Federal Circuit Refuses to Hear Private Right Issue

by Dennis Crouch

Cascades Projections v. Epson America (Fed. Cir. 2017) (en banc denial)

In a split decision, the Federal Circuit has denied Cascades petition for initial en banc hearing.  The petition asked one question: “Whether a patent right is a public right.” Because a Federal Circuit panel already decided this decision in MCM, Cascades asked the court to bypass the initial panel appeal and head straight to the en banc question.  See MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015), cert. denied 137 S. Ct. 292 (2016).  The issue is important because the answer to the private right question could lead to a judgment that the administrative patent trial system is an unconstitutional violation of due process rights.  I previously discussed the case on Patently-O.

Whether a Patent Right is a Public Right

 

For judges wrote separately on the case:

Judge Newman Concurring in Denial: The important question here is “whether the statutory scheme created by the America Invents Act, in which the Office is given an enlarged opportunity to correct its errors in granting a patent, with its decision subject to review by the Federal Circuit, meets the constitutional requirements of due process in disposition of property.”  Judge Newman suggests that she would vote for re-hearing after “full opportunity for panel rehearing.”

Judge Dyk (Joined by Judges Prost and Hughes) Concurring in the Denial: “MCM was correctly decided. . . . [T]here is no inconsistency in concluding that patent rights constitute property and that the source of that property right is a public right conferred by federal statute.”

Judge O’Malley, Dissenting from the Denial: Patent rights are likely “core private rights only subject to adjudication in Article III courts.”

Judge Reyna, Dissenting from the Denial: “The state of current law compels en banc review.”   According to Judge Reyna, the clear statement from Supreme Court’s 1898 decision in McCormick Harvesting that “The only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent.” McCormick Harvesting Mach. Co. v. C. Aultman & Co., 169 U.S. 606, 609 (1898).

We’ll look for the upcoming panel decision in the case and subsequent en banc hearing.

 

 

Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

115 thoughts on “Federal Circuit Refuses to Hear Private Right Issue

  1. “The Seventh Amendment right of trial by jury is the right which existed under the English common law when the Amendment was adopted. Baltimore & Carolina Line, Inc. v. Redman, 295 U. S. 654, 657. Thus, the Court asks, first, whether infringement cases either were tried at law at the time of the founding or are at least analogous to a cause of action that was. There is no dispute that infringement cases today must be tried before a jury, as their predecessors were more than two centuries ago.” Markman v. Westview 517 US 370. Isn’t this whole ‘public rights’ issue, really about whether a patent holder has a right to a jury trial? Why isn’t Markman dispositive?

    1. Iwasthere, my argument precisely. The Federal Circuit, in both Patlex and in MCM, is deciding the issue backwards. First one should determine whether there is a Seventh Amendment right in the first place to a trial for invalidity based upon traditional analysis of whether that issue was tried to a jury at common law. (Of course it was.) Once one determines that the issue of validity was tried to a jury at common law, it has a Seventh Amendment right that cannot be taken away by assigning the trial of that issue to either a court of equity or to an administrative agency.

      Instead, the Federal Circuit decided first that patents were public rights which, of course, do not have a right to a trial by jury. Thus the historical analysis is obviated.

    2. Thus, the Court asks, first, whether infringement cases either were tried at law at the time of the founding or are at least analogous to a cause of action that was. There is no dispute that infringement cases today must be tried before a jury, as their predecessors were more than two centuries ago.” Markman v. Westview 517 US 370.

      The PTAB does not decide infringement.

      1. Invalidity is a compulsory counter claim to a charge of infringement. ‘You can’t infringe an invalid patent,’ we’ve all heard that one before.

        1. Furthermore, reason for the 7th Amendment in the first place – was to protect the people from government. And your argument conjures away a protected right – the right to have property disputes tried to an independent judicial department – plus a right to a jury trial locked in by ratification of the bill of rights.

          1. [Y]our argument conjures away a protected right – the right to… to a jury trial locked in by ratification of the bill of rights.

            This argument assumes the conclusion. Did the bill of rights lock in such a right? Was there such a right in the first place for the bill of rights to lock in? One cannot “preserve” that which did not exist in the first place.

            1. It “assumes” only that other Constitutional protections of property apply.

              You seem to have a genuine problem with accepting that.

              1. It “assumes” only that other Constitutional protections of property apply.

                Jury trials are not a “Constitutional protection[] of property.” They are a constitutional protection of rights which were tried to a jury in England in 1791. Some property rights were entitled to jury trials in England in 1791 (e.g., disputes over who is the rightful owner of a tract of land), while others were not (e.g., disputes over who owned a treasure salvaged from a sinking ship).

                In other words, the mere fact that something is property does not mean that a VII amendment right is invoked. It is mere sloppiness to imagine that the VII amendment applies merely because a property right is at stake.

                1. Greg – did I ever specifically say that VII was the other Constitutional protection of property?

                  You are mixing up protaganists.

            2. Well no, Ned is correct, he has done the research, patents were covered by the 7Th amendment. And now you are questioning the purpose of the 7th Amendment itself? And FYI, Markman, says you do that step “First”.

              1. patents were covered by the 7[t]h amendment

                I am not sure what this means. Seventh amendment analyses are to be done issue by issue, not trial by trial. (Markman v. Westview Instr. Inc., 517 U.S. 370, 377 (1996) (The second question to be answered in a VII amendment analysis is “whether a particular issue occurring within a jury trial… is itself necessarily a jury issue”). You cannot just say “patent cases involved juries” and stop there. You have to know whether validity itself was tried to a jury.

                Incidentally, there were different varieties of scire facias writs. Mowry v. Whitney, 81 U.S. 434, 439 (1872). One of these scire facias actions involved a trial as between two private parties, and the decisions of these trials had effect only between those parties. Another involved an action brought in the name of the King to cancel the patent as against the whole world.

                Obviously, IPRs are more analogous to the second, in that the result of an IPR is to cancel the claims as assertable against anyone, not just the IPR petitioner. So the really relevant question is not merely whether there were jury trials in some scire facias trials, but whether there were jury trials in the particular scire facias trials brought in the name of the King? Then the next question is what those juries were charged to consider (did they adjudicate validity per se, or merely consider whether the patentee’s fraud—where fraud was alleged in the obtaining of the patent—was willful)?

                Perhaps Ned would care to comment on what evidence we have for jury trials in that particular class of scire facias actions, and what those juries were there to decide?

                1. Greg, I beg you to review all the posts from Distant Perspective over the last few weeks where he quotes extensively from cases and reporters discussing scire facias actions.

                  I am literally stunned, though, at your question at this late date. Scire facias actions were filed in either Kings Bench or the Petty Bag, both common law courts. Trial of disputed facts was to a jury, and at Kings bench. The common law judge entered a judgment of invalidity, if that was the verdict, and recorded it with the clerk of the Petty Bag.

                  The issue of validity is LEGAL. Legal issues were always tried in the common law courts.

                  There is no equitable remedy involved since the court does not have to order anything. The verdict of invalidity was enough.

                  Then we have the fact that Story already knew all this in ex parte Wood & Brundage, where he held that scire facias actions at common law to test validity of a patent had a Seventh Amendment right to a jury trial.

                2. I am literally stunned, though, at your question at this late date.

                  I am flattered that you might be stunned when it becomes clear that I do not know something. I assure you, there is nothing “stunning” here. No one should be surprised to see me say “I do not know…”

                  Trial of disputed facts was to a jury, and at Kings bench.

                  Sure, but that is my question: what facts were at stake? What evidence do we have about what the jury was charged to decide in these Rex v. _____ scire facias actions? I do not recall seeing that Distant Perspective reported anything on that point.

                  [Justice] Story already knew all this in ex parte Wood & Brundage, where he held that scire facias actions at common law to test validity of a patent had a Seventh Amendment right to a jury trial.

                  Ah, how I wish that he had. It would so simplify things if Justice Story really had ruled that there was a VII amendment right to a jury trial in validity actions. Regrettably, when I read Wood & Brundage, it really was not clear to me to what extent the VII amendment was actually being invoked.

                  In any event, the procedure at issue in Wood & Brundage was so different than an IPR, that I am not sure how applicable Wood & Brundage may actually be.

      2. Validity was a defense to infringement at common law and tried to a jury.

        That should have settled the issue.

      3. Greg,

        Maybe yo can “wow” them with a statement like “you still have something with an invalid patent.”

        I know that I was wowed with that statement.

  2. Judge Newman, either senile or beaten. Due process? What is she talking about?

    Dennis – why are you suggesting the same? Dupe the proles? You aren’t smart enough. Explain.

    1. Nothing convinces like bald assertion seasoned with a medley of my informal fallacies like argumentum ad hominem and poisoning-the-well…

  3. Patent Chutzpah of the Day: Aylus’ losing argument that statements about its invention made in response to a petition for IPR can not be used to find prosecution disclaimer.

  4. I’ve got a treat for AAA here today. In a training today a lady from the board was telling examiners literally, in responding to arguments by the applicants that involve them using caselaw, examiners are literally not supposed (or at least are not required) to go to the caselawl itself and make legal arguments etc. etc. against the applicant. Instead the examiners are to look at the MPEP, regurgitate whatever they think best supports their position (or else withdraw the rejection) and “act as a fact finder”. And specifically the examiners are not required to do legal research beyond the MPEP and any guidance memoranda/MPEP.

    Though examiners are allowed to read the caselaw and respond however they decide based thereupon.

    And that is official training up ins the office. And this is to maintain consistency.

    1. Oh and I forgot to add, the lady had noted that they will deal with the super fancy legal arguments at the board, unless they are entirely persuasive to the examiner and the examiner withdraws the rejection on their own.

      1. 6, what about this scenario: Patent owner says they have a markman order, attach the order – making it of record, and then specifically disclaim any claim scope broader than the markman order to PTO in the examination and then assert: This is the BRC for the claims. Is that an argument of fact or law?

    2. [E]xaminers are literally not supposed (or at least are not required) to go to the caselawl itself and make legal arguments etc. etc. against the applicant. Instead the examiners are to look at the MPEP…

      This seems a very prudent policy, to my mind. The MPEP is something that we all (applicants and examiners) have in common. If we could all confine ourselves to the MPEP during the stage of prosecution that takes place in front of examiners, it would make the process easier and less frustrating for all parties.

    3. 6, while it appears that examiners are entitled research the law and present their own views, the board is essentially telling them that unless those views correspond to the views of the patent office higher-ups, they will be given little or no weight. So why waste everyone’s time.

      It would be a rare occasion indeed that an examiner could persuade the board and the patent office to change its views on a point of law because of something the examiner said or argued. But appears to be the examiner’s right to make the attempt so if he so chooses

      1. Maybe 6 should add the part about how the Office itself states that the MPEP does NOT have the force of law and that any question regarding law shall instead refer to the actual case law (and NOT the office higher-up “versions” in the MPEP)…

        1. I’m not sure where you think I should “add that”, or why. This thread is about AAA (and others) having been btching to high heaven about examiners not giving him sophisticated legal analysis in response to the instances where he’s trying to be persuasive by blathering about caselaw, and instead the examiners just regurgitate caselaw from the MPEP’s cited cases. And now it’s official training (new training btw) that examiners are encouraged to do just that, and are not especially required to go digging for whatever case. “Procedurallylol” I guess you could say, they’ll be handling those for realsies at the board apparently. Unless of course the attorney manages to persuade the examiner.

          1. You have the “btch” part wrong, 6.

            No one is asking that “examiners not giving him sophisticated legal analysis.”

            What is being “btched” about is the Office disregarding the actual law and arguments provided by those who know the law and Examiners doing the opposite of “examiners not giving him sophisticated legal analysis” by mouthing an MPEP writing that (far too often) gets the application of law wrong.

            The fact that this is “official training” does not change anything and certainly does not change the duty to properly examine under the law.

            1. “The fact that this is “official training” does not change anything ”

              It does make it official that the examiners aren’t obliged by mgmt (or the PAP element talking about legal aspects of examination) to do their own legal analysis of the caselawl outside of that which is in the MPEP. In other words, if the examinator gets ur soooophisticated legal wranglin’ that you’re wanting them to do in a given case at your bidding when you make an argumentation “wrong”, there’s literally nothing holding them accountable, and neither does mgmt want there to be. That is, unless they’re going agin the MPEP (rather than regurgitating the MPEP for you). And that this is for the express purpose of being consistent between examinatin’s that people are btching about to the director(s).

              With this new training, that’s now official.

              “and certainly does not change the duty to properly examine under the law.”

              Arguably, but it does make it so that there are 0 consequences officially to just plain stickin’ to your MPEP guns, and when this is made public (if it isn’t already) applicants will be officially on notice that they need to take their sooooophisticated legal argumentations to the board unless they can convince the examiner.

              Also, you’ll be glad to hear that the class is mostly about how to respond to applicant’s arguing some caselaw (regardless of whether the examiner used any caselaw cites in the OA). So hopefully this will make the corps better informed. Oh, and the first part of the course teaches examiners some of the basics about facts/law distinction and the various routes of review up to the supremes, and the various deference granted where.

              Frankly I think they may have come up with this thing from us btching online. But truthfully it has been needed for basically forever.

              1. you’ll be glad to hear that the class is mostly about how to respond to applicant’s arguing some caselaw (regardless of whether the examiner used any caselaw cites in the OA).

                Getting warmer.

                but it does make it so that there are 0 consequences officially to just plain stickin’ to your MPEP guns,

                Nope. Ice cold.

      2. “the board is essentially telling them that unless those views correspond to the views of the patent office higher-ups, they will be given little or no weight. So why waste everyone’s time.”

        No they never said that. Indeed they said the opposite. Each case will be evaluated on its own facts/merits by the board. And of course the board continues to be there to only look for reversible error or whatever it was from Ex Parte Frie.

    4. It is certainly no surprise to long term PTO practitioners that arguing case law itself to PTO examiners [rather than MPEP section citations based on MPEP case law citations] is normally a waste of time [for other than making a record for appeal]. Even if the MPEP provision in question is only citing OLD case law.
      And, some PTAB ex parte appeal briefs do not do a good job of presenting more current Fed. Cir. decisions that the PTAB prefers.

  5. A few thoughts about Judge Reyna’s dissent:

    (1) I think that Judge Reyna falls victim to a problem of terminology. People hear the words “private property” and “public rights” and they think “public is the opposite of private, so these two things must be mutually exclusive. That is incorrect. It is simply a category error. Patents are both private property and public rights.

    If you permit the PTAB to adjudicate validity, you have in no wise impeached the patent owner’s property rights. At the end of an IPR, the owner still owns the patent. The owner’s ownership is unaffected. It would be a real separation-of-powers problem if the PTAB were authorized to decide ownership issues, but it is not.

    The one thing that the PTAB is empowered to decide is validity. Validity relates to the ability to use a patent in a public regulation scheme. But, of course, public regulations schemes are precisely the sort of “public rights” matters that may be legitimately entrusted to administrative tribunals in the first instance.

    1. (2) Judge Reyna says (pg. 14 of the slip opinion) that “the MCM panel explicitly found for the first time that ‘patent rights are public rights.'” Judge Reyna is simply wrong in this assertion. Patlex Corp. v. Mossinghoff, 758 F.2d 594, 604 (Fed. Cir. 1985) held that patent validity is a public rights question. The MCM panel was merely following precedent, not breaking any new ground.

    2. (3) Judge Reyna gives (slip op. at 16) as a reason for en banc review that Patlex held that McCormick was decided on constitutional grounds, while MCM contends that McCormick was only decided on statutory grounds—not constitutional grounds. This observation is irrelevant. Patlex also held (758 F.2d at 604) that

      The holding of McCormick Harvesting may also be distinguished, in view of Congressional intent to provide a separate procedure for reexamination while preserving the reissue practice. The purpose of reissuance of patents is to enable correction of errors made by the inventor, at the initiative of the inventor. The reexamination statute’s purpose is to correct errors made by the government, to remedy defective governmental (not private) action, and if need be to remove patents that should never have been granted. We do not read McCormick Harvesting as forbidding Congress to authorize reexamination to correct governmental mistakes, even against the will of the patent owner. A defectively examined and therefore erroneously granted patent must yield to the reasonable Congressional purpose of facilitating the correction of governmental mistakes. This Congressional purpose is presumptively correct, and we find that it carries no insult to the Seventh Amendment and Article III.

      In other words, even if Patlex and MCM disagree that McCormick does not implicate the constitution, both panels agree that McCormick is distinguishable on the grounds that it was deciding a case against a very different statutory background than the one at issue post-1981. Even if an en banc panel were to agree with Patlex against MCM that McCormick implicated constitutional issues, such a decision cannot change the outcome of the case. The Constitutional rights at issue derive from the statutory text in place at the time of of the fight. The statute at issue now is so different from the one at issue in McCormick that quoting stray lines in McCormick just cannot get the petitioner here to a different outcome than the one that they encountered in this IPR.

      1. While you say that the statute is different (and in fact a difference does exist that goes against your larger viewpoint), you have a(nother) legal error to contend with in that the statute as regards patents as property was NOT changed.

        Once a right has been developed, that right may – and in the case of patents as property, does – inure other Constitutional protections afforded that type of right.

        Greg, every time you venture forth your legal views and do not take into consideration this important fact, you merely present the same flaw as has been shown to you.

        1. A few responses:

          1) I have no idea whether the statute in force back in 1898 contained explicit mention of patents as property. Care to cite the section asserting as much?

          2) It really does not matter whether the statute did or did not say as much, however. The point is that the statute back then made no provisions for reexamination, but the statute today does.

          3) That fact in no wise diminishes the status of patents as property, so the specious assertion that the Constitution’s protects property, while true as far as it goes, is simply irrelevant.

          1. 1) The bit about patents as property is reflected in the writings of the people who wrote the Constitution.

            Even without 35 USC 282, patents were considered property from the onset – this is of course reflected in ALL of the Supreme Court cases touching upon the issue.

            As to that section of law, you might enjoy this: link to law.cornell.edu

            2) provisions for reexamination DO NOT make your point – as I have previously shared. I am not holding my breath waiting for you to grasp points already given to you.

            3) What you feel as irrelevant is not so. Quite in fact, your own choice to feel that way is itself irrelevant. It appears that you too want to view patents as property (if I read the “diminishes” comment correctly), but somehow you think that patents as property somehow does not pull into the dialogue that other protections from other parts of the Constitution are invoked once Congress created a property right.

            THAT would be plain legal error.

            Once Congress created the patent right as a property right, those other protections inured.

            It is a critical point then (the opposite of “irrelevant”), that even Congress no longer had absolute free reign to change patent law – without regard to those other Constitutional protections.

            It really just does not matter how you personally feel about that, Greg. That is how the Constitution works. Whether or not this will be applied properly is quite a different matter.

            1. you might enjoy this: link to law.cornell.edu

              Yes, yes, fine. Naturally, I am aware of section 282 and am thoroughly on board with the goal that this section aims to advance.

              This really does not tell us anything about the statute in force back in 1898, however, which was the point actually in discussion.

              I am not holding my breath waiting for you to grasp points already given to you.

              Likewise & reciprocated…

              1. This really does not tell us anything about the statute in force back in 1898, however, which was the point actually in discussion.

                You did not explore the link that I provided.

                As to “reciprocated,” you have no points presented which I have not grasped – and shown that I have grasped. Your choice of word is incorrect.

                You are getting very sloppy Greg.

                1. You did not explore the link that I provided.

                  Where was I supposed to explore? When I click on the historical notes section, it only traces things back to the codification of Title 35 in the 1952 act. If it goes back to 1898, you might want to link to that part, because I am not seeing it.

                  [Y]ou have no points presented which I have not… shown that I have grasped.

                  We will have to agree to disagree there.

                2. Derived from Title 35, U.S.C., 1946 ed., § 69 (R.S. 4920, amended (1) Mar. 3, 1897, ch. 391, § 2, 29 Stat. 692, (2) Aug. 5, 1939, ch. 450, § 1, 53 Stat. 1212).

                  Sloppy Greg.
                  Sloppy.

                3. We will have to agree to disagree there.

                  You agreeing or disagreeing does not change the facts.

                4. Sloppy Greg.

                  Did you check the section you are now citing? Here it is, reproduced in its entirety:

                  RS §4920
                  In any action for infringement the defendant may plead the general issue, and, having given notice in writing to the plaintiff or his attorney thirty days before, may prove on trial any one or more of the following special matters:

                  First. That for the purpose of deceiving the public the description and specification filed by the patentee in the Patent Office was made to contain less than the whole truth relative to his invention or discovery, or more than is necessary to produce tile desired effect; or,

                  Second. That he had surreptitiously or unjustly obtained the patent for that which was in fact invented by another, who was using reasonable diligence in adapting and perfecting the same; or,

                  Third. That it has been patented or described in some printed publication prior to his supposed invention or discovery thereof, or more than two years prior to his application for a patent therefor; or,

                  Fourth. That he was not the original and first inventor or discoveror of any material and substantial part of the thing patented; or,

                  Fifth. That it had been in public use or on sale in this country for more than two years before his application for a patent, or had been abandoned to the public.

                  And in notices as to proof of previous invention, knowledge, or use of the thing patented, the defendant shall state the names of the patentees and the dates of their patents, and when granted, and the names and residences of the persons alleged to have invented or to have had the prior knowledge of the thing patented, and where and by whom it had been used; and if any one or more of the special matters alleged shall be found for the defendant, judgment shall be rendered for him with costs. And the like defenses may be pleaded in any suit in equity for relief against an alleged infringement; and proofs of the same may be given upon like notice in the answer of the defendant, and with the like effect.

                  That looks rather strikingly different from modern day §282. In fact, almost completely different (although some of the spirit is the same). In any event, there was no statutory provision in the old RS §4920 (or in RS §4898, the antecedent to modern §261) about patents being property, so I do not know how you figure that this part was not changed.

                  Nothing here really detracts even an iota from my point above.

                5. You agreeing or disagreeing does not change the facts.

                  Quite true. Just as your assertion or contradiction cannot change the facts either.

                6. your assertion or contradiction

                  LOL – I have the facts, and that is what I pound. What is this “assertion or contradiction” that you feel that I have instead?

            2. The bit about patents as property is reflected in the writings of the people who wrote the Constitution.

              Even without 35 USC 282, patents were considered property from the onset – this is of course reflected in ALL of the Supreme Court cases touching upon the issue.

              Yes. I agree with all of this. We are both agreed that patents are property.

    3. This is a distinction without a difference. That is like saying that it is not a taking for a federal agency to hold that your property title for your house is invalid, but it would be a taking if they held that you don’t own the house.

      I am sure our Justices might hold something like that as they are little better than common criminals, but that doesn’t mean it is consistent with the Constitution.

      OK. Sure. Pretty sure a taking includes any of the bundle of rights.

      1. That is like saying that it is not a taking for a federal agency to hold that your property title for your house is invalid, but it would be a taking if they held that you don’t own the house.

        I know that might seem like an apt analogy, but it is not. It is the fallacy of equivocation. The word “valid” means something very different when applied to a title deed than it means when applied to a patent claim.

        If my title deed is declared “invalid,” I have nothing left. It is not that I “own” an invalid title. I “own” nothing.

        By contrast, if I have an invalid claim in my patent, that most definitely does not mean that I own nothing. As the owner of the patent, I can still seek a reissue, and claim any remaining patentable subject matter that exists within my disclosure.

        Do not be confused by the fact that we use the same word—“invalid”—to describe the two very different circumstances of title deeds and patent claims. As Justice Holmes once observed, “[a] word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used.” Towne v. Eisner, 245 U.S. 418, 425 (1918).

        Pretty sure a taking includes any of the bundle of rights.

        Definitely not. Andrus v. Allard, 444 U.S. 51, 66 (1979)

        The regulations challenged here do not compel the surrender of the artifacts, and there is no physical invasion or restraint upon them. Rather, a significant restriction has been imposed on one means of disposing of the artifacts. But the denial of one traditional property right does not always amount to a taking. At least where an owner possesses a full “bundle” of property rights, the destruction of one “strand” of the bundle is not a taking, because the aggregate must be viewed in its entirety.

        1. Well, for one thing invalidating the claims may very well be all there is if the claims were granted over 2 years ago.

          Plus, there was a quid pro quo. The patentee disclosed their invention and paid money.

          Plus your quote on property rights goes to a restriction of disposal and not a revocation of a right granted by the government. Do you think for squatters where they applied for land that the government could invalidate their title to the land without a court? Simply send out a letter and say, well, we’ve decided that our grant of your land 50 years ago was in error so get off it.

          1. [I]nvalidating the claims may very well be all there is if the claims were granted over 2 years ago.

            Two years is the limit for broadening reissue. At the point where your claim is held invalid, I do not see why you bother trying to broaden it. What you want is to narrow your claim (to limit it to the genuinely patentable subject matter), and the 2 year limit does not apply to a reissue proceeding where you seek to narrow the originally granted claims.

            Plus, there was a quid pro quo. The patentee disclosed their invention and paid money.

            What of it? There is no amount that you can pay to be allowed to own an invalid claim.

            Do you think for squatters where they applied for land that the government could invalidate their title to the land without a court?

            Definitely not. That was my point. Title deed validity and patent claim validity are very different things, and therefore it should not come as a surprise that the law treats them differently. Only a court can invalidate your title deed, and no one here is arguing to the contrary.

            1. You are not being fair Greg. First, a patentee may not want to just narrow. There are other embodiments, plus the rule is that you cannot broaden any claim element. So, after two years the rules on reissue are very restrictive regarding claims.

              You keep saying they are different, but you have not identified any differences. The fact is the squatters is a very good analogy as the government agency may have made a mistake, but would have to go to court to correct the mistake.

              So, can you try to come up with one difference? Your reissue argument is exceedingly lame in practice as anyone that files reissues know (like me.) The latitude after two years is almost nonexistent.

              So, anything else? So far you quote some case about takings that was an edge case. I could cite 100 cases that say the opposite.

              1. First, a patentee may not want to just narrow.

                Then that patentee should have kept a continuation pending. Even before the AIA, you could not use a reissue to achieve a broader embodiment after 2 years. Why are you talking about broadening reissues in the context of IPRs? This is all just irrelevant distraction.

                [T]he rule is that you cannot broaden any claim element. So, after two years the rules on reissue are very restrictive regarding claims.

                True. What of it. My point is that at the end of an IPR, a patentee may find that some of the patent claims are invalid. Given that the PTAB is only empowered to pass on novelty and obviousness, what that means in practice is that the PTAB has found that there exists, within the scope of the granted claims, some subject matter that is old in the art. If the patentee wants valid claims, the patentee needs to narrow the claims so as no longer to read on those old embodiments. Broadening will not help the patentee to recraft patentable claims, so I do not see why you think it germane to observe that the patentee is not allowed to broaden.

                You keep saying they are different, but you have not identified any differences.

                As Judge Reyna noted (slip op. at 8), the Court held in Murray’s Lessee v. Hoboken Land & Improvement, 59 U.S. 272 (1855), the Congress does not have the power to remove matters that belonged to the courts of common law from the jurisdiction of the Art. III courts. However, where Congress creates a right anew, it is free to leave the administration of that new right to the courts, or to create an administrative agency to administer the statutorily created rights.

                Rights in real estate are the quintessential domain of the common law courts, as anyone who has taken property law will remember. By contrast, the Court has held that patents “did not exist at common law, and the rights, therefore, which may be exercised under it cannot be regulated by the rules of the common law.” Gayler v. Wilder, 51 U.S. 477, 494 (1850).

                In other words, rights in real estate predate the U.S. Congress (or the United States itself, come to that), and thus it simply is not possible to allocate the power to resolve real estate disputes to any other branch than the courts. The Congress created patents, however, and therefore the Congress is free to assign their administration to the PTAB if Congress so chooses.

                In short, the difference between the two examples you give is one well grounded in both law and history. The analogy between land and IP is a good one in most circumstances, but it does not hold here. This analogy will not serve to establish the point you are trying to carry.

                So far you quote some case about takings that was an edge case. I could cite 100 cases that say the opposite.

                Great. I do not need 100 counterexamples to know when I am wrong. How about you cite your best one? I will be grateful to be shown where I have misunderstood the law.

      1. There are no “unanswered” points. You have received an answer to all of them. I gather that you consider many of these answers unsatisfactory (as is your right), but that is not the same as to say that the points are “unanswered.”

          1. Fair enough. Do not hold your breath waiting for a different “reply” (or “answer” or “response” or whatnot).

            1. Do not hold your breath

              I am not – but likewise, please do not pretend that you have given answers (or replies or responses of whatnot).

            2. Yet again, please pardon any potential duplicates because the filter is asinine

              Do not hold your breath

              I am not – but likewise, please do not pretend that you have given answers (or replies or responses of whatnot).

                1. Greg,

                  it is either Pretending or
                  L
                  I
                  Eing.

                  I gave you the benefit of the doubt.

                  (please forgive any potential double post due to narrative shaping)

                2. Please forgive the potential repeat posting because of the asinine filter…

                  The childish aspect is from you.

                  And yes, your child’s quip applies to you here as well.

                  Here’s a deal for you: do not try to present what is not there, and I will not call you out for trying to present what is not there.

      2. Consider all of my previously supplied and unanswered points presented again here.

        Worst. “Argument”. Ever.

        1. Malcolm,

          The lowest of my “worst” is miles higher than the highest of your “best.”

          Perhaps you should try to focus on improving yourself before engaging in your mindless quips.

    4. Greg, in another note below you said that patents are public rights because they affect the entire public like a statute, and at the same time they can be private property. In some respects, patents like the patent Elizabeth granted East India Company in 1601 is such a patent that affects the entire public but is also the property of its owner. It was intended to invest in the East India Company exclusive property that it might reliably invest the resources to take develop trade in its area of exclusivity which included the United States.

      But there is a distinction between patents on trade and patents on invention and this distinction has been made carefully by the courts in England and in the United States since at least the early 1600s as well. Patents on trade were declared illegal in England in the Case of Monopolies, but patents on inventions were not because patents on invention did not affect the entire nation as did patents on trade.

      The Supreme Court addresses very same issue in the recent case of B&B Hardware. The dissent argued that patents were like statutes and therefore public rights. But the majority, authored by Justice Breyer if I recall correctly, demurred, observing that patents only cover the claimed invention and therefore only affected those who used the claimed invention. Thus they were in fact very much like patents on property that affected trespassers.

      1. The Supreme Court addresses very same issue in the recent case of B&B Hardware.

        I have the inkling that you are right that the Court addressed this point recently, but it was not in B&B Hardware. That was a trademark case, not a patent case. I wish I knew what case you have in mind. If I find it, I will let you know.

      2. I think that “patents are like personal laws” bit was from Thomas (and had Malcolm praising him like no get out).

        As I mentioned previously the analogy is one of the worst possible ones to try to use, and the person using it unremarkably does more harm to their own position than good.

    5. Greg,

      Another bone to pick with you, from your comment of “At the end of an IPR, the owner still owns the patent. The owner’s ownership is unaffected.

      I have to wonder if you have purposefully taken leave of your senses and thrown out any understanding of what a patent actually is with such a comment. A pronouncement of invalidity certainly DOES NOT leave the owner with an owned patent. Not as that term “patent” is (properly) understood. I cannot imagine what it is that you think the owner actually owns after a pronouncement of invalidity that still carries with it the meaning of “patent.” And quite frankly, I am not sure that my trying to understand what you feel as still earning the legal designation after such a decision advances any legal dialogue here.

      Also:

      I think that you ploy an “ownership” angle that is misleading at best. I also think that you overplay the “public” in your comment of “Validity relates to the ability to use a patent in a public regulation scheme.

      ALL laws – as you attempt to portray them with your comment here – relate to “public regulation scheme” because there is in essence no such thing as a law passed solely to any one individual.

      The logic that you imply carries with it the destruction of the position that you want to establish, as that logic proves too much.

    6. Please pardon the potential puzzling post per the perfidious filter scheme in place…

      Greg,

      Another bone to pick with you, from your comment of “At the end of an IPR, the owner still owns the patent. The owner’s ownership is unaffected.

      I have to wonder if you have purposefully taken leave of your senses and thrown out any understanding of what a patent actually is with such a comment. A pronouncement of invalidity certainly DOES NOT leave the owner with an owned patent. Not as that term “patent” is (properly) understood. I cannot imagine what it is that you think the owner actually owns after a pronouncement of invalidity that still carries with it the meaning of “patent.” And quite frankly, I am not sure that my trying to understand what you feel as still earning the legal designation after such a decision advances any legal dialogue here.

      Also:

      I think that you ploy an “ownership” angle that is misleading at best. I also think that you overplay the “public” in your comment of “Validity relates to the ability to use a patent in a public regulation scheme.

      ALL laws – as you attempt to portray them with your comment here – relate to “public regulation scheme” because there is in essence no such thing as a law passed solely to any one individual.

      The logic that you imply carries with it the destruction of the position that you want to establish, as that logic proves too much.

      1. A pronouncement of invalidity certainly DOES NOT leave the owner with an owned patent.

        Really? Can you point me to the statutory section in the U.S. code that says that if you lose claims in an IPR, you are no longer able to file for a reissue to claim any patentable subject matter in your application? I am unaware of any such code provision, and in the absence of such a code provision, it would appear that the patentee still owns something.

        1. You are not listening Greg.

          What do you have with an invalid patent?

          Sure, you can try to inject some validity, but that is a non-sequitor to what you DO have with an invalid patent.

          Sloppy, sloppy, sloppy.

          1. What do you have with an invalid patent?

            This discussion would benefit from precision and clarity. Properly speaking, an IPR cannot give rise to an “invalid patent.” There are patents with invalid claims, but an invalid claim is not the same thing as an invalid patent (e.g., a patent that violates 35 U.S.C. §184).

            So, your question should more properly be “what does one have with a patent for which all the claims are invalid?”. The answer to that question is, I believe, fairly obvious: one has a patent for which all of the claims are invalid.

            If that patent discloses some still-patentable subject matter then, as I noted above, you can file for a reissue. That is not nothing.

            Even if it contains no additional subject matter, you still own that patent. It may be a thing not worth owning, but that does not alter your status as owner.

            Consider the situation of an owner of good Tennessee farmland in the time of the civil war. One day, the land might be rich and fertile and worth many hundreds of thousands of dollars. The next day, a bloody battle is fought on that land, which poisons the ground and thoroughly reduces the value of the property. Does the government need an order from an Art III court before it can depreciate the value of the property so? Not really. Does it have to pay compensation to the farmer? Not really.

            In other words, not every action that the government takes that depreciates the value of an asset requires an Art III court and/or a compensation payment. It would require an order of an Art III court to dispossess the farmer of the ownership of that farmland, or the patentee of the ownership of the patent, but no court is required merely because the government’s actions leave the owner in possession of an asset worth less today than it was yesterday.

          2. What do you have with an invalid patent?

            You still own the ribbon copy. An IPR loss does not mean that you must surrender your actual “letter patent.”

            I realize that may sound flippant, but it is not, really. My point is that patentees who lose IPRs—even an IPR that cancels all claims—do not have any property taken from them. The patentees still own all of the property that they owned before. The assets is probably less valuable after the IPR than it was before, but all of the same assets belong to all of the same owners after an IPR as before.

            1. You still own the ribbon copy.

              LOL – nice.

              We are talking about more than a piece of paper though – your pedanticism, while perhaps amusing to yourself, does not further your position. So you are wrong in claiming that this is not flippant.

              The patentees still own all of the property that they owned before.

              Absolutely not – and therein you reveal that you are NOT talking about all of the sticks in the bundle of a granted patent property – you are being pedantic and talking about a single physical stick. CLEARLY not all of the same assets are there. If this is not clear to you – you have no business at all dealing with patent law for paying clients.

              Try again – and try to stay on point.

      2. ALL laws – as you attempt to portray them with your comment here – relate to “public regulation scheme” because there is in essence no such thing as a law passed solely to any one individual.

        I agree that all U.S. laws are generally applicable laws, and therefore they all can be broadly characterized as parts of various public regulation schemes. I think that it is possible to answer your argument, but when I try right now, I cannot do so within the character limits presently in force. I will have to see if I cannot think of a way to explain my point in brief enough presentation to be allowed past the recent catches.

  6. Just counting noses here:

    There are twelve active service judges.

    Three of them are on record saying that en banc reconsideration of MCM is unnecessary—full stop.

    Two are on record saying that it is necessary.

    One is game to reconsider MCM, but not on the basis of the public/private question that the petitioner here wanted.

    I think that the omens look promising for the SCotUS to take up this question, but I have to say that I am skeptical that the CAFC is going to reconsider the question.

    1. Typically Greg, en banc review is reserved for cases that present issues of exceptional importance. I think all agree that the issues presented by IPRs and the role of the administrative state and whether that state has gone too far is of exceptional importance not only for patent law, before America.

      You will note that the three arguing that there should be no en banc are Dyk, Prost and Hughes, who just happened to be the members of the panel in MCM Portfolio LLC. Among those who were not in that panel, we have three judges that favor en banc review. Thus the split is really 3-3 among those who have expressed an opinion.

      But I agree with you that the prospects look bleak that the court will take the issue en banc.

    1. True. Judge Newman is a gem. This is yet another example of her exceptionally insightful understanding of U.S. patent law. She is the true heir to Judge Learned Hand.

    2. I don’t know what you guys are talking about. This has nothing to do with due process, and everything to do with unconstitutionally taking power out of the Article III courts.

      1. What power has been “taken” from the Art. III courts? Are you under the misimpression that Art. III courts are no longer empowered to pass on validity under the AIA? The courts have all of the same powers post-AIA that they had pre-AIA.

          1. What does this even mean. It is not that the AIA takes some but not all powers from the court. The AIA takes no powers from courts. If you list out all the powers that courts had pre-AIA, and then scratch out the ones that no longer remain post-AIA, you will see that the list does not change, at all.

          2. Greg, the power to decide patent validity is gone. Crossed off. Still in the statute, but nullified by the PTAB at will.

            1. No, I assure you, Art. III courts are still empowered to decide patent validity. Why, just last week in Helsinn the CAFC affirmed the New Jersey district court’s finding of an on sale bar. Rumors of the loss of power of district courts to decide validity have been greatly exaggerated.

              1. Please imagine the following:

                Pre-AIA: The SDNY sustains a validity challenge on Claims 1–6 of US 5,367,890. A year later, the ‘890 patentee asserts Claims 1–6 against a different defendant in the SD Cal and the district court there holds the same claims invalid.

                Post-AIA: The SDNY sustains a validity challenge on Claims 1–6 of US 5,367,890. A year later, the ‘890 patentee asserts Claims 1–6 against a different defendant in the SD Cal. The defendant petitions the PTAB to consider those 6 claims, and the PTAB finds them all unpatentable.

                How are those two scenarios meaningfully different. They are not. It has always been the case that one court could sustain validity and a later court could hold the claims invalid. The only difference is that there is one more tribunal (the PTAB) in the mix than there ever used to be. The courts’ power to sustain claim validity or hold claims invalid, however, is not diminished in the least. It is the same as it ever way.

              2. It has never been the case, even pre-AIA, that a district court had the power to settle validity questions for all time. It has always been the case that one court could sustain a claim, and a later tribunal could invalidate the same claim.

                1. Greg, the parties have to be different. If the parties are the same, the parties are bound.

                  When the government is involved, it is a party. Its decisions on a point actually litigated and decided need to bind future government decision making. That is why reexamination required a “substantial new question,” as standard all but ignored by the PTO, and consistently ignored by the PTAB in IPRs that seem to like reversing examiners.

                2. Greg, the parties have to be different. If the parties are the same, the parties are bound.

                  Sure. If IPRs were working as the statute provides* the same would be true in IPRs. You only get to take one run at a set of claims, but that does not mean that someone else cannot later take a run at the same set of claims and invalidate them where you failed.

                  * Instead of the cockamamie manner that the CAFC has read §315.

                3. lots of “if’s”…

                  plus, as I pointed out in the predecessor arc of the same flavor: standing is not even required in the AIA actions.

      2. What are you talking about? Article III courts have the power they have based on what power Congress decides to give them. Plus, if it wasn’t a due process issue, no one would have standing to sue.

          1. 1) Judicial Review 2) Decide cases and controversies that Congress says they can decide, 3) there are a few things that the Supreme Court has original jurisdiction over that are not implicated in these cases.

        1. Ordinary squirrel – Article III courts have the power they have based on what power Congress decides to give them.

          Obviously, you have not yet read Marbury v. Madison. It was a grant of power by Congress to the Supreme Court to issue the mandamus requested Marbury that was at issue in that case. We of course know what the Supreme Court decided about that.

          1. I actually thought of that, but thought it might muddy the waters. Yes, Article III courts have the power of judicial review. Congress cannot take that away. Otherwise, Congress gets to say what Article III courts get to do.

            The idea that Congress can “unconstitutionally tak[e] power out of the Article III courts” (other than judicial review) is absurd on its face. That is why the issue must be involve another right (such as due process of the patent owner) in which a party can have standing.

      3. unconstitutionally taking power out of the Article III courts.

        No power has been taken away from Art III courts.

  7. This issue is “important” in the same way that the “eligibility of anything described as a process” is important, i.e., it’s important to a tiny tiny class of rich entitled whiners who care about one thing and one thing only: their wallets.

    Everything else is noise because if these rich entitled whiners get their way, everybody else — like 99% of the population — is going to pay the price.

    And none of them really care. After all, these whiners already got plenty of $$$. They just want more.

      1. are they all white or not?

        All? Almost certainly not. Nearly all? Of course. And mostly guys, too. We’re looking at a class of people that is mostly indistinguishable from the Republican reps in Congress. You know the type: “real Americans.”

        And I’m referring to the US maximalist contingent. Maybe “anon” will pipe up to tell us that we need to pay close attention to what Chinese innovators think about this issue. That will be delicious.

    1. …and the same old same old incongruent spin of “class” trying to be attached to the single MOST accessible form of innovation – the very opposite of the 1percenter dust kicking…

    2. MM, we exist today in a political firestorm regarding patent law. It really started back in the 1990s when the patent office decided to begin issuing business method patents. They did this on their own accord. A few years later Judge Rich and State Street Bank approved of what they were doing. That led to the issuance of do-it-on-a-computer type claims that were only definitively found to be unpatentable subject matter when the Supreme Court ruled that way in the 2014 case of Alice. But in the meantime, as we all know, the issuance of software and business method claims allowed many to prey on large established Internet type businesses like eBay, Microsoft, Google and others. These businesses organized themselves to lobby against so-called NPE’s/trolls and the heavily criticized software patents. Their efforts resulted in cases like eBay at the Supreme Court, all the 101 cases from the mid-2000’s on, and in patent reform in Congress that included IPRs that were specifically designed to attack the patents of so-called trolls.

      Now, while I will agree that something had to be done about business method and do-it-on-a-computer type patents that basically allows anybody to patent anything, and where the claims could not practically be examined because of their vagueness, the solution was not to effectively kill off the patent system for people who are not the big established institutions like eBay, Microsoft, Google, IBM and others. But that is what happened.

      This is not an issue simply about rich white folks trying to make more money by effectively abusing litigation process or by obtaining patents on otherwise unpatentable subject matter. This is an issue that is important because by making patents so easily attackable by the big boys, the wealthy, there is little investment capital for the startup that needs patent protection, because the patents they may acquire a practically unenforceable and therefore do not provide reliable collateral as they once did.

      The primary cause of the devaluation of patents, and of the tilting of the whole system to favor the entrenched, is IPRs. The issues are important, and they have nothing to do with favoring rich white folks because the people who are in favor of IPRs are the big companies while the people who are trying to overturn IPRs are relatively impecunious by comparison.

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