`
`No. 21-746
`================================================================================================================
`
`In The
`Supreme Court of the United States
`--------------------------------- ♦ ---------------------------------
`
`APPLE INC.,
`
`v.
`
`Petitioner,
`
`QUALCOMM INCORPORATED,
`Respondent.
`
`--------------------------------- ♦ ---------------------------------
`On Petition For A Writ Of Certiorari
`To The United States Court Of Appeals
`For The Federal Circuit
`--------------------------------- ♦ ---------------------------------
`BRIEF OF ENGINE ADVOCACY, THE PUBLIC
`INTEREST PATENT LAW INSTITUTE,
`AND ACT | THE APP ASSOCIATION
`AS AMICI CURIAE IN SUPPORT OF PETITIONER
`--------------------------------- ♦ ---------------------------------
`
`CHRISTOPHER T. BAVITZ
` Counsel of Record
`CYBERLAW CLINIC
`Harvard Law School
`1585 Massachusetts Avenue
`Cambridge, MA 02138
`(617) 496-5155
`cbavitz@law.harvard.edu
`BRIAN SCARPELLI
`ACT | THE APP ASSOCIATION
`1401 K Street NW, Ste. 501
`Washington, DC 20005
`(517) 507-1446
`bscarpelli@actonline.org
`
`ABIGAIL RIVES
`ENGINE ADVOCACY
`700 Pennsylvania Avenue SE
`Second Floor
`Washington, DC 20003
`(202) 599-1859
`abby@engine.is
`ALEX MOSS
`PUBLIC INTEREST PATENT
` LAW INSTITUTE
`79405 Hwy. 111 Ste. 9-414
`La Quinta, CA 92253
`(818) 281-2191
`alex@piplius.org
`
`================================================================================================================
`COCKLE LEGAL BRIEFS (800) 225-6964
`WWW.COCKLELEGALBRIEFS.COM
`
`
`
`
`
`i
`
`TABLE OF CONTENTS
`
`Page
`TABLE OF CONTENTS ......................................
`i
`TABLE OF AUTHORITIES .................................
`iii
`INTERESTS OF AMICI CURIAE .......................
`1
`SUMMARY OF ARGUMENT ..............................
`3
`ARGUMENT ........................................................
`5
`
`I. The Federal Circuit’s Narrow Approach to
`Standing is Inconsistent with Supreme
`Court Precedent, Creating Disagreement
`within the Federal Circuit and Frus-
`trating the Public’s Interest in Weeding
`Out Invalid Patents ...................................
`A. The Federal Circuit’s Approach to
`Standing Undermines Principles
`Articulated by this Court ....................
`B. The Federal Circuit’s Restriction on
`Standing Harms
`the Public by
`Denying Rulings on the Merits for
`Many Patent Cases ..............................
` II. The Federal Circuit’s Approach Frustrates
`Congress’s Carefully Balanced Policy to
`Root Out Questionable Patents ................. 11
`A. The Realities and Constraints of
`Patent Examination Necessitate an
`Effective Ex-post Mechanism
`to
`Review Patent Quality ........................ 12
`B. Congress Considered Appellate Rights
`an Essential Component of the Post-
`grant Review Structure ....................... 14
`
`5
`
`6
`
`9
`
`
`
`ii
`
`TABLE OF CONTENTS—Continued
`
`Page
`C. The Federal Circuit’s One-Sided
`Approach to Standing Deters Even
`Strong Administrative Challenges and
`Frustrates Evenness in Patent Law ..... 16
` III. Taking an Overly Narrow Approach to
`Standing Will Harm Innovation and
`Economic Development, Especially in the
`Context of Startups and Small Businesses ... 19
`A. The Federal Circuit’s Approach Opens
`Avenues for Gamesmanship, Where
`Startups Are at a Particular Dis-
`advantage ............................................ 21
`B. Resolving Patent Validity Early and
`Efficiently Provides Startups and Small
`Businesses Freedom
`to
`Innovate
`Without Wasting Limited Resources ..... 23
`C. Restrictions on Standing Lessen the
`Likelihood Others will Step in to Clear
`the Field of Invalid Patents ................. 26
`CONCLUSION ..................................................... 28
`
`
`
`iii
`
`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`Amerigen Pharms. Ltd. v. UCB Pharma GmbH,
`913 F.3d 1076 (Fed. Cir. 2019) .................................. 8
`Apple Inc. v. Qualcomm Inc., 17 F.4th 1131 (Fed.
`Cir. 2021) ................................................... 5, 7, 17, 21
`Apple Inc. v. Qualcomm Inc., 992 F.3d 1378 (Fed.
`Cir. 2021) ................................................................. 21
`AVX Corp. v. Presidio Components, Inc., 923 F.3d
`1357 (Fed. Cir. 2019) ........................................... 7, 17
`Blonder-Tongue Lab’ys, Inc. v. Univ. of Ill.
`Found., 402 U.S. 313 (1971) .................................... 23
`Bowen v. Mich. Acad. of Fam. Physicians, 476
`U.S. 667 (1986) ........................................................ 16
`Bresnick v. U.S. Vitamin Corp., 139 F.2d 239 (2d
`Cir. 1943) ................................................................. 25
`Canadian Lumber Trade All. v. U.S., 517 F.3d
`1319 (Fed. Cir. 2008) ................................................. 6
`Clinton v. City of New York, 524 U.S. 417 (1998) ......... 6
`Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261
`(2016) ................................................................. 10, 11
`E.I. DuPont de Nemours & Co. v. Synvina C.V.,
`904 F.3d 996 (Fed. Cir. 2018) .................................... 8
`Gen. Elec., Co. v. United Techs. Corp., 928 F.3d
`1349 (Fed. Cir. 2019) ............................... 5, 6, 7, 8, 17
`Graham v. John Deere Co. of Kan. City, 383 U.S.
`1 (1966) ...................................................................... 9
`
`
`
`iv
`
`TABLE OF AUTHORITIES—Continued
`
`Page
`
`Hewlett Packard Co. v. MPHJ Tech. Invs., LLC,
`No.
`IPR2013-00309, 2014 WL 6617698
`(P.T.A.B. Nov. 19, 2014) ........................................... 27
`JTEKT Corp. v. GKN Automotive Ltd., 898 F.3d
`1217 (Fed. Cir. 2018) ................................................. 8
`Kimble v. Marvel Entm’t, LLC, 576 U.S. 446
`(2015) ................................................................. 11, 14
`Lear, Inc. v. Adkins, 395 U.S. 653 (1969) .......... 4, 10, 15
`Massachusetts v. EPA, 549 U.S. 497 (2007) ................ 16
`Medimmune Inc. v. Genentech, Inc., 549 U.S. 118
`(2007) ............................................................... passim
`Oil States Energy Servs., LLC v. Greene’s Energy
`Grp., LLC, 138 S. Ct. 1365 (2018) ........................... 11
`Picard v. United Aircraft Corp., 128 F.2d 632 (2d
`Cir. 1942) ................................................................. 24
`Pope Mfg. Co. v. Gormully, 144 U.S. 224 (1892) ........... 9
`Precision Instrument Mfg. Co. v. Auto Maint.
`Mach. Co., 324 U.S. 806 (1945) ............................... 11
`Sanofi-Aventis U.S., LLC v. Dr. Reddy’s Lab’ys,
`Inc., 933 F.3d 1367 (Fed. Cir. 2019)......................... 15
`SCA Hygiene Prods. Aktiebolag v. First Quality
`Baby Prods., LLC, 137 S. Ct. 954 (2017) .................. 6
`Walker Process Equipment,
`Inc. v. Food
`Machinery & Chemical Corp., 382 U.S. 172
`(1965) ....................................................................... 25
`
`
`
`
`
`
`v
`
`TABLE OF AUTHORITIES—Continued
`
`Page
`
`STATUTES AND RULES
`5 U.S.C. § 701(a)(2) ..................................................... 16
`35 U.S.C. § 314(d) ........................................................ 15
`35 U.S.C. § 315(e)(2) .................................................... 17
`35 U.S.C. § 319 ............................................................ 15
`35 U.S.C. § 325(e)(2) .................................................... 17
`35 U.S.C. § 329 ............................................................ 15
`Supreme Court Rule 37 ................................................ 1
`
`OTHER AUTHORITIES
`153 CONG. REC. H10270-10307 (Sept. 7, 2007) .......... 14
`3 KENNETH DAVIS & RICHARD J PIERCE,
`ADMINISTRATIVE LAW TREATISE (3d ed. 1994) ............ 6
`Abby Rives, Opinion, Fortress Patent Fight Shows
`Abusive Litigation Hurts Startups, LAW360
`(Mar 25, 2020), https://www.law360.com/
`articles/1256250 ...................................................... 22
`AIPLA, Report of the Economic Survey 2019
`(2019) ....................................................................... 23
`Alberto Galasso & Mark Schankerman, Patents
`and Cumulative Innovation: Causal Evidence
`from the Courts (Nat’l Bureau of Econ. Rsch.,
`Working Paper No. 20269, 2014) ...................... 10, 25
`Amy L. Landers, The Antipatent: A Proposal for
`Startup Immunity, 93 NEB. L. REV. 950
`(2015) .................................................... 21, 22, 25, 26
`
`
`
`vi
`
`TABLE OF AUTHORITIES—Continued
`
`Page
`
`An Assessment of the Impact of the America
`Invents Act and Patent Trial and Appeal Board
`on the US Economy, PERRYMAN GRP. (June 25,
`2020), https://www.perrymangroup.com/media/
`uploads/report/perryman-an-assessment-of-
`the-impact-of-the-american-invents-act-and-
`patent-trial-and-appeal-board-on-the-us-economy-
`06-25-20.pdf ............................................................. 20
`Catherine E. Tucker, The Effect of Patent
`Litigation and Patent Assertion Entities on
`Entrepreneurial Activity, ANALYSIS GRP. (May
`15, 2014), https://www.analysisgroup.com/Insights/
`publishing/the-effect-of-patent-litigation-and-
`patent-assertion-entities-on-entrepreneurial-
`activity/ .................................................................... 24
`Christopher R. Leslie, The Anticompetitive
`Effects of Unenforced Invalid Patents, 91
`MINN. L. REV. 101 (2006) ............................ 12, 24, 25
`Daniel F. Klodowski & Eric A. Liu, Federal
`Circuit PTAB Appeal Statistics Through
`April 30, 2021, FINNEGAN (May 20, 2021),
`https://www.finnegan.com/en/insights/blogs/at-
`the-ptab-blog/federal-circuit-ptab-appeal-statistics-
`through-april-30-2021.html ..................................... 18
`David Benson & Rosemarie H. Ziedonis,
`Corporate Venture Capital as a Window on
`New Technologies:
`Implications
`for
`the
`Performance of Corporate Investors When
`Acquiring Startups, 20 ORG. SCI. 329 (2009) ......... 19
`
`
`
`vii
`
`TABLE OF AUTHORITIES—Continued
`
`Page
`
`FED. TO COMM’N, TO PROMOTE INNOVATION: THE
`PROPER BALANCE OF COMPETITION AND PATENT
`LAW AND POLICY, Executive Summary (2003) ............ 12
`H.R. REP. No. 112-98 (2011) ....................... 3, 10, 14, 15
`James Madison, Detatched Memoranda (ca. 31
`January 1820), NATIONAL ARCHIVES: FOUNDERS
`ONLINE, https://founders.archives.gov/documents/
`Madison/04-01-02-0549 (last visited Dec. 15,
`2021) .......................................................................... 9
`JANICE M. MUELLER, PATENT LAW 39 (3d ed.
`2009) ........................................................................ 18
`Jay Pil Choi & Heiko Gerlach, 9(1) AM. ECON. J.:
`MICROECON. 315 ....................................................... 22
`Jean O. Lanjouw & Mark Schankerman,
`Enforcement of Patent Rights in the United
`States, in PATENTS IN THE KNOWLEDGE-BASED
`ECONOMY (Wesley M. Cohen & Stephen A.
`Merrill eds., 2003) ................................................... 25
`Job Creation, U.S. CENSUS BUREAU, https://bds.
`explorer.ces.census.gov/ (last visited Dec. 4,
`2021) ........................................................................ 19
`Joe Mullin, HP Launches the Second Attack
`Against Notorious “Scan to E-mail” Patents,
`ARSTECHNICA (May 29, 2013 1:20 PM), https://
`arstechnica.com/tech-policy/2013/05/hp-launches-
`the-second-attack-against-notorious-scan-to-
`e-mail-patents/?itm_source=parsely-api .................. 27
`John R. Allison et al., Our Divided Patent
`System, 82 U. CHI. L. REV. 1073 (2015) .................. 13
`
`
`
`viii
`
`TABLE OF AUTHORITIES—Continued
`
`Page
`
`Josh Landau, Inter Partes Review: Five Years,
`Over $2 Billion Saved, PATENT PROGRESS
`(Sept. 14, 2007), https://www.patentprogress.
`org/2017/09/14/inter-partes-review-saves-over-
`2-billion/ ................................................................... 20
`Letter
`from Thomas Jefferson
`to
`Isaac
`MacPherson (Aug. 13, 1813) in 13 THE
`WRITINGS OF THOMAS JEFFERSON 326 (Albert
`Ellergy Bergh ed., Library ed. 1903) ........................ 9
`MANHATTAN STRATEGY GRP., PATENT EXAMINERS
`PRODUCTION EXPECTANCY GOALS RE-ASSESSMENT
`AND ADJUSTMENT STUDY (2010) ............................... 13
`Mark A. Lemley & A. Douglas Melamed, Missing
`the Forest for the Trolls, 113 COLUM. L. REV.
`2117 (2013) .............................................................. 22
`Michael D. Frakes & Melissa F. Wasserman,
`Irrational Ignorance at the Patent Office, 72
`VAND. L. REV. 975 (2019)......................................... 13
`Michael D. Frakes & Melissa F. Wasserman, Is
`the Time Allocated to Review Patent Applic-
`ations Inducing Examiners to Grant Invalid
`Patents?: Evidence from Micro-Level Applica-
`tion Data, 99 REV. ECONS. & STATS. (2017) ...... 13, 14
`S. REP. No. 110-259 (2008).......................................... 15
`Sapna Kumar, Standing Against Bad Patents,
`32 BERKELEY TECH. L.J. 87 (2017) .......................... 18
`
`
`
`
`
`
`ix
`
`TABLE OF AUTHORITIES—Continued
`
`Page
`
`Startups & the U.S. Patent System: Prioritizing
`Quality and Balance to Promote Innovation,
`ENGINE 15
`(July 2021), https://static1.
`squarespace.com/static/571681753c44d835a4
`40c8b5/t/60f8579bae6a2d324b7440a2/162688
`8093336/Engine+Patent+Quality+Booklet+2
`021+7.21.pdf ...................................................... 19, 26
`Survey of Patent Examiners, U.S. GOV’T
`ACCOUNTABILITY OFF. (GAO-16-478SP, June
`2016), https://files.gao.gov/special.pubs/gao-
`16-478sp/results.htm#question_57 (last visited
`Dec. 14, 2021) .......................................................... 13
`The State of the Startup Ecosystem, ENGINE 6,
`17 (2021), https://engineis.squarespace.com/
`s/The-State-of-the-Startup-Ecosystem.pdf ............. 23
`U.S. Patent No. 7,844,037 ........................................... 27
`U.S. Patent Statistics Chart: Calendar Years
`1963-2019, U.S. PAT. & TRADEMARK OFF. (Dec.
`13, 2021), https://www.uspto.gov/web/offices/
`ac/ido/oeip/taf/us_stat.htm ...................................... 12
`
`
`
`1
`
`INTERESTS OF AMICI CURIAE1
`Amici are organizations that represent high-
`
`technology startups, small business innovators, and
`the public and are dedicated to ensuring that the
`patent system works to foster innovation. This
`includes preserving effective administrative mechan-
`isms for clearing out invalid patents.
`
`is a non-profit
`(“Engine”)
`Engine Advocacy
`
`technology, policy, research, and advocacy organization
`that bridges the gap between policymakers and start-
`ups. Engine works with government representatives
`and a community of high-technology, growth-oriented
`startups across the nation to support the development
`of technology entrepreneurship.
`
`Institute
`Interest Patent Law
`The Public
`
`(“PIPLI”) is a non-profit, nonpartisan organization
`dedicated to ensuring the patent system promotes
`innovation and access for the benefit of all members of
`the public. PIPLI conducts policy research; engages in
`educational outreach; advocates for greater transpar-
`ency, ethics, and equity in the patent system; and
`ensures representation of the public’s interest in
`
`
`1 Pursuant to Supreme Court Rule 37, counsel for amici
`
`curiae represent 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 amici or their counsel, made monetary
`contributions intended to fund the preparation or submission of
`this brief. Counsel for both parties have consented to amici’s
`request for consent to the filing of this brief, and both parties
`received timely notice of amici’s intent to file.
`
`
`
`2
`
`courts and agencies that decide important issues of
`patent law.
`
`ACT | The App Association (the “App Association”)
`
`is an international advocacy and education non-profit
`organization representing more than 5,000 small
`business technology firms that develop the software
`applications and connected devices powering the
`Internet of Things. Located in all 435 congressional
`districts of the United States, the App Association
`represents an ecosystem that supports 5.9 million
`American jobs and is valued at approximately $1.7
`trillion.
`
`The patent system concretely affects millions of
`
`innovators and individual Americans who depend on
`access to patented technology but may not participate
`directly in the patent system. These constituencies
`include research scientists, open source technology
`developers, small business owners, medical patients,
`and assistive device users. Wrongly-granted patents
`hurt them by eroding space for innovation, compe-
`tition, and access while simultaneously empowering
`incumbents, increasing prices, and burdening courts.
`Due to limited financial resources and legal limitations
`on standing, members of the public can rarely
`challenge wrongly-granted patents directly, even when
`they suffer their negative effects firsthand. The public
`thus has a powerful interest in ensuring that private
`entities who possess the requisite resources, standing,
`and arguments to institute administrative proceedings
`before the Patent and Trial Appeal Board can pursue
`them to completion. Litigation settlements do not and
`
`
`
`3
`
`should not prevent the resolution of patent validity
`disputes.
`
`--------------------------------- ♦ ---------------------------------
`
`SUMMARY OF ARGUMENT
`
`The Federal Circuit’s overly-restrictive view of
`
`Article III standing in a series of patent appeals
`contravenes Supreme Court precedent and Congress’s
`choice to allow such appeals to proceed. This Court’s
`immediate intervention is necessary to prevent harms
`to the patent system, domestic innovation, and the
`broader public that the Federal Circuit’s lopsided
`deference to the Patent Trial and Appeal Board
`(“PTAB”) will otherwise inflict.
`
`Congress carefully crafted administrative patent
`
`review mechanisms to “improv[e] patent quality” and
`make the U.S. patent system “more efficient.” H.R. REP.
`No. 112-98, at 39 (2011). Instead of forcing private
`third parties to incur substantial litigation costs to
`eliminate invalid patents, Congress instituted a more
`affordable and accessible alternative. In contrast to
`prior administrative patent review mechanisms,
`Congress knew that access to appeal was important
`and expressly authorized it. Infra Section II.B.
`
`Nevertheless, the Federal Circuit’s recent case law
`
`departs from precedent to severely restrict standing
`when a dissatisfied PTAB challenger is not facing
`imminent threat of suit. That is what happened to
`Apple here, as this Court has repeatedly held that
`patent challengers do not sacrifice standing simply
`
`
`
`4
`
`because they are licensees. E.g., Medimmune Inc. v.
`Genentech, Inc., 549 U.S. 118, 137 (2007) (holding
`licensees have declaratory judgment jurisdiction to
`challenge patents); Lear, Inc. v. Adkins, 395 U.S. 653,
`671 (1969) (rejecting licensee estoppel). The Federal
`Circuit’s approach to standing frustrates Congress’s
`goals, upends settled precedent, and hurts the public
`by discouraging parties who are best suited to
`challenge questionable patents from pursuing post-
`grant review.
`
`The practical consequences of these Federal
`
`Circuit cases are stark. Startups, small businesses,
`and the broader public bear the burden of wrongly-
`granted patents which unjustly obstruct innovation,
`competition, and access to technology. Invalid patents
`impose these harms even absent pending or imminent
`litigation. Successful patent challenges eliminate the
`injurious effects of invalid patent broadly, not just for
`the party instituting review—emphasizing the value of
`administrative patent challenges, the public’s need for
`them, and the benefits we stand to lose under the
`Federal Circuit’s approach.
`
`If the Federal Circuit continues to circumscribe
`
`judicial review of certain PTAB decisions, the U.S.
`patent system, economy, and innovation ecosystem will
`suffer.
`
`
`
`--------------------------------- ♦ ---------------------------------
`
`
`
`
`5
`
`ARGUMENT
`I. The Federal Circuit’s Narrow Approach to
`Standing is Inconsistent with Supreme
`Court Precedent, Creating Disagreement
`within the Federal Circuit and Frustrating
`the Public’s Interest in Weeding Out
`Invalid Patents.
`
`This case is the among the most recent in a series
`
`of Federal Circuit decisions that improperly cabin
`access to judicial review, in conflict with Medimmune.
`549 U.S. at 137. In addition to breaking with
`Medimmune on the issue of licensee standing, the
`Federal Circuit’s decision below undermines the
`established principle that a party is not required to
`first risk damages and incur serious risk of economic
`harm in order to challenge the validity of patents
`blocking its path. See, e.g., id. at 134.
`
`The Federal Circuit’s unduly narrow approach has
`
`prompted express disagreement among the judges of
`that court, with some dubbing it “overly rigid” and
`highlighting how it “contravenes” the America Invents
`Act (“AIA”). Gen. Elec., Co. v. United Techs. Corp., 928
`F.3d 1349, 1355 (Fed. Cir. 2019) (Hughes, J., concur-
`ring); accord Apple Inc. v. Qualcomm Inc., 17 F.4th
`1131, 1139 (Fed. Cir. 2021) (Newman, J., dissenting).
`This divide, coupled with the harm caused by the
`Federal Circuit’s narrow application of standing,
`crystallizes the need for this Court’s review.
`
`
`
`
`
`6
`
`A. The Federal Circuit’s Approach to
`Standing
`Undermines
`Principles
`Articulated by this Court.
`
`The Federal Circuit is “tak[ing] a patent-specific
`
`approach to the doctrine of [ ] standing that is out of
`step with Supreme Court precedent.” Gen. Elec., Co.,
`928 F.3d at 1355 (Hughes, J., concurring). This Court
`should grant certiorari to reaffirm that “[p]atent law is
`governed by the same . . . procedural rules as other
`litigation.” SCA Hygiene Prods.
`areas of civil
`Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct.
`954, 964 (2017).
`
`The Federal Circuit’s approach to standing within
`
`the context of PTAB appeals departs from this Court’s
`and its own precedent by unduly limiting the doctrine
`of competitive standing, “which relies on economic logic
`to conclude that a plaintiff will likely suffer an injury-
`in-fact when the government acts in a way that
`increases competition or aids the plaintiff ’s competi-
`tors.” Canadian Lumber Trade All. v. U.S., 517 F.3d
`1319, 1332 (Fed. Cir. 2008); see, e.g., Clinton v. City of
`New York, 524 U.S. 417, 433 (1998) (the Supreme Court
`“routinely recognizes probable economic injury result-
`ing from [governmental actions] that alter competitive
`conditions as sufficient to satisfy the [Article III
`‘injury-in-fact’ requirement],” and any party “who is
`likely to suffer economic injury as a result of
`[governmental action] that changes market conditions
`satisfies this part of the standing test” (citing 3
`KENNETH DAVIS & RICHARD J PIERCE, ADMINISTRATIVE
`LAW TREATISE 13–14 (3d ed. 1994))). The Federal
`
`
`
`7
`
`Circuit has reasoned that the “government action at
`issue” in a patent review—“the upholding of specific
`patent claims”—is “quite different” from the types of
`government action that it and other courts have found
`standing to challenge,
`for example,
`limiting a
`challenger’s sales by “opening the market to more
`competitors.” AVX Corp. v. Presidio Components, Inc.,
`923 F.3d 1357, 1364–65 (Fed. Cir. 2019). This reasoning
`is flawed. Not only is the Federal Circuit asking for
`more than this Court’s precedent requires, it is
`ignoring the practical consequences of this government
`action: when it upholds a questionable patent, it is
`preserving a monopoly that inherently and adversely
`affects competition.
`
` Moreover, the Federal Circuit’s narrow and
`idiosyncratic approach to standing departs from how
`this Court treats injury in the context of patent
`licenses, creating anomalous results. See, e.g.,
`Medimmune, 549 U.S. at 137. The case at hand is
`illustrative: the Federal Circuit has created a situation
`where, if Apple wants to bring a validity challenge, it
`would have to challenge Qualcomm’s full portfolio of
`100,000 licensed patents; break its portfolio license
`agreement and be sued now; or wait for the license to
`expire and be sued then. Yet, as Judge Newman has
`explained, precedent confirms such extreme measures
`are not necessary. Apple, 17 F.4th at 1139.
`
`Additional departures from precedent are appar-
`
`ent in other recent cases. In General Electric, the
`Federal Circuit refused to review a patent challenge
`even though the parties were “direct competitors in a
`
`
`
`8
`
`fiercely competitive market that requires significant
`up-front investment,” and where the patent at issue
`“effectively precluded” one competitor from developing
`in the space it felt was improperly covered by an
`invalid patent. 928 F.3d at 1358
`(Hughes, J.,
`concurring). And in JTEKT Corp. v. GKN Automotive
`Ltd., the Federal Circuit refused to find standing in a
`case between competitors, where the petitioner was
`already engaged in potentially infringing product
`development because, the court emphasized, it had not
`yet proven a concrete, substantial, or likely risk of an
`infringement suit. 898 F.3d 1217, 1221 (Fed. Cir. 2018).
`
`By contrast, the Federal Circuit finds standing
`
`where a party has built a plant to make the infringing
`product, E.I. DuPont de Nemours & Co. v. Synvina C.V.,
`904 F.3d 996, 1004–05 (Fed. Cir. 2018), or has gotten
`FDA pre-approval for a drug, Amerigen Pharms. Ltd. v.
`UCB Pharma GmbH, 913 F.3d 1076, 1084–85 (Fed. Cir.
`2019), both of which require enormous upfront costs.
`These cases reflect the Federal Circuit’s tendency to
`erect unwarranted (even insurmountable) barriers to
`those willing to invest in meritorious validity chal-
`lenges—directly against what this Court articulated in
`MedImmune: that requiring a party to “destroy a large
`building, bet the farm, or [ ] risk treble damages” to
`have standing in court “finds no support in Article III.”
`549 U.S. at 134.
`
`
`
`
`
`
`9
`
`B. The Federal Circuit’s Restriction on
`Standing Harms the Public by Denying
`Rulings on the Merits for Many Patent
`Cases.
`
`The issues here transcend this dispute and these
`
`two parties. Invalid patents corrode the benefits of the
`patent system,2 and this Court has repeatedly
`articulated the underlying importance of the public
`interest in patent law to preserve access to funda-
`mental ideas that facilitate downstream innovation.
`See Graham v. John Deere Co. of Kan. City, 383 U.S. 1,
`9 (1966). “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).
`Thus, the public is best served by a patent system that
`
`2 The Founders recognized that wrongful claimants would
`
`obtain patents and that improvidently granted ones could inflict
`serious harm. See Letter from Thomas Jefferson to Isaac
`MacPherson (Aug. 13, 1813) in 13 THE WRITINGS OF THOMAS
`JEFFERSON 326, 335 (Albert Ellergy Bergh ed., Library ed. 1903)
`(“Considering the exclusive right to invention as given not of
`natural right, but for the benefit of society, I know well the
`difficulty of drawing a line between the things which are worth
`to the public the embarrassment of an exclusive patent, and
`those which are not.”); James Madison, Detatched Memoranda
`(ca. 31 January 1820), NATIONAL ARCHIVES: FOUNDERS ONLINE,
`https://founders.archives.gov/documents/Madison/04-01-02-0549
`(last visited Dec. 15, 2021) (“[G]rants of this sort can be justified
`in very peculiar cases only, if at all; the danger being very great
`that the good resulting from the operation of the monopoly, will
`be overbalanced by the evil effect of the precedent; and it being
`not impossible that the monopoly itself, in its original operation,
`may produce more evil than good.”).
`
`
`
`10
`
`focuses on the merits of validity, to enable “full and free
`competition in the use of ideas which are in reality a
`part of the public domain.” Lear, 395 U.S. at 670; see
`also Alberto Galasso & Mark Schankerman, Patents
`and Cumulative Innovation: Causal Evidence from the
`Courts 19 (Nat’l Bureau of Econ. Rsch., Working Paper
`No. 20269, 2014) (showing invalid patents block follow-
`on research).
`
`Indeed, licensees like Apple often are the only
`
`entities with sufficient incentives to challenge invalid
`patents. As this Court explained when rejecting the
`doctrine of licensee estoppel in Lear, “If [licensees] are
`muzzled, the public may continually be required to pay
`tribute to would-be monopolists without need or
`justification.” 395 U.S. at 670. The Federal Circuit’s
`decision contravenes this Court’s reasoning in Lear
`and the public’s interest in the full and free
`competition that wrongly-granted patents prevent.
`
`Licensees operating in the same technological
`
`field as a patent’s subject matter are uniquely well-
`positioned to assess its validity. They have the
`requisite technical knowledge, understand the per-
`spective of a person of ordinary skill in the art, and can
`identify and access relevant prior art. Congress
`created post-grant review mechanisms to provide an
`“efficient system for challenging patents that should
`not have issued.” Cuozzo Speed Techs., LLC v. Lee, 579
`U.S. 261, 280 (2016) (quoting H.R. REP. No. 112-98, at
`39–40 (2011)). Those reviews will be neither efficient
`nor effective if those most motivated and qualified to
`challenge wrongly-granted patents (licensees) cannot
`
`
`
`11
`
`obtain judicial review without risking severe economic
`harm.
`
`
`II. The Federal Circuit’s Approach Frustrates
`Congress’s Carefully Balanced Policy to
`Root Out Questionable Patents.
`
` Within patent law, “Congress has the prerogative
`to determine the exact right response—choosing the
`policy fix, among many conceivable ones, that will
`optimally serve the public interest.” Kimble v. Marvel
`Entm’t, LLC, 576 U.S. 446, 465 (2015). With the AIA, it
`created inter partes review (“IPR”) and post-grant
`review (“PGR”), which “offer[ ] a second look at an
`earlier administrative grant of a patent” and serve two
`purposes: (1) “helping resolve concrete patent-related
`disputes among parties” and (2) “help[ing] protect the
`public’s ‘paramount interest in seeing that patent
`monopolies . . . are kept within their legitimate scope.’ ”
`Cuozzo, 579 U.S. at 279–80 (quoting Precision
`Instrument Mfg. Co. v. Auto Maint. Mach. Co., 324 U.S.
`806, 816 (1945)).
`
`The Federal Circuit’s overly restrictive IPR and
`
`PGR standing rule undermines the dual purpose of the
`post-grant review system that Congress created. And
`these disputes are inherently public because “the
`decision to grant a patent is a matter involving public
`rights—specifically, the grant of a public franchise.” Oil
`States Energy Servs., LLC v. Greene’s Energy Grp.,
`LLC, 138 S. Ct. 1365, 1373 (2018). But, the public only
`
`
`
`12
`
`benefits when private entities can present and pursue
`validity challenges to completion.
`
`
`
`A. The Realities and Constraints of Patent
`Examination Necessitate an Effective
`Ex-post Mechanism to Review Patent
`Quality.
`
`The U.S. patent system cannot effectively promote
`
`the progress of science and useful arts without viable
`post-issuance error correction. If anything, the
`importance of such challenges is greater today than
`ever. Given the staggering number of patent appli-
`cations and limited resources for examination, invalid
`patents will inevitability slip through, and the public
`will bear their costs unless and until their validity is
`challenged.
`
`The Patent Office examines over 600,000 patent
`
`applications each year. U.S. Patent Statistics Chart:
`Calendar Years 1963-2019, U.S. PAT. & TRADEMARK
`OFF. (Dec. 13, 2021), https://www.uspto.gov/web/offices/
`ac/ido/oeip/taf/us_stat.htm. Given that load, “patent
`examiners have from 8 to 25 hours to read and
`understand each application, search for prior art,
`evaluate patentability, communicate with the appli-
`cant, work out necessary revisions, and reach and
`write up conclusions” which can be insufficient to
`perform a thorough examination. Christopher R.
`Leslie, The Anticompetitive Effects of Unenforced
`Invalid Patents, 91 MINN. L. REV. 101, 106 (2006)
`(quoting FED. TO COMM’N, TO PROMOTE INNOVATION:
`
`
`
`13
`
`THE PROPER BALANCE OF COMPETITION AND PATENT LAW
`AND POLICY, Executive Summary, at 10 (2003)); see
`also, e.g., Michael D. Frakes & Melissa F. Wasserman,
`Is the Time Allocated to Review Patent Applications
`Inducing Examiners to Grant Invalid Patents?:
`Evidence from Micro-Level Application Data, 99 REV.
`ECONS. & STATS., 550, 552 (2017) [hereinafter “Frakes
`
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