Although the petitioner’s brief, perhaps unsurprisingly, nowhere mentions Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), citation to the case is spread liberally throughout the respondent’s brief.
The respondent immediately takes issue with the argument that patents are not public rights, summarily citing MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015), cert. denied, 137 S. Ct. 292, which held that that neither Article III nor the Seventh Amendment bars IPRs, a holding that, according to the respondent, does not conflict with any decision of the Court or any other court of appeals, rendering further review unwarranted.
Going into greater detail, the respondent argues that the petitioner got things backward because the Seventh Amendment is implicated only if an issue must be adjudicated by an Article III court, and if an administrative adjudicative scheme comports with Article III, the Seventh Amendment “poses no independent bar,” citing Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 54 (1989).
Nonetheless, the respondent next deals with the Seventh Amendment issue, arguing that the application of the jury trial right to patent claims depends solely on whether the claims at issue were historically tried before juries, and that because IPRs provide no right to monetary damages but only the equitable relief of cancellation of a patent, they deal with issues that were traditionally brought before courts of equity, not resolved by juries, citing Mowry v. Whitney, 81 U.S. (14 Wall.) 434, 440 (1872).
Turning to the Article III issue, the respondent contradicts the petitioner’s position that patents are private rights. According to the respondent, Congress is free to delegate even a “seemingly private right” to non-Article III courts if the right “is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution,” citing Granfinanciera, 492 U.S. at 54. This includes disputes between private parties if “the claim at issue derives from a federal regulatory scheme,” or if “resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within the agency’s authority,” citing Stern, 564 U.S. at 490.
This is an interesting theory because patents, of course, derive from the Constitution, Article I, Section 8, Clause 8, not from any “regulatory scheme”. Nor is it clear that a PTO determination of validity, as opposed to a court’s determination, is “essential” to any limited regulatory objective.
For this reason, the respondent is forced to blur the Constitution with regulation, arguing that in exercising its constitutional authority to establish a patent system, Congress created the PTO to issue patents under standards set by federal law, meaning that patent rights exist only by virtue of statute. According to the respondent, ensuring patents are properly issued is therefore “closely integrated” into the “public regulatory scheme” of patent issuance, appropriate for agency resolution. But this ignores patent examination, which is the principal tool to ensure patents are appropriately issued, and insists that the PTO must in effect be given an additional do-over that supplants Article III courts.
The respondent addresses this by relying on MCM Portfolio, in which the Federal Circuit opined that Congress “saw powerful reasons to utilize the expertise of the PTO for an important public purpose – to correct the agency’s own errors in issuing patents in the first place,” 812 F.3d at 1290. The respondent adopts the Federal Circuit’s conclusion that patent rights are public rights, which does not seem to flow as seamlessly from the putatively “powerful reason” for an administrative do-over as the respondent appears to believe.
Perhaps sensing this, the respondent next argues that patent rights have not been recognized for centuries as a private property right, but instead are creatures of statute, citing Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 229 n.5 (1964) and Gayler v. Wilder, 51 U.S. (10 How.) 477, 494 (1851) (“[t]he [patent] monopoly did not exist at common law, and the rights, therefore, which may be exercised under it cannot be regulated by the rules of the common law.”) Accordingly, the respondent argues that the patent monopoly is created by an act of Congress and as such, exist only by virtue of a federal statutory scheme. Furthermore, according to the respondent, post-grant proceedings are essential to the limited regulatory objective within the PTO’s authority: to ensure that only proper patents are issued and to correct mistakes made in wrongly-issuing patents.
The respondent concludes the constitutional portion of its brief by repeating that no conflict exists among lower courts (which of course it could not given the exclusive jurisdiction of the Federal Circuit) and that since 1980 Congress has given the PTO post-grant review authority when it created ex parte reexaminations which have been held by the Federal Circuit as not running afoul of either Article III or the Seventh Amendment, citing Patlex Corp. v. Mossinghoff, 758 F.2d 594, 604 (Fed. Cir. 1985). Per the respondent, IPRs are not constitutionally different from reexaminations. Essentially, the respondent appears to believe that Federal Circuit jurisprudence carries more persuasive authority with the Court than it appears to have done in the past ten years.
CLICK HERE to READ a summary of the Constitutional arguments made by the Petitioner.