Posts Tagged: "constitution"

There appears to be a consistent pattern of public rights cases from Murray’s Lessee to Stern. Congress may establish a public right, separate from actions that affect the federal government, that involves an action related to protection of the public, such as health or welfare, and may establish an executive tribunal in which to adjudicate these rights. An Article I tribunal may adjudicate these public rights, primarily by advancing a fact-finding role, but within the constraints of consent, due process and review by an Article III court. On the other hand, private rights or rights involving matters between private parties that have been adjudicated in common law in Article III courts will continue to be resolved only in the federal courts. A right to a jury to hear facts in federal courts will be maintained in those disputes between private rights involving private parties.

The modern public rights jurisprudence flows from Atlas Roofing in 1977 to Stern in 2011. Although the case law does not provide a straight line, there is a consistent pattern illustrating the clear constraints of administrative agency adjudication. These constraints include consent of the parties, due process and review by Article III courts. Without these elements, according to a continuous line of Supreme Court jurisprudence, administrative proceedings are illegitimate and unconstitutional. Stern is the governing precedence on the issue of the public rights doctrine, with the composition of the Court today substantially identical to that of the Stern Court.

The Crowell Court distinguishes between matters of common law adjudicated in the federal courts and matters that may be reviewed in administrative agencies. However, the Court is concerned mainly with the maintenance of due process in administrative tribunals… The Crowell Court is thus concerned about the “essential demands of due process” and the limits of federal government authority. Enabling administrative tribunals to act merely as finders of fact, within the bounds of due process, and allowing for their findings to be reviewed in Article III courts, the issue of separation of powers is prominent in the preservation of the independence of the judiciary.

This experiment in patent validity review an executive agency by the Patent Trial and Appeal Board, an Article I tribunal in the PTO, has been unsuccessful…The chief constraints of the public rights doctrine involve consent and due process by an Article I tribunal and review of tribunal determinations by an Article III court. None of these features are present in the PTAB review of issued patents. In fact, the PTAB has shown a massive number of institutional abuses of IPRs that have undermined its legitimacy and negated its determinations… Ultimately, it will be shown that PTAB has vastly worse patent validity review results than federal district courts because of a blatant disregard for due process. As a consequence of these observations, it should be clear that the PTO is susceptible to political influences by the powerful technology lobby’s false narrative of poor quality patents that resulted in creation of a sanctimonious mechanism for patent validity review to constrain competition from market entrants, with an effect to promote technology incumbent profits.

The Supreme Court has agreed to hear a petition for Certiorari in Oil States Energy Services v. Greene’s Energy Group, which will result in the Court addressing the constitutionality of post grant proceedings… The impact of the resulting decision in this case may affect patent dispute outcomes not just moving forward, but possibly spanning 5 years into the past… At a (very) high level, there are three possible outcomes arising from the Supreme Court decision that is expected in 2018 that will impact the IPR process: no change, some change, major change.

An exclusive right is more than a mere right of remuneration – it is the right to control the use and disposition of one’s property, and to deny others access to it. Without the fundamental attribute of exclusivity, we lurch toward a system of compulsory licensing, or a private right of individuals to take another’s property on the promise of mere monetary compensation. Under our Constitution, and particularly the Fifth Amendment, or the Takings Clause, even the government does not possess that right except that it be for some demonstrable public – rather than private — use. Thus, to be true to the express language of our Constitution, and respectful of the limits imposed on the Fifth Amendment, the rights inherent in intellectual property necessarily must include a right to exclude others from the enjoyment of that property.

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.

In arguing that inter partes review (IPR) violates the U.S. Constitution, the petitioner in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC advances two theories. The first is that patents are private rights, not public rights, and therefore suits to invalidate patents must be tried before a jury under the Seventh Amendment. Second, even if the Seventh Amendment is not violated by IPRs, suits for invalidity must be tried in an Article III forum, not in an agency proceeding. The petitioner also takes issue with claim interpretation and claim amendment limitations during IPR, which are beyond the scope of this post.

Several of the briefs address the absurdity currently being advanced, claiming patents are so-called “public rights.” This novel notion — more in line with Karl Marx than John Locke — is a direct assault upon the very essence of private property rights… The Cato-ACUF brief reasons “public rights” into a sniveling lump: “Ultimately, the implications of the argument that merely because a right to particular property flows from a statutory scheme, such rights are ‘public rights’ and that disputes over them can be withdrawn from Article III courts are staggering. Such a conclusion would mean that anyone who derives his land title from the Homestead Act can be forced to have any disputes over that property be resolved by a bureaucrat in the Bureau of Land Management. Under this view, Congress could require that a dispute between an individual and a private financial institution over a mortgage or a student loan be heard before an official in the Treasure Department on the theory that the relevant loans were made pursuant to a federal statutory scheme. The government enacts statutes affecting property rights all the time, but that does not convert the rights that trace their roots to such statutes into ‘public rights.’”

Since U.S. patents are granted with exclusive right to exclude, the only way to realize values of inventions is licensing, suing for damages or both. This reward mechanism would depend upon corporate cultural attitude to patents. In the early time, corporations were more willing to license and buy patents. After corporations have developed a culture of using free inventions, patent owners are unable to get rewards and unable to enforce their rights due to excessive enforcement fees. Thus, the only way to recover tiny values is selling patents to enforcement firms… All inventions are rare birds that cannot be mass-produced like articles in production shops. Thus, the patent office must use the most inclusive fishnet with an ability to capture as many inventions as possible. Since each invention is unknown at the time of capturing, one cannot design any method to capture all good inventions. Placing any limitation in the capturing method could exclude great and even greatest inventions before the patent office even knows what would be excluded.

A quiet title seems an absolute prerequisite to the enjoyment of an exclusive right guaranteed by the Constitution. Unfortunately, a quiet title in a patent today simply does not happen if you are actually lucky enough to have obtained a patent on a commercially valuable innovation… The problem with patents in the post-AIA era is the system and judges that implement the system do not apply basic property laws, despite the fact that the statute says that patents are to have the attributes of property. Title in patents never seem to quiet any more – ever. Indeed, it is particularly difficult, if not impossible, to quiet title now thanks to the existence of inter partes review (IPR), a type of post grant challenge to the patent that can literally be brought at any point in time during the life of the patent.

The Supreme Court ruled that the anti-disparagement clause in the Lanham Act violates the Free Speech Clause in the First Amendment. Matal v. Tam. As a result, the United States Patent and Trademark Office may no longer deny registration of a federal trademark application on the ground of disparagement. Several states, including Massachusetts and New Hampshire, have anti-disparagement trademark provisions that will no longer be enforceable either… The statute does not define ‘scandalous’, but like the restriction against disparaging marks, the courts and the PTO focus on whether a mark is offensive.

After a streak of six patent decisions uniformly overruling the Federal Circuit, and for the first time all term, the Supreme Court finally handed the Federal Circuit a win this week. In its landmark ruling in Matal v. Tam (formerly Lee v. Tam), the U.S. Supreme Court struck down the restriction on the registration of marks that “disparage” under Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a). Justice Samuel A. Alito Jr. wrote unanimously for the eight justices in holding that Section 2(a)’s prohibition on disparaging registrations violates “a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”

Russ: Slifer: ”Clearly the Supreme Court is not done with its intellectual property obsession. By granting certiorari in Oil States vs. Greene’s Energy Group, et al. the Court has agreed to address the questions of constitutionality of post grant reviews, the amendment process implemented by the USPTO, and how the USPTO applies the broadest reasonable interpretation to claims. Some commentators believe that this is a good sign for patent owners and the end of IPR’s. I don’t anticipate, however, that the Court will shift in a pro-patent direction and gut a cornerstone of the AIA. This will most likely be one of the rare cases where the Supreme Court substantially affirms the CAFC.”

The Supreme Court granted certiorari only on the first question, whether inter partes review violates the U.S. Constitution by extinguishing private property rights through a non-Article III forum without a jury… The grant of certiorari in this case is particularly noteworthy given that the United States was asked by the Supreme Court for its views and opined in its brief that the petition should be denied… Over the last several years 8 of the 9 Supreme Court Justices have signed on to an opinion that has recognized that a patent confers either an exclusive or valuable property right.