are you going to get to change them.)
MM and anon remind me of that Star Trek episode “The Alternative Factor” after they are locked together.
That’s funny cuz I often feel like I’m arguing with the Nomad probe.
If they find out that their own patent is unpatentable over a reference etc. then they can simply let it die, they don’t have to “come forward to have it invalidated”.
Sometimes I think the conceptual parallels between real property and intellectual “property” are drawn too deeply. That said, I would find it entertaining if someone tried to get an “easement” on a patent through adverse possession at common law.
Adverse possession in most states is what, 20 years…?
And patent term is…
😉
A parallel with eminent domain has been supplied.
This is a factor in the “recompense” bit.
Laches?
The US government takes an easement to all US patents. It’s only because the government has waived sovereign immunity that that you have a limited right to seek money damages in the claims court. You can never get a patent injunction against the government.
Indeed, the US government took license to many (all?) patents in WWII, and forced them into license pools. As I recall, all German and Japanese patents were seized as well. Too bad that chapter is not taught in law school.
Hrdy and Picozzi: Do [Dolin and Manta] intend for Congress to compensate patentees in these cases or to take fewer actions limiting patent rights, simply due to the fear of effectuating a taking? This seems like a dangerous basis on which to formulate patent policy.
Dangerous and i d i 0 tic. But rest assured: Dolin and Manta and the “stakeholders” they are cheerleading for could care less about any of that.
All that matters is this: the “expectations” of some rich people have been upset. That makes the rich people upset. Their game isn’t going to be as much fun. And so somebody should pay for that, right? Because … rich people.
Those are the same “stakeholders” (and their oh-so-serious lawyers), by the way, who spent years commenting here and elsewhere — as the toxic patent bubble was blowing up — that businesses, particularly businesses using computers (!), should just accept that being threatened or sued for patent infringement is part of life. “It’s the American way!” We all should stop whining and buy insurance.
But that giant bubble of crxp and the immense cost it represented to everybody who wasn’t playing the game wasn’t a “taking”. Nope! That was just the “stakeholders” making the world go round. We should thank them! How dare we ask the courts to reconsider their absurd holdings! How dare we ask the Supreme Court to take a look at what’s going on! The Supreme Court, these “stakeholders” tell us, has no right to interpret patent laws! If we don’t like the laws, we were told, then we should got to Congress and change them!
So we went to Congress and changed them. And now (surprise!) the “stakeholders” are complaining about that.
I’m still wondering about the arguments these people would make if a computer glitch or a craaazy PTO director granted a million junk patents tomorrow. Everybody knows the patents are junk — they cover a million public domain methods and compositions. So how to get rid of them? A million separate negotiations to determine their value and compensate the owners? A million trials? Seriously?
All you’re missing is the tin foil hat. Next!
All you’re missing is the tin foil hat.
I have no idea what a “tin foil hat” has to do with mundane observations about the patent system and the professional patent maximalists who have milking it to death for the last quarter century. They’ve been right out in the open for quite some time, Gary. I wish I was making it all it up but, sadly, that’s not the case.
Translation: “Huh? What?”
Classic Vinnie meme from Malcolm…
The reference to the Penn Central seems to me to cut the other way. In that case, the Court found that there was not a taking because “[u]nlike the governmental acts in Goldblatt, Miller, Causby, Griggs, and Hadacheck, the New York City law does not interfere in any way with the present uses of the Terminal.” Here, however, post-grant procedures permit the USPTO to invalidate patents, which would, of course, “interfere…with the present uses of the [patent].”
Moreover, the authors appear to confuse what those present uses are, as shown in the following quote:
“various regulatory review statutes, such as the Food, Drug, and Cosmetic Act (FDCA), the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), and the Toxic Substances Control Act (TSCA), practically reduce effective patent lifetimes by prohibiting patentees from commercially marketing or using protected products prior to regulatory approval. Yet none of these statutes fully compensate patentees for their losses.”
Patents provide a right to exclude, not a right to practice. Preventing patent holders from making products does not actually alter the rights granted by the patent. In stark contrast, post-grant procedures do, in fact, allow invalidation of a patent by the USPTO, which interferes with the right to exclude.
“Does Congress really need to compensate patentees every time it passes a statute that significantly affects the value of issued patents?”
Respectfully, this is a straw man, as I’m sure even those most aggressively challenging post-grant review don’t think that every statute that “significantly affects the value of issued patents” is unconstitutional.
“Could Congress pass regulations for the purpose of restraining bad-faith enforcement of patents that have already been granted?”
Unless you take the position that it is impossible for destruction of patent rights to ever be a taking (which is quite a maximalist position), wouldn’t this depend upon what these regulations actually do? Couching this stance in moralistic terms (“restraining bad-faith enforcement”) makes it sound better, but the devil is always in the details.
“What about judicial actions that reduce the value of patents? Do they intend for Congress to compensate patentees in these cases or to take fewer actions limiting patent rights, simply due to the fear of effectuating a taking? This seems like a dangerous basis on which to formulate patent policy.”
Is it really so crazy to think that monkeying around with private property rights should be done cautiously and with a light touch? As the Court has said, “[r]etroactivity is not favored in the law.” Bowen v. Georgetown Univ. Hospital, 488 US 204, 208 (1988). And anything that affects the rights provided by already-issued patents is, by definition, retroactive. Starting from the stance that one should be careful about retroactively affecting hundreds of thousands of patents does not seem dangerous; it seems prudent.
post-grant procedures permit the USPTO to invalidate patents, which would, of course, “interfere…with the present uses of the [patent].”
No. Those patents — like all patents — were already subject to invalidation and challenge. The existence of IPR proceedings does not “interefere” with any “present uses” of that patent.
The term “uses” is a bit misleading, by the way. There’s just one “use” for a patent: you sue people with it. All the other activities that happen around a patent flow from that one use.
Means and Ends Malcolm – you keep on missing the point that whatever “noble” ends that you think that you have, just are NOT good enough to “get there” through improper means.
That’s a rather important point in law.