No. 16-712
`
`IN THE
`Supreme Court of the United States
`————
`OIL STATES ENERGY SERVICES, LLC,
`Petitioner,
`
`v.
`
`GREENE’S ENERGY GROUP, LLC, ET AL.,
`Respondents.
`
`————
`On Writ of Certiorari
`to the United States Court of Appeals
`for the Federal Circuit
`————
`BRIEF OF THE PHARMACEUTICAL RESEARCH
`AND MANUFACTURERS OF AMERICA AS
`AMICUS CURIAE IN SUPPORT OF PETITIONER
`————
`
`JUSTIN B. WEINER
`MOLOLAMKEN LLP
`300 North LaSalle St.
`Chicago, IL 60654
`JAMES C. STANSEL
`DAVID E. KORN
`PHARMACEUTICAL
`RESEARCH AND
`MANUFACTURERS OF
`AMERICA
`950 F Street, N.W.
`Suite 300
`Washington, D.C. 20004
`
`JEFFREY A. LAMKEN
`Counsel of Record
`ERIC R. NITZ
`JAMES A. BARTA
`MOLOLAMKEN LLP
`The Watergate, Suite 660
`600 New Hampshire Ave., N.W.
`Washington, D.C. 20037
`(202) 556-2000
`jlamken@mololamken.com
`
`Counsel for Amicus Curiae
`
`WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D.C. 20002
`
`

`

`QUESTION PRESENTED
`Whether inter partes review—an adversarial process
`used by the Patent and Trademark Office (PTO) to
`analyze the validity of existing patents—violates the
`Constitution by extinguishing private property rights
`through a non-Article III forum without a jury.
`
`(i)
`
`

`

`TABLE OF CONTENTS
`
`
`Interest of Amicus Curiae .........................................
`Summary of Argument ...............................................
`Argument ......................................................................
`I. American Law Has Long Regarded
`Patent Rights as Private Property—Not
`Public Rights ....................................................
`A. For Centuries, the Courts,
`Congress, and Commentators Have
`Understood That Issued Patents
`Are Private Property ................................
`B. Common Sense Compels the
`Conclusion That Patents Are
`Private Property Rights ...........................
`C. Analogous Areas of Law Confirm
`That Issued Patents Are Private
`Rights ..........................................................
`D. The Federal Circuit Improperly
`Conflated the Process of Patent
`Issuance with the Status of Issued
`Patents ........................................................
`II. Constitutional Policy Recognizes Patents
`as Individual Property ....................................
`III. Reversal Is Warranted ...................................
`Conclusion .....................................................................
`
`
`
`Page
`1
`3
`5
`
`7
`
`8
`
`14
`
`16
`
`22
`
`28
`31
`33
`
`
`
`(iii)
`
`

`

`iv
`TABLE OF AUTHORITIES
`
`
`Page(s)
`
`
`CASES
`Alden v. Maine, 527 U.S. 706 (1999) ....................
`Atlas Roofing Co. v. Occupational Safety
`& Health Review Comm’n,
`430 U.S. 442 (1977) ..................................... 3, 7, 14
`BFP v. Resolution Tr. Corp., 511 U.S. 531
`(1994) ....................................................................
`Brown v. Duchesne, 60 U.S. (19 How.) 183
`(1857) ....................................................................
`Butler v. Pennsylvania,
`16
`51 U.S. (10 How.) 402 (1851) .............................
`Cammeyer v. Newton, 94 U.S. 225 (1877) ........ 8, 15
`Cascades Projection LLC v. Epson Am.,
`Inc., 864 F.3d 1309 (Fed. Cir. 2017) ................
`Cleveland v. United States, 531 U.S. 12
`(2000) ....................................................... 7, 20, 21, 22
`Cleveland Bd. of Educ. v. Loudermill,
`470 U.S. 532 (1985) .............................................
`Coll. Sav. Bank v. Fla. Prepaid
`Postsecondary Educ. Expense Bd.,
`527 U.S. 666 (1999) ............................................
`Colorado v. New Mexico, 467 U.S. 310
`(1984) ....................................................................
`Commodity Futures Trading Comm’n v.
`Schor, 478 U.S. 833 (1986) ........................... 27, 32
`Consol. Fruit-Jar Co. v. Wright,
`94 U.S. 92 (1877) .................................................
`
`26
`
`11
`
`29
`
`15
`
`22
`
`14
`
`29
`
`8
`
`
`
`
`

`

`v
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`Cont’l Paper Bag Co. v. E. Paper Bag Co.,
`210 U.S. 405 (1908) .............................................
`Coombes v. Getz, 285 U.S. 434 (1932) ...................
`Creede & Cripple Creek Mining &
`Milling Co. v. Uinta Tunnel Mining &
`Transp. Co., 196 U.S. 337 (1905) ......................
`Curtis v. Loether, 415 U.S. 189 (1974) .................
`Dolan v. City of Tigard, 512 U.S. 374
`(1994) ....................................................................
`Eldred v. Ashcroft, 537 U.S. 186 (2003) ...............
`Ex parte Bakelite Corp., 279 U.S. 438
`(1929) ....................................................................
`Ex parte Wood, 22 U.S. (9 Wheat.) 603
`(1824) ...............................................................
`Feltner v. Columbia Pictures Television,
`Inc., 523 U.S. 340 (1998) ............................... 10, 19
`Fla. Prepaid Postsecondary Educ.
`Expense Bd. v. Coll. Sav. Bank,
`527 U.S. 627 (1999) ..................................... 7, 15, 32
`Fox Film Corp. v. Doyal, 286 U.S. 123
`(1932) ....................................................................
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`721 F.3d 1330 (Fed. Cir. 2013) .........................
`Gutierrez-Brizuela v. Lynch,
`834 F.3d 1142 (10th Cir. 2016) ..........................
`Halstead v. Grinnan, 152 U.S. 412 (1894) ...........
`Horne v. Dep’t of Agric., 135 S. Ct. 2419
`(2015) ....................................................................
`Hovey v. Henry, 12 F. Cas. 603
`(C.C.D. Mass. 1846) ...........................................
`
`
`
`
`
`
`
`14
`16
`
`18
`32
`
`14
`19
`
`14
`
`8, 10
`
`20
`
`25
`
`25
`29
`
`15
`
`8
`
`

`

`vi
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`Iron Silver Mining Co. v. Campbell,
`135 U.S. 286 (1890) ..................................... 17, 18, 19
`James v. Campbell, 104 U.S. 356 (1882) ..............
`15
`Johnson v. Towsley, 80 U.S. (13 Wall.) 72
`(1871) ............................................................ passim
`Kimble v. Marvel Comics Entm’t, LLC,
`135 S. Ct. 2401 (2015) .........................................
`Lynch v. United States, 292 U.S. 571
`(1934) ....................................................................
`McClurg v. Kingsland,
`42 U.S. (1 How.) 202 (1843) .................. 9, 12, 15, 26
`McCormick Harvesting Mach. Co. v.
`Aultman, 169 U.S. 606 (1898)................... 9, 19, 22
`MCM Portfolio LLC v. Hewlett-Packard
`Co., 812 F.3d 1284 (Fed. Cir. 2015) .......... passim
`Mich. Land & Lumber Co. v. Rust,
`18
`168 U.S. 589 (1897) .............................................
`Moore v. Robbins, 96 U.S. 530 (1878) .......... 18, 24, 25
`Murray’s Lessee v. Hoboken Land &
`Improvement Co., 59 U.S. (18 How.) 272
`(1856) ...................................................................
`N. Alaska Envtl. Ctr. v. Lujan, 872 F.2d 901
`(9th Cir. 1989) .....................................................
`Nidec Motor Corp. v. Zhongshan Broad
`Ocean Motor Co., No. 16-2321,
`— F.3d —, 2017 WL 3597455
`(Fed. Cir. Aug. 22, 2017) ..................................
`Novartis AG v. Noven Pharm. Inc.,
`853 F.3d 1289 (Fed. Cir. 2017) .........................
`
`
`
`
`
`
`
`30
`
`16
`
`10
`
`18
`
`33
`
`25
`
`

`

`vii
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`Patlex Corp. v. Mossinghoff, 758 F.2d 594
`(Fed. Cir. 1985) ...................................................
`Plaut v. Spendthrift Farm, Inc.,
`514 U.S. 211 (1995) .............................................
`Printz v. United States, 521 U.S. 898
`(1997) ....................................................................
`Richmond Screw Anchor Co. v. United
`States, 275 U.S. 331 (1928) ................................
`SCA Hygiene Prods. Aktiebolag v. First
`Quality Baby Prods., 137 S. Ct. 954
`(2017) ....................................................................
`Seymour v. Osborne, 78 U.S. (11 Wall.) 516
`(1871) ....................................................................
`Smelting Co. v. Kemp, 104 U.S. 636 (1880) .........
`Soc’y for the Propagation of the Gospel in
`Foreign Parts v. Town of New Haven,
`21 U.S. (8 Wheat.) 464 (1823) ....................... 9, 16
`Star Salt Caster Co. v. Crossman,
`14
`22 F. Cas. 1132 (C.C.D. Mass. 1878) ................
`Stern v. Marshall, 564 U.S. 462 (2011) ........ passim
`United States v. Am. Bell Tel. Co.,
`128 U.S. 315 (1888) .............................................
`United States v. Am. Bell Tel. Co.,
`167 U.S. 224 (1897) .............................................
`United States v. Beebe, 127 U.S. 338
`(1888) ....................................................................
`United States v. Maxwell Land-Grant Co.,
`121 U.S. 325 (1887) .............................................
`United States v. Schurz, 102 U.S. 378
`(1880) ............................................................ 4, 16, 18
`
`
`
`
`
`
`
`27
`
`25
`
`11
`
`16
`
`19
`
`8
`18
`
`17
`
`28
`
`29
`
`29
`
`

`

`
`
`
`
`32
`
`viii
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`United States v. Stone, 69 U.S. (2 Wall.)
`525 (1865) .......................................................... 17, 19
`Wallace v. Adams, 204 U.S. 415 (1907) ................
`14
`Wellness Int’l v. Sharif, 135 S. Ct. 1932
`(2015) ....................................................................
`Whitney v. Emmett, 29 F. Cas. 1074
`(C.C.E.D. Pa. 1831) ............................................
`Wyeth v. Stone, 30 F. Cas. 723
`(C.C.D. Mass. 1840) ...........................................
`CONSTITUTIONAL PROVISIONS,
`STATUTES, AND RULES
`U.S. Const. art. I, § 8, cl. 8 ............................. 13, 20, 29
`U.S. Const. art. IV, § 3, cl. 2 ................................ 16, 26
`5 U.S.C. § 8470(b) ....................................................
`24
`17 U.S.C. § 102 .........................................................
`26
`31 U.S.C. § 3711(g)(9) .............................................
`24
`31 U.S.C. § 3711(g)(9)(H) .......................................
`24
`31 U.S.C. § 3716 .......................................................
`24
`31 U.S.C. § 3720D ....................................................
`24
`35 U.S.C. § 2(a)(2)(A) ..............................................
`23
`35 U.S.C. § 2(b) ........................................................
`23
`35 U.S.C. § 251(a) ....................................................
`10
`35 U.S.C. § 261 ...................................................... 4, 14
`35 U.S.C. § 284 .........................................................
`15
`35 U.S.C. § 311 .........................................................
`28
`35 U.S.C. § 312 .........................................................
`28
`35 U.S.C. § 316(a) ....................................................
`28
`
`9
`
`8
`
`
`
`

`

`
`
`ix
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`35 U.S.C. § 316(d) ....................................................
`28
`38 U.S.C. § 5302(a) ..................................................
`25
`42 U.S.C. § 404(b) ....................................................
`25
`Patent Act of 1790, ch. 7, 1 Stat. 109 ....................
`10
`§ 4, 1 Stat. at 111 .................................................
`10
`Patent Act of 1793, ch. 11, 1 Stat. 318 ....... 3, 9, 10, 12
`§ 1, 1 Stat. at 320 ............................................... 3, 9
`§ 5, 1 Stat. at 322 ...............................................
`10
`§ 7, 1 Stat. at 322 ...............................................
`12
`§ 10, 1 Stat. at 323 .............................................
`10
`Patent Act of 1836, ch. 357, 5 Stat. 117 ........ 10, 11, 13
`§ 1, 5 Stat. at 117-118 .........................................
`13
`§ 12, 5 Stat. at 121-122 .......................................
`10
`§ 13, 5 Stat. at 122 ...............................................
`10
`§ 14, 5 Stat. at 123 ............................................ 10, 11
`§ 15, 5 Stat. at 123 ...............................................
`11
`§ 16, 5 Stat. at 123-124 .......................................
`11
`§ 17, 5 Stat. at 124 ...............................................
`11
`Patent Act of 1870, ch. 230, 16 Stat. 198 ..............
`11
`§ 59, 16 Stat. at 207 .............................................
`11
`§ 60, 16 Stat. at 207 .............................................
`11
`§ 61, 16 Stat. at 208 .............................................
`11
`Patent Act of 1952, Pub. L. No. 82-593,
`10
`66 Stat. 792 .........................................................
`Act of Apr. 21, 1792, ch. 25, 1 Stat. 257 ............. 12, 16
`Act of May 5, 1792, ch. 30, 1 Stat. 266 ..................
`12
`Act of Jan. 21, 1808, ch. 13, 6 Stat. 70 ................ 12, 13
`Act of Feb. 7, 1815, ch. 36, 6 Stat. 147 ..................
`12
`Act of Jan. 25, 1828, ch. 3, 6 Stat. 370 ...................
`12
`
`
`
`
`
`

`

`x
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`Act of June 30, 1834, ch. 213, 6 Stat. 589 .............
`13
`Act of July 2, 1836, ch. 336, 6 Stat. 678 ................
`12
`Act of Feb. 2, 1838, ch. 6, 6 Stat. 702 ....................
`12
`Act of May 31, 1838, ch. 90, 6 Stat. 717 ................
`12
`Pub. L. No. 96-517, 94 Stat. 3015 (1980) ..............
`27
`Pub. L. No. 106-113, 113 Stat. 1501 (1999) ..........
`27
`Sup. Ct. R. 37.6 ........................................................
`1
`LEGISLATIVE MATERIALS
`H.R. Rep. No. 112-98, pt. 1 (2011) ........................
`S. Doc. 338, 24th Cong., 1st Sess. (1836) ..............
`EXECUTIVE MATERIALS
`77 Fed. Reg. 48,680 (Aug. 14, 2012) ......................
`OTHER AUTHORITIES
`Bruce W. Bugbee, Genesis of American
`Patent and Copyright Law (1967) ...................
`George Ticknor Curtis, A Treatise on the
`Law of Patents for Useful Inventions
`(4th ed. 1873) .......................................................
`Joseph A. DiMasi et al., Innovation in the
`Pharmaceutical Industry: New
`Estimates of R&D Costs, 47 J. Health
`Econ. 20 (2016) ...................................................
`Frank H. Easterbrook, Intellectual
`Property Is Still Property,
`13 Harv. J.L. & Pub. Pol’y 108 (1990) .......... 26, 30
`The Federalist No. 43 (Madison)
`(Rossiter ed., 2008) ............................................
`
`28
`11
`
`
`
`
`
`
`
`31
`
`12
`
`13
`
`30
`
`20
`
`

`

`xi
`TABLE OF AUTHORITIES—Continued
`
`Page(s)
`IPR Report, Vol. 16, Harnessing Patent
`Office Litigation, Harness Dickey
`(Dec. 16, 2016), available at http://ipr-
`pgr.com/wp-content/uploads/2017/03/
`IPR-PGR-Report-Vol.-16.pdf ..........................
`Edmund W. Kitch, The Nature and
`Function of the Patent System,
`20 J.L. & Econ. 265 (1977) ............................. 30, 31
`Lisa Larrimore Ouellette, Note, How
`Many Patents Does It Take To Make a
`Drug?, 17 Mich. Telecomm. & Tech. L.
`Rev. 299 (2010) ...................................................
`PWC, 2017 Patent Litigation Study (May
`2017), https://www.pwc.com/us/en/for
`ensic-services/publications/assets/2017-
`patent-litigation-study.pdf ................................
`William C. Robinson, The Law of Patents
`for Useful Inventions (1890) .................... 11, 13, 14
`USPTO, General Information Concerning
`Patents (Oct. 2015), https://www.uspto
`.gov/patents-getting-started/general-
`information-concerning-patents#head
`ing-6 .....................................................................
`USPTO, Patent Trial & Appeal Board
`Trial Statistics (July 31, 2017), https://
`www.uspto.gov/sites/default/files/docu
`ments/Trial_Statistics_2017_07_31.pdf ..........
`Albert H. Walker, Text-Book of the
`Patent Laws (3d ed. 1895) ........................ 3, 13, 14
`
`
`
`
`
`
`
`28
`
`30
`
`15
`
`23
`
`33
`
`

`

`IN THE
`Supreme Court of the United States
`————
`NO. 16-712
`
`
`
`
`
`
`
`
`
`
`
`OIL STATES ENERGY SERVICES, LLC,
`
`Petitioner,
`
`
`
`v.
`
`
`
`
`
`GREENE’S ENERGY GROUP, LLC, ET AL.,
`
`
`
`Respondents.
`————
`On Writ of Certiorari
` to the United States Court of Appeals
`for the Federal Circuit
`————
`BRIEF OF THE PHARMACEUTICAL RESEARCH
`AND MANUFACTURERS OF AMERICA AS
`AMICUS CURIAE IN SUPPORT OF PETITIONER
`————
`INTEREST OF AMICUS CURIAE
`The Pharmaceutical Research and Manufacturers of
`America (PhRMA) is a voluntary, nonprofit association
`representing the Nation’s leading research-based phar-
`maceutical companies.1 PhRMA’s members research and
`
`
`1 Pursuant to this Court’s Rule 37.6, counsel for amicus curiae states
`that no counsel for a party authored this brief in whole or part. No
`counsel or party made a monetary contribution intended to fund the
`preparation or submission of this brief, and no person other than
`amicus, its members, or its counsel made such a contribution. All
`
`
`
`

`

`2
`develop innovative medicines, treatments, and vaccines
`that save, prolong, and improve the quality of the lives of
`countless individuals around the world every day.
`The question in this case turns on the fundamental na-
`ture of patent rights. For two centuries of this Nation’s
`history, an issued patent was—like other conveyances of
`property—not subject to withdrawal, revocation, or can-
`cellation except on court order following judicial pro-
`ceedings. In 2011, however, Congress created an adver-
`sary proceeding for the cancellation of already-granted
`(and potentially fully commercialized) patents; authorized
`the initiation of that proceeding at almost any point dur-
`ing a patent’s life; and vested adjudicative authority over
`that proceeding in an administrative agency. Whether
`that “inter partes review” scheme comports with Article
`III and the Seventh Amendment requires the Court to
`evaluate whether issued patents are public rights—like
`tariffs or safe-working regulations—or private property.
`PhRMA has a profound interest in that question.
`From 2000 to 2017, PhRMA members invested over half
`a trillion dollars in researching and developing new
`medicines. In 2016 alone, PhRMA members invested
`$65.5 billion in research and development. PhRMA mem-
`ber companies rely on the patent system to protect the
`innovations resulting from those enormous investments.
`Moreover, PhRMA’s members are sometimes defendants
`in patent infringement actions. And PhRMA’s members
`buy, sell, and license patents. PhRMA thus has unique
`and uniquely balanced insights on the implications of the
`issues before the Court, as well as the need for an ef-
`
`
`parties have consented to the filing of this brief. Copies of letters
`granting consent have been filed with the Clerk.
`
`
`
`

`

`3
`ficient patent system that fosters, rewards, and protects
`innovation and competition alike.
`SUMMARY OF ARGUMENT
`From the earliest days of the Republic, courts and
`Congress understood that issued patents are property—
`just like granted rights in land and chattels—and must
`be protected as such. Whatever leeway Congress has to
`dictate the terms on which patents issue, cancellation and
`invalidation of already-issued patents must conform to
`the requirements applicable to private property. In this
`case, the Federal Circuit upheld inter partes review
`based on the mistaken view that patent rights are public
`rights, even after the patent is issued and vests. That
`misconception cannot be sustained. Text, history, and
`common sense all demonstrate that patents, once issued,
`are personal property, not public rights.
`I-A. While the boundary between private and public
`rights has sometimes been unclear, disputes over private
`property have always fallen on the private-rights side of
`the line. For “[w]holly private tort, contract, and proper-
`ty cases,” the public-rights doctrine is “not at all implica-
`ted.” Atlas Roofing Co. v. Occupational Safety & Health
`Review Comm’n, 430 U.S. 442, 458 (1977). Once issued
`and vested, patents are property rights, not public rights.
`Courts have understood as much for at least a century
`and a half; so did Framing-era Congresses. The Patent
`Act of 1793, for example, identified patents as “exclusive
`property.” Sec. 1, ch. 11, 1 Stat. 318, 320. As one early
`treatise concisely put it: “Patents are property.” Albert
`H. Walker, Text-Book of the Patent Laws § 151 (3d ed.
`1895).
`Like their contemporary counterparts, early Congres-
`ses confronted issues of patent quality (and even fraudu-
`lent procurement). But, for nearly 200 years, Congress
`
`
`

`

`4
`addressed those issues by allowing the validity of issued
`patents to be challenged the way property rights are
`traditionally challenged—in court.
`B. Issued patents have all the “attributes of personal
`property.” 35 U.S.C. § 261. Patents confer the right to
`exclude others, and to bring suit against those who
`invade that right. They can be bought, sold, and inher-
`ited. Patents are protected from government takings
`without compensation, from retroactive annulment by
`Congress, and from deprivation without due process.
`Public rights traditionally bear none of those hallmarks
`of private property.
`C. Patents are similar to other government-conferred,
`private rights. Land patents and mining patents transfer
`property from the sovereign to individuals pursuant to a
`statutory scheme administered by an agency. Once
`issued, however, land and mining patents are “private
`rights of great value,” Johnson v. Towsley, 80 U.S. (13
`Wall.) 72, 84 (1871); the lands they cover “cease[ ] to be
`the land of the government,” United States v. Schurz, 102
`U.S. 378, 396-397 (1880). Copyrights are also “private
`rights,” in large part because, like patents, they confer
`rights of exclusion. Even licenses that are not property
`in the hands of the government can become private
`property once issued to individuals. Once issued, patents
`are private property as well.
`D. The Federal Circuit focused on the fact that
`patents exist by virtue of statute and are granted by an
`administrative agency. But that speaks to how patents
`come into existence—not whether they are private prop-
`erty once issued. Once a land patent or mining patent is
`issued—by an agency under statutory authority—the
`land at issue becomes private property, not a public
`right. Issuance is thus a watershed moment. Congress
`
`
`
`

`

`5
`may be able to grant agencies time-limited authority to
`corral mistakes in issuance before rights vest. But that
`does not include authority to continuously revisit and
`upset vested private property rights in perpetuity.
`II. The Framers recognized that respect for private
`property was critical to the Nation’s prosperity. The con-
`stitutional power “to secure” patent rights to inventors
`reflects that understanding. Our patent system can pro-
`mote investment in research and development, and
`facilitate licensing of inventions, only if issued patents are
`accorded the respect accorded other forms of private
`property. Treating patents as public rights, as opposed
`to the private rights the Constitution directs Congress to
`“secur[e],” is inconsistent with constitutional goals.
`III. The Federal Circuit upheld “inter partes” adver-
`sary litigation before an agency, over Seventh Amend-
`ment and Article III challenges, based on the erroneous
`view that issued patent rights are public rights rather
`than private property. That fundamental error at the
`threshold of the Federal Circuit’s analysis infected
`everything that came after. Once a court determines that
`a right is private, it must at the very least apply
`“searching” scrutiny to any scheme that provides for ad-
`judication of that right before an agency. That searching
`review may include inquiry into consent (not granted
`here), or consent’s significance in the particular context.
`Because the Federal Circuit mistakenly deemed issued
`patents to be public rather than private property rights,
`its analysis fell short of the searching review required
`when private rights are at stake. Reversal is warranted.
`ARGUMENT
`Once issued to the inventor, patents are private prop-
`erty—not “public rights.” This Court’s cases, historical
`practice, the enactments of the earliest Congresses, and
`
`
`

`

`6
`common sense all reflect that understanding. The Con-
`stitution grants Congress authority to “promote the
`Progress of Science and useful Arts” by “securing” to in-
`ventors “the exclusive Right” to their inventions. Our
`patent system can achieve that constitutional goal only if
`patents are accorded the stability and respect that is due
`other forms of property. The pharmaceutical industry
`invests hundreds of billions of dollars in researching and
`developing new treatments to improve the health and
`welfare of the public across the globe. Those investments
`make sense only because the resulting intellectual prop-
`erty is respected as property.
`The question presented in this case asks whether Con-
`gress exceeded constitutional boundaries by granting the
`Patent and Trademark Office (PTO)—an administrative
`agency—authority to conduct adversary adjudications
`over the invalidation of issued patents. How that ques-
`tion is answered hinges on whether patents, once issued,
`are private property. Congress may have broad author-
`ity to assign determinations about public-rights questions
`to administrative agencies. But efforts to assign adjudi-
`cation of “private rights” outside of the judicial branch
`are at the very least subject to “searching” review. The
`Federal Circuit upheld inter partes review based on its
`conclusion that patents are public rights even after they
`are issued to inventors. That conclusion cannot be
`reconciled with text, history, or common sense. It may
`be that questions over whether to issue a patent in the
`first place are questions of public rights. But once the
`patent has issued, the rights it conveys are private
`property rights—no less than the right to land granted
`by a government-issued land patent or the right to a
`chattel conveyed by a government sale. Because the
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`7
`Federal Circuit faltered at the very first step of the
`analysis, the judgment below cannot be sustained.
`I. AMERICAN LAW HAS LONG REGARDED PATENT
`RIGHTS AS PRIVATE PROPERTY—NOT PUBLIC
`RIGHTS
`While the boundary between “public” and “private”
`rights may not always have been clear, there should be
`no doubt that rights to private property fall on the
`“private rights” side of that divide. Whatever the scope
`of the “public rights” doctrine generally, “[w]holly pri-
`vate tort, contract, and property cases, * * * are not at all
`implicated” by it. Atlas Roofing Co. v. Occupational
`Safety & Health Review Comm’n, 430 U.S. 442, 458
`(1977) (emphasis added). Because they concern the “lia-
`bility of one individual to another under the law as
`defined,” disputes over property are “matters ‘of private
`right’ ”—not public rights. Stern v. Marshall, 564 U.S.
`462, 489 (2011).
`Because issued patents are private property, they—
`and disputes about them—likewise fall on the “private”
`side of the divide. Issued “[p]atents * * * have long been
`considered a species of property,” like land and chattels.
`Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll.
`Sav. Bank, 527 U.S. 627, 642 (1999). For more than two
`centuries, the courts, Congress, and commentators have
`understood that issued patents are private property.
`That is true even though patent rights derive from gov-
`ernment action. When the government is considering
`whether to grant property to an individual—whether
`through a utility patent or a land patent—the individual
`may have no “vested right.” Johnson v. Towsley, 80 U.S.
`(13 Wall.) 72, 84 (1871). Some unissued rights in the
`government’s hands may not even qualify as “property.”
`Cf. Cleveland v. United States, 531 U.S. 12, 25-26 (2000).
`
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`8
`But once the government has conferred property to a
`citizen, “title * * * passe[s] from the government,” and
`any dispute concerning the property “bec[o]me[s] one of
`private right.” Johnson, 80 U.S. (13 Wall.) at 87. Pat-
`ents, once issued, are the private property of the
`inventors to whom they are issued, no less than issued
`land patents or other rights the government might con-
`fer.
`A. For Centuries, the Courts, Congress, and
`Commentators Have Understood That Issued
`Patents Are Private Property
`1. This Court and its members concluded long ago
`that patent rights, once issued, are private property. By
`1824, this Court was already equating patents with
`“property.” Ex parte Wood, 22 U.S. (9 Wheat.) 603, 608
`(1824). Reiterating that conclusion nearly a century and
`a half ago, this Court observed that “[i]nventions secured
`by letters patent are property in the holder of the pat-
`ent.” Seymour v. Osborne, 78 U.S. (11 Wall.) 516, 533
`(1871). Patent rights “rest[ ] on the same foundation” as
`other property, Consol. Fruit-Jar Co. v. Wright, 94 U.S.
`92, 96 (1877), and are “as much entitled to protection as
`any other property,” Cammeyer v. Newton, 94 U.S. 225,
`226 (1877).
`As one Justice summarized: “An inventor holds a
`property in his invention by as good a title as the farmer
`holds his farm and flock.” Hovey v. Henry, 12 F. Cas.
`603, 604 (C.C.D. Mass. 1846) (Woodbury, Circuit Justice).
`Justice Story agreed, describing patent infringement
`suits as cases about “private rights.” Wyeth v. Stone, 30
`F. Cas. 723, 728 (C.C.D. Mass. 1840). Patents thus con-
`cern “a question of property, of private right, uncon-
`nected with the public interest, and without any ref-
`erence to the public, unless a case is made out of a design
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`9
`to deceive them.” Whitney v. Emmett, 29 F. Cas. 1074,
`1080 (C.C.E.D. Pa. 1831) (Baldwin, Circuit Justice) (em-
`phasis added).
`This Court gave effect to that understanding early in
`this Nation’s history. Because issued patents are proper-
`ty of the inventor, the Court held, Congress cannot re-
`scind them by repealing the underlying patent law.
`McClurg v. Kingsland, 42 U.S. (1 How.) 202 (1843). Con-
`gress, the Court declared, could not “take away the
`rights of property in existing patents.” Id. at 206. Per-
`mitting Congress to do so would contravene “well-
`established principles,” ibid., including the rule that the
`legislature cannot “extinguish[ ]” by repeal “rights of
`property already vested,” Soc’y for the Propagation of
`the Gospel in Foreign Parts v. Town of New Haven, 21
`U.S. (8 Wheat.) 464, 493-494 (1823).
`In McCormick Harvesting Machine Co. v. Aultman,
`169 U.S. 606 (1898), the Court likewise rebuffed the Exe-
`cutive’s attempt “to set * * * aside” an already-issued
`patent. Id. at 609. Upon issuance, the patent “passed be-
`yond the control and jurisdiction” of the Executive. Id. at
`608. It became “the property of the patentee * * * enti-
`tled to the same legal protection as other property.” Id.
`at 609. The Patent Office loses the “power to revoke,
`cancel or annul” a patent “upon [its] issue”; a contrary
`ruling would “deprive the applicant of his property
`without due process of law, and would be in fact an
`invasion of the judicial branch of the government by the
`executive.” Id. at 612.
`2. Early Congresses understood that patents confer
`property—“exclusive property,” Patent Act of 1793, § 1,
`ch. 11, 1 Stat. 318, 320—to inventors. The Patent Acts of
`1790 and 1793 (as well as the 1836 Act) authorized a pat-
`entee to seek damages from infringers by affording them
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`10
`“a right to sue at common law.” Ex parte Wood, 22 U.S.
`at 608. This Court has “long recognized” that “ ‘suit[s] at
`common law’ ” involve private rights—not public rights.
`Stern, 564 U.S. at 484 (quoting Murray’s Lessee v. Hobo-
`ken Land & Improvement Co., 59 U.S. (18 How.) 272
`(1856)).
`The 1790, 1793, and 1836 Patent Acts, moreover, speci-
`fied the form of action, authorizing an “action on the
`case.” Patent Act of 1836, § 14, ch. 357, 5 Stat. 117, 123;
`Patent Act of 1793, § 5, ch. 11, 1 Stat. 318, 322; Patent Act
`of 1790, §4, ch. 7, 1 Stat. 109, 111. An “action on the case”
`was a then-commonplace form of action used to obtain
`“damages for invasions of other property rights.” Felt-
`ner v. Columbia Pictures Television, Inc., 523 U.S. 340,
`349 (1998).
`Indeed, for nearly 200 years—from 1790 until at least
`1981—Congress provided only one mechanism for with-
`drawing wrongfully issued patent rights—an action in
`court. Patent Act of 1793, § 10, ch. 11, 1 Stat. 318, 323;
`Patent Act of 1836, §12, ch. 357, 5 Stat. 117, 121-122; Pub