Amici briefs supporting AIA Trials and Inter Partes Review are beginning to be filed. The first brief in is filed by John Vandenberg’s team at Klarquist representing SAP, Gilead, Nautilus, and others. The Brief presents a reexamination linkage and slippery-slope argument in two forms: (1) killing inter partes review will also kill reexaminations; and (2) pre-AIA patentees ‘consented’ to reexamination and that should be seen as consent to inter partes review.
Vandenberg writes:
Since 1980, the Patent Office has issued more than 10,000 reexamination certificates canceling, amending, adding, or confirming claims of issued patents. Inter partes review is substantively identical to reexamination, enforcing the same patentability conditions and issuing the same certificates canceling, amending, adding or confirming claims. Like reexamination, inter partes review is a rational condition the Legislature has imposed to maintain a patent, pursuant to its Constitutional authority to grant patents “for limited Times” to promote the useful Arts.
Since 1980, every patent applicant has consented to the substance of this reexamination as a maintenance condition for each granted patent. . . . Petitioner obtained its patent before 2011. But, like every other patent applicant since December 12, 1980, Petitioner consented to reexamination as a condition for maintaining its patent. Petitioner knew that the patent it sought would be subject to a reexamination request by anyone in the world at any time, including the Commissioner (now Director) of Patents, potentially leading to early cancellation of the patent. And, as noted, the substance of that reexamination to which it consented, is identical to inter partes review.
[16-712 bsac SAP America, Inc., et al.]
I am sympathetic to the arguments here – especially if narrowed to focus solely on inter partes reexamination. A key caveat though is that the Supreme Court has never ruled that inter partes reexaminations are a proper exercise of administrative power.
I just read General Electric’s brief. Essentially it is said that the “PTO” has been in the adjudication business regarding interferences since 1793, that included patents from 1836, that included reissues, and later included reexaminations from 1980 – and that IPR are more of the same.
However, the 1793 Act only allowed interfering applications to be arbitrated, the 1836 Act specifically allowed a bill in equity to challenge the determination of the PTO, ditto reexaminations until the AIA. Thus patent owners always had a right to their day in court with respect to interferences or reexaminations until the AIA.
But another point I do agree with. Once you concede that reexaminations are constitutional, you also necessarily concede that IPR are constitutional. GE makes that point abundantly clear.
Below, Ron Katznelson notes:
“ The asymmetry arises immediately upon the grant of the exclusive patent right in exchange for disclosure and is irreversible thereafter because the patentee’s loss and the dedication of his invention to the public is irreversible.”
Inherent in this concept is the fundamental notion under girding ALL patent law: the Quid Pro Quo.
Now, some might venture back with a counter point of “well, if you did not deserve a patent in the first place, then there is no harm done.”
Such a statement misses the mark -and misses by miles.
Whether or not a patent is “rightly granted” rests in the very presumption. One cannot logically put the cart before the horse, dismiss the presumption as if it did not exist at all (and note to particular regulars, when I say “presumption,” I clearly mean BOTH its presence AND its level), and then “justify” the Ends reached of “it was not proper.”
ONLY after the proper Means are walked through – including the means recognizing both the presence AND the level of the presumption – can any Ends that may be reached be said to be just.
The act of the grant itself confers the bundle of property rights.
The act of the grant itself turns the inventor’s inchoate (I dare say natural) right into a full legal property right.
The act of the grant itself provides ALL other Constitutional protections that inure to property.
Some (and the regulars here know exactly which sAme ones those “some” are) want a different set of laws, a different Constitution, and a different “philosophy” towards property to replace the bedrock principles of the US Sovereign patent law principles – which patent principles remain tied to property principles.
THIS is – and must be – one of the KEY drivers kept in mind for the Oil States case.
I dare say that every machination, every other philosophy that seeks to weaken patent rights falls when the proper view of the Quid Pro Quo is kept front and center.
ONLY after the proper Means are walked through – including the means recognizing both the presence AND the level of the presumption – can any Ends that may be reached be said to be just.
So one can only know that c-&-c is the correct standard by assuming as much at the front end of the analysis? That is known as the logical fallacy of assuming the consequent.
Dr Katznelson made a very good point. You are doing him no favors by trying to help.
You are not paying attention – there is NO “assuming.”
This is simply the basic understanding of the US patent system and what the Quid Pro Quo means.
As for “doing him no favors,” your bias is showing – nothing more.
Re: “The fundamental notion under girding ALL patent law: the Quid Pro Quo.”
Regardless, that is not going to be a basis on which Oil States will be decided. Because it is not a Constitutional requirement, or even an absolute requirement in U.S. patent law. Millions of U.S. patents have validly issued in which the invention was fully publicly disclosed within the grace period prior to filing a patent application, or publicly disclosed while the application was still pending even though no patent issued. Even under the AIA there remains a pre-filing grace period for the inventors. 18 month pre-issue application publication can only be avoided by giving up foriegn equivalent application filing.
Paul, the disclosure of an invention to the public in exchange for patent gives the patentee a vested right in the patent that is his property. Thus it does create a constitutionally protected property interest in the patent. The central argument of the government is that the patentee has no property interest in the patent whatsoever. Therefore this issue is central to this case.
Paul,
The fact that “the invention was fully publicly disclosed within the grace period prior to filing a patent application, or publicly disclosed while the application was still pending” merely means that it was the free choice of the inventor to disclose prior to issuance of a patent. It does not mean that the patent bargain is not a legal requirement. And you are wrong because the disclosure in exchange for exclusive right “is an absolute requirement in U.S. patent law” and no patent applicant can be compelled to disclose before the patent issues. See 35 U.S.C. 122(b)(2)(B).
Do you remember your colleagues pushing in 1997 for mandatory 18 month publication in HR 400? How did that end? We are in America – not in Europe, which has long perilously deviated from the patent bargain. In America, we still have a system where one can get a patent in exchange for disclosure. In the ROW, one can only get an option for a patent in exchange for disclosure – an option which may not always vest.
It is NOT a coincidence that MANY of those seeking international “HARMonization” are those that see disruptive innovation as a business problem to be quashed at any cost.
The Efficient Infringers Handbook clearly needs patent to be NOT property – and to NOT have protections of property. Rather, such “should” be viewed as things of “optionality” and de minimus harm if infringed (thus, the tie to other Big Business concepts such as “efficient breach”).
The Supreme Court Tackles Patent Reform, by Richard A Epstein, a preeminent legal scholar and professor of law, writes that IPRs are unconstitutional. link to fedsoc.org
Before he moves on to IPR, he writes,
“The contrast between the 1952 Act and the AIA could not be starker. The 1952 Act was drafted by an eminent committee of two patent experts: Giles Rich, who later went on to serve 43 years as a patent appeals judge, and Pasquale Joseph Federico, who served as a high ranking official in the PTO. It was passed by voice vote. The 1952 Act is less than half the length of the AIA, but it is more than twice as good. The AIA is cluttered with arcane refinements and complex procedures, and it violates the fundamental maxim of legislative reform: if it ain’t broke, don’t fix it. ”
Breathtaking, and so true.
Good article. I hope he is right.
Interesting read about due process which the other patent law site has been talking about quite a bit.
“Breathtaking, and so true.”
Oh, how I wish that you would take your anti-Rich blinders off Ned.
(by the way – thanks for the link, an interesting read, especially deep into the article, the following pops up:
“The Supreme Court unanimously rejected a broad reading of the public rights exception in the trademark context in its 2017 decision in Matal v. Tam. ”
Most definitely not the centerpiece of the article, but the two paragraphs point out several points already on the discussion tables of this blog (discussion points that – as so often happens – repeatedly go ignored by those with limited scripts constrained to cheerleading for an AIA mechanism that is at base critically flawed).
The Supreme Court unanimously rejected a broad reading of the public rights exception in the trademark context in its 2017 decision in Matal v. Tam.
I think that this is basically correct, but the problem with this observation—if it is intended as the basis for a prediction about what the Court will do in this case—is that there is no neatly discernible pattern in the Court’s public rights jurisprudence. Basically, “public rights” is an ad hoc label that the Court has contrived so that it can allow some things to be adjudicated outside the Art. III framework, while retaining others strictly within the Art. III framework, without quite admitting the arbitrary nature of the distinction between what is in and what is out.
The label made sense when it was first contrived by Chief Justice Marshall, but it has since lost any coherent boundaries. I expect the Court to reverse the CAFC’s Oil States Rule 36, but that expectation is grounded merely in the statistical observation that the Court rarely affirms the CAFC. I think that it is a fool’s errand to establish a prediction on the basis of the Court’s previous approaches to “public rights,” because that jurisprudence is simply an incoherent mess that could made to support any outcome in this case with equal plausibility.
“ because that jurisprudence is simply an incoherent mess that could made to support any outcome in this case with equal plausibility.”
Not the first time that the Supreme Court has done this with patent law.
Exactly. Nor will it be the last time, unless and until Congress simply takes patent law away from the SCotUS (I realize, however, in saying this to you, I am merely preaching to the choir).
One issue I recently heard John Duffy well-known yapper on patents talk about was the “new reference” issue. Duffy misrepresents this issue. Duffy has created a mythical “new reference” that is relevant to patentability of a patent. But, this is a myth. The reality is that an expert in the field is expected to know the references and cannot possible list all the references. So, there is a presumption that the expert has selected the most relevant references.
Anyone can find a reference not listed on the patent and claim that it is a “new reference” that is relevant to patentability. So, the myth centers on some image in one’s head of a person suddenly unearthing “new reference.” The reality is that the expert has already considered this “new reference” and determined it was not as relevant as the references selected to examine the patent.
My bet is that Duffy is getting some of that Google money to put out this argument. Duffy is using this argument to challenge the presumption of validity. As in, well, the presumption of validity shouldn’t hold when there is a “new reference.” But, there are no “new references.” There are only references not selected by the expert as relevant as other references.
But, then Duffy has no real experience with patents. He write appellant briefs and academic articles and manages to cause a bit of mischief now and then, but nothing more.
Hmmm,
Not sure I agree with your reasoning. Reality IS that examination does NOT take into account every possible reference.
That is simply a truism.
That part of your comment is a bit weak.
That being said, the rest of your comment is a bullseye: the aim here is to attack the level of the presumption of validity that is a stick in the bundle of property rights of a granted patent.
AND part of that provision is a dependence on the initial examination to have been made “by a professional” who it is to be taken as having commanded the best prior art to be used in the examination. ++++
Duffy is not the first to attempt this attack. His company includes certain Supreme Court Justices (notwithstanding the i4i case).
As Ron Katznelson put it so powerfully (on that other blog)***, a grant of a patent is KNOWN to be made with an imperfect record. Nonetheless, Congress still set the level of presumption to be at the Clear and Convincing level – and this very much has to do with the property aspect (think of quiet title, and the necessity of being able to “trust” that you actually have a property at the time of grant).
Of course, this feeds right back into the current IPR regime mess – and the point that some IPR apologists simply seem unable to grasp: a later action by Congress (i.e., “tacking on”) may not violate protections already inured to that which is being tacked-on TO.
*** See: post 20 at link to ipwatchdog.com
++++ IF one is to want to attack examination qua examination as NEVER being able to guarantee that ALL prior art has been contemplated, one might as well simply remove examination in its entirety. WHY bother with examination at all, if there will be NO such “quiet title” that attaches to that process? What do innovators actually obtain if the examination is merely a “one-way” keep out, and in practice, “examination” NEVER ends?
Such a system violates the edict of the grant of power to Congress: such a system does not – and cannot “secure” anything. And to be clear – this lack of security applies to ALL patents, so the counter of “well, you really did not deserve a patent on that” falls far short of being any type of persuasive point.
Please Pardon the Potential (re) Post:
Hmmm,
Not sure I agree with your reasoning. Reality IS that examination does NOT take into account every possible reference.
That is simply a truism.
That part of your comment is a bit weak.
That being said, the rest of your comment is a bullseye: the aim here is to attack the level of the presumption of validity that is a stick in the bundle of property rights of a granted patent.
AND part of that provision is a dependence on the initial examination to have been made “by a professional” who it is to be taken as having commanded the best prior art to be used in the examination. ++++
Duffy is not the first to attempt this attack. His company includes certain Supreme Court Justices (notwithstanding the i4i case).
As Ron Katznelson put it so powerfully (on that other blog)***, a grant of a patent is KNOWN to be made with an imperfect record. Nonetheless, Congress still set the level of presumption to be at the Clear and Convincing level – and this very much has to do with the property aspect (think of quiet title, and the necessity of being able to “trust” that you actually have a property at the time of grant).
Of course, this feeds right back into the current IPR regime mess – and the point that some IPR apologists simply seem unable to grasp: a later action by Congress (i.e., “tacking on”) may not violate protections already inured to that which is being tacked-on TO.
*** See: post 20 at link to ipwatchdog.com
++++ IF one is to want to attack examination qua examination as NEVER being able to guarantee that ALL prior art has been contemplated, one might as well simply remove examination in its entirety. WHY bother with examination at all, if there will be NO such “quiet title” that attaches to that process? What do innovators actually obtain if the examination is merely a “one-way” keep out, and in practice, “examination” NEVER ends?
Such a system violates the edict of the grant of power to Congress: such a system does not – and cannot “secure” anything. And to be clear – this lack of security applies to ALL patents, so the counter of “well, you really did not deserve a patent on that” falls far short of being any type of persuasive point.
OK, anon, those are good points.
But, consider this. How does one tell when a reference is a “new referenced”? I argue that it is not possible except perhaps in extraordinary circumstances.
Duffy is trying to argue that just because a reference not cited in the prosecution record is used in an invalidity argument that the presumption of validity should be suspended.
So, I don’t think my argument is weak at all. It is going to the heart of what it means for an expert to examine a patent in the real world of tens of thousands of references potentially being relevant.
As I mentioned, Night Writer, your second point hits the bullseye and it really is asinine to think that a reference, merely not being one “recorded” as viewed during the examination, should remove that stick in the bundle of property rights that is a granted patent.
After all – that is exactly what Microsoft wanted to do to i4im and the the Court did not buy what Microsoft was selling.
I just think that the better path is more along the fact as put so powerfully by Ron Katznelson.
As they say, the best L I E S have a kernel of truth, and that kernel is that NOT every last reference in the world is viewed under examination.
For whatever little my opinion is worth, I agree with this.
Congress still set the level of presumption to be at the Clear and Convincing level…
Not to put too fine a point on it, but this assertion is not true. There are only two places in Title 35 where Congress sets an evidentiary standard: in §273, where Congress specifies clear-&-convincing for the prior-use defense against infringement (a point which does not actually touch on validity); and in §316(e), where the Congress specifies preponderance-of-evidence for invalidity in IPRs.
In other words, the only time that Congress sets an evidentiary standard for invalidity, it specifies preponderance-of-evidence, not clear-&-convincing. It was the Court that introduced the c-&-c standard, untethered to any actual statutory text.
“Not to put too fine a point on it, but this assertion is not true.”
It is absolutely true.
Maybe you want to try reading the i4i case….
Your tortured searchings for some backing to your previously errant views on presumptions – and the levels of those presumptions – really takes you into the weeds here Greg.
Maybe you want to try reading the i4i case…
Fair enough. You are certainly correct that i4i held that Congress set the evidentiary standard at c-&-c. Neither of us tends to be overawed by the pretense that, if the SCotUS says X, then X must be true. Given that anyone who cares to can read the statute and see that Congress did not specify a c-&-c standard, I am a touch bemused to see you piously quoting the SCotUS in this uniquely convenient instance.
It is rather humorous – although here I am also disagreeing with your view of what Congress had to say on the matter (piety not stemming from just the Supremes).
This too may be traced to your past troubles with the concept – as you have not readily grasped the concept in play is more than just “presumption,” but also touches on the level of that presumption.
Your views have just been too crabbed (and myopic as far as what “presumption” alone means).
A fact that many law professors are ignorant of is that a standard of proof determine the level of certainty a fact-finder must have in deciding something is true, set onlyto allocate the risk of errors in adjudications among the litigants. The presumption of validity under the clear-and-convincing-evidence standard in patent law is not merely due to Congress’ implicit codification. As I have explained in my Amicus Brief in i4i (see link to j.mp), it is based on a fundamental principles of due process in a world where fact-finders commit adjudication errors.
The heightened standard was used even before the Office started examining applications in 1836. See my i4i Brief, at 30-32, (quoting passages from Sen. Rep. Accompanying Senate Bill No. 239, 24th Cong., 1st Sess. (April 28, 1836), as endorsing the heightened standard of proof and the presumption of patent validity). Rather, the presumption of validity under the clear-and-convincing-evidence standard is an immutable adjudicatory standard matched to the large asymmetry in the countervailing risks to the litigants due to fact-finder errors in validity determinations.
In a patent infringement action, the litigants’ risks of fact-finding errors in determining infringement are symmetric, because each party has the same dollars at risk—the damages judgment amount in the event of a finding for their adversary. There is no reason to favor one litigant over the other and proof is based on 50:50 probability. Therefore, this essential symmetry of risks has long been recognized as requiring that infringement be proven by preponderance-of-the-evidence. Bene v. Jeantet, 129 U.S. 683, 688 (1889).
That, however, is not the case for patent invalidity determinations. When the fact-finder erroneously upholds an invalid patent, the defendant risks the unjust loss of damage award only for his own activity, whereas when the fact-finder erroneously finds a valid patent invalid, the patentee risks the unjust loss of his rights to damage awards from hundreds or thousands of infringers or licensees, and the unjust enrichment of the public with a disclosure of the invention that was published upon consummation of the patent bargain. The asymmetry arises immediately upon the grant of the exclusive patent right in exchange for disclosure and is irreversible thereafter because the patentee’s loss and the dedication of his invention to the public is irreversible.
The concept of a “flexible” standard based on whether the PTO considered a reference or made an error is nonsensical – there is no “do over” in the patent bargain. If the PTO did not consider a reference, it may add to the weight of the evidence so that the standard of proof may be more easily overcome, but it cannot pull down the level of certainty an adjudicator must have in order to invalidate a patent.
Ron, your briefs are extremely valuable on this point. I can only thank you.
Regarding the PTO and all those who stand in favor of IPRs, their underlying thesis is that the examination provided by the PTO is all but worthless. But rather than promoting some reform of the PTO, they want to be able to re-examine a patent by an inter partes proceeding at any point it is asserted. This means, of course, that a patent cannot be relied upon because when it is needed, it is then truly “examined” and typically invalidated at the rate of above 70%. They could care less that the system they have erected does not permit a patentee to have a reliable property interest in his patent, a reliability that is so necessary when making investments. The patent system they have brought America is, to say the least, FUBAR.
[T]he presumption of patent validity). Rather, the presumption of validity under the clear-and-convincing-evidence standard is an immutable adjudicatory standard matched to the large asymmetry in the countervailing risks to the litigants…
This is an excellent point, stated clearly & persuasively. Nevertheless I would like to make two quibbling responses:
1) You show, convincingly, that there is a good reason why c-&-c should be the evidentiary standard. That does not quite go as far as to show that this rule is “immutable.” The fact that the policy should be set in a certain way is no guarantee that Congress will set it that way (see, e.g., §316(e)). In any event, you have convinced me that we would do better to revise §316(e) to require c-&-c.
2) That said, while you have convinced me that c-&-c is the right standard as a matter of optimal public policy, I could envision a cogent push-back to your point about “disclosure… published upon consummation of the patent bargain…,” viz. no that Congress has installed §316(e) in Title 35, IPR challenge is part of “the patent bargain.” Not as to pre-AIA patents, of course, but as to AIA patents, if you signed up knowing that your patent is subject to challenge in IPR under a preponderance standard, you can hardly complain “that is not part of the bargain.”
[T]hose who… favor of IPRs… want to be able to re-examine a patent by an inter partes proceeding at any point it is asserted. This means, of course, that a patent cannot be relied upon because when it is needed, it is then truly “examined” and typically invalidated at the rate of above 70%.
Two responses:
1) I just do not see how your conclusion (“cannot be relied upon”) follows from your premise (can re-examine a patent at any point). Obviously the aspect of “re-examination” that a patentee might fear is not the possibility of amendment (over which the patentee enjoys complete control), but rather the possibility of invalidation. One has always been able, however, to challenge a patent’s validity whenever it is asserted. At most, IPRs mean that this challenge becomes very slightly easier. This is a change in degree, not kind.
Can it really be the case that any slight change in the relative ease of invalidation might strike so serious a blow to the patent system? If so, why have you not expressed similar concerns about KSR or Alice, which have done at least as much to ease the standards for invalidation?
2) Where are you getting that 70% figure? IP Watchdog had an excellent report from Lex Machina that showed that ~65% of the time that someone petitions for IPR, the end result is no claims cancelled, and ~70% of the time, the patent comes through with at least some of the challenged claims intact.
Hm, my link to the relevant graphic does not work. The article is here. Please scroll to the first graphic for the numbers.
Greg, your reasonable comment “That does not quite go as far as to show that this rule is ‘immutable.’” is fair given the unfamiliarity of most observers with SCOTUS’ jurisprudence on standards of proof. Given the large disparity of risk of adjudication error, the C&C standard is “immutable” as the Fifth Amendment to the Constitution: “In any given proceeding, the minimum standard of proof tolerated by the due process requirement reflects … how the risk of error should be distributed between the litigants. The minimum standard is a question of federal law which this Court may resolve. Retrospective case-by-case review cannot preserve fundamental fairness when a class of proceedings is governed by a constitutionally defective evidentiary standard.” Santosky, 455 U.S. at 745–46 (emphasis added). The IPR preponderance of evidence standard is “a constitutionally defective evidentiary standard.”
As to your point of applicants having “signed up” and consented to post AIA IPRs, your “forfeiture of rights” leap is simply just that – a leap without a legal basis. This is a leap as to all patents, including post AIA-filed patents; but would you at least agree that your point is wrong when it comes to patents filed before the AIA?
[W]ould you at least agree that your point is wrong when it comes to patents filed before the AIA?
Definitely. I thought I had made clear as much when I wrote “[n]ot as to pre-AIA patents, of course… .” If I was not clear, please know that I agree that subjecting pre-AIA patents to IPRs is unconstitutional for the reasons that you have explained.
Greg,
You are still making your “tacking on” error.
Ron,
Greg has already acquiesced to the point concerning pre-AIA patents.
However, on the view that some “tacked-on” requirement is somehow allowed to violate other Constitutional protections, see the point presented by Loderunner at post 15.
Your allusion to Loderunner’s discussion of unconstitutional conditions in #15 would be more convincing if you could—you know—actually name a particular constitutional provision being violated, rather than vaguely gesture at “protections for property.”
To paraphrase Prof. Pollock, “proof of [unconstitutionality] in the air, so to speak, will not do.” Palsgraf v. Long Island R.R., 248 N.Y. 339, 341 (1928) (Cardozo, C.J., quoting Pollock, Tort’s, 11th ed.).
Greg, the reliability comes from the heightened standard of proof. The use of the lower standard of proof combined with BRI is not a slightly easier method of determining validity. Not slightly at all.
Asked and answered Greg.
Pay attention – I do not like your Br’er Rabbit games.
“There are no new references”? NW you must have only clients that are omnivorous readers of U.S. and foreign patent applications and with photographic memories? Not to defend Duffy, but in more than 44 years of patent practice [with necessarily having to ask inventor-experts about their knowledge of prior art that could be material to what they wanted patented] on numerous if not the majority of occasions I or the examiner found material references they were not aware of or did not remember. Even a few cases of experts forgetting material information that was in one of their own many prior publications!
Do you realize that prior art can include an indexed single copy of a thesis in a single foreign library, as in the famous Blackberry patent suit?
…and this is another reason why Night Writer – look at the dust kicking from Paul.
I don’t Stern v. Marshall is really dispositive because it was clear in that case that the tort was a common law tort. So, here the question is whether the issue of validity should be resolved in common law.
So, Stern v. Marshall gets us that if validity should be resolved in common law, then IPRs are unconstitutional.
I respect the creativity of the argument, but it confirms that intellectual property attorneys like the ones who wrote this brief really don’t have any business writing about constitutional law issues.
The brief totally ignores the well-established doctrine of “unconstitutional conditions,” which provides that the government cannot condition the provision of a discretionary benefit upon relinquishing a constitutional right. I suspect the authors who wrote the brief didn’t even know the doctrine existed.
Anyway, the doctrine goes back to the early 1900s, and the issue comes up frequently in the context of government contracting and benefits (such as for federal highways and other contracts), but the rationale is clearly applicable here. The Supreme Court has repeatedly stated that the government’s authority to confer discretionary benefits like contracts, tax exemptions, etc. (and I would consider patents to be among them) cannot be conditioned upon the person accepting an abridgment of their constitutional rights.
So if the Klarquist brief is correct, that accepting IPR was somehow a “condition” of getting a patent, it makes no difference. Because if IPR is unconstitutional, then accepting IPR would be an unconstitutional condition. End of story.
I personally don’t think there’s a snowball’s chance in Hell that the Court will invalidate the IPR procedure, but this misguided “conditions” argument doesn’t move the ball. Next brief, please…
“I personally don’t think there’s a snowball’s chance in Hell that the Court will invalidate the IPR procedure….”
Why?
But I agree with you that patent lawyers arguing on both sides of Oil States generally do not have a clue of even what the issue is.
Ned, yea, I made the comment about “patent lawyers” and constitutional issues because it seemed weird that the lawyers who worked on it didn’t acknowledge the doctrine of unconditional conditions. If they had known about it, it seems doubtful that they would have explicitly and repeatedly characterized IPR (and the attendant relinquishment of a right to jury trial under the Seventh Amendment) as a “condition” of getting a patent. The brief does show creativity and was written by very smart lawyers, but I think the “conditions” rationale might not have been fully thought out.
To answer your other question, Ned, I really don’t see the Supreme Court invalidating IPR. It’s not because I want them to rule on the issue one way or another. I never thought too much of the Article III argument, but the Seventh Amendment argument is potentially more problematic to IPR.
But the problem is that, upon reviewing all of the briefs (and knowing just enough about constitutional law to get me into trouble), the Petitioners simply haven’t made a compelling case that in cases involving ONLY invalidity challenges to issued patents (NOT also seeking damages for infringement), a Seventh Amendment right to jury trial attached. Even today, validity-only challenges in courts are treated as declaratory judgment actions, a purely equitable remedy to which no jury trial right attaches.
The Seventh Amendment, by its terms, turns this into a historical inquiry. And I have to say, the evidence is at best ambiguous. Both sides have made made the proper arguments, but in the end, there just really isn’t a clear answer to the jury trial question.
And therein lies the problem. Given Congress’s near-plenary authority over patents vested by the constitution, the Supreme Court is not going to want to dismantle the IPR regime enacted by Congress without a very clear constitutional violation.
My prediction is they are going to sustain the AIA post grant proceedings and won’t even have to resolve the Seventh Amendment question, nor will they even have to address the “public rights” issue. They will simply say that IPR and other post-grant remedies are an integral part of the statutory scheme for patents that Congress, and I predict it will be a narrow decision that leans heavily on the characteristics of the patent system.
“Even today, validity-only challenges in courts are treated as declaratory judgment actions, a purely equitable remedy to which no jury trial right attaches.”
You do know that Lockwood held the opposite — that there was a right to a jury trial with respect to a DJ actions for invalidity?
“The Declaratory Judgment Act, passed in 1934, ch. 512, 48 Stat. 955 (codified as amended at 28 U.S.C. §§ 2201-02 (1988)), created an action unknown at common law.[7] 973*973 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2752 (2d Ed.1983). Designed particularly to assist potential litigants unable to settle their rights and liabilities through then-existing procedures, an action for “declaratory relief is sui generis and is as much legal as equitable.” Borchard, supra note 7, at 26-28, 239. Indeed, from the Act’s passage in 1934 until the merger of law and equity in the federal system in 1938, declaratory judgment actions were heard on both the law and the equity sides of the federal courts. See, e.g., United States ex rel. Guest v. Perkins, 17 F.Supp. 177 (D.D.C.1936) (law side); Texas Co. v. Wilkinson, 21 F.Supp. 771 (E.D.La.1937) (equity side). This has led a number of courts to remark that declaratory judgments are neither legal nor equitable, rather than both. See, e.g., Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 284, 108 S.Ct. 1133, 1140-41, 99 L.Ed.2d 296 (1988); Hartford Fin. Sys., Inc. v. Florida Software Servs., 712 F.2d 724, 727 (1st Cir.1983); American Safety Equip. Corp. v. J.P. Maguire & Co., 391 F.2d 821, 824 (2d Cir.1968). The variety of formulations should not, however, distract one from the basic point: declaratory judgment actions are, for Seventh Amendment purposes, only as legal or equitable in nature as the controversies on which they are founded. See Fed. R.Civ.P. 57 (“Declaratory Judgments”); Simler v. Conner, 372 U.S. 221, 223, 83 S.Ct. 609, 611, 9 L.Ed.2d 691 (1963) (“The fact that the action is in form a declaratory judgment case should not obscure the essentially legal nature of the action.”).
As to whether the issue of a right to a jury trial is clear or not for actions to revoke patents for invalidity based on the historical record, do you agree or disagree with I demonstrated in my brief that the writ scire facias was a legal remedy from start to finish and that equity had no jurisdiction in England (and therefor, in the US) to provide a remedy where there was a complete an adequate remedy at law?
In point of fact, there are no cases in equity revoking a patent for invention in the entire reported history of England. Not one. The government cites none. The infringer cites none. Not one. Nada. Zilch.
Does that tell you anything?
Ned, you have not directly responded to his factual statement of current law that: “validity-only”* challenges in courts are treated as declaratory judgment actions, [as] a purely equitable remedy to which no jury trial right attaches.” [You have only responded with more ancient law.]
Do you deny that a jury is not required in such cases, or not?
*no demand for any damages
Lockwood (1995) is ancient law? It held directly opposite from the proposition that DJ actions to invalidate a patent are purely equitable.
Mein Gott, Paul. Really.
Fine – then all you needed to say in response to his statement of law is that that is not the law for purely invalidity challenges in D.C.s, even in a modern declaratory judgment action, per the 1995 Fed. Cir. Lockwood decision.
The Lockwood decision that the Supreme Court vacated? What has that to do with anything?
You are correct, Ned, I stand corrected. Lockwood was a combined damages/invalidity case at first, but the patentee dismissed its infringement claim, so the jury trial right there was indeed based on the invalidity DJ claim.
I still don’t think that matters all that much, since Lockwood was vacated by the Supreme Court and isn’t binding on them anyway.
Lode_Runner, the problem is that the government briefs do the same thing as you did, make the bald assertion that a DJ action is an equitable remedy with no right to jury trial without citing authority, when there is authority to the contrary and no authority in support of the statement.
Lode Runner, thanks for your fresh legal thoughts and your fresh and specific prediction for the outcome of this case. I was expecting to see more of this here.
I would only hazard a bet that this federal administrative law statute constitutionality case will NOT be decided on the basis of 200 or so year old Sup. Ct. decisions, and 300 or so year old British decisions, that have been so extensively argued on this blog.
“I would only hazard a bet that this federal administrative law statute constitutionality case will NOT be decided on”
While you thank someone ELSE for a “fresh and specific prediction,” you once again merely snipe from the sidelines with a “will NOT be decided” – absent any touch upon the merits, and absent any evidence of critical thinking of your own.
Am I surprised?
Would anyone be?
“the government cannot condition the provision of a discretionary benefit upon relinquishing a constitutional right. ”
You mean something that a previously existing (and unchanged in and of itself) property right cannot have some new law “tacked on” in which that new law does not abide by other Constitutional protections (based on the property aspect)….?
(I don’t think so, but the items run in such a similar vein, that I could not help but jab certain IPR defenders – and others who are simply anti-patent).
As to “personally don’t think there’s a snowball’s chance in Hell that the Court will invalidate the IPR procedure” – what is the rationale that you see the Court advancing?
> You mean something that a previously
> existing (and unchanged in and of itself)
> property right cannot have some new law
> “tacked on” in which that new law does not
> abide by other Constitutional protections
> (based on the property aspect)….?
What you’re talking about is more of a Takings analysis, and that’s a loser argument as confirmed by the fact that no one has leaned on that rationale to invalidate IPR.
The amicus brief is instead taking the position that, even if IPR is unconstitutional, it doesn’t matter because patent owners have effectively consented to post-issuance PTO determination of validity, without a jury, as a condition of getting a patent. The brief’s evidence of this “condition” is the existence of analogous reexamination procedures that have been in place for decades that had characteristics similar to IPR. (The analogy to inter partes reexam works, but ex parte is a stretch since it’s not adversarial.)
The problem is that, as my original comment said, the argument goes nowhere. If IPR unconstitutionally deprives patent owners of their rights (under the Seventh Amendment, Article III, or whatever), then “condition” of accepting IPR or procedures like it is an unconstitutional one, and thus the argument fails.
If IPR unconstitutionally deprives patent owners of their rights (under the Seventh Amendment, Article III, or whatever), then “condition” of accepting IPR or procedures like it is an unconstitutional one, and thus the argument fails.
Nobody has rights “under” Art. III (except maybe federal judges, who could, one supposes, speak of a “right” to life tenure employment without diminution of salary). As for VII amendment, no one has a right to a jury trial in a suit against the government. Sovereign immunity is a well established exception to the VII amendment jury right.
In short, Congress conditioning the patent on an acquiescence to IPRs cannot run afoul of the unconstitutional conditions doctrine because there are no “rights” actually at stake here. One cannot be deprived of a right that one never had in the first place.
… last time I checked, trial by jury under the Seventh Amendment was, when applicable, a “right.”
Sovereign immunity doesn’t work here, either. An IPR is not a “suit against the government.” It’s an adversarial proceeding with two opposing parties, a petitioner and a patent owner. It happens to be heard by the PTO instead of a court, but it was designed to have the hallmarks of adversarial litigation.
An IPR is not a “suit against the government.”
Think about Cuozzo, the very first IPR case ever in front of the SCotUS. Who was on the other side of that case from Cuozzo Speed Tech.?
When the patentee appeals from a holding of unpatentability, what is the patentee seeking.? Retraction of the certificate of correction that the PTO has applied, no?
Can the IPR petitioner retract that certificate? No.
Can the government? Yes.
So, who, really, is the party across the “v.” in an Art. III appeal from an IPR invalidation?
Good points!
Greg, you are right. Even a scire facias was the government vs. the patent owner, with the petitioner paying for the proceeding. The fact that a petitioner in an IPR is a named party is not different in kind from a scire facias.
Greg,
All that you are doing is repeating your “tacking on” error.
Well, you are certainly correct that I am restating my “tacking on” position. Naturally, I will not agree that this is an sort of error. From where I am standing l, this is another instance of you digging deeper into your obscurantist supposition that there is some sort of constitutional obstacle to Congress adding another condition to the patent grant.
“ obscurantist supposition that there is some sort of constitutional obstacle to Congress adding another condition to the patent grant.”
LOL – it is not “some sort of” – it is a basic maxim.
One cannot add an unconstitutional condition to anything.
For some reason, YOU are the one being “obscurant” and you are the one merely repeating an error shown to be an error through simple and direct logic.
And this too is the very thing that Lode_Runner points out – and that you so casually disregard.
You are always free to close your eyes to the counter points presented – but you are not free to say that those counter points do not exist or that they have not been presented. That’s just poor gamesmanship on your end. Just as “Naturally, I will not agree that this is an sort of error” just because where you are standing is a place that you do not want it to be an error. It clearly is an error whether or not you want it to be, whether or not you are standing here or there, whether or not you choose to label anyone else. The error remains yours.
“that’s a loser argument as confirmed by the fact that no one has leaned on that rationale to invalidate IPR.”
That’s extremely poor logic.
“Not tried” is not synonymous with “not work.”
But don’t get me wrong – my post was admittedly a side step to your thoughtful “condition” analysis – and certainly not meant to displace your point.
One thing I think you have wrong is you say that IPRs are only for validity of the patent, but I think that gets mixed-up because anyone that is sued in federal court can then go to the PTO.
“Since 1980, every patent applicant has consented to the substance of this reexamination as a maintenance condition for each granted patent”
“https://patentlyo.com/patent/2010/02/appealing-a-bpai-rejection-in-an-ex-parte-reexamination.html”
“The caveat is that reexaminations filed prior to the 1999 amendment of §145 may also be appealed to a district court under §141. ”
The amici gives 1980 as the year the consent was given. However, the above by Prof. Couch seems to give 1999 as the starting date of consent if any as the Patent owner/application had option to challenge BPAI in district court till 1999.
Can any one please clarify why the Amici is talking about 1980 repeatedly?
the reexamination system was created in 1980. link to keionline.org
But, this is where their blatant dishonesty is revealed, Dennis. The point of the argument is that as of 1980, patent owners no longer had a right to a day in court before their patents were repealed. Congress amended Section 306 (“secs. 6(h)(2) (effective Sept. 16, 2011)”) to remove the right of a de novo “appeal” to the district courts.
Great point Ned. Thanks for that. Let’s get you to work taking down Benson and Alice.