By Dennis Crouch
In addition to its patent law jurisprudence, the Federal Circuit also handles appeals from the US Court of Federal Claims (CFC). The CFC hears monetary claims against the U.S. Government – including breach of contract, takings, and unlicensed patent use under 28 U.S.C. Section 1498. The CFC also meets in the same Madison Place building as the Federal Circuit.
The Federal Circuit’s new decision in Crow Creek Sioux Tribe v. United States, App. No. 2017-2340 (Fed. Cir. August 17, 2018), revolves around a water-rights takings claim against the U.S. Government. The particular claim stems from two dams across the upper Missouri River that limit the Tribe’s ability to use and enjoy river water. The tribe sued in 2016. However, the case was dismissed for failure to state a claim. The Federal Circuit has now affirmed that decision – holding that the tribal water rights are only a weak form of property. In particular, the appellate held that the tribal property right in the water flow only extends to the amount of “to the extent needed to accomplish the purpose of the reservation.” Quoting Winters v. United States, 207 U.S. 564 (1908) (known as “Winters rights” to water). In Cappaert v. United States, 426 U.S. 128, 138 (1976), the court reiterated the winters rule – noting that Winters rights entitle a tribe to “that amount of water necessary to fulfill the purpose of the reservation, no more.”
Although so-called Winters rights are fully vested, the rights are only offended by government (or third-party) uses that impinge upon the Tribe’s needs for the water. There is no property right violation if the Tribe still has enough water for Reservation uses. The complaint in this case does not allege that the water flow limits block any necessary Tribal function – as such the complaint fails to assert any legally cognizable harm.
The tribal rights here are greater than prior-appropriation rights common to Western-America states. Notably, Waters rights are set-aside for the reservation and are not abandoned by mere non-use. In addition, because they were established pre-statehood, they are prior in time to almost all other nearby claims.
In many ways patents are treated as the complete opposite of the tribal water rights and serve as a speculative resource rather than a limited natural resource. A patentee has an exclusive right to control almost any non-licensed use – regardless of whether that use causes any direct harm to the patentee. The one area where the water rights rules overlap is in equity – an injunction must be predicated by harm felt by the patent owner.
So a Tribe gets screwed over on water rights. Par for the course. They got their sovereign immunity as patent owners punched out too – right?
Did they get screwed?
At first blush (and purely on the surface), I am not so sure here (vis a vis water law).
As I noted, water law is complex, so more than a cursory view would take more effort than I want to give.
Agreed riparian law is complex. And making the comparison to equity injunctions is probably even dumber in the case of riparian rights.
Agreed – the attempted angle (to make it “relevant” to this blog???) was a pretty silly reach.
Be that as it may, the reasons why it was a silly reach did provide an opportunity to draw important contrasts. So I guess we all have that going for us.
The relevance for this blog is simply that it is a Sup. Ct. decision on native American tribal rights, when there is a likely cert coming on buying tribal immunity from IPRs.
Except for the complete difference in the two items and the lack of relevancy because of that difference, you may have had a point.
As it is, well, no, you do not have a point.
(I don’t even see any sovereign immunity angle being offered)
Just to be clear, this was a CAFC decision, not a Supreme Court decision.
Just to be clear, how does that matter?
(to the point at hand, obviously it matters when the Supreme says anything, because they are not constrained by the separation of powers, current case or controversy, or void for vagueness, and the like)
What the Sioux have lost is what the Missouri River was like before the dams. Aptly described by Mark Twain as “too thin to plow, but too thick to drink” and also called “the big muddy.”
A patent right is the right to prevent an entity from taking certain actions with respect to the claims of a patent (infringing). An injunction is a court order preventing an entity from taking certain actions with respect to the claims of a patent. Why would an injunction not be the normal response from a court against an entity which has already been to be infringing?
Infringers’s Rights (especially as attempted by those espousing Efficient Infringement).
The four factors of equity should not be applied in a vacuum, as the sharing of authority from Congress does not occur in a vacuum.
Unfortunately, the Court has chafed at giving full faith and credit to the very nature of the item transgressed. Likely, this is exacerbated by its lack of humility when a lower court “takes a shortcut” when applying the four factors. If one carefully reads eBay, that one may note that the Supreme’s chastising is for “taking the short cut,” – and NOT necessarily where that short cut leads.
When one does not take the short cut AND includes the path that needs to be taken by ALL of fully appreciating the nature of patents, the constraints from Congress and the very first rule of equity (while NOT giving undue influence to any “feelings” of “0h n0, that’s so severe”), the end result of the short cut is validated.
Might there be some super small set of facts that leads to an end place different than the short cut?
I suppose so. As they say, exceptions make the rule.
Can someone here provide a hypo that shows all of those things that need apply (as I have supplied) and show that exception?
I leave that as an open challenge.
A careful reading of the HOLDING in eBay has the second cert question answered definitively: Continental Paper Bag is affirmed. Now go read the Bag case. Maybe someday we will get a District Court judge that can read and follow the law.
“has the second cert question answered definitively: Continental Paper Bag is affirmed.”
You would likely believe that those cheerleading against patents have no clue as to what your statement means.
What possible harm could come from infringement? Why would anyone being infringed need to be made whole?
(the scary thing is that that person appears to be serious)
How about a property interest in one’s security clearance?
It may be proven that it has absolute economic value: with it, one may keep a particular job, while without it, they are on the street.
It is obtained by some form of prescribed governmental process- potentially similar to a driver’s or professional licence, which generally cannot be removed once granted without due process.
Can the President take something of value from someone on a whim? For political retribution? It seems very dicey to me legally. Now the very slightest fig-leaf that there was concern for security etc. would be enough to defeat any litigation, but when the President Tweets that the action was political payback…
Something seems very very wrong with this setup.
I would look at it from the perspective of the ways in which the president is allowed to discriminate against people. To my knowledge, political enemy of the president is not a protected class. However, there could be first amendment issues depending on whether revocation of a security clearance could be considered an action against someone. For current employees that require security clearances for their jobs, revoking security clearance is effectively termination. However, for former employees it is my understanding that their clearances were maintained so that they could act as consultants. In so far as the gov’t can choose who it uses as consultants, I see no reason why it cannot revoke the clearance of those that it will not consult with.
In which court would someone stripped of security clearance litigate a complaint?
The Court of Federal Claims?
Federal government employees would usually have the right to litigate adverse employment decisions via the MSPB and CAFC. But review of security clearance issues are very narrowly circumscribed. See, e.g., Ryan v. DHS, No. 2014-3181 (Fed. Cir. 2015). Under the Supreme Court’s decision in Dept. of Navy v. Egan, 484 U.S. 518 (1988), security clearance determinations are the exclusive determination of Agency heads, without any appeal to the MSPB, except to challenge whether due process was afforded.
My guess is that the courts/MSPB would review these security clearance revocations pretty much like the Supreme Court reviewed the travel ban — if he says it’s for national security purposes, we’ll believe him, regardless of the evidence to the contrary.
A security clearance (and compartments) is based on the need to know. About the closest thing the federal government has to employment at will like the private sector. Agree with you on the case law there are limited avenues of appeal. But if you are not even in the job anymore? Forgetaboutit.
Check out the latest Lawfare podcast. They had been on a lawyer who represents people whose security clearance has been revoked. Tl;dr, the recent revocations do not violate a “property” right, but they are probably reversible in court (if one cares to challenge the action) as not conforming with the APA.
One may start with a premise that a security clearance is a property belonging to the person.
But that is a premise, and is not set in stone.
Yes, it has value, and yes, there is a procedure that one goes through to obtain the clearance.
But is that enough to warrant the attribution of property?
Very much unlike patents, which derive from – and cannot exist apart from – the Lockean concept of individual ownership (the inchoate nature, which is the starting point of the Quid Pro Quo), the nature of a security clearance starts with the nature of the state choosing to grant permission and access wherein that choice need not be made – with absolutely no tie to any Lockean concept of property prior to the conferring of the permission.
This very much distinguishes along the privilege/property dimension (and in so doing, provides a meaningful contrast that may elucidate understanding of how patent law is meant to work).
Starting from the patent context may be interesting, and putting this in relative context, the President “taking” falls more along the line of any “right to work” state and a job, wherein “right to work” is akin to “right to fire.” Linked to but still separate, a security clearance remains an item “of permission.” It is – and remains – the government permitting someone access to the government’s “stuff.”
Even if we take an employment angle – in such situations, the employer has a right to fire – at will. Is that then a “taking” in a similar manner? Is not a job valuable and obtained through a process? If that were enough, would “property” conflict such “right to work?” Can a “right to work” be divorced from a “right to fire?)
Water rights are an extremely complex area of law and bear little to no resemblance to patent law – even in areas that appear to have overlap.
For example, “The one area where the water rights rules overlap is in equity – an injunction must be predicated by harm felt by the patent owner.” – the harm felt by a patent owner is not the same type of personalized harm, and may (and should) include the larger harm that one’s exclusivity is violated without more.
A critical driver here is that fact that the US patent system does not carry ANY mandate to “must use.” Another critical driver is that the right (and harm thereof) to exclude is a negative right – different in character than any positive water rights.
One of the hugest errors in patent law (by the Supreme Court – I know, how shocking) is in not recognizing that the typical analysis under equity drives FIRST to make the aggrieved whole.
There is nothing more pure and able to meet this demand of equity for patent holders – who have (again) the negative right of excluding others – than what is otherwise considered a “strict” equitable measure of injunction.
To put it simply, the normal judicial reflex under equity for injunctions is a reflex of last resort – and this is the opposite reflex that should inure – under equity – for patent law matters.
Interestingly, this area also draws a sharp contrast as to a situation in which Congress shares its Constitutionally-granted powers (in sharp contrast to 35 USC 101/102/103/112, for example).
In fact, it helps to look at that specific statutory sharing (and not just as a model for sharing, but as with any shared authority, the specific guidelines as to proper sharing).
With emphasis added:
35 U.S.C. 283 Injunction.
The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.
Note here as well, that the “in accordance with the principles of equity” (from which the above mentioned “make the transgressed whole” aspect comes from) is constrained with a specific purpose. Other equitable principles should reasonably adhere to this constraint. If a court (or Court) violates the constraint and that violation can be shown to be unreasonable in light of the purpose of the sharing of power from Congress, then this section of law may be violated by the court (or Court).
“To put it simply, the normal judicial reflex under equity for injunctions is a reflex of last resort – and this is the opposite reflex that should inure – under equity – for patent law matters.”
You seem to be assuming that negative rights are entitled to an opposite presumption towards injunctions than positive rights. Where are you getting this from? Moreover, you appear to be assuming your conclusion that patent rights inherently include the right to injunction. If that were true, 283 would have read “shall grant” rather than “may grant.”
Already settled by the Sup. Ct. in eBay v. MercExchange (2006): The standard four-factor test for a permanent injunction applies in patent cases (9-0, Thomas & Roberts concur, Kennedy concurs).
As to eBay,
The “settling” by the Supreme Court (go figure – another patent case in such a condition) needs to be evaluated in light of the Court’s propensity to be anti-patent.
A further point, Paul: it is not if the four factors apply, but rather how the four factors apply (keeping in mind the deliberate constraints of Congress and the nature of the exclusionary, as well as the number one goal of equity in making the transgressed whole.
Keep in mind as well that the stated purpose of the patent system – to promote – includes not only the linear (or non-linear) advancement, but also the use of the word in the marking sense of “promotion.” In that sense, the Court should have recognized that there should be a presumption of notice on top of any due process notice (to even reach the status of transgressed), and that after a finding of transgression (wherein Notice is surely met), that most any ongoing transgression (if allowed at all) should be allowed by the party that has been transgressed.
How this is not most excellently met by the tool of injunction, please let me know.
It just is an afront to sensibility to fall back mindlessly to some non-patent law generic notion of “0h n0es, injunctions are the most extreme form of remedy.”
Where’s he getting it from? You need to ask? – it’s right there in black and white he gave you the statute. What is the ‘right to exclude?’ itself – without the ability to sue out the right and get an exclusion order? A right without a remedy is no right at all. – Someone said that. Maybe Story.
“No assumption, as I clearly point out that the number one aim of equity is to make the transgressed whole.” — Where are you getting this “point” from, which I currently consider to be an assumption? Isn’t the point of any tort judgment (law or equity) to make the transgressed whole? My understanding is that equity kicks in to fix situations when money isn’t enough.
Assuming there is no inherent right to an injunction, why is a patentee automatically aggrieved in a way that money cannot fix? If there is an inherent right to an injunction, then your talk of equity is beside the point because not awarding an injunction would infringe the right to an injunction regardless of whether the patentee is aggrieved in some other manner.
Perhaps you should explain exactly what you believe a patentee has lost by infringement that requires being made whole.
Good questions. eBay does NOT preclude obtaining injunctions against patent infringers who are taking exclusive product sales away from patentees which are product producers. It does preclude injunctions being obtained by NPEs (patent owners who make or sell nothing) against companies that are actually supplying customer products. That is, patent owners that only ever wanted or needed anything but money damages, and thus cannot show any harm requiring equity. And even NPEs can still get up to treble damages for willful infringements.
Possibly I am incorrect. IANAL.
NPE is more a propaganda than a legal term.
Like Edison I fund my research and my research team that works on my current inventions from licensing revenue from previous inventions. Without the licensing revenue I might have to lay off people or worse.
I should have no problem under eBay in obtaining an injunction against an infringer against whom I have obtained a judgment of infringement.
JM, since you helpfully indicate that you are not an attorney, you might want to consult your licensing attorneys as to the appropriateness of public comments like this that you are only interested in licensing revenue as to the subject here? Also consulting as to possible structuring of an exclusive license on a patent in which the licensee actually making and selling products under your patent has the right to sue on the patent, if greater odds of obtaining an injunction is important to you? [And also as to requiring the licensee to “mark” all said products.]
Thanks for the comment. The family attorneys seem to have agreed with you because they structured the licensing agreements mostly in the way you suggested.
As someone else noted w/o citation, the patent statute, 35 USC 283 – “Injunctions” – says that injunctions “may” be granted “in accordance with the principles of equity” “as the court deems reasonable.” The automatic granting of injunctions for any infringement decision by anyone against anyone was not statutory, it was a Fed. Cir. practice shot down by eBay.
The shortcut was shut down.
You are not paying attention.
No one is saying “automatic.” What is being said is that the full meaning (what a patent is, what the direction from Congress entails. etc) must be employed.
It simply does not behoove the situation to “short cut” the analysis in the other directions and turn a blind eye to the things that make the result of the short cut simply more amenable than some generalized notion that “injunctions are too severe.”
Sorry. I responded to the wrong comment. I intended to respond to 1.1.3
“You seem to be assuming that negative rights are entitled to an opposite presumption towards injunctions than positive rights. ”
No assumption, as I clearly point out that the number one aim of equity is to make the transgressed whole. Clearly the nature of the negative right of exclusivity is Mbbest reflected in the form of injunctions.
No assumption either on “right to injunction” as I explain how the sharing of authority should play out.
Not sure why this was so difficult for you.
“No assumption, as I clearly point out that the number one aim of equity is to make the transgressed whole.” — Where are you getting this “point” from, which I currently consider to be an assumption? Isn’t the point of any tort judgment (law or equity) to make the transgressed whole? My understanding is that equity kicks in to fix situations when money isn’t enough.
Assuming there is no inherent right to an injunction, why is a patentee automatically aggrieved in a way that money cannot fix? If there is an inherent right to an injunction, then your talk of equity is beside the point because not awarding an injunction would infringe the right to an injunction regardless of whether the patentee is aggrieved in some other manner.
Perhaps you should explain exactly what you believe a patentee has lost by infringement that requires being made whole.
“Where are you getting this “point” from,”
The basics of remedies, from which the principles of equity intersect.
Think about it: in the situation that we are discussing, an infringer has been adjudged to be infringing.
“Perhaps you should explain exactly what you believe a patentee has lost by infringement that requires being made whole.”
Read your own question out loud.
Slowly.
Let me know when you realize just how inane your question is.
I accept your concession.
I accept yours.
Gee that was fun.
On another thread, Greg DeLassus vents some ire at the notion (gasp) that those seeking patents are customers of the patent office.
But look closer here at this law: the sharing of power to the judicial branch is provided with the express constraint of “to prevent the violation of any right secured by patent.” Notice as well what is expressly missing: any notion of what Greg wants to elevate to some higher level of customer.
Is this just another “should be something else,” Greg?
“The several courts having jurisdiction of cases under this title may grant injunctions [1] in accordance with the principles of equity [2] to prevent the violation of any right secured by patent, [3] on such terms as the court deems reasonable.”
There are three constraints as indicated above. In any case, you appear to be treating [2] as a directive “to prevent the violation of any right secured by patent” as opposed to a constraint on a court’s ability to issue an injunction.
?
I am pointing out that the constraint exists.
Are you saying that it does not exist?
Are you saying that the opposite of the constraint is somehow there? that the courts may willy-nilly apply their own “reasoning” in disregard to having an effect of protecting the rights of the patent grant?
That’s a rather per verted takeaway.
Huh?
“as opposed to a constraint on a court’s ability to issue an injunction.”
“Huh?” First.
So what it happening under eBay when the injunction is denied? Traditional equity would demand – disgorgment of profits (going forward) – as the alternative remedy under the equity rule of unjust enrichment. What are the Courts doing these days so far as the ‘compulsory license?’ or does PTAB just invalidate any patent reaching the remedy stage – so we don’t know?
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