throbber
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 ACT | the app
`aSSOCiatiOn in SUppOrt Of reSpOndentS
`
`BrIan ScarpellI
`Counsel of Record
`act | the app aSSocIatIon
`1401 K Street NW, Suite 501
`Washington, DC 20005
`(517) 507-1446
`bscarpelli@actonline.org
`
`Counsel for Amicus Curiae
`
`274890
`
`A
`
`(800) 274-3321 • (800) 359-6859
`
`

`

`i
`
`TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . i
`
`TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . iii
`
`INTEREST OF THE AMICUS CURIAE. . . . . . . . . . .1
`
`SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . . . .2
`
`ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
`
`I. GRANTING PETITIONER’S REQUEST
`WOULD FORCE THE COURT TO
`VIOLATE THE SEPA RATION OF
`POWERS BECAUSE PETITIONER
`IS REQUESTING THE COURT TO
`EX ECU TE RIGHTS V ESTED IN
`ARTICLE I OF THE CONSTITUTION . . . . . .6
`
`
`
`A. Petitioner’s Argument Relies on
`an Erroneous Assumption That
`the Nature of a Patent Right Is
`a Derivative of Article III of the
`U.S. Constitution and Not Article I . . . . . . .8
`
`
`
`i. Article I of the Constitution, On Its
`Face, Makes Clear that Congress
`Determines the Nature and Scope
`of a Patent Right. . . . . . . . . . . . . . . . . . . .9
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`

`

`ii
`
`ii. The Court’s Own Precedent
`Endorses the Interpretation that
`Congress Determines the Nature of
`a Patent Right and Where It Can be
`Adjudicated. . . . . . . . . . . . . . . . . . . . . . .13
`
`
`
`II. DUE TO CONGRESS ENACTING THE
`AIA TO INCLUDE AN IPR, IT HAS
`MADE PETITIONER’S SEVENTH
`AMENDMENT CONSIDERATION IN
`THIS CASE IRRELEVANT . . . . . . . . . . . . . . .15
`
`
`
`III. PATENTS – AND PREDICTABILITY IN
`THE FUNCTIONING OF THE PATENT
`SYSTEM – ARE VITAL TO THE APP
`ECONOMY’S CONTINUED GROWTH . . . . .18
`
`
`
`IV. IPR PROVIDES SMALL BUSINESSES
`A C O S T- E F F IC I E N T WA Y T O
`DEFEND THEIR PATENTS AGAINST
`INFRINGEMENT CLAIMS . . . . . . . . . . . . . . .20
`
`
`
`A. Small Businesses Do Not Have the
`Resources to Fight Claims in Federal
`Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
`
`
`
`B. IPR Provides Small Businesses with a
`Cost-Efficient Forum to Defend Their
`Respective Patents . . . . . . . . . . . . . . . . . . . .23
`
`
`
`CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
`
`Table of Contents
`
`Page
`
`

`

`iii
`
`CASES
`
`Alice Corp. Pty. Ltd. v. CLS Bank Intern.,
`
`134 S. Ct. 2347 (2014). . . . . . . . . . . . . . . . . . . . . . . . . .19
`
`Continental Paper Bag Co. v.
`Eastern Paper Bag Co.,
`210 U.S. 405 (1908) . . . . . . . . . . . . . . . . . . . . . . . . .2, 7, 8
`
`
`
`Crowell v. Benson,
`
`285 U.S. 22 (1932). . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
`
`Crown Die & Tool Co. v.
`Nye Tool & Machine Works,
`261 U.S. 24 (1923) . . . . . . . . . . . . . . . . . . . . . . . . . .2, 7, 8
`
`
`
`Cuozzo Speed Technologies, LLC v. Lee,
`
`136 S. Ct. 2131 (2016) . . . . . . . . . . . . . . . . . . . . . . . . . . .9
`
`Curtis v. Loether,
`
`415 U.S. 189 (1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
`
`Gayler v. Wilder,
`
`51 U.S. 477 (1850) . . . . . . . . . . . . . . . . . . . . . . . . . . .9, 13
`
`Granfinanciera, S.A. v. Nordberg,
`
`492 U.S. 33 (1989). . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
`
`Kappos v. Hyatt,
`
`566 U.S. 431 (2012). . . . . . . . . . . . . . . . . . . . . . . . . . . .14
`
`TABLE OF CITED AUTHORITIES
`
`Page
`
`

`

`iv
`
`Markman v. Westview Instruments, Inc.,
`
`52 F.3d 967 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . .18
`
`McClurg v. Kingsland,
`
`42 U.S. 202 (1843). . . . . . . . . . . . . . . . . . . . . . . . 7, 10, 13
`
`MCM Portfolio LLC v. Hewlett-Packard Co.,
`
`812 F.3d 1284 (Fed. Cir. 2015) . . . . . . . . . . . .13, 14, 20
`
`Murray’s Lessee v.
`Hoboken Land & Improvement Co.,
`59 U.S. 272 (1855). . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
`
`
`
`Northwest Airlines, Inc. v.
`Transp. Workers Union of Am.,
`451 U.S. 77 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . .3, 7
`
`
`
`Sears, Roebuck & Co. v. Stiffel Co.,
`
`376 U.S. 225 (1964). . . . . . . . . . . . . . . . . . . . . . . . .10, 13
`
`Stern v. Marshall,
`
`131 S. Ct. 2594, 2613 (2011) . . . . . . . . . . . . . . . . . . . . .14
`
`Stern v. Marshall,
`
`564 U.S. 462 (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . .2, 6
`
`Thomas v. Union Carbide Agric. Prods. Co.,
`
`473 U.S. 568 (1985). . . . . . . . . . . . . . . . . . . . . . . . . . . .13
`
`U.S. v. Nixon,
`
`418 U.S. 683 (1974) . . . . . . . . . . . . . . . . . . . . . . . . . . .3, 7
`
`Cited Authorities
`
`Page
`
`

`

`v
`
`STATUTES AND OTHER AUTHORITIES
`
`U.S. Const. Amend. VII . . . . . . . . . . . . . . . . . . . . . . . .3, 16
`
`U.S. Const. Art. I § 8, Cl. 8 . . . . . . . . . . . . . . . . . . 9, 10, 17
`
`35 U.S.C. § 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
`
`35 U.S.C. § 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
`
`35 U.S.C. § 154(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
`
`35 U.S.C. § 154(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
`
`35 U.S.C. § 311 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 10, 17
`
`35 U.S.C. § 311(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
`
`ACT | The App Association, State of the
` App Economy 2017 (2016) . . . . . . . . . . . . . . . . . . . . . . .4
`
`AIPLA, Report of the Economic Survey (2015) . . . . . .22
`
`Brian Howard, 2017 Second Quarter Litigation
` Update, Lex Machina (Jul. 18, 2017) . . . . . . . . . . 19-20
`
`H.R. Rep. No. 112–98 . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
`
`Joel Thayer, To Innovate, We Must Repatriate,
` act | the app aSSocIatIon (Apr. 18, 2017) . . . . . . .21
`
`Cited Authorities
`
`Page
`
`

`

`vi
`
`Matt Cutler, 3 Years of IPR: A Look at the
` Stats, law360 (Oct. 9, 2015, 3:59 PM) . . . . . . . . . . . .24
`
`Michelle Lee, PTAB Update: Proposed Changes
`to Rules Governing PTAB Trial Proceeding,
` PTO Blog (Aug. 19, 2015) . . . . . . . . . . . . . . . . . . . . . .23
`
`Morgan Reed, Comments of ACT | The App
`Association to the National Telecommunications
`and Information Administration regarding
`The Benefits, Challenges, and Potential
`Roles for the Government in Fostering the
`Advancement of the Internet of Things,
` ACT | The App Association (June 2, 2016). . . . . . . .19
`
`PATENT ASSERTION ENTITY ACTIVITY: AN
` FTC STUDY, 2016 WL 6639228 . . . . . . . . . . . . . .5, 21
`
`Stephen Maebius, 2017 Mid-Year Statistics
`Point to Continued Rise in IPR Petitions,
` natIonal law revIew (Apr. 28, 2017). . . . . . . . . . . .23
`
`Sup. Ct. R. 37.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`Tristan Louis, How Much Do Average Apps
` Make?, Forbes (Aug. 10, 2013) . . . . . . . . . . . . . . . . . .22
`
`World of Intellectual Property Organization,
` WIPO Magazine, WIPO (2010) . . . . . . . . . . . . . . . . .22
`
`Cited Authorities
`
`Page
`
`

`

`1
`
`INTEREST OF THE AMICUS CURIAE1
`
`ACT | The App Association (App Association) is
`an international grassroots advocacy and education
`organization representing more than 5,000 small and
`medium sized software application developers and
`information technology firms. We are the only organization
`focused on the needs of small business innovators from
`around the world. The App Association advocates for
`an environment that inspires and rewards innovation,
`while providing resources to help its members leverage
`their intellectual assets to raise capital, create jobs, and
`continue to grow.
`
`In light of the critical role that the U.S. Patent and
`Trade Office’s (PTO’s) inter partes review (IPR) plays
`in the U.S. patent system, the App Association has a
`keen interest in the proper functioning of this system,
`and the IPR process specifically. Our members rely on
`their patents to grow their businesses and create new
`American jobs; however, they have faced, and continue to
`face, challenges to the validity of their patents. Without
`the use of the PTO’s IPR, federal court litigation is often
`extremely costly and unattainable by small businesses.
`
`1. Pursuant to Rule 37.6, amicus affirms that no counsel for
`a party authored this brief in whole or in part and that no person
`other than amicus and its counsel made a monetary contribution
`to its preparation or submission. Petitioner filed a blanket consent
`in this appeal on July 7, 2017, and respondent provided its consent
`to the filing of this brief via email dated August 11, 2017. Further,
`blanket consent was filed by respondent United States Patent and
`Trademark Office on August 30, 2017.
`
`

`

`2
`
`SUMMARY OF ARGUMENT
`
`Although Petitioner challenges the PTO’s authority
`to perform a post-grant review, its underlying argument
`attacks something far more fundamental. At the root of
`its claim, Petitioner is truly challenging the PTO’s very
`authority sanctioned by Congress and core functions
`by suggesting that Congress cannot set the temporal
`parameters of determining patentability. Thus, Petitioner
`takes issue with Congress’s ability to enact a statute
`containing an IPR process for patent rights. The issue in
`this case is simple: either Congress can delegate the issue
`of patentability determination to the PTO post-grant, or
`it cannot at all. Confusingly, Petitioner assumes, given
`the IPR’s adversarial nature, that the determination for
`patentability is an Article III exercise after the PTO
`grants a patent right. However, it has not produced any
`Constitutional provision providing Article III courts
`with such authority when there is an active IPR statute.
`Moreover, this Court has long recognized congressional
`authority to delegate that specific function in Article II
`fora for statutory rights. E.g., Stern v. Marshall, 564 U.S.
`462, 491 (2011).
`
`Congress alone determines the existence and the
`scope of a patent right. E.g., Crown Die & Tool Co. v. Nye
`Tool & Machine Works, 261 U.S. 24, 35 (1923) (recognizing
`that only Congress can expand or diminish scope of a
`patent); Continental Paper Bag Co. v. Eastern Paper Bag
`Co., 210 U.S. 405, 429-30 (1908) (deferring to congressional
`supremacy over federal courts to determine the scope and
`validity of patent rights). Once Congress legislates on a
`particular topic, federal courts are tasked to interpret and
`apply common law that does not conflict with their intent.
`
`

`

`3
`
`Northwest Airlines, Inc. v. Transp. Workers Union of
`Am., 451 U.S. 77, 95 n. 34 (1981) (holding “once Congress
`addresses a subject, even a subject previously governed
`by federal common law, the justification for lawmaking
`by the federal courts is greatly diminished. Thereafter,
`the task of the federal courts is to interpret and apply
`statutory law, not to create common law.”). In the instant
`proceeding, Congress has made clear that it intends to
`subject a recent patentee’s right to an IPR under the
`America Invests Act (AIA). As this Court is aware, it is
`bound by the authority vested to it by the U.S. Constitution
`and must not exceed that authority. U.S. v. Nixon, 418 U.S.
`683, 704 (1974) (holding “[this Court] must follow that the
`Court has authority to interpret claims with respect to
`powers alleged to derive from enumerated powers [within
`Article III of the Constitution].”). If the Court chooses to
`define a patent right as a private right—a Constitutional
`power that solely belongs to Congress—it will infringe on
`the separation of powers doctrine. This action would run
`contrary to clear congressional intent to give the PTO
`authority to execute a post-grant review of patentability;
`the Court should respect that delegation.
`
`Moreover, because Congress codified it in the AIA,
`the PTO’s IPR is not subject to a Seventh Amendment
`challenge. Petitioner relies on dubious reasoning and
`assumptions in asserting its claim. Due to Congress
`codifying the process by statute, the IPR is both consistent
`with Article III and the Seventh Amendment to the
`U.S. Constitution. Petitioner has not proffered a valid
`justification as to why the Seventh Amendment requires
`a jury trial for issues concerning patentability when
`Congress has explicitly given that right to the PTO.
`
`

`

`4
`
`In its relatively short existence, the software
`application (app) industry has served as the driving force
`in the rise of smartphones, tablets, and other internet-
`connected devices and markets. The burgeoning app
`economy has revolutionized the software industry,
`influencing every sector of the economy in every United
`States (U.S.) federal district. ACT | The App Association,
`State of the App Economy 2017 (2016), http://actonline.org/
`wp-content/uploads/App_Economy_Report_2017_Digital.
`pdf.
`
`Underlying the growth and ingenuity of this society-
`altering economy and its related benefits are intellectual
`property rights, particularly patents. Patents allow
`small business innovators to protect their intellectual
`investment in their innovative products, attract venture
`capital, maintain a competitive position in the marketplace,
`and level the playing field amongst established companies
`and competitors. In fact, small businesses produced 16
`times more patents per employee than large firms. An
`Analysis of Small Business Patents by Industry and Firm
`Size, http://archive.sba.gov/advo/research/rs335tot.pdf;
`Innovation in Small Businesses: Drivers of Change and
`Value Use www.sba.gov/sites/default/files/rs342tot_0.pdf.
`
`An IPR proceeding provides a specialized and more
`efficient process for patent claim dispute resolution.
`For small businesses, the IPR assists in reducing the
`high burdens associated with federal court litigation,
`enabling more vulnerable small businesses that do not
`have disposable income to engage in lengthy and costly
`federal court trial expenses to defend their patents. In
`the hyper-competitive app economy, our members face the
`reality that any time spent away from obtaining capital
`
`

`

`5
`
`for their business and developing their product could
`put them at an unrecoverable disadvantage, potentially
`spelling death for their venture. Conversely, time spent
`in patent litigation during a court proceeding that lasts
`years, or costs hundreds of thousands of dollars, is a time
`and opportunity cost they cannot bear. Even if the parties
`eventually settle the matter, the litigation process can
`last for many years. PATENT ASSERTION ENTITY
`ACTIVITY: AN FTC STUDY, 2016 WL 6639228, at *35
`(writing “two-thirds of settled Litigation [patent assertion
`entity (PAE)] cases were settled within a year whereas
`half of settled Portfolio PAE cases took more than two
`years to settle.”).
`
`The App Association’s members are not large
`companies; many are startups that have a small number
`of employees. Much of their day is spent developing a
`customer base, meeting hard deadlines, finding venture
`capitalists to help fund their businesses, and other
`necessary activities. In addition, our members rely on
`access to patents and are threatened by aggressive
`licensors, often Patent Assertion Entities (PAEs), who
`may bring them into costly court proceedings that force
`them to accept a license in a short timeframe. Some patent
`licensors rely on the fact that many startups do not have
`the resources to protect their interests and appropriately
`challenge the patentability of the claim(s) at issue, thus
`leaving them vulnerable to licensing arrangements
`that greatly benefit the licensor. Hence, IPRs serve
`as an efficient and effective process protecting small
`businesses like our members from the onerous financial
`and temporal burden associated with proceedings in
`front of Article III tribunals. They also serve the public
`interest by streamlining patent dispute resolutions that
`
`

`

`6
`
`would otherwise congest Article III courts more than
`they are already.
`
`ARGUMENT
`
`I. GR A N T I NG PET I T ION ER’ S R E QU E ST
`WOULD FORCE THE COURT TO VIOLATE
`THE SEPARATION OF POWERS BECAUSE
`PETITIONER IS REQUESTING THE COURT TO
`EXECUTE RIGHTS VESTED IN ARTICLE I OF
`THE CONSTITUTION
`
`Although Petitioner challenges the PTO’s authority
`to perform a post-grant review, its underlying argument
`attacks something far more fundamental. At the root of
`its claim, Petitioner is truly challenging the PTO’s very
`authority sanctioned by Congress and core functions
`by suggesting that Congress cannot set the temporal
`parameters of determining patentability. Thus, Petitioner
`takes issue with Congress’s ability to enact a statute
`containing an IPR process for patent rights. The issue in
`this case is simple: either Congress can delegate the issue
`of patentability determination to the PTO post-grant, or
`it cannot at all. Confusingly, Petitioner assumes, given
`the IPR’s adversarial nature, that the determination for
`patentability is an Article III exercise after the PTO
`grants a patent right. However, it has not produced any
`Constitutional provision providing Article III courts
`with such authority when there is an active IPR statute.
`Moreover, this Court has long recognized congressional
`authority to delegate that specific function in Article II
`fora for statutory rights. E.g., Stern v. Marshall, 564 U.S.
`462, 491 (2011).
`
`

`

`7
`
`Article I of the Constitution clearly gives Congress
`the authority to define a patent right and where it can
`be adjudicated. McClurg, 42 U.S. at 206 (holding “…
`the powers of Congress to legislate upon the subject of
`patens is plenary by the terms of the Constitution, and
`as there are no restraints on its exercise, there can be no
`limitation of their right to modify them at their pleasure,
`so that they do not take away the rights of property
`in existing patents.” [Emphasis added]). Additionally,
`Congress alone determines both the existence and the
`scope of a patent right. E.g., Crown Die & Tool Co. v. Nye
`Tool & Machine Works, 261 U.S. 24, 35 (1923) (recognizing
`that only Congress can expand or diminish scope of a
`patent); Continental Paper Bag Co. v. Eastern Paper Bag
`Co., 210 U.S. 405, 429-30 (1908) (deferring to Congress’s
`supremacy over federal courts to determine the scope and
`validity of patent rights). Once Congress has spoken on a
`particular topic, the task for federal courts is to interpret
`and apply common law that does not conflict with their
`intent. Northwest Airlines, Inc. v. Transp. Workers Union
`of Am., 451 U.S. 77, 95 n. 34 (1981) (holding “once Congress
`addresses a subject, even a subject previously governed
`by federal common law, the justification for lawmaking
`by the federal courts is greatly diminished. Thereafter,
`the task of the federal courts is to interpret and apply
`statutory law, not to create common law.”). In the instant
`proceeding, Congress is clear that it intends to subject a
`recent patentee’s right to an IPR under the AIA and the
`Court should follow through with Congress’s intention.
`
`This Court is bound by the authority vested in
`it by the U.S. Constitution and must not exceed that
`authority. U.S. v. Nixon, 418 U.S. 683, 704 (1974) (holding
`“[this Court] must follow that the Court has authority
`
`

`

`8
`
`to interpret claims with respect to powers alleged to
`derive from enumerated powers [within Article III of the
`Constitution].”). Therefore, it should interpret the relevant
`statute as Congress has written and not circumvent their
`intentions by redefining concepts that fall outside of its
`Constitutional purview (e.g., the nature of a patent right).
`If the Court chooses to define a patent right as a private
`right—a Constitutional power vested squarely with
`Congress—it will certainly infringe on the separation of
`powers doctrine because it would run contrary to clear
`congressional intention to delegate a post-grant review
`process (i.e., IPR) to the PTO.
`
`A. Petitioner’s Argument Relies on an Erroneous
`Assumption That the Nature of a Patent
`Right Is a Derivative of Article III of the U.S.
`Constitution and Not Article I
`
`Congress alone determines both the existence and
`the scope of a patent right at all stages. E.g., Crown Die
`& Tool Co., 261 U.S. at 35; Continental Paper Bag, 210
`U.S. at 429-30. In its brief, Petitioner bases its assertions
`on a flawed assumption when it contends that the PTO’s
`IPR process is unconstitutional and that an Article III
`court maintains an authority to circumvent congressional
`intent in this regard. Petitioner attempts to have the Court
`circumvent congressional intent and put it into a position
`where it exceeds its Constitutional purview, because it
`is clear from the perspective of the Constitution that
`Congress maintains that authority, and they intend to
`include an IPR process under section 311 of the AIA to
`be executed by the PTO.
`
`

`

`9
`
`In this case, Congress sanctioned the Patent Trial and
`Appeal Board (PTAB) within the PTO to engage in a post-
`grant review to determine patentability under sections
`102 or 103 of the AIA. 35 U.S.C. § 311 (2013). Section 102
`specifically demands that the “claimed invention” be novel.
`35 U.S.C. § 102 (2012); see Cuozzo Speed Technologies, LLC
`v. Lee, 136 S.Ct. 2131, 2149 (2016) (Alito, J., concurring in
`part dissenting in part). Where section 103 requires the
`claimed invention be “nonobvious.” 35 U.S.C. § 103 (2012);
`see Cuozzo Speed Technologies, 136 S.Ct. at 2149. These
`are the only two justifications the PTAB may invalidate
`a patent engaging in an IPR. § 311(b). However, the
`Constitution is clear; Congress may sanction the PTO
`to engage in a post-grant review to determine a patent’s
`validity and the Court should recognize and respect that
`intention.
`
`i. Article I of the Constitution, On Its Face,
`Makes Clear that Congress Determines
`the Nature and Scope of a Patent Right
`
`Under Article I of the Constitution, Congress may
`determine the nature of a patent right. U.S. Art. I § 8, Cl.
`8. Article I gives Congress the “power...to the progress
`of science and useful arts, by securing for limited times
`to authors and inventors the exclusive right to their
`respective writings and discoveries...” See id. Congress
`used this clause as its basis to enact the AIA. H. Rept.
`112-98. This clause also affords Congress the ability to
`determine the status of a right. See Gayler v. Wilder, 51
`U.S. 477, 494 (1850) (writing “[patent rights were] created
`by the act of Congress; and no right can be acquired
`in it unless authorized by statute, and in the manner
`the statute prescribes.”). Therefore, Congress has sole
`discretion as to how a patent right is defined.
`
`

`

`10
`
`Petitioner’s argument implicitly invokes Article III’s
`“cases and controversy” clause to advance its claim that
`patentability determination fits squarely in a court’s
`jurisdiction. However, its assessment is misguided,
`because the issue before the Court is whether the PTO can
`reexamine the patentability of a claim, which fits squarely
`under the PTO’s delegated authority under Article I.
`Thus, the PTO is well within its bounds because Congress
`delegated that authority to it. See 35 U.S.C. § 311; see also,
`McClurg, 42 U.S. at 206.
`
`Patent rights “exist only by virtue of statute.” Sears,
`Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 229 at n. 5
`(1964). By logical extension, Congress can determine the
`very nature of the right, and, given its enactment of the
`AIA providing for a post-grant review in an Article II
`forum, it is clear Congress intended patentability to be
`adjudicated at the PTO, which is their sole discretion.
`If the Court were to adopt a conclusion contrary to the
`one proffered here, then it will effectively run afoul to
`the separation of powers by placing itself in the position
`of Congress, because, in essence, it would be executing
`a power exclusive to Article I—defining the nature of a
`patent right.
`
`In Petitioner’s brief, the fact that patent rights are only
`recognized by statute is artfully left out of its argument.
`Nowhere in its argument does it even mention the fact that
`Congress can define a patent right. Instead, it wants the
`Article III courts to make such a determination, which,
`if adopted, would run afoul to the separation of powers.
`Petitioner’s argument merely relies on the assumption
`that Congress does not have this ability and uses this
`misguided assumption to promulgate baseless assertions
`
`

`

`11
`
`suggesting that Congress is “divest[ing] federal courts of
`judicial power.” Petitioner Brief at 35. When in all reality
`Congress has the sole discretion to define a patent right
`as either a public or private right, because it is a right
`of their own invention. Thus, it is clear of Congress’s
`intention to sanction the PTO’s IPR, which is well within
`their prerogative, not the Court’s.
`
`By claiming that a patentee assumes a private
`property right post-PTO grant, Petitioner’s argument
`seeks to bifurcate Constitutional responsibility between
`Congress and an Article III court by suggesting that
`Congress can only define the nature of a patent right
`before it is granted and the courts then have that domain
`post-grant. However, nowhere in its brief does it describe
`how, from the perspective of Constitutional authority,
`this transfer occurs. It is clear that the Petitioner is not
`contesting Congress’s authority to delegate a patent
`grant to the PTO initially, but it supplies the Court with
`very little justification as to why Congress’s authority is
`extinguished when it enacted section 311 of the AIA to
`have the PTO correct its mistake under an IPR. Therefore,
`Petitioner seems to believe that a patent, in its inherency,
`is a private right at every stage of its existence—a feature
`noticeably absent from both the Constitution and any
`statute enacted by Congress.
`
`Petitioner attempts to make a patent right tantamount
`to ownership of a physical property, such as a house or an
`acre of land. Petitioner believes that, because Congress
`provides patentees the right to exclude, they, therefore,
`must have intended this right to be a private right. Brief
`of Petitioner at 29; See 35 U.S.C. § 154(a)(1) (2017). Even
`following that logic, Petitioner has yet to demonstrate
`
`

`

`12
`
`a context other than patents where a person or entity’s
`private property’s right to exclude was subject to a
`government imposed timeline before it is to forfeit that
`property back over to the government. 35 U.S.C. § 154(a)
`(2) (mandating that a patentee has only 20 years to exclude
`others from using it).
`
`A patentee’s property right is more clearly akin
`to a broadcaster seeking to license spectrum from the
`Federal Communications Commission (FCC); where the
`FCC issues a broadcaster a license for a spectrum block
`with a set amount of time in which the broadcaster can
`use the set aside spectrum (including the right to exclude
`other from using it) with the understanding that the
`property must be given back to the FCC when the term
`of the license expires. In the event the FCC finds that the
`broadcaster exceeded the scope of her license before the
`license’s term ends, it allows the broadcaster to engage in
`an adversarial hearing in front of an administrative law
`judge within the FCC to fight the claim. Much like the
`FCC issuing a license for spectrum to a broadcaster, after
`a patent’s 20-year term expires, her patent right must be
`returned to the PTO for public use and, if the patentee’s
`patent is invalid or overbroad, then the PTO allows for the
`patentee to engage in adversarial hearing, i.e., an IPR,
`before making its determination. Given the Court has not
`found the FCC’s actions to be unconstitutional, it would be
`wholly inconsistent to find the PTO’s in this case.
`
`

`

`13
`
`ii. The Court’s Own Precedent Endorses the
`Interpretation that Congress Determines
`the Nature of a Patent Right and Where
`It Can be Adjudicated
`
`The Court has long held that Congress determines
`the nature of a patent right. Moreover, if it decides to the
`contrary, then it would directly conflict from all of its own
`precedent to the contrary spanning over a century that
`expressly recognizes that fact. See, McClurg v. Kingsland,
`42 U.S. 202, 206 (1843); Gayler, 51 U.S. at 494; Murray’s
`Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272,
`284 (1855); Sears, 376 U.S. at 229; & Thomas v. Union
`Carbide Agric. Prods. Co., 473 U.S. 568, 587 (1985).
`Many lower courts have relied upon and agree with the
`Court’s interpretation and have already held the PTO’s
`IPR process as constitutional. E.g., MCM Portfolio LLC
`v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015).
`
`The Court recognizes that they play by Congress’s
`rules, and not the other way around when it comes to
`patent law. McClurg, 42 U.S. at 206. Moreover, if Congress
`sanctions the PTO’s ability to correct its own mistake, then
`it must recognize it. In the context of the novelty of patent
`claims, if there are not novel patents in the market and it
`cannot be corrected by the PTO; then, ultimately, we could
`have two identical claims for two different patents. Hence,
`this would adversely affect the patentee who filed that
`claim first to be able to use or license his/her patent if the
`second patentee’s right is recognized. See id. Moreover,
`if the PTO cannot execute an IPR to correct its mistake
`of granting a patent with an already encumbered claim,
`then, in effect, they would be infringing on the first filers’
`patent rights by not taking action. This situation is why,
`
`

`

`14
`
`in part, Congress created the IPR in the first place. Thus,
`Congress, exercising their “plenary” and “unrestrained”
`authority in this regard, created a statute to preserve
`existing rights of patent holders by keeping ones that are
`not novel out of the market. See id.
`
`As the Federal Circuit noted in remarking on similar
`arguments made by the plaintiffs in MCM Portfolio, it is
`a peculiar position to take. Mainly, because, if a party is
`not disputing that the PTO does not possess the authority
`to determine patentability initially, then, in essence, that
`party is asserting that the PTO is not allowed to correct
`its mistake, which is logically inconsistent. Petitioner does
`not seem to appreciate that a patent right “derives from an
`extensive federal regulatory scheme,” Stern v. Marshall,
`131 S.Ct. 2594, 2613 (2011), and is created by federal law.
`Congress created the PTO, “an executive agency with
`specific authority and expertise” in patent law, Kappos
`v. Hyatt, 566 U.S. 431 (2012), and saw powerful reasons
`to utilize the expertise of the “PTO for an important
`public purpose—to correct the agency’s own errors in
`issuing patents in the first place.” MCM Portfolio, 812
`F.3d at 1293. Thus, Congress created the patent right
`and delegated the discretion of its validity to an executive
`administrative agency, the PTO.
`
`The issue Petitioner brings here is whether the PTO,
`under its congressional delegation, properly granted the
`patent initially; a right “that can only be conferred by
`the government.” See Crowell v. Benson, 285 U.S. 22, 50
`(1932). Due to the fact that Congress defines the nature
`of a patent right, Supra. Sec. I.A.i.; it has the ability to
`delegate authority to the PTO to determine patentability,
`even in the context of post-grant review. Therefore,
`
`

`

`15
`
`Petitioner’s arguments rely on a premise that is neither
`based in fact nor in law, because nowhere in its brief does
`it give credence to the fact that patent rights are a creation
`of Congress. It merely proffers its premise that a post-
`grant patent right is somehow an Article III enumerated
`power without pointing to a particular provision in the
`U.S. Constitution.
`
`II. DUE TO CONGRESS ENACTING THE AIA TO
`INCLUDE AN IPR, IT HAS MADE PETITIONER’S
`SEVENTH AMENDMENT CONSIDERATION IN
`THIS CASE IRRELEVANT
`
`Because Congress codified it in the AIA, the PTO’s
`IPR is not subject to a Seventh Amendment challenge.
`
`“The exceptions to the charge were confined
`to these two points, which constitute the only
`subject for our consideration. Whether these
`exceptions are well taken or not, must depend
`on the law as it stood at the emanation of the
`patent, together with such changes as have
`been since made; for though they may be
`retrospective in their operation, that is not a
`sound objection to their validity; the powers of
`Congress to legislate upon the subject of patens
`is plenary by the terms of the Constitution, and
`as there are no restraints on its exercise, there
`can be no

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Try refreshing this document from the court, or go back to the docket to see other documents.

We are unable to display this document.

Go back to the docket to see more.