In my high school civics classes, I learned that the people created the American government by granting only certain rights to it. The rights we didn’t grant, we kept for ourselves or the States. I learned that law is the execution of the authority of government backed by legally applied violence. The authority of law was well understood by the people, so the people put in place mechanisms to separate powers to both control and limit the power of government. A loss of control or delimiting of power would certainly mean a loss of our rights.
A primary construct of the government we created is that the body closest to the people, Congress, was granted the sole and exclusive domain of writing law. Placing that power closest to the people helps to ensure that our rights are protected. The judicial branch, with its unelected lifetime appointed judges, was tasked to interpret the meaning of law – not to create law.
Unfortunately, my high school civics teacher was wrong. The part he didn’t understand was the reality of how government really operates. Today’s government is untethered to the very documents that created its existence in the first place. How the government uses its power and how the application of that power is separated for the protection of our rights is no longer a respected tenet of government – at least not respected by the government. The results we have not were long ago predicted. We lose our rights and that loss is clearly illustrated in the story of patent reform since 2005.
Article I, Section 8, Clause 8 of the Constitution (the document that constructs the government) constructs a patent as nothing but an “exclusive Right” and this is the only place in the entire Constitution that the word “Right” is even used.
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
The “exclusive Right” is strong language. It demands injunctive relief, which is presumably why the Court of Appeals for the Federal Circuit stated there is a “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances” when they overturned the trial court in a case called eBay v. MercExchange. That general rule stood since the Patent Act of 1790, 216 years.
In 2005, the first round of patent reform legislation, the Patent Reform Act of 2005 (H.R. 2795), hit Congress. In it were several provisions intended to change how patent law had worked for over 200 years, but the most interesting provision was limiting access to injunctive relief.
SEC. 7. INJUNCTIONS.
Section 283 is amended by adding at the end the following:
`In determining equity, the court shall consider the fairness of the remedy in light of all the facts and the relevant interests of the parties associated with the invention. Unless the injunction is entered pursuant to a nonappealable judgment of infringement, a court shall stay the injunction pending an appeal upon an affirmative showing that the stay would not result in irreparable harm to the owner of the patent and that the balance of hardships from the stay does not favor the owner of the patent.’.
The Patent Reform Act of 2005 was an attempt to legislate that injunctive relief be stayed pending an appeal if the patent owner does not suffer “irreparable harm”. If the patent holder does not have a product on the market, it is nearly impossible to prove “irreparable harm” will be caused by staying an injunction. The remedy for infringement is assumed to be money, not market position. Money can be awarded after the appeal so there may be harm, but it would be repairable harm because it would be awarded upon the conclusion of litigation.
While I disagree that Congress can change the plain meaning of the Constitution with legislation alone, Congress without question believed that legislation was required to make such a foundational change to the meaning of a patent right, which is why they legislation was
The Patent Reform Act of 2005 included provisions delving into other procedures and operations within the federal courts. The courts don’t appreciate Congress telling them how to run their courtrooms, so they did not like the legislation and feared it would pass. So the Supreme Court decided to take matters into their own hands in an apparent effort to stall the legislation thereby avoiding Congressional encroachment on their turf. To accomplish that they took up the case called eBay v. MercExchange.
The Supreme Court’s decision in eBay v. MercExchange changed the nature of a patent right from its Constitutional foundation as a private property right, an exclusive right, to some sort of a public right by crafting a four-step checklist to award injunctive relief:
“That test requires a plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”
The patent holder must satisfy all four steps in order to be awarded injunctive relief. Unfortunately, the test is impossibly difficult for most patent holders to pass. Demonstrating step (1), (2) and (3) inherently requires a product on the market. The patent holder must overcome an infringer arguing that without a product on the market, the patent holder is only seeking money and therefore cannot suffer irreparable harm if an injunction is denied. The balance of hardships easily falls on the infringer’s side because the infringer’s customers would be without the product and the patent holder is only seeking money.
Demonstrating step (4) requires an argument related to the public interest in a patent right. This redefines a patent right, which was a property right capable of attracting investment, as some sort of public right virtually incapable of attracting investment. If a big company steals your patented invention and massively commercializes it using their existing market and deep pockets thus running you out of business, it is practically impossible to prove that the public interest is served by injunctive relief. After all, the public interest is served by access to new technologies, which is the point of the patent system to begin with, and the patent holder has no product, never mind the infringer stole it to begin with. Therefore, enjoining the infringer would deny the public access to the new technology, which is a disservice to the public interest.
To summarize the Supreme Courts decision: If you steal it, you keep it, because it serves the public interest. I hope they do not expand the domain of that logic to my car, my house or my business.
In eBay v. MercExchange, the Supreme Court legislated Section 7 of the Patent Reform Act of 2005 in the form of case law. This meant that Congress didn’t have to pass it and it was subsequently dropped. eBay v MercExchange cannot be considered an interpretation of law. The Constitution, black letter law and dozens of cases over hundreds of years created unquestioned precedent for automatic injunctive relief barring exceptional circumstances. The courts rewrote all of patent law, which is clearly legislating from the bench to change the very nature of a property right.
Over the last ten years, one bad patent reform bill after another has been introduced and then pushed by a fantastic lobbying and public relations effort that has dumped hundreds of millions of dollars on Washington DC. eBay v. MercExchange is not the only legislation enacted by the courts in their effort to avoid Congressional meddling with their turf. Legislation was introduced related to damages, willful infringement, inequitable conduct and obviousness, all of which were enacted in whole or in part by the courts, presumably to avoid passage of the legislation in Congress.
If Congress believes that legislation is required to change patent law, why do the courts believe they can legislate via case law to achieve the same laws? Certainly, the courts must know they are legislating from the bench and that is a separation of powers issue far more damaging to our rights than one branch changing the rules of another.
I believe the infringer lobby has taken this turf war to heart and it has become their key strategy in passing laws favorable to them and damaging to small inventors. All they really have to do is push legislation into Congress that goes to the core of courtroom procedures and then spend massive dollars to present the legislation as a fait accompli to make the Supreme Court believe it will pass. In the end, it really doesn’t matter if the legislation passes Congress because the courts will legislate it through case law to avoid Congressional encroachment on their turf.
This sad state of our government was to be avoided by separating those who pass law from those who interpret law. Not surprisingly, we are losing our rights as a result of the courts legislating through case law. At this point, we have lost one of the most important rights, patent rights, and this loss is harming job growth and our economic competitiveness.
Congress is set up deliberately to debate the merits of legislation in an open and approachable forum. This creates law that fully considers the rights of the people. I can attest personally that anyone can walk into Congress, make their case and expose the unintended consequences of bad legislation. Members of Congress are directly elected by the people, and this direct accountability places the people’s interest up front in the legislation they consider.
Conversely, the courts are in no position to determine the unexpected consequences of legislating through case law. Access to the court is limited to parties directly affected by a specific case. While access can be opened to those with the financial wherewithal to write amicus briefs, it is not required. No person can just walk in off the street to explain the unintended consequences of any particular court decision. Federal judges and Supreme Court Justices are not elected. They are lifetime appointed, which, of course, means they have virtually no connection to the people and the decisions they make will never affect their paycheck. Said differently, the courts live in an intellectual vacuum devoid of the knowledge of unintended consequences and personal responsibility. The courts were not granted the power to write law for good reason.
That said, it is what it is. The courts will legislate if they believe Congressional legislation will pass and tamper with their turf. Inventors can use this understanding to push the courts to fix their misguided meddling. Inventors should push legislation into Congress and loudly support its passage so the Supreme Court believes it will pass. If they believe it, they will legislate for us and we don’t have to worry about passing anything through Congress.