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 FOR 72 PROFESSORS OF
`INTELLECTUAL PROPERTY LAW AS AMICI
`CURIAE IN SUPPORT OF RESPONDENTS
`
`MarK a. leMley
`Counsel of Record
`StanforD law SChool
`559 Nathan Abbott Way
`Stanford, CA 94305
`(650) 723-4605
`mlemley@law.stanford.edu
`
`GreG reIlly
`IIt ChICaGo-Kent
`ColleGe of law
`565 West Adams Street
`Chicago, IL 60661
`(312) 906-5168
`
`artI K. raI
`DuKe law SChool
`210 Science Drive
`Durham, NC 27708
`(919) 613-7276
`
`276054
`
`Counsel for Amici Curiae
`
`A
`
`(800) 274-3321 • (800) 359-6859
`
`
`
`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 FOR 72 PROFESSORS OF
`INTELLECTUAL PROPERTY LAW AS AMICI
`CURIAE IN SUPPORT OF RESPONDENTS
`
`MarK a. leMley
`Counsel of Record
`StanforD law SChool
`559 Nathan Abbott Way
`Stanford, CA 94305
`(650) 723-4605
`mlemley@law.stanford.edu
`
`GreG reIlly
`IIt ChICaGo-Kent
`ColleGe of law
`565 West Adams Street
`Chicago, IL 60661
`(312) 906-5168
`
`artI K. raI
`DuKe law SChool
`210 Science Drive
`Durham, NC 27708
`(919) 613-7276
`
`276054
`
`Counsel for Amici Curiae
`
`A
`
`(800) 274-3321 • (800) 359-6859
`
`
`
`i
`
`TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . i
`
`TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . iv
`
`INTEREST OF AMICI . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . . . .1
`
`ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
`
`I. Un d e r t h i s C o u r t ’s A r t i c l e I I I
`Precedent, Congress Can Permit an
`Administrative Agency to Correct Errors
`in Patent Rights that It Granted . . . . . . . . . . . . . .2
`
`
`
`A. Because Patent Rights Are Federal
`Statutory Rights, Congress Has Power
`to Allow Error Correction by the
`Agency that Granted Those Rights . . . . . . .3
`
`
`
`B. PTAB Error Correction Is Integrally
`Related to the Patent Office’s Primary
`Administrative Role of Examining and
`Granting Valid Patents . . . . . . . . . . . . . . . . . .7
`
`
`
`C. Congress’s Discretion to Assign
`Patent Error Correction to the Patent
`Office Is Not Limited by the Fora for
`Patent Cancellation in 1789 . . . . . . . . . . . . .10
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`
`
`ii
`
`II. Congress Adopted an Administrative
`E r r o r C o r r e c t i o n S c h e m e T h a t
`Promotes Article I Objectives Without
`Threatening Article III Principles . . . . . . . . . . .16
`
`
`
`A. C o n g r e s s H a s R e p e a t e d l y
`Determined That Administrative
`Correction of Erroneously Granted
`Patents Is Necessary to Promote
`the “Progress of the Useful Arts” . . . . . . .16
`
`
`
`B. Error Correction Remains Under
`
`the Control of Article III Courts . . . . . . . .20
`
`C. Petitioner’s Facial Challenge to
`Con st it ut ion a l it y Wou ld Mo ot
`Efforts to Improve Administrative
`Error Correction. . . . . . . . . . . . . . . . . . . . . .22
`
`
`
`III. The Absence of a Seventh Amendment Right
`to Have a Jury Resolve Validity Confirms
`the Constitutionality of PTAB Adjudication
`of Some Patent Validity Determinations . . . . . .23
`
`
`
`A. The Seventh A mendment Does
`
`Not Preclude Agency Proceedings . . . . . . .23
`
`B. H i st or ic a l P r a c t ic e C on f i r m s
`That a Jury Is Not Required to
`Adjudicate Validity . . . . . . . . . . . . . . . . . . . .25
`
`
`
`Table of Contents
`
`Page
`
`
`
`iii
`
`CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
`
`APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1a
`
`Table of Contents
`
`Page
`
`
`
`iv
`
`CASES
`
`Atlas Roofing Co. v. OSHRC,
`
`430 U.S. 442 (1977). . . . . . . . . . . . . . . . . . . . . . . . . . . .24
`
`Attorney Gen. ex rel. Hecker v.
`Rumford Chem. Works,
`32 F. 608 (C.C.R.I. 1876) . . . . . . . . . . . . . . . . . . . . . . .27
`
`
`
`B&B Hardware, Inc. v. Hargis Indus., Inc.,
`
`135 S. Ct. 1293 (2015). . . . . . . . . . . . . . . . . . . . . . . . . . .4
`
`Blake v. Smith,
`
`3 F. Cas. 604 (C.C.S.D.N.Y. 1845). . . . . . . . . . . . . . . .30
`
`Block v. Hirsh,
`
`256 U.S. 135 (1921) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
`
`Blonder-Tongue Labs., Inc. v.
`Univ. of Ill. Foundation,
`402 U.S. 313 (1971) . . . . . . . . . . . . . . . . . . . .8, 17, 32, 33
`
`
`
`Board of Ordnance v. Parr,
` PCi/3919 (Privy Council July 19, 1810) . . . . . . . . . . .14
`
`Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,
`
`489 U.S. 141 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . .6, 8
`
`Cardinal Chem. Co. v. Morton Int’l, Inc.,
`
`508 U.S. 83 (1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
`
`TABLE OF CITED AUTHORITIES
`
`Page
`
`
`
`v
`
`CFTC v. Schor,
`
`478 U.S. 833 (1986). . . . . . . . . . . . . . . . . . . . . . . . .16, 20
`
`Cox v. United States,
`
`332 U.S. 442 (1947). . . . . . . . . . . . . . . . . . . . . . . . . . . .24
`
`Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131 (2016) . . . . . . . . . . . . . . . . . . . . . passim
`
`
`Curtis v. Loether,
`
`415 U.S. 189 (1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
`
`Deepsouth Packing Co. v. Laitram Corp.,
`
`406 U.S. 518 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . .3, 4
`
`Drink Tanks Corp. v. Growlerworks, Inc.,
` No. 3:16-cv-410-SI, 2016 WL 3844209
`
`(D. Or. July 15, 2016) . . . . . . . . . . . . . . . . . . . . . . . . . .21
`
`eBay Inc. v. MercExchange, LLC,
`
`547 U.S. 388 (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
`
`Ex Parte Wood & Brundage,
`
`22 U.S. (9 Wheat.) 603 (1824) . . . . . . . . . . . . . . . . . . .30
`
`Graham v. John Deere Co.,
`
`383 U.S. 1 (1966). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
`
`Granfinanciera S.A. v Nordberg,
`
`492 U.S. 33 (1989). . . . . . . . . . . . . . . . . . . . . . . . . .10, 11
`
`Cited Authorities
`
`Page
`
`
`
`vi
`
`Hill v. Thompson,
`
`(1817) 36 Eng. Rep. 239 (Ch.) 242. . . . . . . . . . . . . . . .28
`
`Kappos v. Hyatt,
`
`566 U.S. 431 (2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
`
`Kimble v. Marvel Entertainment, LLC,
`
`135 S. Ct. 2401 (2015). . . . . . . . . . . . . . . . . . . . . . . . . . .8
`
`Livingston v. Van Ingen,
`
`9 Johns 507 (N.Y. 1812) . . . . . . . . . . . . . . . . . . . . . . . .14
`
`Markman v. Westview Instruments, Inc.,
`
`517 U.S. 370 (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
`
`McCormick Harvesting Mach. Co. v.
`C. Aultman & Co.,
`169 US. 606 (1898) . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
`
`
`
`McGaw v. Bryan,
`
`16 F. Cas. 96 (S.D.N.Y. 1821) . . . . . . . . . . . . . . . . . . . .30
`
`Merck & Cie v. Gnosis SpA,
`
`808 F. 3d 829 (Fed. Cir. 2015) . . . . . . . . . . . . . . . . . . .20
`
`Microsoft Corp. v. i4i Ltd. Partnership,
`
`564 U.S. 91 (2011) . . . . . . . . . . . . . . . . . . . . . . . .9, 18, 21
`
`Morris v. Huntington,
`
`17 F. Cas. 818, 821 (C.C.D.N.Y. 1824) (No. 9,831) . . .30
`
`Cited Authorities
`
`Page
`
`
`
`vii
`
`Motion Picture Patents Co. v.
`Universal Film Mfg. Co.,
`243 U.S. 502 (1917) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
`
`
`
`Mowry v. Whitney,
`
`81 U.S. (14 Wall.) 434 (1871) . . . . . . . . . . . . . . . . . . . .31
`
`Murray’s Lessee v. Hoboken Land &
`Improvement Co.,
`59 U.S. 272 (1855). . . . . . . . . . . . . . . . . . . . . . . . . .10, 12
`
`
`
`Northern Pipeline Construction Co. v.
`Marathon Pipe Line Co.,
`458 U.S. 50 (1982). . . . . . . . . . . . . . . . . . . . . . . . . 4-5, 12
`
`
`
`Patlex Corp. v. Mossinghoff,
`
`758 F.2d 594 (Fed. Cir. 1985) . . . . . . . . . . . . . . . . . . .18
`
`Pope Mfg. Co. v. Gormully,
`
`144 U.S. 224 (1892) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
`
`Stern v. Marshall,
`564 U.S. 462 (2011) . . . . . . . . . . . . . . . . . . . . . . . passim
`
`
`Thomas v.
`Union Carbide Agricultural Prods. Co.,
`473 U.S. 568 (1985). . . . . . . . . . . . . . . . . . . . . . . . . .7, 12
`
`
`
`Tull v. United States,
`
`481 U.S. 412 (1987). . . . . . . . . . . . . . . . . . . . . . . . . . . .26
`
`Cited Authorities
`
`Page
`
`
`
`viii
`
`United States v. Am. Bell Tel. Co.,
`
`128 U.S. 315(1888) . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
`
`United States v. Duell,
`
`172 U.S. 576 (1899) . . . . . . . . . . . . . . . . . . . . . . . . . .5, 15
`
`United States v. Mead Corp.,
`
`533 U.S. 218 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
`
`Wellness Int’l Network, Ltd. v. Sharif,
`
`135 S. Ct. 1932 (2015). . . . . . . . . . . . . . . . . .6, 10, 11, 12
`
`Wheaton v. Peters,
`
`33 U.S. 591 (1834) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`STATUTES AND OTHER AUTHORITIES
`
`U.S. Const., Art. I, § 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
`
`5 U.S.C. §§ 551–559 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
`
`35 U.S.C. § 6(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
`
`35 U.S.C. § 261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
`
`35 U.S.C. § 311(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
`
`35 U.S.C. § 315(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
`
`35 U.S.C. § 315(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
`
`Cited Authorities
`
`Page
`
`
`
`ix
`
`35 U.S.C. § 316(a)(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
`
`35 U.S.C. § 316(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
`
`35 U.S.C. § 319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
`
`H.R. Journal, 3rd Cong., 1st Sess., 206 (1794) . . . . . . . .14
`
`C h r I S t I n e M a C l e o D , I n v e n t I n G t h e
`I n Du S t r I a l r e volu t Ion: t h e enGl I S h
` Patent SySteM, 1660–1800 (1988) . . . . . . . . . . . . . . .13
`
`E. Wyndham Hulme, Privy Council Law and
`Practice of Letters Patent for Invention from the
` Restoration to 1794, 33 l.Q. rev. 194 (1917) . . . . . .13
`
`John F. Preis, How the Federal Cause of
`Action Relates to Rights, Remedies, and
` Jurisdiction, 67 fla. l. rev. 849 (2015). . . . . . . . . .12
`
`Joseph Farrell & Robert P. Merges, Incentives to
`Challenge and Defend Patents: Why Litigation
`Won’t Reliably Fix Patent Office Errors and
`Why Administrative Patent Review Might
` Help, 19 BerKeley teCh. l.J. 943 (2004) . . . . . . . . .18
`
`Mark A. Lemley, Why Do Juries Decide If Patents
` Are Valid?, 99 Va. L. Rev. 1673 (2013) . . . . . . . . 28, 32
`
`Cited Authorities
`
`Page
`
`
`
`x
`
`Oren Bracha, Owning Ideas: A History of Anglo-
` American Intellectual Property (June 2005) . . .13, 14
`
`Pau l R . Gugl iu z z a , (In)Va li d Pa t e n t s,
`
`92 notre DaMe l. rev. 271 (2016). . . . . . . . . . . . . . .22
`
`Saurabh Vishnubhakat, Arti Rai, and Jay
`Kesan, Strategic Decision Making in Dual
`PTAB and District Court Proceedings, 31
` BerKeley teCh. l.J. (2016) . . . . . . . . . . . . . . . . . . . .19
`
`Sean Bottomley, Patent Cases in the Court of
` Chancery, 1714–58, 35 J. leG. hISt. (2014) . . . . . . . .13
`
`wI l l I a M M a r t e n, t h e en G l I S h Pa t e n t
` SySteM (1904) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
`
`William Tidd, The Practice of the Court of
` King’s Bench 799 (2d ed. London 1799) . . . . . . . . . . .28
`
`Cited Authorities
`
`Page
`
`
`
`1
`
`INTEREST OF AMICI1
`
`Amici are professors and researchers of intellectual
`property law at universities throughout the United States.
`We have no personal interest in the outcome of this case,
`but a professional interest in seeing patent law develop
`in a way that encourages innovation and creativity as
`efficiently as possible.
`
`SUMMARY OF ARGUMENT
`
`Petitioner argues that only a court – indeed, only a
`jury – has the power to decide that the United States
`Patent and Trademark Office erred in granting a patent.
`That argument flies in the face of the history of patent
`law and this Court’s precedents.
`
`Patents are a creature of statute: as early as 1834, this
`Court specifically recognized that there is no “natural” or
`common law right to a patent. Rather, under its Article I
`power to establish a patent system, Congress is charged
`with determining the contours of the patent grant.
`Congressional power to establish the terms and conditions
`of the patent grant includes the power to establish a
`system for administrative correction of erroneously
`granted patents.
`
`PTAB error correction is also narrow in scope,
`targeted towards bad patents that district court litigation
`
`1. No person other than the amici and their counsel
`participated in the writing of this brief or made a financial
`contribution to the brief. Letters signifying the parties’ consent
`to the filing of this brief are on file with the Court.
`
`
`
`2
`
`would not address, and only a modest extension of prior
`administrative correction proceedings. Moreover, even
`this narrow scope is subject to significant appellate court
`control. PTAB review thus addresses the social cost of
`erroneous patent grants without threatening Article III
`values.
`
`The Seventh Amendment does not compel a different
`conclusion. While patent infringement cases were tried
`to juries at common law, both the government and judges
`retained the power to revoke patents in England and in
`the early United States. When patent validity questions
`were considered in American courts throughout history,
`they were frequently considered by judges, not juries. And
`court consideration of patent validity issues coexisted with
`actions by the legislative and executive branches to revoke
`patents, actions which of course did not require a jury.
`While this Court need not reach the Seventh Amendment
`issue in order to dispose of petitioner’s claims, should it
`reach that issue it should make clear that the Seventh
`Amendment does not create a right to jury trial on patent
`validity.
`
`ARGUMENT
`
`I. Under this Court’s Article III Precedent, Congress
`Can Permit an Administrative Agency to Correct
`Errors in Patent Rights that It Granted.
`
`Despite “some debate” about the full scope of
`permissible non-Article III adjudication, the Court has
`confirmed that Congress may assign adjudication to expert
`administrative agencies in “cases in which the claim at
`issue derives from a federal regulatory scheme, or in which
`
`
`
`3
`
`resolution of the claim by an expert government agency is
`deemed essential to a limited regulatory objective within
`the agency’s authority.” Stern v. Marshall, 564 U.S. 462,
`490 (2011). When “the right [at issue] is integrally related
`to particular federal government action,” no constitutional
`barrier exists to administrative adjudication. Id. at 490-
`491.
`
`Inter partes review is a quintessential example of
`constitutionally-permissible administrative adjudication.
`Patent rights are created by federal statute with no
`common law analog. The precise question resolved is
`whether the United States Patent and Trademark Office
`erred in implementing Congress’s directives by granting a
`patent that failed the statutory conditions of patentability.
`The cancellation of invalid patents through inter partes
`review thus is closely intertwined with, and essential to,
`the Patent Office’s primary administrative function of
`patent examination, allowing the Patent Office to correct
`errors in its prior administrative process.
`
`A. Because Patent Rights Are Federal Statutory
`Rights, Congress Has Power to Allow Error
`Correction by the Agency that Granted Those
`Rights.
`
`American patent rights exist solely because of federal
`statutes enacted by Congress pursuant to Article I.
`“Under the common law the inventor had no right to
`exclude others from making and using his invention.”
`Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518,
`525-526 (1972) (superseded by statute on other grounds);
`see also Wheaton v. Peters, 33 U.S. 591, 661 (1834)
`(concluding that inventors never had exclusive rights to
`
`
`
`4
`
`inventions at common law “either in this country or in
`England”).
`
`The right to exclude others from using an invention
`therefore “must be derived from [the] patent grant, and
`thus from the patent statute.” Deepsouth, 406 U.S. at
`526. As statutory rights created in Congress’s discretion,
`Congress may “select[] the policy which in its judgment
`best effectuates the constitutional aim” and “set out
`conditions and tests for patentability.” Graham v. John
`Deere Co., 383 U.S. 1, 6 (1966) (emphasis added); see also
`Deepsouth, 406 U.S. at 530 (describing Constitution as
`“permissive” for patent rights).
`
`Post-issuance administrative error correction
`and patent cancellation are among the conditions that
`Congress can constitutionally impose on patent rights.
`Congress has broad power to provide for administrative
`adjudication when, as here, the right exists solely because
`of a federal statute “and does not depend on or replace a
`right . . . under state law.”2 Stern, 564 U.S. at 491 (quotation
`omitted). Congress can permit Patent Office error
`correction “before [a] particularized tribunal[] created to
`perform the specialized adjudicative tasks related to that
`right” as an “incidental extension[] of Congress’ power
`to define rights that it has created.” Northern Pipeline
`
`2. Patent rights are comparable to trademark registration,
`which is strictly statutory, and distinctly different from “the
`right to adopt and exclusively use a trademark,” which was a
`pre-existing common law right. See B&B Hardware, Inc. v.
`Hargis Indus., Inc., 135 S. Ct. 1293, 1317 (2015) (Thomas, J.,
`dissenting) (concluding that “no one disputes that the TTAB may
`constitutionally adjudicate a registration claim” because it is a
`“quasi-private right”).
`
`
`
`5
`
`Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50,
`83-84 (1982) (plurality); see also United States v. Duell,
`172 U.S. 576, 583 (1899) (“Congress may provide such
`instrumentalities in respect of securing to inventors the
`exclusive right to their discoveries as in its judgment will
`be best calculated to effect that object.”).
`
`The Patent Act expressly defines the rights granted by
`a patent as being “[s]ubject to the provisions of this title.”
`35 U.S.C. § 261. For over thirty-five years,3 “the provisions
`of this title” have included Patent Office “authority to
`reexamine — and perhaps cancel — a patent claim that
`it had previously allowed.” Cuozzo Speed Techs., LLC v.
`Lee, 136 S. Ct. 2131, 2137 (2016). Patents granted after
`July 1, 1981 were issued subject to cancellation in ex parte
`reexamination, and those granted between November 29,
`1999 and September 16, 2012 were issued additionally
`subject to inter partes reexamination. Id. Congress
`“modifie[d]” reexamination by instituting inter partes
`review on September 16, 2012, as the latest iteration of
`its decades-long scheme for post-issuance Patent Office
`error correction. Id.
`
`As discussed in Part II, inter partes review is
`significantly more streamlined than reexamination,
`which helps to explain why inter partes review has been
`more widely used to revoke invalid patents than prior
`procedures. Despite these differences, inter partes
`
`3. Even earlier, under the Patent Act of 1952, the Board of
`Patent Appeals and Interferences’ decision in an interference
`“constitute[d] cancellation of the claims involved from the patent,”
`albeit only if the Patent Office erred by granting a patent to subject
`matter that was first invented by another patent applicant. Patent
`Act of 1952 § 135, P.L. 593, 66 Stat. 792, 802 (July 19, 1952).
`
`
`
`6
`
`review imposes the same condition on the rights granted
`by a patent that Congress has imposed on every patent
`issued in the past thirty-five years: the possibility of
`post-issuance administrative error review and patent
`cancellation. “Although Congress changed the name from
`‘reexamination’ to ‘review,’ nothing convinces us that, in
`doing so, Congress wanted to change its basic purposes,
`namely, to reexamine an earlier agency decision.” Id. at
`2144.
`
` Thus, the rights provided by virtually every patent
`still in effect are subject to post-issuance Patent Office
`review and cancellation. For that reason, arguments that
`inter partes review impermissibly extinguishes “property
`rights” through an administrative forum miss the point.
`It is “the federal patent scheme [that] creates a limited
`opportunity to obtain a property right in an idea.” Bonito
`Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141,
`149 (1989). “[T]he Patent Act itself indicates that patents
`shall have the attributes of personal property ‘[s]ubject to
`the provisions of this title.’” eBay Inc. v. MercExchange,
`LLC, 547 U.S. 388, 392 (2006) (quoting 35 U.S.C. § 261).
`The possibility of Patent Office error correction and
`cancellation is therefore part and parcel with the right
`created by the patent grant, at least for patents granted
`in the past 35 years.
`
`Even traditional property rights are eligible for
`non-Article III adjudication. Aspects of bankruptcy that
`are indisputably subject to non-Article III adjudication
`involve property rights. See, e.g., Wellness Int’l Network,
`Ltd. v. Sharif, 135 S. Ct. 1932, 1952-54 (2015) (Roberts,
`C.J., dissenting). The Court likewise characterized its
`opinion in Block v. Hirsh, 256 U.S. 135 (1921), which
`
`
`
`7
`
`involved administrative adjudication of landlords’ right to
`possession and rental amounts from holdover tenants, as
`involving rights capable of non-Article III adjudication.
`See Thomas v. Union Carbide Agricultural Prods. Co.,
`473 U.S. 568, 588-589 (1985). And this is particularly
`true of legal interests, like patent rights, that exist solely
`because they were created by administrative agencies in
`the course of implementing a statutory mandate. Thus,
`even if this Court were to find that inter partes review is
`qualitatively different from prior procedures in a way that
`changed the nature of the rights granted, such a finding
`would not implicate Article III.
`
`B. PTAB Error Correction Is Integrally Related
`to the Patent Office’s Primary Administrative
`Role of Examining and Granting Valid Patents.
`
`The Patent Office’s primary administrative role is to
`protect the public interest served by the patent grant.
`Motion Picture Patents Co. v. Universal Film Mfg. Co.,
`243 U.S. 502, 511 (1917); see also Blonder-Tongue Labs.,
`Inc. v. Univ. of Ill. Foundation, 402 U.S. 313, 343 (1971)
`(“A patent by its very nature is affected with a public
`interest.” (quotation omitted)). Specifically, “this court has
`consistently held that the primary purpose of our patent
`law is not the creation of private fortunes for the owners
`of patents but is ‘to promote the progress of science and
`the useful arts.’” Motion Picture Patents, 243 U.S. at 511
`(quoting U.S. Const., Art. I, § 8).
`
`The patent statutes enacted by Congress, and the
`patent rights they create, reflect the need to strike a
`“careful balance” between the benefits from incentivizing
`innovation and the costs imposed by exclusive rights
`
`
`
`8
`
`that can stifle both competition and further innovation.
`Bonito Boats, 489 U.S. at 146; see also Kimble v. Marvel
`Entertainment, LLC, 135 S. Ct. 2401, 2406-07 (2015). In
`particular, the patentability requirements of novelty and
`non-obviousness (the potential grounds for inter partes
`review) reflect Congress’s judgment that exclusive rights
`in information that is already publicly available or can
`be easily determined from publicly available information
`“would not only serve no socially useful purpose, but would
`in fact injure the public by removing existing knowledge
`from public use.” Bonito Boats, 489 U.S. at 148, 150.
`
`It is “as important to the public that competition
`should not be repressed by worthless patents, as that the
`patentee of a really valuable invention should be protected
`in his monopoly.” Pope Mfg. Co. v. Gormully, 144 U.S. 224,
`234 (1892). The Court’s conclusion in Lear, Inc. v. Adkins
`that state law could not bar a licensee from challenging
`the validity of the licensed patent reflected an affirmative
`policy judgment that invalidating weak patents served
`“the important public interest in permitting full and free
`competition in the use of ideas which are in reality a part
`of the public domain.” 395 U.S. 653, 670-671 (1969); see
`also Blonder-Tongue, 402 U.S. at 344 (noting that this
`Court’s decisions have long “encourage[d] authoritative
`testing of patent validity”).
`
`The Patent Office has primary responsibility for
`insuring only warranted patents issue. “Congress has
`charged the United States Patent and Trademark Office
`(PTO) with the task of examining patent applications,”
`and granting patents only if the patent applications satisfy
`“the prerequisites for issuance of a patent” set forth by
`Congress to balance the needs of innovation with the needs
`
`
`
`9
`
`of public accessibility and competition. See Microsoft Corp.
`v. i4i Ltd. Partnership, 564 U.S. 91, 95-96 (2011). The
`Patent Office “has special expertise in evaluating patent
`applications” for compliance with these patentability
`requirements. Kappos v. Hyatt, 566 U.S. 431, 445 (2012).
`
`An invalidity challenge – whether in litigation or in
`inter partes review – is an “attempt to prove that the
`patent never should have issued in the first place” and
`therefore is integrally related to the expert Patent Office’s
`primary examination function. See Microsoft, 564 U.S. at
`96. In fact, the litigation presumption of validity exists to
`reflect deference to the expert Patent Office’s considered
`judgment, not to protect the patentee or because patents
`are property rights. See id. at 97, 110-112.
`
`Just two terms ago, in Cuozzo, the unanimous Court
`indicated that inter partes review is integrally related
`to particular federal government action – to allow non-
`Article III adjudication under Stern – because its very
`purpose is “to reexamine an earlier agency decision.” 136
`S. Ct. at 2144. The Court refused to characterize inter
`partes review as a surrogate for district court litigation
`because it has characteristics of a “specialized agency
`proceeding” that “offer[s] a second look at an earlier
`administrative grant of a patent.” Id. at 2143-44. By
`doing so, inter partes review provides an essential tool
`for the Patent Office’s primary administrative objective
`of “protect[ing] the public’s paramount interest in seeing
`that patent monopolies are kept within their legitimate
`scope.” Id. at 2144 (quotations and alterations omitted).
`
`In sum, inter partes review allows the Patent Office
`to correct errors arising from its primary statutory duty
`
`
`
`10
`
`of examining patent applications for compliance with
`the patentability requirements to determine whether
`exclusive rights should be granted – rights that exist solely
`by Congressional statute with no roots in the common
`law. Inter partes review is a prototypical example of
`permissible administrative adjudication under this Court’s
`Article III precedent.
`
`C. Congress’s Discretion to Assign Patent Error
`Correction to the Patent Office Is Not Limited
`by the Fora for Patent Cancellation in 1789.
`
`Oil States, and several amici, ask this Court to create
`a new Article III test that would limit Congress’s power to
`provide for adjudication of federal statutory patent rights
`to the historical fora for patent cancellation available in
`1789. This argument misunderstands both this Court’s
`Article III precedent and the historical practice regarding
`patent cancellation.
`
`1. A historical practice of non-judicial adjudication
`at the time of the Constitution can support non-Article
`III adjudication today. Wellness, 135 S. Ct. at 1951
`(Roberts, C.J., dissenting). But this Court’s precedent
`does not support a categorical requirement that all issues
`resolved in courts in 1789 must be resolved in Article
`III courts today. See Granfinanciera S.A. v Nordberg,
`492 U.S. 33, 42 (1989) (instructing that whether non-
`Article III adjudication is permissible should be decided
`after determining whether the claim would have been
`decided in law courts in 1789); see also Murray’s Lessee
`v. Hoboken Land & Improvement Co., 59 U.S. 272, 282
`(1855) (describing as “an unwarrantable assumption”
`the conclusion that Article III adjudication was required
`
`
`
`11
`
`because the issues were “settled in what was denominated
`the court of exchequer” in England).
`
`This Court has expressed skepticism about
`Congressional efforts to withdraw from Article III courts
`“any matter which, from its nature, is the subject of a suit
`at the common law, or in equity, or admiralty” or “is made
`of the stuff of the traditional actions at common law tried
`by the courts at Westminster in 1789.” Stern, 564 U.S. at
`484 (quotations omitted); see also, e.g., Wellness, 135 S. Ct.
`at 1938. But the Court’s concern has been the source of
`the right, not the forum of adjudication, at the time of the
`Constitution. In particular, the Court has been troubled
`when Congress assigns a traditional common law right to a
`non-Article III tribunal for adjudication, either directly or
`by replacing the common law right with a statutory right.
`See Stern, 564 U.S. at 493-494 (state common law claims);
`Granfinanciera, 492 U.S. at 60 (statutory replacement
`of “a preexisting, common-law cause of action”); see also
`Wellness, 135 S. Ct. at 1951 (Roberts, C.J., dissenting)
`(rejecting non-Article III adjudication of claims that
`arose “from independent common law sources”). Because
`common law rights were created by, not just adjudicated
`in, courts, adjudication of common law rights is “the most
`prototypical exercise of judicial power.” Stern, 564 U.S.
`at 494.
`
`By contrast, the Court has looked favorably on non-
`Article III adjudication of federal statutory rights like
`patent rights that neither existed in the common law
`nor replaced a common law right. Stern, 564 U.S. at 491
`(“This Court held that the scheme did not violate Article
`III, explaining that ‘[a]ny right to compensation ... results
`from [the statute] and does not depend on or replace a
`
`
`
`12
`
`right to such compensation under state law.’” (quoting
`Thomas, 473 U.S. at 584)).4 Unlike common law rights,
`federal statutory rights exist as an exercise of legislative,
`not judicial power, and therefore Congress has significant
`power to define the mode for adjudication of those rights.
`Northern Pipeline, 458 U.S. at 83 n.35 (plurality). This
`was equally true for the limited statutory rights that
`existed in the 18th century. See John F. Preis, How the
`Federal Cause of Action Relates to Rights, Remedies,
`and Jurisdiction, 67 fla. l. rev. 849, 866 (2015) (noting
`that Parliament in the 18th century sometimes specified
`means for statutory rights to be enforced). That patent
`validity may sometimes have been litigated in courts in
`1789 was the result of legislative (or royal), not judicial,
`power. Thus, non-Article III cancellation of issued patents
`– rights that derive solely from federal statute – may have
`“incidental” effects on the exercise of judicial power but
`does not threaten the core judicial power protected by
`Article III. Northern Pipeline, 458 U.S. at 83 (plurality).
`
` 2. Even assuming arguendo a historical test that
`ignored this Court’s emphasis on whether the right at
`issue is a federal statutory right, patent cancellation
`
`4. See also Murray’s Lessee, 59 U.S. at 284 (non-Article III
`adjudication permissible when a right “depends upon the will of
`congress whether a remedy in the courts shall be allowed at all”);
`Northern Pipeline, 458 U.S. at 83 (plurality) (permitting Congress
`to assign “specialized adjudicative tasks” to “particularized
`tribunals” for rights it creates); id. at 90 (Rehnquist, J., concurring
`in the judgment) (rejecting non-Article adjudication because there
`was “no federal rule of decision provided for any of the issues in the
`lawsuit”); Wellness, 135 S. Ct. at 1951 (Roberts, C.J., dissenting)
`(identifying “Congress’s constitutional authority to enact
`bankruptcy laws” as supporting non-Article III adjudication).
`
`
`
`13
`
`was not so exclusively tied to the courts in 1789 as to
`require Article III adjudication. Patents in England in
`the eighteenth century were a royal grant of prerogative
`from the sovereign. While patents were enforced in
`common law courts, historically only the Crown (through
`the Privy Council) could revoke or annul a patent. See
`Sean Bottomley, Patent Cases in the Court of Chancery,
`1714–58, 35 J. leG. hISt. 27, 27-28, 34 & n.48 (2014).
`Indeed, until 1753 the Privy Council was the only means
`by which a patent could be revoked. See, e.g., ChrIStIne
`MaCleoD, InventInG the InDuStrIal revolutIon: the
`enGlISh Patent SySteM, 1660–1800, at 19 (1988); E.
`Wyndham Hulme, Privy Council Law and Practice of
`Letters Patent for Invention from the Restoration to 1794,
`33 l.Q. rev. 63, 189-191, 193-194 (1917) (concluding that
`the Privy Council had primary jurisdiction over patent law
`until 1753 and continued to have concurrent jurisdiction
`thereafter).
`
`In 1753, the Council granted the courts concurrent
`jurisdiction with the Council itself to revoke a patent. As
`discussed furth
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