Patent

Patent Accidents: Questioning Strict Liability in Patent Law

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Post by Patrick Goold. In 1999, Canadian company, Research in Motion (RIM), launched the Blackberry email pager. The pager was an instant commercial success amongst businesspeople and politicians alike. Behind the Blackberry’s success was its wireless email technology. No longer were emails confined to the desktop but were now easily accessible on-the-go. The technology for … Read more

Freilich on Prophetic Examples

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Post by Janet Freilich Patent law – like many areas of private law – is riddled with unusual, obscure, and sometimes incomprehensible rules. In a forthcoming paper, I draw attention to a particularly puzzling doctrine of patent law: patents can include fictional experiments and made-up data. Take, for instance, the following experiment published in a … Read more

Private Property and Public Franchise: Patents Under the Supreme Court’s “Public-Rights Doctrine”

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Post by John Golden

In an April 24 decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 584 U.S. __ (2018), the United States Supreme Court addressed a question previously highlighted on this blog (see posts of May 30, June 13, and December 4, 2017): the extent to which patents involve public or private rights for purposes of U.S. constitutional law. Specifically, the Court held that whether a patent claim should be canceled for lack of novelty or nonobviousness is “a matter involving public rights” and therefore may be determined by an administrative agency, the U.S. Patent and Trademark Office (USPTO), rather than an Article III court. With Justice Thomas writing for a seven-Justice majority, the Court emphasized its view that, although patents are a “form of property,” the decision to grant a patent—a matter long consigned to the USPTO—is a decision on “the grant of a public franchise” and thus liable to congressional reservation of administrative power “to revoke or amend” the grant. The Court thereby signals the existence of a subcategory of privately held property—namely, public franchises granted to private persons—that is particularly susceptible to administrative adjudication.

But what is a “public franchise”? The Court does not give a crisp definition. Nonetheless, by pointing to aspects of patents that apparently support their classification as public franchises, the Court provides some hints. First, the Court notes that the right to exclude provided by a patent “ ‘did not exist at common law’ ” (quoting Gayler v. Wilder, 51 U.S. (10 How.) 477, 494 (1851)), and is instead “a ‘creature of statute law’ ” (quoting Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261 U.S. 24, 40 (1923)). Further, Congress has authorized such rights by exercising its constitutionally granted “power ‘[t]o promote the Progress of Science and useful Arts’ ” (quoting U.S. Const. art. I, § 8, cl. 8). In other words, Congress has provided for patents pursuant to a public purpose. These observations comport with a definition of “public franchise” that Justice Thomas has proffered before: a right or set of rights “ ‘which public authorities ha[ve] created purely for reasons of public policy and which ha[ve] no counterpart in the Lockean state of nature.’ ” Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 848 n.2 (2015) (Thomas, J., dissenting) (quoting Caleb Nelson, Adjudication in the Political Branches, 107 Colum. L. Rev. 559, 567 (2007)).

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Conference Announcement: The Administrative-Private Law Interface in IP Law, Harvard Law School, March 29

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The Project on the Foundations of Private Law at Harvard Law School, and the University of Texas School of Law invite you to attend The Administrative-Private Law Interface in IP, a day-long conference held at Harvard Law School on March 29. Intellectual property law is historically part of American private law. IP rights are generally … Read more

Intellectual Property and Practical Reason — Eric Claeys

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Post by Eric Claeys, George Mason University, Antonin Scalia Law School

In a recent post, Henry Smith made some perceptive observations about the state of contemporary intellectual property scholarship.  Henry was commenting on a panel at a recent conference, in which panelists stressed that “treating intellectual property as a kind of property does not mean assuming it is absolute.”  And he noted that what he called “external” accounts of IP are much better-represented than what he called “internal” or “interpretivist” approaches to IP. 

I have offered a few thoughts on Henry’s post already, and I hope to offer a few other thoughts in due time.  I am extremely interested in Henry’s question because I have been working on an article focusing on those same questions.  As luck would have it, I just received news that the article was accepted for publication in the journal Jurisprudence.  I’d like to take a minute to flag the article (still in draft form) and summarize its arguments.

The article is titled “Intellectual Property and Practical Reason.”  The article’s main intention is to show how general principles of a certain family of normative theories supply basic guidance for the field of IP. The theory-family covers theories loosely associated with natural law and rights-based forms of eudaemonist or perfectionist political theory.  (In what follows, I’ll describe these approaches as “rights-based perfectionist” approaches.)  In IP, Wendy Gordon, Ken Himma, Adam Moore, Rob Merges, Adam Mossoff’s, and my own work on Lockean labor theory all fall in this family.  But so do Nussbaum-Sen “capabilities” theories, and (at least on some interpretations) Rawlsian fairness theories.

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The Supreme Court Takes on Patents and the Private-Versus-Public-Rights Distinction — John Golden

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Post by John Golden

On June 12, the United States Supreme Court granted certiorari with respect to the first question presented in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 (S. Ct. 2017):

Whether inter partes review—an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents—violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.

This grant gives new prominence to a question flagged in my post of May 30, the question of whether patents involve public or private rights for purposes of U.S. administrative law.  In this context, the question is refracted through a definition of “public rights” that the Supreme Court has developed to delimit the scope of Article III courts’ exclusive powers.  A determination that patent rights are more properly viewed as “private” than “public” could lead to a conclusion that inter partes review, as well as other new mechanisms for the administrative review of patent validity, are unconstitutional. 

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The Supreme Court on Laches, Patent Exhaustion, and Lord Coke — John Golden

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Post by John Golden

Intersections between statutory law and traditional private law principles loom large in two recent patent law decisions of the United States Supreme Court.  For this, we can partly thank the United States Court of Appeals for the Federal Circuit.  As discussed in my first NPL blog post, the Federal Circuit preceded the Supreme Court in taking the cases for en banc review.  The en banc circuit obligingly produced holdings that the Court could not resist overruling.

In the first case, SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, 137 S. Ct. 954 (2017), the Supreme Court held that laches cannot block a claim for damages from patent infringement when that infringement has occurred within the statutorily allowed period of six years before the filing of the claim.  Seven of the eight Justices involved in deciding SCA Hygiene agreed that this outcome followed straightforwardly from the Court’s 2014 decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014), which addressed similar questions regarding laches, damages, and the Copyright Act’s three-year statute of limitations.  Writing for the Court with what appeared to be restrained exasperation, Justice Alito began his opinion by stating, “We return to a subject that we addressed in Petrella ….”  Alito’s opinion proceeded to emphasize that laches arose from equity and that the case before the Court involved “application of the defense to a claim for damages, a quintessential legal remedy.”  In the Court’s view, a statute of limitations such as the Patent Act’s six-year limitation on backward-looking damages “necessarily reflects a congressional decision that the timeliness of covered claims is better judged on the basis of a generally hard and fast rule rather than the sort of case-specific judicial determination that occurs when a laches defense is asserted.”  Application of a laches defense in the face of this congressional judgment “is beyond the Judiciary’s power.”

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Internal and External Accounts of IP Law — Eric Claeys

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Post by Eric Claeys, George Mason University, Antonin Scalia Law School

In a recent post on this blog, Henry Smith asked some important questions about methodological commitments in American scholarship about intellectual property.  Henry distinguished between (on one hand) “external” and (on the other hand) “internal or interpretivist” frameworks for studying law.  He then noted that, in American IP scholarship, “scholars overwhelmingly adopt consequentialist and even utilitarian frameworks” in relation to patent law and repeat those same tendencies in copyright (though not to the same degree as in patent).  Henry’s post invited readers to consider why IP scholarship is so much more externally-oriented than other fields of scholarship on private law.

I completely agree with Henry’s general impressions about normative frameworks  in IP.  I also agree with his suggestion that IP scholars should reflect more upon why and how external accounts came to predominate in IP scholarship.  In this and a few subsequent posts, I’d like to offer a few thoughts.  In later posts, I want to suggest a different demarcation than Henry’s demarcation between external and internal-interpretivist approaches.  But my concern on that point is fairly specialized, removed from the big questions Henry is raising.  Before running off with the proverbial ball to one corner of the field, I hope in this post to offer some thoughts about the state of play in the middle of the field.

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Patents and the Private-Versus-Public-Rights Distinction

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Post by John Golden

Are patent rights public or private rights?  Generally speaking, patents are privately held, and their enforcement is limited to civil suits brought by their private holders.  Hence, in some sense, the answer might seem obvious.  But for purposes of addressing issues of separation of powers and the right to a jury trial, the answer is not so straightforward.  For these purposes, the United States Supreme Court has made central a public-versus-private-rights distinction under which the key question is whether the rights at issue are “integrally related to particular government action” because “the claim at issue derives from a federal regulatory scheme, or … the 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, 491–92 (2011).  If the answer to this question is “yes,” the right in question is a “public right” whose application Congress may entrust to adjudication by an administrative body.  If, on the other hand, the claim is one of “private right,” a category typically understood to include suits traditionally brought at common law, the Court’s understanding of constitutional requirements of separation of powers means that authoritative trial-level adjudication may occur only in an Article III court, one in which the presiding judge or judges enjoy the protections of life tenure and salary protection mandated for the judicial branch by Article III of the United States Constitution.

Controversy rages over the extent to which patent rights—or, at least, challenges to patent rights’ validity—fall within the “public rights” exception to Article III adjudication.  The motive force for this controversy is the popularity of new procedures for post-issuance review of patent claims by administrative patent judges of the U.S. Patent and Trademark Office (PTO).  Starting in the early 1980s, Congress authorized the PTO to conduct post-issuance proceedings that could reconsider the validity of issued patent claims on either the PTO’s own initiative or that of a third party.  Through the America Invents Act of 2011, Congress revised and elaborated on PTO post-issuance proceedings.  One form of the revised set of proceedings, so-called “inter partes review,” has flourished since 2011: the PTO currently receives over 1,000 petitions for inter partes review each year.  In such a proceeding, the patent holder and a patent challenger contest the validity of issued patent claims before administrative patent judges of the PTO’s Patent Trial and Appeal Board (PTAB).

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Internal and External Accounts of IP Law: Notes from IP, Private Law, and the Supreme Court Conference Continued

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Post by Henry Smith

As a follow up to Patrick Goold’s post on the IP, Private Law, and the Supreme Court Conference, let me raise a couple of questions inspired by the first panel. Much of the discussion focused on how treating intellectual property as a kind of property does not mean assuming it is absolute or that all of IP is equally “property-like.” And yet what does it mean to think about a topic in terms of property?

In private law, a distinction is often drawn between two broad families of approaches. On the one hand are external, often functional, theories that explain and justify private law in terms of something else, whether economics, psychology, or philosophy. On the other side and less common in American law schools are internal or interpretivist theories that adopt the perspective of one inside the legal system and seek to make sense of that system from within – to render it coherent.

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Patent Exhaustion and Private Law Goes to the Supreme Court — Patrick Goold

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Post by Patrick Goold

Sir Edward Coke’s Institutes of the Lawes of England, first published in 1628, rarely influences the direction of modern U.S. patent law. But that might be about to change. This December, the Supreme Court of the United States granted certiorari in the case of Impression Products, Inc. v. Lexmark International, Inc., Supreme Court Docket No. 15-1189, concerning the scope of the patent exhaustion doctrine. The case will interest readers of this blog because it highlights the conceptual and doctrinal relationship between IP exhaustion and common law rules regarding restraints on alienation.

The case involves the ongoing battle over refurbished printer toner cartridges. Lexmark International makes printer toner cartridges, over which it owns a number of patents. These cartridges fall into two types: “Regular Cartridges” are sold at full price; while “Return Program Cartridges” are sold at a discount but come with a “single-use/no-resale” restriction, meaning the buyer may neither reuse nor resell the cartridge after the toner has run out. Lexmark sells these cartridges both domestically in the U.S. and abroad. In 2014, Lexmark sued Impression Products for patent infringement. Impression Products had previously: (1) bought domestically-sold Return Program Cartridges, modified by third parties to allow refilling, and resold them in the U.S.; and (2) imported and resold both Regular and Return Program Cartridges from foreign markets. Lexmark maintained both of these actions infringed their U.S. patent rights under § 271 of the Patent Act. Impression argued that both of these acts were non-infringing due to the Patent Exhaustion doctrine, which holds that “the initial authorized sale of a patented item terminates all patent rights to that item.” Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625 (2008). John Golden has discussed the case in a prior New Private Law Blog post.

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“Channeling” District Court Discretion in IP and Beyond — John Golden

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Post by John Golden

In both a patent case and a copyright case from soon-to-end October Term 2015, the U.S. Supreme Court continued a long struggle to define the proper bounds of trial court discretion in various contexts. See generally Henry J. Friendly, Indiscretion About Discretion, 31 Emory L.J. 747, 748–50 (1982). Such questions of trial court discretion commonly relate to questions about the proper nature of equity or equity-like reasoning in district court decision-making, questions that are presumably of interest to a number of readers of this blog.

Questions about trial court discretion have recently had particular prominence in patent law. In this area, an ever-growing string of Supreme Court decisions has, over the course of a decade, rejected what the Court has perceived as excessively rigid rules developed by the U.S. Court of Appeals for the Federal Circuit. See David O. Taylor, Formalism and Antiformalism in Patent Law Adjudication: Rules and Standards, 46 Conn. L. Rev. 415, 464–65 (2013). The newest addition to the string came in June in Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016). In an opinion by Chief Justice Roberts, the Court rejected as “unduly rigid” a Federal Circuit rule permitting the enhancement of patent damages for willful infringement only when the infringer’s conduct was objectively reckless with respect to violation of relevant patent rights. Id. at 1932 (internal quotation marks omitted).

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