`
`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 AMICUS CURIAE
`U.S. GOLF MANUFACTURERS COUNCIL
`IN SUPPORT OF RESPONDENTS
`
`--------------------------------- ---------------------------------
`
`PETER J. BRANN
`(Counsel of Record)
`DAVID SWETNAM-BURLAND
`STACY O. STITHAM
`BRANN & ISAACSON
`184 Main St., P.O. Box 3070
`Lewiston, ME 04243
`(207) 786-3566
`pbrann@brannlaw.com
`Attorneys for Amicus Curiae
`
`MICHAEL J. KLINE
`U.S. GOLF MANUFACTURERS
` COUNCIL
`5601 Skylab Road
`Huntington Beach, CA 92647
`WILLIAM B. LACY, Ph.D.
`U.S. GOLF MANUFACTURERS
` COUNCIL
`333 Bridge Street
`Fairhaven, MA 02719
`
`================================================================
`COCKLE LEGAL BRIEFS (800) 225-6964
`WWW.COCKLELEGALBRIEFS.COM
`
`
`
`
`
`i
`
`TABLE OF CONTENTS
`
`Page
`TABLE OF AUTHORITIES .................................
`ii
`INTEREST OF AMICUS CURIAE ......................
`1
`SUMMARY OF ARGUMENT ..............................
`4
`ARGUMENT ........................................................
`6
` INTER PARTES REVIEW IS AN EVEN-
`HANDED, EFFICIENT, AND EFFECTIVE
`METHOD FOR THE PATENT OFFICE TO
`ENSURE PATENT QUALITY BY ELIMINAT-
`6
`ING ERRORS ...................................................
`CONCLUSION ..................................................... 23
`
`
`
`
`
`
`ii
`
`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`Animal Legal Defense Fund v. Quigg, 932 F.2d
`920 (Fed. Cir. 1991) ................................................. 14
`Aqua Prods., Inc. v. Matal, 2017 WL 4399000
`(Fed. Cir. Oct. 4, 2017) ............................................. 16
`Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131
`(2016) ................................................................... 8, 11
`Edward Katzinger Co. v. Chicago Metallic Mfg.
`Co., 329 U.S. 394 (1947) ............................................ 7
`Kendall v. Winsor, 62 U.S. 322 (1859) .......................... 7
`KSR International Co. v. Teleflex Inc., 550 U.S.
`398 (2007) .................................................................. 7
`Lear, Inc. v. Atkins, 395 U.S. 653 (1969) ....................... 7
`Mercoid Corp. v. Mid-Continent Investment Co.,
`320 U.S. 661 (1944) ................................................... 7
`Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S.
`91 (2011) ............................................................ 14, 15
`Pennock v. Dialogue, 27 U.S. 1 (1829) ........................... 6
`Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir.
`2005) ........................................................................ 11
`Pope Manufacturing Co. v. Gormully, 144 U.S.
`224 (1892) .................................................................. 7
`
`
`CONSTITUTION
`U.S. Const. art. I, § 8, cl. 8 ............................................. 6
`
`
`
`
`
`
`iii
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`STATUTES
`17 U.S.C. § 1067 .......................................................... 22
`35 U.S.C. § 6 ................................................................ 18
`35 U.S.C. § 102 ............................................................ 15
`35 U.S.C. § 103 ............................................................ 15
`35 U.S.C. § 122 ...................................................... 13, 14
`35 U.S.C. § 301 ............................................................ 16
`35 U.S.C. §§ 311-319 ..................................................... 7
`35 U.S.C. § 315 ............................................................ 17
`35 U.S.C. § 316 ...................................................... 16, 18
`35 U.S.C. § 321 ............................................................ 17
`35 U.S.C. § 325 ............................................................ 17
`
`REGULATIONS
`4 C.F.R. §§ 21.0-21.14 ................................................. 22
`43 C.F.R. § 4.470 ......................................................... 22
`47 C.F.R. § 42.51 ......................................................... 18
`
`RULES
`S. Ct. R. 37 .................................................................... 1
`
`LEGISLATIVE HISTORY
`H.R. Rep. No. 112-98, pt. 1 (2011) ............................ 7, 8
`
`
`
`
`
`
`
`iv
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`OTHER AUTHORITIES
`Am. Intell. Prop. L. Assoc., 2015 Report of the
`Economic Survey ..................................................... 19
`Am. Intell. Prop. L. Assoc., 2017 Report of the
`Economic Survey ..................................................... 19
`Gregory Dolin, Dubious Patent Reform, 56 B.C.
`L. Rev. 881 (2015) .................................................... 17
`Rochelle Cooper Dreyfuss, Nonobviousness: a
`Comment on Three Learned Papers, 12 Lewis
`& Clark L. Rev. 431 (2008) ................................ 12, 14
`Joseph W. Dubis, Inter Partes Review: a Multi-
`Method Comparison for Challenging Validity,
`6 Cybaris Intell. Prop. L. Rev. 107 (2015) ............... 19
`Federal Trade Commission, Patent Assertion
`Entity Activity (2016) .............................................. 21
`Michael D. Frakes & Melissa F. Wasserman, Is
`the Time Allotted to Review Patent Applica-
`tions Inducing Examiners to Grant Invalid
`Patents? Evidence from Micro-Level Applica-
`tion Data, 99 Rev. Econ. & Stat. (forthcoming
`2017) ........................................................................ 12
`Rachel C. Hughey & Joseph W. Dubis, Navi-
`gating Post-Grant Proceedings: What Two
`Years of Federal Circuit Decisions and the Su-
`preme Court’s Cuozzo Decision Tell Us About
`Post-Grant Proceedings Before the PTAB, 64-
`FEB Fed. Law 70 (Jan./Feb. 2017) .................... 10, 18
`
`
`
`
`
`v
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`Aashish Kapadia, Inter Partes Review: a New
`Paradigm in Patent Litigation, 23 Tex. Intell.
`Prop. L.J. 113 (2014) ............................................... 20
`Brian J. Love & James Yoon, Predictably Expen-
`sive: a Critical Look at Patent Litigation in the
`Eastern District of Texas, 20 Stan. Tech. L.
`Rev. (2017) ................................................... 18, 19, 20
`Robert P. Merges, As Many As Six Impossible
`Patents Before Breakfast: Property Rights for
`Business Concepts and Patent System Reform,
`14 Berkeley Tech. L.J. 577 (1999) ........................... 14
`Shawn P. Miller, Where’s the Innovation: an
`Analysis of the Quantity and Qualities of An-
`ticipated and Obvious Patents, 18 Va. J.L. &
`Tech. 1 (Fall 2013) ................................................... 15
`Patent Trial and Appeal Board, Trial Statistics
`IPR, PGR, CBM (Aug. 2017) (https://www.uspto.
`gov/sites/default/files/documents/trial_statistics_
`2017_08_31.pdf ) ........................................................ 9
`Sean B. Seymore, Patent Asymmetries, 49 U.C.
`Davis L. Rev. 963 (Feb. 2016) .................................. 12
`Ranganath Sudarshan, Nuisance-Value Patent
`Suits: an Economic Model and Proposal, 25
`Santa Clara High Tech. L.J. 159 (2008) ................. 21
`Todd R. Walters et al., The Evolution of Patent
`Office Litigation Practice Under the AIA, 9 No.
`3 Landslide 40 (Jan./Feb. 2017) .............................. 18
`
`
`
`
`
`vi
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`Stephen Yelderman, The Value of Accuracy in
`the Patent System, 84 U. Chi. L. Rev. 1217
`(2017) ........................................................... 11, 12, 19
`Sandra B. Zellmer & Robert B. Daugherty, The
`Changing Nature of Private Rights to Federal
`Resources, 2017 No. 1 RMMLF-INST *5-2
`(Jan. 26, 2017) ......................................................... 22
`U.S. Golf Manufacturers Council (https://www.sfia.
`org/industryaffairs/committees/golfcouncil) ............. 1
`U.S. Government Accountability Office, GAO-
`16-883T, Patent Office Has Opportunities to
`Further Improve Application Review and Pa-
`tent Quality, 3-6 (2016) ..................................... 12, 13
`U.S. Patent and Trademark Office, Correctness
`Indicator (October 20, 2017) (https://www.uspto.
`gov/patent/initiatives/correctness-indicator#
`step1) ....................................................................... 15
`U.S. Patent and Trademark Office, Patent Trial
`and Appeal Board Statistics (Dec. 31, 2015)
`(https://www.uspto.gov/sites/default/files/
`documents/2015-12-31%20PTAB.pdf ) ................... 20
`U.S. Patent and Trademark Office, USPTO Rec-
`ognizes Patents on Golf-Related Inventions as
`Masters Tournament Opens, Press Release #02-
`24 (Apr. 24, 2002) (https://www.uspto./gov/about-
`us/news-updates/uspto-recognizes-patents-
`golf-related-inventions-masters-tournament-
`opens) ......................................................................... 2
`
`
`
`
`
`1
`
`INTEREST OF AMICUS CURIAE1
`Amicus Curiae U.S. Golf Manufacturers Council
`
`(“USGMC”) is the trade organization representing golf
`equipment manufacturers doing business in the
`United States. Underscoring the importance of innova-
`tion in golf, USGMC quotes legendary golfer Bobby
`Jones on its homepage: “Whatever improvement has
`been wrought in golf clubs, and it has been considera-
`ble, has been done by a careful and sensible improve-
`ment in the methods of construction.” https://www.sfia.
`org/industryaffairs/committees/golfcouncil (last vis-
`ited October 20, 2017). And it is a considerable, careful,
`and sensible improvement, both fostered and policed
`by a functioning patent system. In conjunction with
`the 2002 Masters Tournament, the United States Pa-
`tent and Trademark Office (“Patent Office” or “PTO”)
`issued a press release, noting:
`
`Golf is one of America’s most popular sports,
`and those who play it for fun or for fortune
`spend countless hours of time and money try-
`ing to improve their games. The thousands of
`patents on golf-related inventions are testa-
`ment to that. In the past five years alone,
`more than 8,000 patents have been granted
`
`
`
`1 Pursuant to S. Ct. R. 37.6, counsel for the USGMC repre-
`sent that they authored this brief in its entirety and that none of
`the parties or their counsel, nor any other person or entity other
`than the USGMC or its counsel, made a monetary contribution
`intended to fund the preparation or submission of this brief. Pur-
`suant to S. Ct. R. 37.2(a), counsel represent that all parties have
`given blanket consent to the filing of amicus briefs in support of
`petitioner, respondents, or neither party, all of which have been
`docketed by the Clerk.
`
`
`
`
`
`2
`
`on golf-related equipment and gadgets. More
`than 1,400 of these are associated with golf
`clubs. . . . Nearly 1,000 more patents are re-
`lated to golf balls. . . .
`
`Patent Office, USPTO Recognizes Patents on Golf-
`Related Inventions as Masters Tournament Opens,
`Press Release #02-24 (Apr. 24, 2002) (available at
`https://www.uspto.gov/about-us/news-updates/uspto-
`recognizes-patents-golf-related-inventions-masters-
`tournament-opens) (last visited October 20, 2017)
`(ellipses added).
`
`Suffice it to say, USGMC members have a direct
`
`stake in the U.S. patent system. As noted, the golf in-
`dustry is heavily patented. Golf industry patents cover
`a variety of improvements or changes to products, such
`as golf club heads or golf balls, which range from incre-
`mental to highly significant. These patents often deal
`with intricate and diverse subject matter, including
`physics, micron-level surface treatments, chemical
`compositions and coatings, computer software, and mo-
`tion sensors. Thus, the USGMC has a strong interest
`in protecting the integrity of the game and, as a corol-
`lary, ensuring the quality of the vast number of golf-
`related patents.
`
`Similarly, USGMC members value a patent sys-
`
`tem that is technically sophisticated. Patent applica-
`tions from golf manufacturers tend to be examined by
`a small cadre of Patent Office examiners who, over
`time, become familiar with this field. Industry mem-
`bers rely on the subject-matter knowledge of these
`
`
`
`
`
`3
`
`professionals at the Patent Office to understand the
`technology and what constitutes a patentable improve-
`ment to it.
`
`Additionally, USGMC members operate in an in-
`
`dustry with added layers of self-governance that make
`reliably valid patents especially important. Manufac-
`turers must develop products that comply with the U.S.
`Golf Association’s Rules of Golf, which place additional
`(and evolving) constraints on innovation. Complying
`with these constraints often requires adhering to
`known technical concepts, many of which were never
`patented, and hence unavailable to patent examiners
`conducting a prior art search. For this and other rea-
`sons, USGMC members must be able to assist the Pa-
`tent Office through inter partes review by calling
`relevant, unknown prior art to the office’s attention.
`
`Finally, USGMC members favor a system that can
`
`weed out invalid patents expeditiously and economi-
`cally. USGMC members know first-hand the high cost
`of patent litigation in federal court. They have found
`themselves frequent targets of non-practicing entities,
`a/k/a “patent trolls,” which routinely file suit against
`industry members knowing that the amount in contro-
`versy is likely not high enough to justify the extraordi-
`nary costs of defending a patent suit through judgment
`and appeal.
`
` With these factors in mind, the USGMC submits
`this brief in support of Respondents because its mem-
`bers have a commitment to, and investment in, a well-
`functioning patent system, which includes a fair,
`
`
`
`
`
`4
`
`efficient, and effective administrative process in which
`stakeholders can identify invalidating prior art, and
`Patent Office professionals then correct errors by in-
`validating and canceling claims that should not have
`been issued in the first instance.
`
`--------------------------------- ---------------------------------
`
`SUMMARY OF ARGUMENT
`The USGMC submits this brief in support of a
`
`simple proposition: inter partes review works. If the
`goal of the patent system is to promote the progress of
`science and useful arts for the public good, valid pa-
`tents should be issued and invalid patents, if mistak-
`enly issued, should be canceled. Patents should not be
`written in indelible ink. Even patent examiners can,
`and do, make mistakes, especially when knowledgea-
`ble stakeholders are frozen out of the ex parte patent
`application process, and thus are unable to speak up
`and point out that a proposed patent is invalid over
`prior art. Allowing patent examiners to review the va-
`lidity of patent claims through inter partes review is
`preferable to requiring federal courts to invalidate im-
`properly granted patents in potentially thousands of
`additional lawsuits, or even worse, allowing thousands
`of dubious patents to be enforced through “cost of liti-
`gation” settlements without ever having their validity
`evaluated.
`
`The evidence that inter partes review is stopping
`
`specious patent claims is indisputable. Since the inter
`partes review process was added, nearly 7,000
`
`
`
`
`
`5
`
`petitions have been filed, two-thirds of which have re-
`sulted in the institution of a review proceeding. Of in-
`stituted inter partes review proceedings that have gone
`to a final written determination, over 80% have re-
`sulted in the cancellation of some or all of the patent
`claims. In other words, roughly 3,700 of the inter partes
`review petitions filed in the past five years – more than
`half – have resulted in cancellation of some or all of the
`challenged patent claims.
`
`The suggestion that inter partes review is an in-
`
`discriminate death star destroying good patents is de-
`monstrably wrong. In appeals from decisions of the
`Patent Trial and Appeal Board (“PTAB”) in inter partes
`review proceedings, the Patent Office prevails over
`80% of the time. Stated differently, the Patent Office
`regularly concludes, and the Federal Circuit concurs,
`upon reconsideration, that some patents the Patent Of-
`fice issued should not have been.
`
`Furthermore, inter partes review achieves these
`
`ends more quickly and inexpensively than federal law-
`suits. Although not inexpensive, the median $250,000
`cost of inter partes review pales in comparison to the
`average $3,100,000 cost of litigating a mid-sized pa-
`tent case to judgment in federal court. Additionally, by
`statute, an inter partes review proceeding ordinarily
`must be resolved within one year, whereas federal
`court patent litigation takes on average 2.33 years to
`run its course. Both in theory and in practice, inter
`partes review has lived up to its promise to erase inva-
`lid patents efficiently and economically.
`
`
`
`
`
`6
`
`The alternative to inter partes review is to over-
`
`load federal judges and lay juries with possibly thou-
`sands of additional patent cases that will be more
`expensive to try, and take longer to yield less reliable
`results. Further, the argument against inter partes re-
`view radically reimagines an administrative state in
`which any number of so-called “private rights” – trade-
`marks, oil and gas leases, national park concessions,
`interstate highway paving contracts, etc. – would be
`awarded through a process that acts as a one-way
`ratchet: an administrative agency can grant “private
`rights,” but only a federal district court can remedy an
`agency’s mistakes. The Constitution is not so inflexible
`as to force virtually all errors made by the Patent Of-
`fice (or any other administrative agency) to be resolved
`exclusively by Article III judges and lay juries.
`
`--------------------------------- ---------------------------------
`
`ARGUMENT
`INTER PARTES REVIEW
`IS AN EVEN-
`HANDED, EFFICIENT, AND EFFECTIVE
`METHOD FOR THE PATENT OFFICE TO EN-
`SURE PATENT QUALITY BY ELIMINATING
`ERRORS.
`Inter Partes Review Serves the Public Inter-
`
`est in Patent Quality. The primary purpose of the pa-
`tent system is, of course, “to promote the progress of
`science and useful arts.” U.S. Const., art. I, § 8, cl. 8.
`This Court has variously referred to this public inter-
`est as “the main object,” Pennock v. Dialogue, 27 U.S. 1,
`19 (1829); the “primary[ ] object” and the “true policy
`
`
`
`
`
`7
`
`and ends of the patent laws,” Kendall v. Winsor, 62 U.S.
`322, 327-28 (1859) (brackets added); and the “domi-
`nant [interest]
`in the patent system.” Edward
`Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S.
`394, 401 (1947) (brackets added).
`
`The various doctrines of patent invalidity exist to
`
`serve that purpose. “It is the protection of the public in
`a system of free enterprise which alike nullifies a pa-
`tent where any part of it is invalid. . . . The patent is a
`privilege. But it is a privilege which is conditioned by
`a public purpose.” Mercoid Corp. v. Mid-Continent Inv.
`Co., 320 U.S. 661, 665 (1944) (citations omitted and el-
`lipsis added). “It is as important to the public that com-
`petition should not be repressed by worthless patents,
`as that the patentee of a really valuable invention
`should be protected in his monopoly. . . .” Lear, Inc. v.
`Atkins, 395 U.S. 653, 663-64 (1969) (quoting Pope Man-
`ufacturing Co. v. Gormully, 144 U.S. 224, 234 (1892));
`cf. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 415-16
`(2007) (obviousness doctrine protects against with-
`drawal of what is already known to the public from
`public use).
`
`Congress created inter partes review in 35 U.S.C.
`
`§§ 311-319 to serve this public interest. Congress char-
`acterized the goals of inter partes review as “improving
`patent quality and providing a more efficient system
`for challenging patents that should not have issued.”
`H.R. Rep. No. 112-98, pt. 1 at 39-40. That is, “[t]he leg-
`islation is designed to establish a more efficient and
`streamlined patent system that will improve patent
`quality and limit unnecessary and counterproductive
`
`
`
`
`
`8
`
`litigation costs.” Id. at 40 (brackets added); see also
`Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2139-
`44 (2016) (describing inter partes review). Thus, while
`inter partes review may help “resolve concrete patent-
`related disputes among parties, inter partes review
`helps protect the public’s paramount interest in seeing
`that patent monopolies . . . are kept within their legit-
`imate scope.” Cuozzo, 136 S. Ct. at 2144 (quotation
`omitted and ellipsis in original).
`
`Recognizing the primary role of inter partes review
`
`as serving the public interest in the invalidation of
`wrongly-issued patents, this Court has described the
`Congressional design of inter partes review as a “hy-
`brid proceeding,” embedding certain characteristics of
`an adversarial proceeding into what is essentially a
`standard form of administrative review. Cuozzo, 136
`S. Ct. at 2144. While the manner of proceeding does al-
`low a petitioner to participate in challenging the valid-
`ity of an issued patent, “the purpose of the proceeding
`is not quite the same as the purpose of district court
`litigation.” Id. Where the purpose of litigation is to ad-
`judicate the competing rights of private parties, the an-
`imating purpose of inter partes review is not to resolve
`a private dispute, but to allow the Patent Office “to
`reexamine an earlier agency decision,” i.e., to double-
`check its work. Id. Just as the game of golf depends on
`the integrity of the players, the patent system depends
`on the integrity of issued patents.
`
`The scorecard suggests that inter partes review
`
`has succeeded, allowing the Patent Office – using its
`specialized training and patent law expertise – to take
`
`
`
`
`
`9
`
`a second look at issued patents and winnow out claims
`that were improperly granted based on the prior art.
`According to the most recent available statistics from
`the PTAB, a total of 6,831 inter partes review proceed-
`ings have been filed between September 16, 2012, and
`August 31, 2017. See PTAB, Trial Statistics IPR, PGR,
`CBM at 2 (Aug. 2017) (available at https://www.uspto.
`gov/sites/default/files/documents/trial_statistics_2017_
`08_31.pdf ) (last visited October 20, 2017). Of petitions
`filed during the last three fiscal years, approximately
`two-thirds have resulted in the institution of a review
`proceeding. See id. at 7 (ranging from 63% to 68%, and
`including inter partes, covered business method, and
`post-grant review proceedings). Of instituted review
`proceedings that have gone to a final written determi-
`nation, as opposed to being withdrawn due to a private
`settlement or some other disposition, the Patent Office
`has canceled all challenged claims in 65% of proceed-
`ings, canceled some challenged claims in 16% of pro-
`ceedings, and canceled none of the challenged claims
`in 19% of proceedings. See id. at 11 (including inter
`partes, covered business method, and post-grant re-
`view proceedings). In other words, in over 80% of the
`instituted review proceedings, the Patent Office has
`canceled some or all of the challenged claims.
`
`In appeals from decisions of the PTAB in inter
`
`partes review proceedings, the Patent Office almost al-
`ways prevails. A recent study looked at Federal Circuit
`decisions on the merits of appeals from PTAB determi-
`nations in inter partes and covered business method
`review proceedings. See Rachel C. Hughey & Joseph W.
`
`
`
`
`
`10
`
`Dubis, Navigating Post-Grant Proceedings: What Two
`Years of Federal Circuit Decisions and the Supreme
`Court’s Cuozzo Decision Tell Us About Post-Grant Pro-
`ceedings Before the PTAB, 64-FEB Fed. Law 70, 72
`(Jan./Feb. 2017). Of these, 123 were appeals from inter
`partes review proceedings. In those appeals, 71, or 57%,
`were summarily affirmed without opinion. See id. Of
`the remaining cases, 28 were affirmed. See id. Only 24
`were remanded or reversed at least in part. See id.
`That is, the PTAB’s determination was affirmed in its
`entirety in 80% of appeals from inter partes review pro-
`ceedings.
`
`
`
`Inter partes review succeeds for several reasons.
`
`First, inter partes review redresses an imbalance
`
`in the prior patent system by allowing persons aware
`of potentially invalidating prior art to present that art
`to the Patent Office in a proceeding in which they can
`actually participate. This fact is particularly important
`to the U.S. golf industry, where industry competitors
`have both information about prior art not readily
`available to patent examiners, e.g., magazine articles,
`competitor advertisements, and catalogs, and incen-
`tive to bring that prior art to the attention of patent
`examiners once they become aware of an issued patent.
`
`Second, inter partes review provides the Patent Of-
`
`fice with the best opportunity to correct its errors,
`thereby eliminating wrongly-issued patent claims and
`improving patent quality. Because a small number of
`patent examiners consider most golf-related patents,
`patent examiners evaluate prior art if it is brought to
`
`
`
`
`
`11
`
`their attention. And it is the Patent Office’s subject-
`matter expertise that led the Court in Cuozzo to ob-
`serve that, in “significant respects, inter partes review
`is less like a judicial proceeding and more like a spe-
`cialized agency proceeding.” 136 S. Ct. at 2143.
`
`Third, inter partes review achieves both of these
`
`goals more efficiently and less expensively than fed-
`eral litigation, which costs a fortune, and is conducted
`by judges and before juries that lack the technical ex-
`pertise of the examiners and administrative patent
`judges of the Patent Office. We briefly address each of
`the reasons the inter partes review process works
`within the framework of the Constitution. While pa-
`tent validity can be raised as a defense in a patent in-
`fringement action, the question of whether a patent
`was properly issued in the first place is something the
`Patent Office should be allowed to revisit to protect the
`integrity of the patent system.
`
`Inter Partes Review Reestablishes Fairness
`
`in an Otherwise Partial Patent Application Pro-
`cess. One systemic problem with the patent system is
`that the pre-issuance examination process is tilted,
`both by design and circumstance, in favor of the issu-
`ance of patents. The procedure for obtaining a patent
`is a one-sided affair, involving only an applicant seek-
`ing a patent and a Patent Office examiner. Cf. Phillips
`v. AWH Corp., 415 F.3d 1303, 1317 (Fed. Cir. 2005) (en
`banc) (patent prosecution is “an ongoing negotiation
`between the PTO and the applicant”). “The initial ex-
`amination step is hurried, ex parte, and comparatively
`cursory.” Stephen Yelderman, The Value of Accuracy in
`
`
`
`
`
`12
`
`the Patent System, 84 U. Chi. L. Rev. 1217, 1281 (2017).
`The applicant is presumed to be entitled to a patent
`unless the examiner can show otherwise. See Sean B.
`Seymore, Patent Asymmetries, 49 U.C. Davis L. Rev.
`963, 977 (Feb. 2016) (“Thus, the burden of proving un-
`patentability rests with the PTO.”). Patent examiners
`are overworked, with “notoriously little time to think
`through the relationship between the known prior art
`and the advance claimed” by the applicant. Rochelle
`Cooper Dreyfuss, Nonobviousness: a Comment on
`Three Learned Papers, 12 Lewis & Clark L. Rev. 431,
`434 (2008).
`
`Patent Office examiners face significant chal-
`
`lenges in handling the volume of applications that
`cross their desks. A 2016 study by the Government Ac-
`countability Office highlights a number of these hur-
`dles. See U.S. Gov’t Accountability Off., GAO-16-883T,
`Patent Office Has Opportunities to Further Improve
`Application Review and Patent Quality, 3-6 (2016)
`(“GAO Report”) (available at http://www.gao.gov/assets/
`680/679830.pdf ) (last visited October 20, 2017). Two-
`thirds or more of patent examiners reported that they
`have less time than they need to complete a thorough
`examination of each application. Id. at 5. One recent
`study estimates that examiners spend an average of 19
`hours total on each application. See Michael D. Frakes
`& Melissa F. Wasserman, Is the Time Allotted to Review
`Patent Applications Inducing Examiners to Grant In-
`valid Patents? Evidence from Micro-Level Application
`Data, 99 Rev. Econ. & Stat. *8-9, 41 (forthcoming 2017)
`(cited in Yelderman, 84 U. Chi. L. Rev. at 1233 n.46).
`
`
`
`
`
`13
`
`Over 80% of examiners reported receiving applications
`accompanied by an excessive number of prior art ref-
`erences. GAO Report at 3. Examiners reported difficul-
`ties finding certain categories of prior art, including
`foreign language references in particular. Id. at 3-4.
`And often examiners complain that they must deal
`with unclear applications. Id. at 7-8. Nearly 90% of ex-
`aminers reported always or often dealing with applica-
`tions containing broadly worded claim language. Id. at
`8. Nearly two-thirds of examiners reported that this
`broad claiming made the process of examination more
`difficult. Id. And 45% of examiners reported routinely
`encountering ill-defined terms in the applications they
`review. Id. at 7.
`
`The resulting picture is not a pretty one: over-
`
`worked examiners with too little time to review un-
`clear applications containing broadly-worded claims
`which cite an unreasonably large number of prior art
`references, which often is not the most relevant prior
`art. The odds that an examiner will focus on, and be in
`a position to apply, prior art, or portions thereof, most
`relevant to any particular application are not good.
`
`Adding to the difficulty the Patent Office faces in
`
`properly vetting applications is that the only partici-
`pants in the process are the patent applicant and the
`examiner. A patent application remains confidential
`until, at the earliest, 18 months from the earliest filing
`date from which the applicant seeks to benefit. 35
`U.S.C. §§ 122(a)-(b). Thus, interested parties will likely
`not even learn of the existence of an application for at
`least that length of time. Further, the Patent Office
`
`
`
`
`
`14
`
`Director is required by statute “to ensure that no pro-
`test or other form of pre-issuance opposition to the
`grant of a patent on an application may be initiated
`after publication of the application without the express
`written consent of the applicant.” 35 U.S.C. § 122(c); see
`also Animal Legal Defense Fund v. Quigg, 932 F.2d 920,
`930 (Fed. Cir. 1991) (“A third party has no right to in-
`tervene in the prosecution of a particular patent appli-
`cation to prevent issuance of an allegedly invalid
`patent.”) (citations omitted).
`
`In sum, a third party to which the issuance of a
`
`patent might be directly relevant likely will not learn
`of the existence of the patent until at least 18 months
`after its filing, and cannot do anything to challenge its
`validity until after it has issued, at which point it is
`presumed to be valid. See Microsoft Corp. v. i4i Ltd.
`P’ship, 564 U.S. 91, 95 (2011). The result is a system
`with an in-built incentive structure that promotes the
`allowance of questionable patents; and this system
`tends to generate a vicious cycle in which an increasing
`number of applications are filed, which increases the
`workload of the examiners, which leads to the grant of
`more patents, which leads to a further increase in the
`number of applications, and so on. See Dreyfuss, 12
`Lewis & Clark L. Rev. at 434; Robert P. Merges, As
`Many As Six Impossible Patents Before Breakfast:
`Property Rights for Business Concepts and Patent Sys-
`tem Reform, 14 Berkeley Tech. L.J. 577, 590 (1999).
`
`Recognizing its own limitations, the Patent Office
`
`conducts reviews of issued patents for validity. In a re-
`cent review of approximately 4,000 randomly selected
`
`
`
`
`
`15
`
`office actions from the fourth quarter of 2016, the Pa-
`tent Office calculated that 11.6% of those actions did
`not comply with the statutory requirements of 35
`U.S.C. § 102 (anticipation) and 35 U.S.C. § 103 (obvi-
`ousness), the two grounds for cancellation through in-
`ter partes review. See Patent Office, Correctness
`Indicator (available at https://www.uspto.gov/patent/
`initiatives/correctness-indicator#step1) (last visited
`October 20, 2017). Other analyses conclude that as
`many as 28% of all issued patents would be wholly or
`partly invalidated on grounds of anticipation or obvi-
`ousness if litigated. See Shawn P. Miller, Where’s the
`Innovation: an Analysis of the Quantity a
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