Oil States: a Very Slippery Slope

In a narrow but still huge decision today, Oil States Energy Services v. Greene’s Energy Group, the U.S. Supreme Court today relegated patents and challenges to them as more a public, as opposed to a private, right.  Justice Thomas wrote the opinion of the Court that under the “public-rights doctrine” great latitude is accorded  in allowing the adjudication of “public rights” by non-Article III adjudicators, e.g., political appointees.  The Court held that Article III federal judges (life appointment, more independent) are not needed in Inter Partes Review patent challenge proceedings at the USPTO, where a private challenger can seek the invalidation of a patent under the auspices of a USPTO Board, where the “judges” are subject to the Director and other political appointees that “adjudicate” the patent right.  This particular point was made manifest when a former Director allegedly sought to overturn Patent Board decisions not to her liking by appointing more judges to skew the judgment (panel stacking).

Also,  the majority, looking to history, viewed patents, particularly some patent challenges, as not being entitled, under the common law of the 18th century and beyond, to trials  by jury.   Indeed, the Court held that the Patent Clause in the Constitution, at the founding of the patent system, inherently included a contemplation for potential cancellation proceedings.  Even though Justice Gorsuch in his dissent seriously questioned this interpretation, the Court said that the “historical practice” of the courts over the last two centuries does not matter because under the “public-rights doctrine” the USPTO is perfectly ok today.  Thus, with this finding, patentees are also not entitled to jury trials under the Seventh Amendment since there is no private property taking involved.

In the decision, Justice Thomas sought to narrow the conclusion of the Court today to just the constitutionality of these IPR proceedings, and not extend this viewpoint to other contexts of patents, leaving the “private property” notion for some patent rights hanging.  In his dissent, Justice Gorsuch lucidly contested the majority’s viewpoints and the holding, considering it as dispensing “with constitutionally prescribed procedures” for expediency and a “retreat” from constitutional guarantees for citizens.  Indeed, the majority seemed to interpret the jurisprudence and the historical context quite differently than Justice Gorsuch, viewing the case as an administrative correction, as opposed to a patent case.   The injustice of this decision will have enormous ramifications.

However, as a practical matter, the Justices as a whole were perhaps loathe to invalidate IPR and the thousands of Board decisions made so far, and thus instead stretched the Administrative State to now include IPR patent rights, forfeiting the parties’ private patent rights.  As noted in the oral argument, this decision takes patent rights back to the days of supreme rulers, such as Elizabeth I, where the patent “monopoly” is entirely subject to the ruler’s whim, granting and taking, instead of a patent system for creating a protected and secured private property right.  Here, the government giveth and government can taketh away.  Patents are just franchises, like taxi medallions, under the view of the majority.  Our Founders shudder.

With only two Justices viewing patents as private instruments, Gorsuch and Roberts, this does not bode well for the future.  Congress needs to act to fix this.  However, with the insidious influence of the tech lobbyists to squelch private innovation and future technology challenges by any means, it is doubtful that Congress will step up.   Thus, in due course, when the next Court challenge accrues encroaching on patent rights, we will again be faced with a majority of the Justices deeming patents as another administrative right to be curtailed, instead of the special instruments they are for the private citizen to contribute to Society as a whole, as our Founders intended, by getting a short-term incentive to innovate.  Liberal IPR proceedings over the last few years, invalidating many valuable patents, have significantly undermined the importance and value of patents, the consequences for which are being felt by entrepreneurs, inventors and investors for future technologies.  Today’s decision perpetuates this injustice, much to the delight of our world competitors.

With the value of patents being diminished, and today’s decision is a further diminishment, innovation in America is suffering, the next cures for diseases are compromised, the next valuable app is being thwarted, and the American spirit of invention further quelled.  All because a majority of our Justices deem the patent system as something not deserving of constitutional protections, which is in direct conflict with the Court’s own history and jurisprudence.  The only good news of late is the appointment of Andrei Iancu as Director of the USPTO, who is changing the dialogue.  Hopefully, the Justices will consider patentees not as trolls, but as important keystones to our success as a nation.

The Constitutional Foundations of IP – A Natural Rights Perspective

Despite the value of intellectual properties to the United States, there have been numerous efforts of late to curtail those rights, rights which were enacted by our Founders to encourage inventors and creators.  The Constitutionality of some of these rights is now in question, particularly now at the Supreme Court. Randolph May, writer of the recent book “The Constitutional Foundations of Intellectual Property,” will discuss this critical issue from the natural law perspective.  Raymond Van Dyke, IP practitioner and educator, will speak about the importance of IP to society then and now.

This Greater Washington, DC Licensing Executives Society Chapter event is on the evening of July 20, 2017 in Washington, DC.  Here is the event notice: http://www.lesusacanada.org/events/EventDetails.aspx?id=981094&group=160111

With the constitutionality of inter partes proceedings at the Patent Trial and Appeal Board of the USPTO now in question, the issue is quite pertinent, and the consequences quite serious to the patent system.

If in Washington, DC tonight, I hope that you can make it.

Ray, Greater Washington, DC Chapter Chair, LES

(202)378.3903  vandyke@acm.org

 

Ray Van Dyke Teaches Course on Intellectual Property at SMU

Next week at Southern Methodist University in Dallas, Texas, I reprise my course on intellectual property. Excerpts from the course description are set forth below and available online at  http://lyle.smu.edu/~matula/IPIT/

Dr. David Matula and I have taught the class since 2000, and I am honored to teach the class again on January 15 and 16, 2016. The Course is open to everyone and I hope to see those that can attend next week. Engineers, scientists, corporate and business people, faculty and students have praised the class, and 2016 will be no exception! My presentation includes all the basics on IP, current developments, and purposes of IP to our society (and the past).  For beginners, the class is a lively introduction to IP.  For those with some knowledge of IP, the materials offer a refresher with recent case law.

I hope to see you there!

Ray, vandyke@acm.org

COURSE DESCRIPTION

What is intellectual property? Why should I patent my innovation? How do I draft my claims?  This course will address the importance of technology and intellectual property in America, the fundamentals of patent, copyright, trademark and trade secrets for the lay person, and the real world application of those rights.

Fair use, open source, and alternatives will be described and interpreted.

Current developments and changes are also covered. In particular, the America Invents Act of 2011, the most monumental change to patent law since 1836, will also be discussed, and the significant effects on universities, small inventors and companies highlighted. Supreme Court, Legislation and other developments that affect these rights will also be covered in this popular and engaging presentation.

TOPICS TO BE COVERED BY THE COURSE INCLUDE:

  • History and Philosophy of Intellectual Property Rights and their role in the information age
  • Intellectual property’s impact on information system design and development
  • The inventor’s role in recognizing and protecting a patentable idea
  • Analysis of ground breaking industry patents
  • Impact of Emerging Technologies on Intellectual Property

DETAILS ON LOCATION AND CREDIT

Computer Science & Engineering Department

Bobby B. Lyle School of Engineering
Presents

 16th Annual Short Course on Intellectual Property and Information Technology

January 15 & 16, 2016:  Friday 9:am-5:pm, Saturday 9:am-1:pm

Palmer Conference Center for Engineering Leadership

Caruth Hall, Rm. 406

3145 Dyer Street, Dallas, TX  75205

Short course fee:  $200 (group rates available)

SMU Students:  Credit – one hour:  Register for CSE 5111/7111

Non-credit complimentary SMU student registration available (contact beth@lyle.smu.edu)

Any remaining questions? Contact me at vandyke@acm.org or visit my webpage at http://www.rayvandyke.com

Ray Van Dyke teaching a Class on Patent Law

 

As noted, as Co-Chair of the Intellectual Property Section for the Bar Association of Montgomery County (BAMC), I am pleased to report that the IP Section is having a continuing series of presentations on the fundamentals of intellectual property law  at the Bar headquarters in Rockville, Maryland.  See: http://montbar.site-ym.com/?62

With the increasing value of intellectual property in today’s economy, as well as the ongoing controversies, non-IP professionals, whether attorneys, scientists, business people, and interested citizens, all want to better understand the workings of these legal principles and tools. The first meeting was an overview of all IP rights.

The next meeting, December 1, 2015, will address the current issues and controversies involving patents, e.g., the so-called troll movement and ongoing legislative efforts in that regard.  At the last meeting, on November 11, 2015, the basics of patents were discussed, along with the historical and societal underminings of patents in society, partoicularly in the United States with the strong support of George Washington, Thomas Jefferson, James Madison, Alexander Hamilton and other Founders, as well as Abraham Lincoln, a President well-versed in technology and greatly appreciative of the American system of patent law and the advantages accorded.  Sadly, many of those advantages are being undermined by the rash of legislation, including the AIA.

Copyrights, trademarks and trade secrets will be covered in 2016.

As the speaker, I can say that the material will cover not only the law, but will include anecdotes about famous cases and inventors, putting the material into the context of the times.  My materials have been collected and coalesced over the last 16 years as part of an in-depth course I teach at SMU to engineers, business people, teachers, students and other interested parties.

If anyone has any questions about the course and these meetings, please do not hesitate to contact me.

For attendees, I require an RSVP so that I can gauge the audience and handle logistics. So, if learning a little about IP law is of interest, this series of presentations will do the trick. I look forward to meeting you there!

Ray Van Dyke, Co-Chair, Intellectual Property Section, BAMC

202.378.3903  vandyke@acm.org