Oil States v. Greene’s Energy (Supreme Court 2017).
After receiving party briefs in this case, the Supreme Court requested a responsive brief from the Michelle Lee in her role as PTO Director on the constitutionality of the AIA trial system. That brief has now been filed by the new acting Solicitor General Jeff Wall who handled a number of patent cases in private practice. Despite the regime change, the SG’s office continues to strongly support the AIA Trial system and the brief argues strongly that patents are public rights that may be subject to administrativ review:
Patents are quintessential public rights. Pursuant to its constitutional authority to “promote the Progress of Science and useful Arts” by establishing a patent system, U.S. Const. Art. I, § 8, Cl. 8, Congress created the USPTO, an agency with “special expertise in evaluating patent applications.” Kappos v. Hyatt, 566 U.S. 431, 445 (2012). Congress directed that agency to issue a patent if “it appears that the applicant is entitled to a patent” under standards set by federal law, 35 U.S.C. 131. Patents accordingly confer rights that “exist only by virtue of statute.” Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 229 n.5 (1964). . . . Petitioner’s constitutional arguments do not warrant this Court’s review.
[Read the Brief: 16-712_oil_states_energy_servs._llc_opp] The Supreme Court has already denied certiorari in three prior constitutional challenges to the AIA trial mechanisms. MCM Portfolio v. Hewlett-Packard; Cooper v. Lee; and Cooper v. Square. If Oil States is denied here, there are also several more cases waiting in the wings to raise the challenge again.
Cascades Projections v. Epson America (Fed. Cir. 2017) (en banc denial)
In a split decision, the Federal Circuit has denied Cascades petition for initial en banc hearing. The petition asked one question: “Whether a patent right is a public right.” Because a Federal Circuit panel already decided this decision in MCM, Cascades asked the court to bypass the initial panel appeal and head straight to the en banc question. See MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015), cert. denied 137 S. Ct. 292 (2016). The issue is important because the answer to the private right question could lead to a judgment that the administrative patent trial system is an unconstitutional violation of due process rights. I previously discussed the case on Patently-O.
Judge Newman Concurring in Denial: The important question here is “whether the statutory scheme created by the America Invents Act, in which the Office is given an enlarged opportunity to correct its errors in granting a patent, with its decision subject to review by the Federal Circuit, meets the constitutional requirements of due process in disposition of property.” Judge Newman suggests that she would vote for re-hearing after “full opportunity for panel rehearing.”
Judge Dyk (Joined by Judges Prost and Hughes) Concurring in the Denial: “MCM was correctly decided. . . . [T]here is no inconsistency in concluding that patent rights constitute property and that the source of that property right is a public right conferred by federal statute.”
Judge O’Malley, Dissenting from the Denial: Patent rights are likely “core private rights only subject to adjudication in Article III courts.”
Judge Reyna, Dissenting from the Denial: “The state of current law compels en banc review.” According to Judge Reyna, the clear statement from Supreme Court’s 1898 decision in McCormick Harvesting that “The only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent.” McCormick Harvesting Mach. Co. v. C. Aultman & Co., 169 U.S. 606, 609 (1898).
We’ll look for the upcoming panel decision in the case and subsequent en banc hearing.