The Supreme Court will hear oral arguments on Cyber-Monday 11/27 in two important patent cases:
- Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712. Asking whether inter partes review (IPR) operates unconstitutionally “by extinguishing private property rights through a non-Article III forum without a jury.”
- SAS Institute Inc. v. Matal, No. 16-969. Asking whether, in an IPR, the PTAB must issue a “final written decision as to every claim challenged by the petitioner, or whether it allows that Board to issue a final written decision with respect to the patentability of only some of the patent claims challenged by the petitioner.” See 35 U.S.C. § 318(a).
Since Justice Scalia will not be there, I’ll include a punch-line quote that comes from Oil State’s Reply Brief:
But it is odd to argue that the agency makes so many mistakes in issuing patents that its special expertise is needed to resolve disputes over those errors.
My expectation is that the AIA and PTO’s approach will be upheld in both cases. At oral arguments look for any signals that conservatives will break away from Justice Thomas notion that patent rights are not “core private property” but instead are properly considered lesser franchise rights. In addition, look for consideration of whether the justices are thinking outside-of-patent-law at a bigger picture review of public rights doctrine.
For last minute reading, consider the Oil States Reply Brief [OilStatesReply]. The following is an important portion:
This Court has recognized only narrow exceptions to the rule that Congress may not authorize non-Article III tribunals to exercise the Judicial power by adjudicating disputes between individuals. One of those narrow exceptions involves disputes over public rights. But “ ‘even with respect to matters that arguably fall within the scope of the “public rights” doctrine, the presumption is in favor of Art. III courts.’ ” Stern. Respondents cannot overcome the presumption in favor of Article III, and their attempts to wedge IPR into the narrow public-rights exception only confirms that it does not fit.
a. Claims By Or Against The Government. Respondents liberally cite these paradigmatic public rights cases, e.g., Murray’s Lessee v. Hoboken Land & Improvement Co., 18 How. 272, 274-75 (1855), but in every case – like most modern-day agency enforcement adjudications – the government was a party. IPR adjudicates disputes between private parties and does not at all implicate the government’s sovereign immunity – the origin of the exception. Id. at 274-75. Indeed, the AIA does not authorize the PTO to bring an IPR. 35 U.S.C. § 311(a).
b. Claims Historically Resolved Exclusively By Another Branch. The government concedes, as it must, that “challenges to the validity of issued patents were often brought injudicial forums.” Gov’t Br. 46; see also 3 William Blackstone, Commentaries 260-61; Br. of Legal Historians 5-37; Addendum 23-31. That concession is fatal because the exception applies only to claims “historically *** determined exclusively by” another branch. Stern, 564 U.S. at 485 (emphasis added).
The government nonetheless argues (at 46) that the “authority of the Crown and Privy Council to cancel patents” renders them public rights. Not so. First, this Court has repudiated that theory’s most significant implication, instead holding that an Executive patent revocation “would be in fact an invasion of the judicial branch of the government by the executive.” McCormick Harvesting Mach. Co. v. Aultman & Co., 169 U.S. 606, 612 (1898). Second, the Privy Council ceased revoking invention patents in ordinary cases – such as those involving a patent’s novelty – in 1746. . . .
c. Claims Whose Adjudication Is Essential To An Expert Agency’s Resolution Of A Limited Regulatory Objective, Tied To A “Particular Government Action.”… [R]espondents misapprehend this narrow exception at each step. … [A]dministering the patent laws is not [a limited regulatory objective]…. IPR is not “essential” to that objective…
It will be interesting.
In SAS, the court’s response may depend upon how far the Justices have gone down the road of releasing judicial intuition in favor of a strict-grammar approach to statutory interpretation. The statutory question at issue is found within 35 U.S.C. 318, which focuses on the “decision of the board” in cases where the director has already instituted the IPR:
If an inter partes review is instituted … [the PTAB] shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner ….
The suggestion by petitioners is that the “any patent claim challenged” requires a written decision even as to claims that were challenged in the petition but not instituted for PTAB review. Here, though I see a credible grammar argument that the claims challenged claims referred to in Section 318(a) are limited only to those instituted.
The SAS challenge can also be seen as pushing against the Director’s authority under Section 314 to partially-institute an IPR (institute as to only some of the challenged claims or for only some of the reasons challenged). Of course, that issue is not appealable directly (institution decision is not ordinarily appealable) although the implementing rules could be challenged. And, SAS did not push this button.
Oil State : Oral Arguments
Supreme Court divided over legality of patent reviews
link to reuters.com
I guess the decision is going to be 5/4
So, if Scotus sustains IPR’s on the basis that patents are public rights and not property, will we need to start calling ourselves “Intellectual Public Rights” attorneys?
Certainly no longer attorneys…
perhaps “consultants” or “agents” for now, and once explicitly paid and controlled by the State then perhaps public rights “facilitators” or “administrators” or “officers”.
Professor Crouch, “My expectation is that the AIA and PTO’s approach will be upheld in both cases.”
This means SCOTUS ignores the intentional panel stacking and all of the due process violations that go on daily.
By declaring the AIA unconstitutional, SCOTUS eliminates a raft of cases that will continue to come up through the system. Like CAFC affirming appeals without written opinions.
For what it’s worth, I think SCOTUS saves IPRs but then, when the case arrives, requires the Federal Circuit to write substantive opinions in each and every IPR appeal and other PTO appeals. #Takethatinferiorcourt.
Bluejay,
I think that you need bette means to reach your desired Ends.
Whether or not the Court provides that proper means is, quite frankly, doubtful (given the current broken scoreboard).
One “policy” piece to keep an eye on (from Prof. Crouch’s note above):
“At oral arguments look for any signals that conservatives will break away from Justice Thomas notion that patent rights are not “core private property” but instead are properly considered lesser franchise rights.”
The very essence of the patent system – the Quid Pro Quo – recognizes TWO parties are making a deal, and that deal involves the property of the inventor.
As I have noted previously, whether or not one “likes” the fact, the origin of the US Sovereign patent system is built upon a Lockeian property view. Turning an inchoate property right into a fully legally enforceable property right has nothing to do with any government “leasing” or “franchising” anything to an inventor.
Even the smallest amount of critical thinking shows the “lease” or “license” or “franchise” paradigm to be a fallacy.
ANY “policy” position that does not start with this foundation is suspect from the start.
“..all of the due process violations that go on daily” is a repetition of unsupported hyperbole allegations on the Q blog. It is not being made by any of the numerous brief writers, even in amicus briefs, at the Sup. Ct. If it were true there would have been numerous Fed. Cir. reversals of IPR decisions on that basis by now.
More than pretty sure that you are incorrect as to support for the “unsupported hyperbole allegations.”
You have been corrected there on this very type of comment, oh defender-of-the-IPR-at-any-cost cheerleader, you.
Oil States is not only about the history of patent law, it is about whether modern industrial societies can afford to allow small inventor’s to participate. When they get their patents, they cannot, on their own, develop their inventions. Big companies generally refuse to even look their inventions. Thus the only way an inventor might profit is by enforcement, become a so-called troll.
That is all we have heard about in the last 15 to 20 years: Trolls. We hear about how their patents harm innovation. But the real complaint here is that the patents of the independent inventor cannot be tolerated – in other words, the general policy of big companies to ignore independent inventors has to be enforced by structuring (read: rigging) the system to make it too expensive for them to participate at all. That is what this is all about from the big picture point of view.
Agree.
Nonsense.
The patents that people have problems with are those that claim “inventions” that are either not inventive or that the “inventor” really doesn’t have any right to. Rather than promote the useful arts, these patents are more akin to lottery tickets. Lottery tickets that leech on the hard work of others, who implement system independent of any “knowledge” in the patent, and make the goods and services more expensive without any actual legitimate claim to do so.
Your plight of the individual inventor spin is interesting, but I doubt it is rooted in much reality (at least where the troll problem is concerned).
OSitA,
“who implement system independent of any “knowledge” in the patent,”
There is no such thing as an independent invention defense.
All your other feelings are reflected in your flaw on this point.
No one mentioned the independent invention defense, anon. Try to keep up. We are talking about reality of R&D, not the flights of legal fancy that the courts take to make the patent system remotely workable (i.e. constructive knowledge of POSITA).
Did you not see the item I directly quoted from you…?
You want me to “keep up” but you are way behind – and heading in the wrong direction.
To your admonition then, I kindly say “no thank you.”
Yes, and the statement of mine that you quoted have nothing to do with the independent invention defense. It was a statement about how the real world operates in contrast to the way the courts falsely assume that the world operates. Regardless of whether the independent invention defense exists, these lottery winners are still nothing more than leeches (especially since the “invention” they received a lottery patent for did nothing to actually influence the development of science or technology).
“the statement of mine that you quoted have nothing to do with the independent invention defense.”
You have no clue as to what you are talking about. The quote is directly linked to that defense. That you do not know this AND want to try to “correct” me is rather amusing.
What is really amusing is your apparent lack of reading comprehension coupled with an obtuseness that is truly incredible to behold.
But, with all of your blathering, you try hard not to comprehend the point: these lottery patents have nothing to do with advancing the useful arts because no one in reality relies on them to produce a useful thing.
But since you have chosen your hill, I will link it back. Is it a wonder that when the law is so divorced from reality that a portion of the population finds that the law is unjust? Maybe then, for at least the software arts, we need an independent invention defense.
It is not a lack of reading comprehension on my part.
I comprehended full well what you actually stated.
The lack is on your end and your not realizing what it is that you are talking about.
Your “walking back” only proves my point.
Anon: Patently-O’s foremost expert on telling people what they actually said to try to shoehorn what ever hobby argument he wants to have that day without actually comprehending what the person said.
Let’s review our conversation so far:
OSitA: These types of patents are bad and nobody uses them or derives their knowledge from them.
Anon: There is not independent invention defense.
OSitA: I never said that there was.
Anon: Yes you did. There is not independent invention defense.
OSitA: I never said there was an independent invention defense.
Anon: Yes you did. There is not independent invention defense.
OSitA: No I didn’t. But hey, maybe there should be one.
Anon: Aha! By some magic logical leap, saying that maybe there should be one is the same as originally saying that there is one.
OSitA:
Nice atttempt at spin.
You spoke (without knowing what you were talking about).
I provided your own words.
You attempted to spin again.
I pointed out that your re-attempted spin only proves the initial point.
You AGAIN try to spin.
Guess what ASitA: you are still clueless and all of your spinning is only digging yourself deeper.
You cannot shovel yourself out of the hole that you shoveled yourself into.
Far better to simply acknowledge that I correctly observed what you actually stated and either:
a) indicate that you had meant to say something else (and then say that something else), or
b) indicate that you said what you meant and now have learned something because I pointed out something to you.
Interesting tactic considering nothing in your last comment is remotely true and people can plainly see that it is not true. You are comically flailing at this point, but I am glad I have provided an opportunity for you to once again reveal your sophistry.
“Interesting tactic considering nothing in your last comment is remotely true and people can plainly see that it is not true. ”
Quite the reverse – and it is YOUR lack of understanding that continues to propound your mistakes.
“You are comically flailing at this point,”
Again – quite the reverse, given as you still do not even have enough sense to understand that your spin has been nullified.
“ opportunity for you to once again reveal your sophistry.”
That’s not sophistry. That you continue to get this wrong only shows you insisting on trying to fig yourself out of the hole that you have dug yourself into.
“Tr011s” (as abundantly debunked as that rhetoric may be) is certainly NOT the only attack being ployed on a strong patent system, Ned.
Your own attacks (Windmill Chases) also fall in line against a strong patent system.
THAT is from the big picture point of view.
Ned tells us at 2.3 that IBM has been:
“trying to get validity out of of the U. S. court system and into the patent office”
My reaction, based on opposition experience at the EPO: who wouldn’t want this? Holders of bad patents perhaps?
Oppose and fail? Not a good idea. What doesn’t kill the patent makes it stronger.
Hence, opposition multiplies the difference between good patents and bad. The bad ones crash out. The good ones get stronger.
Isn’t it working out like this at the USPTO? If not, why not?
Horrors, Max, that kind of logic will get you labeled a PTO-post-grant-proceedings supporter in U.S. patent blogs. A regular Dickensian Fagin Picking the Pockets of Patent Professionals.
Max, we all know mainland Europe and many of its US supporters have been long in favor of oppositions. The U.S. first considered them in ’43, but decided against. Why?
Cost.
Small inventors could not afford such a system.
Nothing has changed since ’43.
“we all know mainland Europe”
Home of the original Guild mentality that many came to the US to get away from.
Why would anyone be surprised by MaxDrei’s “gut reaction”…?
Thanks for that Ned. So, the over-riding reason why the validity of duly issued but invalid patents cannot be put in issue is that:
“small inventors could not afford”
it.
Two thoughts:
1. As if they can “afford” the rest of the patent system.
2. Even the smallest can “afford” it at the EPO (or at the UK’s PTO). If they can’t, at the USPTO, it is because in the USA litigation is inherently too expensive for small fry. So what’s the solution? Prohibit oppositions? Or make justice available for the Little Guy?
Ah, MaxDrei, but there’s to rub. Small fry can afford litigation because with damages available they can hire contingency counsel.
Ned, same principle applies, with opposition. Perhaps not back in 1843 but perhaps in the very different world of today.
You, David, are small fry but you nevertheless get through to issue with claims that embarrass Goliath, who then (to your delight) opposes, vindicating all your assertions, that your patent is valuable.
And you are telling me that David STILL can’t find a sponsor, an investor, somebody who fancies shaking down nervous moneybags Goliath?
As I said already, oppose at your peril.
Max, IF.
But to get from here to there, the US inventor has to have millions. He has to withstand unending, serial IPRs. Again, and again, and again. Until he is completely drained of resources.
Ned, that kind of hyperbole does not make for a credible arguments. The number of serial [plural] IPRs petitioned against the same patent by the same petitioners against the same claims has been counted and made publicly available. The majority of all patents against which IPRs are asserted have only one IPR by anyone, and very few patents have more that two IPRs, even though sometimes patent owners are suing multiple defendants. Recent PTAB decisional guidelines are causing even more rejections of plural IPR petitions against the same patent.
Ned, are you there? Have you any answer for Paul?
If the patent owner loses, there is just one.
MaxDrei,
The only answer necessary for Paul is that his own statement is not correct.
He has made that statement in other fora – and has been shown the error of it; that he continues to postulate so does NOT make it so.
Paul has zero credibility when it comes to the discussion of IPRs.
MaxDrei reveals his bias with his choice of words:
1) with claims that embarrass
2) (to your delight)
3) who fancies shaking down nervous moneybags Goliath
1) Goliath is not embarrassed by anything. It is a cold decision as to whether or not claims “out there” need to be concerned with or not – and concern only goes so far as to attempt to engage and drain the resources of the little guy.
2) There is no delight because you are entering a playing field (based on established money rather than on pure innovation). That is most definitely to Goliath’s advantage. You seem to have this odd Pollyanna view that claims that can stand up to opposition is some overriding “trump,” when the name of the game here is far less any such point and far more whether the process of proving out your granted patent can survive is going to be a battle of cash reserves.
3) Again, this is errant, as the battle will be based NOT on whether or not the little guy will survive with his patent intact, but rather, whether the little guy can survive the (money-draining) process of getting to the point that his patent survives. Without a strong patent system, the “risk” to Goliath is minimal and he has plenty of cash to battle David outside the merits of the innovation itself. PLUS – given the various mechanisms (and the recent historical contexts of broken scoreboards) the ONGOING risk is more than a bit asymmetric with the skew going against the patent holder.
You say< "oppose at your peril.” but those are empty words, with a worst case scenario for the transgressor far more minimal then the risks imposed on the David.
Your projected feelings are simply not in tune with the realities of the day.
Feelings? No, just reporting on my decades of experience of oppositions at the EPO, acting for Goliath against David, acting for David against Goliath (but most frequently acting for Goliath X against Goliath Y), acting for the patent owner, acting for the Opponent.
Of course, the financial aspect is very different at the USPTO. But is depth of pocket the single decisive difference? That’s what interests me.
Single MOST decisive difference? (realizing that is NOT what you stated): perhaps not.
Single decisive difference? (which reads differently): Most definitely so.
When you move the game to be a game of kings (which is what the Efficient Infringer folks want), you then compete on non-innovation terms.
Not sure the repetition of years of looking at things through the same pair of glasses helps you with that “decades of experience” thing that you want to use as some type of substantiation of your feelings.
Give me enough time and money and I can put together a reasonable prima facie obviousness case against any claim under U.S. law. And a reasonable case is perhaps all you need for IPR success. Not the same for a creditable case of lack of inventive step under EPO law, in my experience.
Ned, my understanding is that counterclaims for patent infringement are not just “permitted” in response to a declaratory judgment lawsuit for invalidity of a patent, rather, they are effectively required. But in any case DJ actions are usually slow and expensive and thus infrequently used.
Another good observation by Dennis here is “Justice Thomas notion [opinion] that patent rights are not “core private property” but instead are properly considered lesser franchise rights.”
But some commentators seem to think that deciding whether patents are “public rights” or “private rights” completely decides the issue in this case. [By statute they have “attributes of personal property.”]
But of course there have been many governmental limitations on various private rights. Interesting, an early amicus brief in this case by a whole posse of patent professors strongly argues that patents are private property but does NOT go on to argue that this makes IPRs unconstitutional.
Paul, you are absolutely correct that simply arguing that patents are property is not an argument that the validity of a patent cannot be determined in an administrative proceeding. The Federal Circuit in Patlex acknowledged that patents were private property, even so affirm the constitutionality reexaminations because patents are created by Congress, presumably Congress can determine when and how patents can be enforced and revoked. That has been the Government’s position all along, from Patlex, to MCM Portfolio LLC.
Under the law, a proceeding must be tried in a court of law today if such a proceeding was tried in a court of law prior to 1789. We know that patent validity was always determined in a court of law prior to 1789, whether the action began as a infringement case pursuant to a writ scire facias. Under the law, therefore, patent owners have a right to a trial in a court of law and to a jury can.
I found it interesting that the government brief openly suggest that the issue of whether a patent is property is not an issue in this case because the resolution of that issue is irrelevant to the outcome.
Dennis, thanks for noting the argument that “the AIA does not authorize the PTO to bring an IPR. 35 U.S.C. § 311(a).” That is the first valid and relevant argument I have seen for distinguishing post-AIA reexaminations from IPRs, as Oil States is seeking, since the reexamination statute does indeed have a specific [but very rarely exercised] provision for PTO-Director-initiated reexaminations.
But note that IPRs have no restriction on what “person” can petition for an IPR. We already know that IPRs do not required petitioner standing and thus can be initiated by non-profit organizations or stock manipulators. Also, an IPR can be conducted by the PTO even one or both parties refuse to participate.
So, an interesting question: could someone in the FTC or JD file an IPR petition?
Paul, you hit upon the weakness of the Oil States argument emphasizing that the government is not involved as the reason that IPR cannot fall under the public rights exception. The problem with this argument is that by the close of the 18th century, the government of England only revoked patents pursuant to the writ scire facias, a common-law writ conducted only in the common-law courts of England, thereby giving a patent owner a right to a trial by jury. Thus even if the government were to be the protagonist, the patent owner were still have a right to a jury trial and therefore would have a right to a trial in a court of law.
Note there is a difference between waiving sovereign immunity, thereby allowing somebody else to sue the government, and the government suing somebody in a court of law. The government suing somebody in a court of law is not a waiver of sovereign immunity allowing the government to specify the terms of the waiver. The government’s act of suing in a court of law does not thereby automatically strip an American citizen of his constitutional rights to a trial by jury.
Ned, I mentioned, in a comment on an earlier post the English proceedings by petition of right.
This is discussed in particular in Holdsworth, A history of English law, vol. 9, pp. 8-45. The following link comes in to a long complicated discussion around page 14:
link to archive.org
English common law evolved the notion of an idealized king who could intentionally do no wrong. If nevertheless a wrong had clearly resulted then this
must have resulted from the actions of the king’s servants or officers. Hence language like “The Queen was deceived in her grant”. But every wrong ought in law to have a remedy. So if some grant or action of the king (or queen) resulted in an alleged wrong that, if committed by a subject, could be addressed by the common law, the king could be petitioned for a remedy. An appropriate writ would then have to be endorsed by, for example, the attorney general (or in later times, a minister) with the words fiat justitia (or equivalent). (It is at least suggested that, if the petitioner did not have a legal right to the fiat then he or she had at least a moral right: the attorney general ought, in the interest of justice, to endorse the writ. The writ then went to the Chancery, which established a special commission to inquire into the matter, and, if a trial was needed, then then the proceedings transferred to the King’s bench for a jury trial (at least until jury trials in civil cases were largely discontinued).
Do try to understand the additional perspective related to our Sovereign and its desire to NOT have royalty.
The definition of who may file an IPR petition is in 35 USC 311(a) and states: “(a) In General- Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent. ..” There are no indicated exclusions for “a person.”
Actually Paul….I think if you read some of the amici’s you will find that at least one addressed the “person” issue…stating that the long-standing general legal precedence the GOV’T isn’t a “person” in the eyes of the law unless EXPRESSLY written in. (I can’t recall which one…however.)
Valuationguy is correct. That’s a canon of construction, at least per Justice Scalia and Bryan Garner in “Reading Law.”
The easiest answer to the argument “But it is odd to argue that the agency makes so many mistakes in issuing patents that its special expertise is needed to resolve disputes over those errors.”
Compare professional $20,000. and up prior art searches, claim charts and declarations by IPR Petitioners defending patent infringement suits with the following USPTO current prior art application search fees for large, small and micro entities:
Utility Search Fees $600.00, $300.00, $150.00.
How thorough a private-enterprise prior art search would you get for those prices? Especially with a PTO prior art search conducted on originally filed claims quite likely to be different from issued claims?
This, on Paul’s “different claims” and the rigor (or otherwise) of USPTO searching of “duly issued” claims:
At the EPO, it happens very often, that a claim amendment is refused admission because it results in a claim to subject matter that has not been searched. Can USPTO Examiners do the same?
They cannot refuse an amendment because it has not been searched because they are supposed to search based on the disclosure.
However, they can refuse a claim amendment based on it being drawn to a different invention. (But, you can file an RCE to get the amendment accepted.)
Yes, or file a divisional.
Thanks for that interesting reply, Night.
Of course, also at the EPO are Examiners required to search “based on the disclosure”. And they do. Indeed, they search relative to claims that have not yet been written or filed, that is, the claims they themselves would write, to overcome the patentability objections they themselves are about to write, on the claims as filed.
But despite all that, they often fail to imagine the contorted claims they are presented with, in response to the FOAM. To such claims, they refuse admission. Applt naturally then files a divisional, to get a search report on the wretched claims.
Takeaway? Cheaper to pay for a decent set of dependent claims (and the disclosure to match) than it is for the filing and (delicate) prosecution of a divisional
Your feelings are noted.
Wretched indeed.
Once again, Paul needs to be reminded that such an attempted comparison is apples to oranges.
Did we not just have a recent thread on fees being used for a variety of reasons – and NOT just for “cost”…?
Paul, but this is not really an answer as to why the PTO is necessary to determine whether a patent has been issued that should not have been issued.
We are all dancing around why we are where we are in the United States. IBM and others back in the day, have been trying to get validity out of of the U. S. court system and into the patent office. They have been trying to do this for two reasons: First, they do not think that juries are competent to decide on the validity of a patent. Second, they want to preemptively challenge a patent without regard to standing.
Ned, those were not the main reasons, and they apply equally to reexaminations.
Paul, we all know the evolution from reexaminations to IPR. They started off completely ex parte, added third party participation, then subtracted the examiner. The goal at all times has been essentially the same.
Well, if patents are determined to be a public right, then there really isn’t anything other than that which is enumerated in the Constitution that will ever not be a public right.
Presumably everybody have been for a long time familiar with the following passage from Chief Justice Roberts’s opinion for the Court in Stern v. Marshall:
“That is why we have long recognized that, in general, Congress may not “withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty.” Murray’s Lessee v. Hoboken Land & Improvement Co., 18 How. 272, 284 (1856). When a suit is made of “the stuff of the traditional actions at common law tried by the courts at Westminster in 1789,” Northern Pipeline, 458 U. S., at 90 (Rehnquist, J., concurring in judgment), and is brought within the bounds of federal jurisdiction, the responsibility for deciding that suit rests with Article III judges in Article III courts.”
To reiterate, a five-justice majority, as opposed to a four-justice plurality in Northern pipeline. And Justice Breyer, writing for himself and Justices Ginsburg, Sotomayor and Kagan, whilst not accepting the Murray’s Lessee/Northern pipeline as binding precedent, nevertheless presents a five-factor test derived from Schor…
What matter might be “matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty”?
As a matter of historical accident, not the matter of Murray’s Lessee. (The discussion of the old English Court of Exchequer on pages 238-242 of Volume 1 of Holdsworth’s A History of English Law seems instructive, especially the account of the jurisdiction of the Court of Exchequer as a “court of revenue”, as a separate jurisdiction distinct from its common law and equitable jurisdiction. Holdsworth observes (p. 239) that “the Court of Exchequer, sitting as a court of Revenue, is the nearest approach to an administrative court.”
What about letters patent of invention. According to 8 justices in Horne v. Department of Agriculture, they are “property”. They are also “franchises”.
In English law, various long lists of types of “hereditaments” crop up in deeds, wills, Acts of Parliament, letters patent, charters etc. The lists are similar but not identical.
Here is a passage from the royal charter of the Colony of Georgia (1732) incorporating such lists (which I suggest could be considered matter for suits at common law):
“and that they and their successors by that name shall and may forever hereafter, be persons able and capable In the law, to purchase, have, take, receive and enjoy, to them and their successors, any manors, messuages, lands, tenements, rents, advowsons, liberties, privileges, jurisdictions, franchises, and other hereditaments whatsoever, lying and being in Great Britain, or any part thereof, of whatsoever nature, kind or quality, or value they be, in fee and in perpetuity, not exceeding the yearly value of one thousand pounds, beyond reprises; also estates for lives, and for years, and all other manner of goods, chattels and things whatsoever they be; for the better settling and supporting, and maintaining the said colony, and other uses aforesaid; and to give, grant, let and demise the said manors, messuages, lands, tenements, hereditaments, goods, chattels and things whatsoever aforesaid, by lease or leases, for term of years, in possession at the time of granting thereof, and not in reversion, not exceeding the term of thirty-one years, from the time of granting thereof; . . . and that they . . . by the name aforesaid, shall and may forever hereafter, be persons able, capable in the law, to purchase, have, take, receive, and enjoy, to them and their successors, any lands, territories, possessions, tenements, jurisdictions, franchises and hereditaments whatsoever, lying and being in America, of what quantity, quality or value whatsoever they be, for the better settling and supporting and maintaining the said colony;”
Source: link to historycentral.com
I don’t know. From what I’ve seen the SCOTUS, they pretty much do what they want and find ways to justify it.
Distant, there is no doubt that when England discovered the utility of patents to promote the general welfare, they wanted the patents to be somewhat secure that the owners of the patents could rely on them to make investments and develop whatever was the subject of the patent, be it a franchise or a trade a new manufactures. The problem of course arose that because patents were so valuable, unscrupulous prevaricators would often deliberately lie that they had made an invention when they had only copied from others. Thus, as Oren Bracha has actually argued, ease of revocation must follow with the ease of acquisition. Thus we see at the close of reign of Elizabeth I, the crown had to revoke a large number of patents that had been granted to the unscrupulous.
Today we have the same complaint as at the time of Elizabeth and as of the time of the founding of the United States when Patents were granted without rigorous examination. There needed to be a simple, reliable procedure, to attack the validity of the patent. At the time of Elizabeth I, that was the privy Council. At the close to 1700s in England, and at the beginning of the United States, it was the the writ scire facias.
Today, any aggrieved party can bring a declaratory judgment lawsuit asking that the patent be declared invalid. The problem is the Rules of Civil Procedure that permits the patent owner to bring counterclaims for infringement. It is the Rules of Civil Procedure that are driving up the costs of patent revocation in courts. The courts might want to consider appropriate reform.
With respect, this might be overstating the engagement of those in the 16th and 17th centuries with “policies” regarding “intellectual property”. Whatever theories the more intellectual lawyers might develop up to the 16th century regarding a highly idealized corporation sole that, in law, exhibited absolute perfection, was always open handed and bountiful and always working for the best interests of the governed, in practice the ruling kings and queens were always after money, and usually intent on rewarding favorites without draining the treasury. And the Tudors in particular vigorously asserted their powers and authority. Hence the granting of numerous “odius monopolies”. And the text of the Statute of Monopolies presumably describes how the typical monopolists of the “odious” variety enforced their monopolies on the people at large.
One could go on about English history. A few days ago, I was looking at an article by Prof. Adam Mossoff. I would normally expect to disagree with what he writes, but in this paper he was arguing, it seemed to me correctly, that in the 17th century, it was more a case of encouraging new manufactures, whether brought in from abroad, or dreamed up – with the reward of a patent monopoly for a limited period being the reward and encouragement for establishing a new manufacture, is opposed to a reward to an inventor for the disclosure of a purportedly new and useful idea.
I suspect it is probably correct to argue that the the ways of thinking about “patents” that are now commonplace in the patent community only really crystallized out in the second half of the 18th century.
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It may be as well to remember that in the 16th and 17th centuries, the “Privy Council” equated with the government. But in the 18th century, its role changed, and its business became far more formal, largely concerned with Colonial business, trade, navigation and foreign affairs. Paging through the papers made available online, the few patent disputes like those over Hamblin’s, Dr. James’s and Wilkinson’s patents stick out like sore thumbs – business that has landed on the Privy Council that for the most part seem to have no particular business to be there, except to the extent that the Office of Ordinance acted to try to ensure that Wilkinson either tested the validity his patent in the law courts or else had it annulled.
Money?
Yeah. What many here may not know is that the patentee at the time of Elizabeth and the Stewarts many times owed yearly royalties to the Crown in exchange for the patent. Also, the Atty. Gen. was enjoined to assist the patentee in enforcement.
This was a radically different kind of system than we have today.
Your admitted tendency to disagree with Mossoff is troubling.
Care to shine a little light as to the cause of this disagreement?
(Mind you, I am not a fan of most nearly all academics, but Mossof is one that is far closer to the mark – I would dare say probably the one closest to the mark).
The way I see it.
In the late 18th century, the law specific to patents of invention was in its infancy. But such patents were at that time, it seems to me, just a small part of a bigger picture centering on grants of the Crown, and specifically grants of franchises by the Crown. Basic principle: if an ordinary citizen conveys property to another citizen, the law of the land prevents the first citizen from resuming that property by revoking the conveyance.
But if the grantor is sovereign, there is the risk that the sovereign might arbitrarily assert prerogative power or legislative power to revoke the grant to the disadvantage of the grantee. Therefore principles of common law developed that insisted that the grants of the sovereign must be matters of record, implemented using letters patent as the instrument, adopted rules of construction distinct form those for the construction of ordinary deeds, where the law sought to capture the intention of the grantor, and established the principle that (at least in the absence of explicit defeasance clauses), letters patent could only be annulled in the law courts under strict rules. This is documented in the various “abridgments” and ”digests” and other such legal treatises that were published or republished in the late 18th and early 19th centuries. Patents for inventions and land patents both stem from this inheritance. But in the U.S., there is no continuum of other types of patent grant connecting the two species of patent still prevalent in the U.S. But the historical connection was still apparent in SCOTUS opinions in cases such as United States v. Bell Telephone Co., 167 U.S. 224 (1897).
Noting the comment by anon at 8.2 above, it is perhaps worth clarifying the use of the word “franchise” in the quote included in comment 1.1. Such legal quotations from that period do not refer to (say) a “franchise” for a fast food outlet, or the like.
As the following “other heritaments” makes clear, and as is clear from old treatises and caselaw, the term “franchise” in English common law from medieval times through to the 18th century was used for various species of incorporeal property, including for example a ”right” to hold markets and fairs in particular towns on particular days of the year and take the profits. Such rights could be held as property, or descend by inheritance.
Words change their meaning. If you said “Have a nice day!” in medieval times, you might well elicit a funny look, because, in modern English (according to one etymology I have seen) this would translated into “Have a stupid day!”. The word “nice” derives from nescius, meaning stupid, but the word has changed its meaning over the centuries. In particular, meaning of the word “nice” at the beginning of the 19th century is discussed in the novel Northanger Abbey, by Jane Austen.