Celgene v. Peter: application of IPRs to pre-AIA patents is not a taking

By Jason Rantanen

Celgene Corp. v. Peter (Fed. Cir 2019)18-1167.Opinion.7-30-2019

Panel: Prost (author), Bryson, Reyna

While Oil States v. Greene’s Energy, 138 S.Ct. 1365 (2018), answered the question of whether inter partes review proceedings were unconstitutional generally, it left unanswered the question of whether application of inter partes review proceedings to patents granted prior to the America Invents Act constituted a taking under the 5th Amendment.  Here, the Federal Circuit directly addresses that question, concluding that it is not.

Constitutional challenges like this one can be challenging to raise effectively on appeal.  While usually, the issues are brought up in a footnote or single sentence, this was not one of those instances: Celgene devoted 8 pages of its principal brief to its takings argument, making a serious go at it.  Still, Celgene had not raised the argument before the Board and requests to address an argument for the first time on appeal are granted only in exceptional circumstances.  However, given the circumstances–Celgene’s raising of an issue not directly resolved by Oil States, the growing number of retroactivity challenges following Oil States, and the thoroughness of the briefing on the issue, among other considerations–the court concluded that “this is one of those exceptional circumstances in which our discretion is appropriately exercised to hear Celgene’s constitutional challenge even though it was not raised below.”  Slip Op. at 25.

Celgene’s argument on the merits rested on a regulatory takings theory.  It contended that “subjecting its pre-AIA patents to IPR, a procedure that did not exist at the time its patents issued, unfairly interferes with its reasonable investment-backed expectations without just compensations.”  Id. at 26.  In response, the PTO argued that (1) the patent owner never had a valid property right because the patent was erroneously issued in the first instance,” and (2) “patents have been subject to reconsideration and cancellation by the USPTO in administrative proceedings for nearly four decades, and Celgene’s own patent[s were] issued subject to this administrative revocation authority,” and that “the AIA did not alter patent holders’ substantive rights.”  Id. at 26, 27 (internal quotation marks omitted).

The Court’s analysis focused on the degree of the change: “specifically whether IPRs differ from the pre-AIA review mechanisms significantly enough, substantively or procedurally, to effectuate a taking.”  Id. at 27.  The court concluded that they were not, a conclusion that was also in line with its precedent rejecting “constitutional challenges to retroactive application of the pre-AIA ex parte reexamination mechanism.”  Id.  The money quote:

The validity of patents has always been subject to challenge in district court. And for the last forty years, patents have also been subject to reconsideration and possible cancellation by the PTO. As explained below, IPRs do not differ significantly enough from preexisting PTO mechanisms for reevaluating the validity of issued patents to constitute a Fifth Amendment taking.

The bulk of the court’s remaining discussion walks through the various administrative revocation procedures in place over the past few decades, comparing and contrasting them with IPRs.  While the court recognized differences between ex parte and inter partes reexaminations, on the one hand, and inter partes review proceedings on the other, it viewed the similarities as “far more significant.”  Id. at 30.  The substantive grounds for review are the same (anticipation and obviousness, based on the same categories of prior art, the same evidentiary standard applies (preponderance of the evidence), the same claim construction standard applies (broadest reasonable interpretation applied in this set of IPRs), in both cases the Director has discretion to initiate the proceeding, and serve essentially the same purpose.

In the end, “Although differences exist between IPRs and their reexamination predecessors, those differences do not outweigh the similarities of purpose and substance and, at least for that reason, do not effectuate a taking of Celgene’s patents.”  Slip. Op. at 36.

The court also affirmed the PTAB’s decisions finding the appealed claims obvious.

 

83 thoughts on “Celgene v. Peter: application of IPRs to pre-AIA patents is not a taking

  1. 11

    Re-reading this decision, I found the following 2 segments of interest:

    “Finally, the briefing on the constitutional issue in this case is sufficiently thorough for our review. See Appellant’s Br. 44–52; Intervenor’s Br. 35–44; Reply Br. 20–28. This case stands in sharp contrast with Trading Technologies
    International, Inc. v. IBG LLC, 921 F.3d 1378, 1385 (Fed.Cir. 2019),..”

    “Celgene has made no showing—nor could it—that claims canceled in IPRs, including its own claims, would have fared any better in the preexisting reexamination procedures.”

    1. 11.1

      The first is in direct reference to what amounted (quite literally) to a throw-away SINGLE line in the prior case.

      The second should serve more of a condemnation of the judges here, as NO ONE would even need start to have any type of showing. Such is an apples and oranges that merely feeds on the boffed Celgene attempt (as I have noted previously).

  2. 10

    Meanwhile, in other news, turns out Mr. Epstein was shaking it up with lots of prominent “intellectual leaders” in the sciences and “tech” sectors. How shocking! Nobody could have predicted that. So … who were the patent attorneys h0bkn0bbing with him? We’ll find out eventually … (his other lawyer friends are already … notorious).

    link to nytimes.com

    1. 10.1

      old news, why are boomers always months to years behind the times?

  3. 9

    Since the takings argument here was primarily about the retroactive effect [versus reexaminations] of AIA post grant proceedings on pre-AIA patents, this is just to note that this is increasingly irrelevant as those patents expire. Also to note that the patent in Oil States v. Greene’s Energy was a pre-AIA patent.

    1. 9.1

      B-b-b-but if any part of the AIA goes down the whole thing goes down with it! Bildo promised us!

      LOL

      1. 9.1.1

        Since you have such “wonderful records” (no doubt for that book no one will ever see), you can pinpoint the statement I made backing away from that position – leastwise until I find the express rejection of the severability amendment that WOULD create an “all or nothing” situation, eh?

  4. 8

    “as certain technology lifecycles grow shorter, it is important that the USPTO not rely too heavily on fees paid late in the life of a patent. Therefore, the Office proposes to slightly rebalance the back-end fees to recover the initial search and examination costs earlier in the life of the patent.”

    link to federalregister.gov

    I thought we all might enjoy snickering at the PTO implicitly recognizing a decreasing value of older patents.

    1. 8.1

      They may as well put the fees back up front, inventors are not participating anyway, just corporations.

    2. 8.2

      Not sure what “rely too heavily” means. If product life cycles are getting shorter then fewer patent will be maintained till late in life. But by the same token, those that are maintained till the end of their term are going to be those blockbusters that, exceptionally, are making ever greater tons of money for their owners. If the USPTO is going to rely for its income stream on anything in particular, it should be on the community of blockbuster mega-profitable patents. Better that than to cream income off entrepreneurs who are struggling, in the early years of their patents, to make any profit at all out of their innovations.

      1. 8.2.1

        I agree.

        1. 8.2.1.1

          So do I. And for the additional reason that less expensive application costs from filing through publication encourages their greater use for planned future product defensive prior art purposes, especially against foreign competitor filings. [Assuming the PTO really does keep applications secret for 18 months, rather than hacked by foreign agents as other U.S. agencies have been.]

      2. 8.2.2

        (Using the PTO results to estimate demand elasticity rather beyond the underlying empirical data) if you made the large entity 11th year maintenance fee a bit more than $600,000, it could replace all other fees. Is that a better system?

        (Actually, that doesn’t account for the increased demand from the zeroed fees. There’d presumably be more requests for examination in a world with free examination. But that estimate is well beyond a napkin calculation.)

      3. 8.2.3

        Other than a piece in an obvious con game, what is the actual value of a typical “do it on a computer” patent?

        Pretty much worthless. To everybody.

        G ar b age in , g ar b age out.

        1. 8.2.3.1

          You either have exactly zero clients in the computing arts or you have the single largest case of cognitive dissonance in recorded history.

  5. 7

    Is it possible to convene a more anti-patent group of CAFC judges than the panel that decided this case? One wonders how this decision would have gone had it been, say, Judges Newman, O’Malley and Moore on the panel.

    1. 7.1

      Newman’s pretty good, but Takings jurisprudence is not her strong suit.

      Although here — truth be told — Celgene’s attempt is part of the problem (listen to the oral arguments – a rather p00r showing there).

      1. 7.1.1

        If “Celgene’s attempt is part of the [constitutional “takings” argument] problem (listen to the oral arguments..” it was certainly not for not paying a sufficient fortune for “silk stocking” leading law firm representation. Listed for Celgene on this decision is a D.C. partner of Jones Day and 3 NYC attorneys, a San Diego attorney; and 3 Quinn Emanuel Urquhart & Sullivan attorneys! These are not the kind of firms that are likely leave possible argument or any legal rock unturned.
        [Also note the number Government attorneys who weighed in here.]

        1. 7.1.1.1

          Did you listen, or merely see the “Name” before you made your mind up?

          1. 7.1.1.1.1

            … sometimes the “borrowed authority” of “Names” just is not up to snuff.

          2. 7.1.1.1.2

            My observation was about Celgene’s costly and extensive yet failed legal efforts here, not about [meaninglessly] making my [vs the Court’s] mind up about anything. If there was an effective legal argument to be made it would have been made in their brief. Oral arguments to an appellate court [unlike some jury trials], no matter how articulate, are not effective for tilting against windmills or trying to “turn a sow’s ear into a silk purse.”

            1. 7.1.1.1.2.1

              If there was an effective legal argument to be made it would have been made in their brief.

              This has no basis in reality.

        2. 7.1.1.2

          Honestly, though, it is kind of embarrassing to see such high-powered litigators embarrass themselves like this. Literally no one in the whole history of this farce has cited any authority for the proposition that takings law could be used to set aside these IPRs. Setting aside the agency action is not the remedy for a “taking.” The remedy for a taking is compensation. This is not a particularly obscure or sophisticated point.

          It is as if a product liability tort action is being brought to change a child custody order. The cause of action is just never—even if successfully proven—going to get the plaintiff the sort of relief that the plaintiff is actually seeking.

          1. 7.1.1.2.1

            For not being a “a particularly obscure or sophisticated point,” Greg sure gets it wrong — in spades.

          2. 7.1.1.2.2

            Incidentally—and not to put too fine a point on it—the idea that takings law should be available as a mechanism to set aside agency actions is the purport of Justice Thomas’ concurrence (slip op. at 1). No other justice was willing to join the Thomas concurrence, which tells you just how far this view is from being law (as opposed to the idiosyncratic hobby horse of some Fed Soc fanatics).

            1. 7.1.1.2.2.1

              “… the purport of Justice Thomas’ concurrence…”

              Sorry, “Justice Thomas’ Knick concurrence.” Mea culpa.

          3. 7.1.1.2.3

            I disagree that the sought relief would not be obtained by the cause of action. If the government had to contend with IPR invalidations requiring compensation, possibly in the millions of dollars for some cases, the government would stop doing IPR invalidations.

            1. 7.1.1.2.3.1

              But that is not relief for this plaintiff. Even if the PTO were to say “we are going to be very choosy going forward about which IPRs we institute, because we cannot afford to be paying too much restitution,” that will not make this patent any less dead. Nor does the PTO have any statutory authority at this point in the process to say “sorry, we have changed our minds. If we are going to have to pay money for invalidating the claims, then we declare the claims no longer invalidated.”

              In other words, nothing about the cause of action in this case can get the plaintiff the relief being sought in this case. I expect that you are correct that the plaintiff would be pleased to see other IPR petitions in the future not be instituted, but that is not the sort of particular relief that can make the present cause of action ripe in this case and provide Art. III jurisdiction for this dispute.

          4. 7.1.1.2.4

            Being able to bill at $1000./hr. seems to compensate for lots of mere alleged embarrassment, and of course there is the acquiescence of the client’s own attorneys.

          5. 7.1.1.2.5

            [Im not sure if I’ve posted in the right part of the tree—this responds to DeLassus]. What would you suggest they do instead? It looks from the opinion like Celgene’s lead arguments were on the merits of the validity issues. And, while it was already there on appeal with invalid claims, it chose to make additional arguments taking a shot at a constitutional argument that would win the whole case if successful. The argument had low odds of success, but the merits arguments didn’t succeed either.

            And as a practical matter, even if you’re right that the proper way to go about this is a suit in the CFC for money… how does that suit come together? Do you wait until your patent is invalidated and then sue in the CFC for compensation for your irrevocably dead patent? Or do you sue early, arguing that you have lots of patents of questionable validity, and the AIA has cheapened all of them (I think I recall that “partial” diminutions in value are often found not to be takings).

            Adding a somewhat long shot constitutional argument to an appeal brief sounds to me like the least bad of several unattractive options—or it least it’s not necessarily embarrassing for Celgene’s lawyers to have thought it was.

            1. 7.1.1.2.5.1

              I think the alleged injury was being subject to an IPR, although I’m not sure if the claimed “injury” occurred at institution of the IPR or when the AIA became law.

            2. 7.1.1.2.5.2

              Do you wait until your patent is invalidated and then sue in the CFC for compensation for your irrevocably dead patent? Or do you sue early, arguing that you have lots of patents of questionable validity, and the AIA has cheapened all of them (I think I recall that “partial” diminutions in value are often found not to be takings).

              I am not really the person to decide the timing, because I think that Celgene’s whole theory of the case was risible. I gather, however, that they meant to advance—with a straight face—the idea that the passage of the AIA effected the taking, because their pre-AIA patents had one set of legal rights attached pre-AIA and a different, less valuable set post-AIA. Therefore, at any point post-AIA they could (and should, if they meant this cause of action to proceed) have brought suit against the government in the Court of Federal Claims.

              In any event, Celgene was here seeking equitable relief (a voiding of the IPR decision) and “[e]quitable relief is not available to enjoin an alleged taking of private property for a public use, duly authorized by law, when a suit for compensation can be brought against the sovereign subsequent to the taking.” Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016 (1984). So, can a suit for compensation be brought? Yes, 28 U.S.C. U.S. §1491 provides that “[t]he United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded… upon the Constitution… .” That is what Celgene (say that they) thought they had—a “claim against the United States founded upon the Constitution.”

              So, then Celgene were not permitted to request this equitable relief until first they had sought their compensation in the Court of Federal Claims. Until they had done so, their equitable pleas for relief in this case under the Fifth Amendment were not yet ripe for adjudication. They were, of course, free to appeal the merits of the IPR decision in the CAFC, while they simultaneously brought the Fifth Amendment challenge in the CFC. If, however, the CFC were to award compensation, then Celgene simply would not have a remaining Takings case, and thus no standing to make this Fifth Amendment challenge. The CAFC, therefore, should not have agreed to hear it, and should not have passed on it (even as a discretionary matter).

            3. 7.1.1.2.5.3

              [I]t least it’s not necessarily embarrassing for Celgene’s lawyers to have thought it was.

              You are right this far—I really should not have used the word “embarrassing.” I have no right to that word, because (embarrassed as I am to admit it) I did not see the flaw in this Takings argument myself until I heard Judge Hughes explain it in the Trading Tech oral arguments. Seeing as I was too dim to notice the flaw in this argument, I should not hold it against others who also missed the flaw. I apologize for any offense given by talk of “embarrassing” failures.

    2. 7.2

      Judge Newman authored Patlex, so there is little reason to suppose that she would have gone another way here. Similarly, Judge Moore is, perhaps, the most deferential CAFC judge to established precedent (i.e., Patlex). Consider me skeptical, then, that Moore would have gone another way.

    3. 7.3

      –Is it possible to convene a more anti-patent group of CAFC judges than the panel that decided this case?–

      Maybe Dyk, Mayer, Bryson

      1. 7.3.1

        Any panel with Judge Dyk is going to be worse for the patentee than the otherwise same panel without Judge Dyk, and that is true regardless of technology subject matter.

  6. 6

    In the end, “Although differences exist between IPRs and their reexamination predecessors, those differences do not outweigh the similarities of purpose and substance and, at least for that reason, do not effectuate a taking of Celgene’s patents.” Indeed CAFC, Indeed. Boil the frog slowly, so it never knows it’s being cooked.

    1. 6.1

      Ouch.

      The late Ned Heller spins in his grave.

      1. 6.1.1

        Whoa, “late”?

        Truth?

        1. 6.1.1.1

          Yes, Ned died in April 2018. It was covered on PatentlyO. He is (and long will be) greatly missed.

          1. 6.1.1.1.1

            For all of Ned’s faults (and being human, he had many), one of them was NOT an abject unwillingness to engage (quote unlike certain inte11ectual cowards that while posting “in their real name,” do not engage the “inconvenient” counter points from other certain posters, but who would rather snipe from the sidelines). Ned would at least engage at initial points.

            For Ned, his disengagement clearly came at the discussion points at which his active client advocacy would be clearly compromised were he to further engage (and maintain inte11ectual honesty). In other words, he engaged up to the limit at which professional ethics stopped him from admitting counter points that otherwise he would surely admit to.

            1. 6.1.1.1.1.1

              … and let me just add that THAT may merely be an artifact of the desire to use the borrowed authority of posting “with your real name” in order to conduct advocacy in this particular forum.

              Of course, the well-buried posting rules for this site indicates well that posts are supposed to be personal views, as opposed to professional advocacy on the behalf of clients… ( not that those rules are in any way even remotely [objectively and evenly] applied… )

    2. 6.2

      In other words inventors are schmucks. We need to report the patent bar and the USPTO to the FTC consumer protection bureau.

      1. 6.2.1

        Once again Josh, you paint FAR too broadly in seeking to put all of the patent bar into one bucket.

        As I have mentioned to you previously, there are plenty of us on the patent bar that do NOT operate with active cognitive dissonance and truly seek to obtain (and advocate for) a strong patent system.

  7. 5

    Note to self: boycott Celgene and encourage all clients to do the same.

    1. 5.1

      Celgene is merely typical of the excesses of Big Pharma.

  8. 4

    Could the court’s “this is one of those exceptional circumstances in which our discretion is appropriately exercised to hear Celgene’s constitutional challenge even though it was not raised below” be translated as: “we are so sick and tired of the more than 50 of these [typically half-baked] Constitutional arguments against IPRs (which the Sup. Ct. has refused to take up yet again) that we are telling you to please stop trying here.” [Of course there will be some patent attorneys willing to tick off the court against their client by continuing to do so.]

    1. 4.1

      +1

      1. 4.1.1

        LOL – two people who refuse to engage on the merits trying to diminish the fact that the court DID take up a Constitutional question…

        Classic .

    2. 4.2

      Of course there will be some patent attorneys willing to tick off the court against their client by continuing to do so.

      No doubt. I note for instance, one of the more frequently presented “constitutional” arguments presented around these parts concerns the application of a preponderance-of-evidence standard in IPRs instead of clear-&-convincing constitutes a taking. The putative “unconstitutionality” of this point is squarely addressed in this opinion (slip op. at 35)

      Celgene also notes that the presumption of validity… overcome only by clear and convincing evidence, does not apply in IPRs… However,… we long ago explained that we do not consider the section 282 presumption of validity to be a property right subject to the protection of the Constitution.

      (Internal quotation, citations, and ellipses omitted)

      Nevertheless, I do not expect that the more febrile partisans of this argument will give it up, merely because it has been squarely presented and squarely shot down. Rather, the failure of this argument when squarely presented will simply be treated as more evidence that the courts (rather than the internet fever swamps) do not properly understand constitutional law.

      1. 4.2.1

        yeah yeah yeah – we talked about this when you posted about the oral arguments.

        As I noted then, Celgene boffed the oral arguments, so it really is not a surprise to see the court MISS based on the p00r arguments it saw.

    3. 4.3

      Could the court’s [takings decision]… be translated as: “… please stop trying here.” [Of course there will be some patent attorneys willing to tick off the court against their client by continuing to do so.]

      It appears that the effort to rescind the ACA will never end until the entire healthcare law is struck down. In the same way, it appears to me that the opponents of the PTAB trial procedures of the AIA will never give up until either (1) they win and get the IPR/PGR/CBM regime declared unconstitutional on some grounds; or (2) Congress effaces such trials from the U.S. Code (or modifies them so severely as to have effectively removed them from the books).

      In other words, this constant churn of legal absurdity will never end, unless and until the absurdity proponents win. I suppose that one might as well cultivate an appreciation for the finer points of absurdity.

  9. 3

    I am sure that Celgene will petition for certiorari here. When they do, I believe that the correct response will be for the SCotUS to GVR, with instructions for the CAFC to consider its jurisdiction to have decided the constitutional question here in view of the evident unripeness of the challenge.

    As the CAFC notes (slip op. at 26) “[t]he Takings Clause of the Fifth Amendment states that private property shall not ‘be taken for public use, without just compensation.'” In other words, there are two elements for a successful takings case: (1) “has there been a taking?”; and (2) “was the taking without just compensation?”. Here, Celgene did not even attempt to establish the second element of its challenge.

    In order to extract just compensation from the PTO for an (allegedly) improper taking, Celgene would have had to sue the PTO in the Court of Federal Claims. Celgene did not even attempt to do so. This case does not come to the CAFC as an appeal from the CFC denying a suit for compensation. Rather, the appeal comes from the PTO’s IPR judgment. The PTO has no statutory authority to award compensation for canceled claims. Even if the CAFC had believed that the PTO’s IPR decision amounted to an improper taking, the CAFC has no power to grant a remedy here (an order of compensation) in the absence of a suit from the CFC.

    Because the CAFC has no power to grant the appropriate remedy in this suit, it follows that the CAFC likewise had no jurisdiction to pass on this challenge in the first place. Rather, the CAFC should simply have noted that the case was not yet ripe for decision, given the failure of Celgene to sue the PTO in the CFC.

    A precedent decided by a court without jurisdiction has no precedential force. Therefore, this issue is not actually decided until and unless the case comes to the CAFC on appeal from the CFC, rather than directly from the PTO. For the moment, the entire second half of this decision is just an impermissible advisory opinion without actual legal force.

    1. 3.1

      Celgene would have had to sue the PTO in the Court of Federal Claims.

      I am traveling at the moment, but I could swear that there was just a recent case that HELD opposite to the supposition that Greg advances – that a Takings case NEED NOT first run the gamut of going through the “without just compensation” angle.

      1. 3.1.1

        There was a recent case, but it deals with takings by a State. KNICK v. TOWNSHIP OF SCOTT, PENNSYLVANIA (link to supremecourt.gov)
        A plaintiff does not need to exhaust the state remedies before bringing a federal suit, but “… because Congress—unlike the
        States—is free to require plaintiffs to exhaust administrative remedies before bringing constitutional claims.”
        I am not familiar with the federal procedure for bringing the federal claim.

        1. 3.1.1.1

          Sorry, I am not following you. What does Knick have to do with anything here. Knick says that if you have a takings claim against a state, you do not first have to bring it in state court before you might be allowed to bring it in federal court. Here, there is no case against a state (at the risk of belaboring the obvious, the PTO is an arm of the federal government, not the state government), so Knick is simply inapposite.

          1. 3.1.1.1.1

            Correct. I was replying to the comment that there was a recent takings case, but the Knick case is not relevant to the facts here.

            1. 3.1.1.1.1.1

              Ah, got it. Thanks.

            2. 3.1.1.1.1.2

              Thanks – that’s the case, but I cannot see how you think it not relevant here.

              The facts may be different, but the application of law would be precisely the same.

              Note that Greg’s “High Road” summary of the case is decidedly wrong, and this was NOT merely a “try in federal as opposed to try in state.”

              More than a bit ironic that Greg wants to “argue” about others making “silly” Constitutional arguments when he gets things so wrong so quickly.

    2. 3.2

      For the moment, the entire second half of this decision is just an impermissible advisory opinion without actual legal force.

      ROTFLMAO

      So says Greg DeLaffatus, who was appointed to determine which cases have “actual legal force” and which don’t. Oh wait — that didn’t happen.

      Of course, Greg also believes that his client will be able to patent a correlation and come after me when I … correlate something with something else! He’s a very serious person.

      Celgene did not even attempt to establish the second element of its challenge.

      The second element of the takings analysis requires that Celgene show that it was “not compensated.” Pretty sure Celgene established that. They lost their patents. The PTO does not reimburse applicants for fees paid to obtain an invalid patent. Therefore, there was no compensation from the government for the “taking”. Does anyone involved with this dispute believe there was any doubt about any of this? No. Did anyone assume otherwise? No. Did everyone assume that there was no compensation, because everyone — all parties, and all the judges — possesses at least that minimum level of rationality? Yes. So the second element was met? Of course it was.

      And thus the matter was ripe and Greg’s entire argument about “ripeness” falls apart like a house of straw. Not that it matters much either way. These “takings” arguments are ridiculous.

    3. 3.3

      Celgene did not even attempt to establish the second element of its challenge.

      Of course, this is because Celgene’s case is baseless in the first place. The remedy for a “takings” is just compensation, but Celgene does not want compensation. Celgene wanted the IPR decision to be set aside as contrary to law. This is not even a possible outcome of a takings challenge. The whole thing was a huge waste of the court’s time, and the eventual cert. petition will be an even bigger waste.

      1. 3.3.1

        The whole thing was a huge waste of the court’s time, and the eventual cert. petition will be an even bigger waste.

        On that much we can agree.

        The claims themselves were so disgusting that everyone who touched them at any point in their prosecution history should be ashamed of themselves, and that includes the Examiners at the PTO who let them out the door.

      2. 3.3.2

        The remedy for a “takings” is just compensation, but Celgene does not want compensation.

        Sure they do. They want $400 billion dollars because that’s how much all those babies are worth that were “saved” by their awesome patent on … using a database to maintain medically relevant information.

        Oh wait … those claims were pure junk so it’s actually Celgene who should be reimbursing everyone whose time and money they wasted. Never mind.

      3. 3.3.3

        The remedy for a “takings” is just compensation, ”

        Um, no. The remedy for what would be a proper takings MAY be just compensation. But the argument (and ensuing remedy) for an IMPROPER takings is different.

        1. 3.3.3.1

          Please elaborate:

          What is an improper takings as opposed to a proper takings?

          What is the remedy for an improper takings?

          1. 3.3.3.1.1

            See the recent Supreme Court case, so kindly provided by Greenacre to obtain a sense of when a view of recompense (of any kind) is not available. If the ONLY issue is one of not having provided sufficient recompense, then the taking is otherwise proper and remediable by the recompense.

            But not all Takings are such. Those that cannot be remedied merely by recompense are improper Takings. The remedy for such is to revert the situation such that the Takings is nullified – and to the extent that the Takings occurs per operation of law, and the Takings are improper — as an operation of law — the law is voided as unconstitutional.

            Consider a loose analogy of Takings by zoning laws. Certain zoning laws engender Takings arguments in view of the recompense, without questioning the underlying zoning law. Other issues may arise with the zoning law itself, for which the remedy of mere recompense is not sufficient, and the remedy will include not allowing those zoning laws to continue to have legal effect.

            1. 3.3.3.1.1.1

              The bottom line is that certain Takings are permitted to the government while others simply are not.

    4. 3.4

      In other words, there are two elements for a successful takings case: (1) “has there been a taking?”; and (2) “was the taking without just compensation?”.

      To be scrupulously rigorous here, one could imagine a three prong test: (1) “has there been a taking?”; (2) “was the taking for a public use?”; and (3) “was the taking without just compensation?”. In other words, the plain words of the takings clause limit the clause’s applicability to property “taken for public use,” so one could imagine a world in which the courts scrutinize the challenged taking to determine whether the use for which the property was taken is sufficiently “public.”

      In practice, however, the Court has totally evacuated the “public use” phrase of any actual meaning. Kelo v. New London, 545 U.S. 469 (2005). What is left, then, is that a taking is proper if just compensation is paid, and improper if not. So long as just compensation is available, however, is there simply no basis in current law for a court to set aside a federal action as a violation of the takings clause.

      1. 3.4.1

        Greg has (unsurprisingly) advocated yet again to present a false light.

        I am not sure if this is entirely malicious, or to what degree simple lack of understanding permeates Greg’s advocacy efforts.

        His prior “whipped out” credentials show a solid lack of connection with the subject matter of Takings law, and his choice of snide shots from the sidelines while not engaging on the merits of counter points presented (by certain individuals clearly more in the know then he) leads to a bit of “Internet Shout Down, monologuing (rather than any actual dialogue from which Greg would have at least a chance of learning if his errors).

        But as they say, purposeful ig n0r ance is no excuse, so Greg’s wayward advocacy — regardless of the mix of malicious and chosen false hoods and actual error remain fully by his choice.

        1. 3.4.1.1

          (as an example — since Greg was so quick to mischaracterize the recent Supreme Court case, I will bet that he did not bother to read the part about the government’s action to remove the element of just compensation)

    5. 3.5

      Lots of problems here, Greg, with some of your observations.

      (1) The Supreme Court would never GVR this case. First of all, I don’t know who would even raise such an argument. The only party who could petition for certiorari would be Celgene, the losing party. And Celgene was the party who so vociferously urged the CAFC to take up the Takings argument in the first place. The Supreme Court will not look on Celgene arguing that the CAFC should not have taken up this issue, when it was Celgene that urged them to do so. Even if it was an error to take up the issue, it was clearly an invited error. Second, the underlying constitutional challenge was fairly weak and insubstantial. This will be cert denied, not a GVR.

      (2) The remedy argument you make is puzzling. The reason no one addressed the second (“just compensation”) prong is because it was undisputed that the AIA provides NO compensation for canceled claims. Accordingly, the analysis collapses entirely into the first prong; if cancelling pre-AIA claims in IPR was deemed a Taking, that would have been unconstitutional BECAUSE the statute provided no just compensation.

      The remedy here, if the challenge was successful, would have been to nullify IPR cancellations of pre-AIA claims. The court obviously cannot rewrite the statute to make it constitutional by providing for a monetary compensation remedy not authorized by statute. It would be up to Congress to determine if it wanted to fix the statute by enacting some type of compensation regime.

      (3) The CAFC clearly had jurisdiction to hear the constitutional challenge. It’s an Article III court, it is empowered both by statute and the constitution itself to hear cases or controversies involving questions of federal law, including the constitutionality of federal statutes. You can argue that issues should have been raised in some earlier proceeding or lower tribunal, but those arguments raise discretionary questions of appellate procedure and the timing of issue presentation, which do not affect the CAFC’s core jurisdiction under Article III to hear the challenge. Those types of discretionary calls by the Courts of Appeal are simply not fodder for Supreme Court review.

      1. 3.5.1

        The reason no one addressed the second (“just compensation”) prong is because it was undisputed that the AIA provides NO compensation for canceled claims. Accordingly, the analysis collapses entirely into the first prong; if cancelling pre-AIA claims in IPR was deemed a Taking, that would have been unconstitutional BECAUSE the statute provided no just compensation.

        Thank you for your typically thoughtful reply. I must, nevertheless, disagree with your reasoning here. Your response proves too much. By your logic, the entire patent act is unconstitutional. After all, the government is free to infringe any patent, and Title 35 provides no explicit statutory provision for compensation. If a statute must explicitly provide a mechanism for compensation in order not to trespass against the Takings Clause then, by your logic, all government intrusions on patents are a necessarily uncompensated (and thus unconstitional) taking.

        Of course, it is not the case that all government intrusions on patents are an uncompensated taking, and that is because 28 U.S.C. §1491 provides a forum in which just compensation might be adjudicated and awarded. The patent act does not need to specify a mechanism for or amount of compensation, because some other provision of the law already provides.

        In a similar manner, if the AIA works a taking, that does not mean that the AIA must itself specify a means for compensating the affected property owner. Rather—once again—the Tucker Act’s §1491 provisions supply that compensation mechanism where one is needed.

        However, the patentee here did not even attempt to make use of that mechanism specified in §1491. Therefore, the patentee’s taking claim is not yet ripe for CAFC adjudication.

        The Supreme Court would never GVR this case… This will be cert denied, not a GVR.

        As a practical matter, I am sure you are correct. I think that it would be a cleaner result if they were to GVR (so that people are not left thinking that the CAFC’s decision here is an actual decision with actual precedential effect), but in practice it is much more likely simply to be dismissed than GVRed.

        1. 3.5.1.1

          In other words, your contention that “[t]he court obviously cannot rewrite the statute to make it constitutional by providing for a monetary compensation remedy not authorized by statute,” while accurate as far as it goes, is irrelevant. There is already a statutory provision on the books that provides for monetary compensation in the event of a government taking. The court would not need to “rewrite” the statute, but rather merely need to apply the statutes already on the books.

          First, however, the appellant here would have had to invoke those statutes (by bringing a Tucker Act claim). The patentee’s failure to bring such a claim makes the whole case unripe for Art. III adjudication.

          1. 3.5.1.1.1

            Tucker Act is inapposite to the AIA IPR fact pattern.

            It is beyond silly to even contemplate otherwise.

            Oh wait, this is just Greg blowing more nonsense.

      2. 3.5.2

        The remedy here, if the challenge was successful, would have been to nullify IPR cancellations of pre-AIA claims

        That’s not what Bildo told us! The entire AIA goes down, just like “the good ship Titanic.” Remember? My goodness we were told this probably five hundred times since its passage.

        Maybe you just don’t take Bildo seriously.

        1. 3.5.2.1

          See above.

  10. 2

    Of course, if Congress passes an incredibly id i 0tic expansion of 101 and suddenly I’m a patent infringer (i.e., a “copyist” LOL) because I think about the meaning of some data I collected using a prior art method, we should all just be happy. Totally not a “taking” of anything! Nope. Nothing remotely unconstitutional about it. After all, where are all the medically relevant new thoughts going to come from without patent protection? Greg DeLaffatus has all the answers. Maybe Dennis should ask him to write a very special and compelling post explaining the awesomeness of it all to all those people out there who have let themselves get too accustomed to thinking about data without fear of being sued.

    1. 2.1

      Move the goal post back — you have inserted your old moving of the claim to be purely something of “thinking,” and that is a strawman.

  11. 1

    The court also affirmed the PTAB’s decisions finding the appealed claims obvious.

    And there were very serious 101 issues as well that our IPR system unfortunately does not address. On their face, Celgene’s claims are a prime example of the sort of disgusting claims that morally bankrupt companies will try to obtain as they pull out all the stops in the system in an attempt to control medically relevant information.

    And make no mistake: if anything resembling the revisions to 101 are passed, it’s exactly these kinds of claims (and worse) that will become the number one priority of both pharma companies and the zillion tr 0lls out there who will inevitably turn up to milk the system and the public for every penny that’s out there.

    1. 1.1

      Also, lest we forget the bigger picture: these “takings” arguments are part of a full-court press by Repu k k k e hacks (Ferderalist S0ciety @ h0les, primarily) whose main goal is to crush the regulatory power of the Federal Government. Golly, I wonder why a desperate shrinking minority of rich entitled white @ h0les would engage in that strategy? It would be so irresponsible to speculate …

      1. 1.1.1

        “whose main goal is to crush the regulatory power of the Federal Government”

        NOICE! GTFO federal gubmit!

        “desperate ”

        MM unironically thinks that the most powerful demographic on the face of the planet is “desperate”. LOL!

      2. 1.1.2

        …white…?

        Again, the abject RacyISM is presented by Malcolm — and done so “unironically” (But I would take exception to the use of the word “thinking” when it comes to Malcolm’s rants here)

        1. 1.1.2.1

          … as per the very topic of this thread, the juristic person of Celgene is racy ISM neutral. But why let that fact get in the way of Malcolm’s poly rant?

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