August/September 2017
As the alarm sounds for that wake-up call aka September (whoa, did I take a vacation this summer, or was that only a dream?), brace yourselves: It’s a bumpy year ahead for the IP world. SCOTUS will decide next term, via Oil States v. Greene’s Energy Group, the constitutionality of the USPTO (through the Patent Trial and Appeal Board (PTAB), its Article I court) revoking granted patents in inter partes review proceedings (IPRs), and various tech sectors are lobbying Congress for and against efforts to amend Section 101 (the patentable subject matter eligibility statute). The patent world has long debated the scope of patent protection, and the concomitant benefits and costs of patents. Today, the tone of that argument has risen to a screech. A few years of living under the IPR post-grant proceedings regime of the America Invents Act (AIA) (which has made patents harder to hold on to) and the SCOTUS Mayo/Alice test restricting patent-eligible subject matter (which has made patents harder to obtain at the USPTO and harder to hold on to in litigation) have sparked deeply felt controversy about both. Where some see IPRs or the Mayo/Alice test (or both) as deep wounds to the future of U.S. innovation, others like their new-found ability to use IPRs or the Mayo/Alice test to slay the infringement dragon swiftly, before amassing significant federal district court discovery and litigation expenses, by challenging patents in IPRs or winning motions to dismiss on the pleadings district court complaints against them based on the Mayo/Alice test. Embedded in these debates are value-laden judgments about the scope and role of patents. In my experience, it’s hard to assess the various arguments for all the Mom and apple pie that’s in the mix. So often the debaters press the version of patent policy that ostensibly favors their goals, reinforced by anecdotes akin to ghost stories told around a campfire. But I want solid empirical evidence, not just sound bites, and I bet many of you do, too. I have come across one recent study that does a good job of providing evidence that bears on how obtaining patents affected our innovation economy in the period before IPRs and Mayo/Alice. I summarize it below. The researchers (Joan Farre-Mensa (Harvard Business School), Deepak Hegde (NYU Stern School of Business), and Alexander Ljungqvist (NYU Stern School of Business)) studied the value to a startup of obtaining its first patent. Working from a database of 34,215 first-time patent applications filed by U.S. startups at the USPTO since 2001 (and that matured into patent grants by December 31, 2013), they measured five types of firm-level outcomes (using a variety of data sources cited in the article): (i) growth in sales and employment; (ii) follow-on patenting and patent citations; (iii) the pledging of patent applications as collateral to raise debt; (iv) venture funding; and (v) fundraising by startups through initial public offerings (IPOs). They compared these outcomes for startups whose first patent applications were granted to those for startups whose first patent applications were rejected during the same time period. See Joan Farre-Mensa, et al., What’s a Patent Worth? Evidence from the U.S. Patent “Lottery” 3, 9-11 (Nat’l Bureau of Econ. Research, Working Paper No. 23268, © 2017). Here’s what they found: Having its first patent application granted “increase[d] the average startup’s employment growth over the next five years by 54.5 percentage points,” compared to those startups whose first patent applications were rejected. Id. at 3. “The effect on sales growth—a 79.5 percentage-point increase over five years—[wa]s even larger.” Id. at 3-4. For the average startup in their sample, receiving a patent led to “16 additional employees after five years, and $10.6 million in additional sales cumulated over five years after winning the patent lottery.” Id. at 4. “A first patent grant also increases both the number of subsequent patents the firm is granted (by 49%) and their quality (with the average number of citations per subsequent patent increasing by 26%).” Id. A first-patent grant “increase[d] a startup’s chances of securing funding from VCs by 47%, and of securing a loan by pledging the patent as collateral by 76%, within three years of the patent decision.” Id. A patent grant also “more than double[d] the odds of the startup raising funding from public investors through an IPO.” Id. The effect of patents on raising VC funding was strongest for startups “that (i) had raised little or no VC funding before the USPTO’s decision, (ii) were founded by inexperienced entrepreneurs, (iii) [we]re located in areas where attracting investors’ attention is harder, and (iv) operate[d] in the IT sector.” Id.; see also id. at 21-24, 29-30. In short, their findings indicate that, in the pre-IPR/pre-Mayo/Alice era, “[a] patent grant set[] a startup on a growth path” fueled by “funding that help[ed] transform its ideas into products and services that generate jobs, revenues, and follow-on inventions.” Id at 4; see also id. at 21-24, 29-30. What’s the value of a first-time patent to a startup today in the era of IPRs and the Mayo/Alice test? The same as before, less, or more? All three, if you listen to the anecdotes. Turns out the answer is not so easy to measure; questions like this one may require several more years for data to accumulate before large-scale researchers can tackle them. So, at least for the measures used by these researchers, it’s two to three years too early to know. I’m still looking for other reliable ways to tease out the answers, and I’m pleased to say that various sitting and ad hoc committees of the Association have been working diligently—including over the all-too-short summer—to try to separate fact from myth about the impact of IPRs and the Mayo/Alice test on the value of patents on our innovation economy. I’ll keep you posted.
In This Issue:
NYIPLA President's Corner
anneMARIE hassett
An Interview with 2017 NYIPLA Inventor of the Year Award Winner Dr. Adrian Krainer 2017 Hon. William C. Conner IP Writing Competition Second Place winner August/September 2017 IP Media Links Increasing Trademark Scams Discussed at USPTO Forum Historian’s Corner: As Time Goes By - IP & Longevity IPRs Are a Constitutional Exercise of Congressional Authority to Empower an Administrative Agency to Determine the Validity of Patents Oil States Energy Services, LLC v. Greene’s Energy Group, LLC: Patent Rights, Public or Private and Whose Thoughts and Ideas are They Anyway? Supreme Court 2016-2017 IP Case Review NYIPLA’s Mentoring Program Kick-Off Event The NYIPLA Sponsors Its Fourth Successful Annual Summer Associate Moot Court Program at the Court of Appeals for the Second Circuit Trademark Law and Practice Committee Presents a Half-Day Program Moving Up & Moving On Welcome New Members
96th Annual Dinner in Honor of the Federal Judiciary
october 24
Friday, March 23, 2018 New York Hilton Midtown Keynote Speaker Bob Woodward Outstanding Public Service Award Honorable Sue L. Robinson (Ret.) District of Delaware
Understanding the Protectable IP of Jewelry and Fashion Willkie Farr & Gallagher LLP, New York, NY NYIPLA Member - $35.00
One-Day Patent CLE Seminar Princeton Club of New York
october 17
Preparing an Amicus Submission on Behalf of the NYIPLA Foley Lardner LLP, New York, NY NYIPLA Member - $25.00
Calendar
november 16
IP Considerations for New IP Practitioners and Non-IP Attorneys Hofstra Law School, Hempstead, NY NYIPLA Member - Free
october 4
An Interview with 2017 NYIPLA Inventor of the Year Award Winner Dr. Adrian Krainer By: Mitch Hadley, Inventor of the Year Award Committee
2017 Inventor of the year
The New York Intellectual Property Law Association (NYIPLA) annually presents an Inventor of the Year Award to an individual who, through his or her inventive talents, has made worthy contributions to society by promoting “the progress of Science and useful Arts.” Earlier this year, the NYIPLA was pleased to name Dr. Adrian Krainer the Inventor of the Year for 2017. Dr. Krainer is a named inventor on numerous patents and patent applications. In particular, Dr. Krainer is an inventor of U.S. Patent No. 8,980,853, and was recognized for his research that led to the first-ever FDA-approved drug for treating spinal muscular atrophy (SMA), which is the leading genetic cause of infant mortality. That drug, nusinersen, was approved by the FDA for use in the United States in December 2016 and was recently approved, in June 2017, for marketing in Europe. Dr. Krainer graciously agreed to answer a few questions about his research and this breakthrough invention. The NYIPLA was pleased to name you Inventor of the Year for 2017 for your work developing nusinersen, the first FDA-approved drug for the treatment of SMA. After years of research, what is it like to be able to provide this much-needed drug to the world? First of all, I am very grateful to NYIPLA for this award. Nusinersen (Spinraza™) is the culmination of many years of basic and preclinical research, followed by five years of rigorous clinical trials. It stems from earlier research on RNA splicing, a phenomenon that was discovered 40 years ago, and from antisense technology, which was also first introduced about 40 years ago. My lab began to work on SMA more than 15 years ago, and I’ve been doing research on splicing since the early 1980s. Our first publication describing nusinersen was in 2008. From the very beginning, I hoped that our research would one day directly or indirectly help alleviate human suffering, but the fact that it directly led to an effective treatment—indeed the first approved treatment for SMA—is really a dream come true. Have you had the opportunity to interact with any patients who have been treated with the drug that you have invented? Are there any patient experiences that you can share? I have regularly participated in annual SMA meetings since 2000. As a result, I have had regular contact with SMA patients of all ages and their families. I met many patients when the possibility of a treatment was only a distant hope, then when they were trying to enroll in a clinical trial, and more recently, after they started treatment. I have also communicated with families around the world who are still trying to get access to nusinersen, pending approval in their countries. Emma is a young child with SMA type 2; her family is from Long Island, and they visited my lab when she was a year and half old, waiting to enroll in a nusinersen phase-3 trial. They had to wait until she was two, and she lost a lot of strength during that time. Fortunately, she has shown great improvement since entering the trial. After two years or so on the trial, they finally learned that she had indeed received the drug, rather than the placebo. At the last CureSMA meeting, I met some of the patients who were genetically diagnosed but treated with nusinersen before the onset of symptoms, as very young infants. One was a toddler who I could see walking around very normally, and his parents explained how they had previously lost a child with type 1 SMA, who could never achieve significant motor milestones, let alone walk. I also bumped into Lauren, a young woman who has been on nusinersen for over five years, as she was one of the pioneers on a phase-1 trial. I remember she wrote me when she was 16, mentioning how pleased she was that she had gained the strength to shoot and make baskets during wheelchair basketball. She went on to college, away from home, and though she still uses a wheelchair, she is able to walk. I truly admire SMA patients and families, especially those who took the risk to participate in clinical trials for a new experimental drug. Thanks to them, nusinersen can now help thousands of patients worldwide. Will you please explain briefly how your drug works to treat SMA? Nusinersen (Spinraza™) is an antisense oligonucleotide (ASO), i.e., a short synthetic strand of nucleic acid. It resembles DNA and RNA, but has chemical modifications that stabilize it and make it more drug-like. It consists of 18 bases (the building blocks of DNA/RNA) of four different kinds, and the sequence (order) of these bases is such that nusinersen precisely homes on and binds to a particular region of the RNA made from the SMN2 (survival of motor neuron 2) gene. The interactions involved are the same that hold the two strands of DNA together in a double helix. SMN2 is a gene present in one or more copies in all SMA patients, who lack the SMN1 gene; SMN2 can make a small amount of functional SMN protein, but not enough to keep spinal motor neurons healthy. When nusinersen binds to the SMN2 RNA, it restores correct splicing, such that the gene can now express normal levels of SMN protein. RNA splicing is an editing process that involves cutting and pasting of the RNA, before it is used as a template to direct synthesis of protein. Nusinersen blocks the binding of a splicing repressor protein to the RNA, such that the cell’s splicing machinery can correctly cut and paste an important RNA segment that is otherwise left out. What in your educational or personal background led to your invention? In particular, what led to developing a treatment for SMA? I began to work on RNA splicing during my PhD training with Professor Tom Maniatis at Harvard, and I continued this line of work in my lab at Cold Spring Harbor Laboratory, for over 30 years. I was recruited to CSHL by Rich Roberts, one of the discoverers of RNA splicing in 1977, for which he shared the Nobel Prize in 1993. My colleagues and I have contributed to the understanding of the mechanisms and regulation of this fundamental cellular process. In 1999, others showed the relevance of SMN2 mis-splicing in SMA, and we began to work on the underlying mechanisms, shortly after coming across these findings. Our mechanistic work in turn eventually led us to try to come up with a therapy, and we were fortunate to have the opportunity to join forces with Ionis Pharmaceuticals to systematically design, test, and optimize many ASOs, including nusinersen. I also want to stress the contributions of Dr. Yimin Hua, who did many of the key experiments in the discovery and preclinical development of nusinersen, while he was in my lab. If you are able to share, what are you working on currently? We continue to work towards a better mechanistic understanding of RNA splicing and other pathways involving RNA. In the area of SMA, we are trying to gain a better understanding of the pathogenesis mechanisms, using mouse models and antisense technology. We are also working on antisense applications in other disease areas, such as brain and liver cancer, and cystic fibrosis. How do you see the field of SMA treatment progressing over the next few years? Having an approved, effective treatment has certainly transformed the field, and there is a lot of momentum. There is still room for optimizing when, how much, and how often nusinersen should be administered. Several other potential treatments are being vigorously pursued, some of which are already showing promise in early clinical trials. Combination therapies could have added benefits, depending on what each drug targets, and how it is administered. Given that SMA is progressive, the trend will be to treat it as early as possible, preferably before the onset of symptoms. Thus, newborn screening for SMA will play a crucial role. Finally, clinicians will need to evaluate, and adapt treatments to, the unique needs of patients who are surviving longer and achieving unprecedented milestones in response to drug treatment. Your story is inspirational to young inventors who are researching solutions to other genetic disorders and health problems. What advice would you give to them? It may take many years, but focusing on understanding basic mechanisms can provide the foundation for devising novel targeted therapies. Persistence in pursuing novel applications you believe in can eventually pay off. Our approach was initially perceived as a long shot at best, and it probably was. The key to success was probably being highly methodical, obtaining very convincing data for each step along the way, and taking advantage of the complementary expertise in academia and biotech/pharma to drive a successful collaboration. Don’t be afraid to learn new methodologies and concepts way outside your field of expertise; a multidisciplinary approach can be extremely effective.
CALL FOR NOMINATIONS 2018 NYIPLA INVENTOR OF THE YEAR AWARD Submission Deadline: December 1, 2017 Each year, the New York Intellectual Property Law Association (NYIPLA) presents the "Inventor of the Year Award" to pay tribute to an individual or group of individuals who, through their inventive talents, have made worthy contributions to society by promoting "the progress of Science and useful Arts." We encourage you to nominate one or more candidates. The Inventor of the Year Award enables the Association to extend recognition to deserving innovators and inventors, and promote the practice of intellectual property law. This year's award will be accompanied not only by recognition, but also by a monetary award of $5,000.00 to the winner. In order to be eligible for the Award, nominees must have received one or more U.S. patents for his/her/their invention(s) contributing to modern society. Please forward your nominations no later than Friday, December 1, 2017. See the nomination form for further rules and information, as well as the Frequently Asked Questions. Jonathan Auerbach and Brian Prew Co-Chairs, Inventor of the Year Award Committee jonathan@radip.com and bprew@goodwinlaw.com
Diversity Scholarship Co-Chair Patrice Jean, Conner Second Place Winner Hannah Pham, NYIPLA President Anne Hassett, Julie Pham
2018 Honorable William C. Conner Intellectual Property Law Writing Competition Submission Deadline Monday, March 5, 2018 Awards to be presented on Tuesday, May 15, 2018 at the Princeton Club of New York during the NYIPLA Annual Meeting First Place $1,500.00 Runner-up $1,000.00 The competition is open to students enrolled in a J.D. or LL.M. program (day or evening). The subject matter must be directed to one of the traditional subject areas of intellectual property, i.e., patents, trademarks, copyrights, trade secrets, unfair trade practices and antitrust. Entries must be submitted electronically by March 5, 2018, to the address provided below. See Rules for details on submission requirements. Richard H. Brown NYIPLA Conner Writing Competition Co-Chair Day Pitney LLP 7 Times Square New York, NY 10036-7311 Tel: +1 212.297.5854 Fax: +1 212.916.2940 E-mail: rbrown@daypitney.com
2017 Hon. William C. Conner IP Writing Competition SECOND PLACE Winner
Hannah Pham from the New York University School of Law for her paper entitled Standing up for Stand-up Comedy: Joke Theft and the Relevance of Copyright Law and Social Norms in the Social Media Age Read Full Essay
Conner Writing Competition Co-Chair Richard Brown and Conner Second Place Winner Hannah Pham
August/September 2017 IP Media Links By: Jayson L. Cohen
August 2017 saw issues relating to Chinese policies and practices concerning technology innovation and IP protection in the mainstream news, as reflected in articles published in the New York Times. On August 1, Keith Bradsher published an article entitled, “Trump Administration Is Said to Open Broad Inquiry Into China’s Trade Practices.” Bradsher reported the Trump administration’s announcement that it would set in motion a so-called Section 301 investigation into “China trade practices . . . amid growing worries in the United States over a Chinese government-led effort to make the country a global leader in microchips, electric cars and other crucial technologies of the future.” Bradhser noted that the administration’s attitude represents “a shift . . . away from its emphasis on greater cooperation between Washington and Beijing.” Bradsher identified one of China’s technology policies at issue as the “Made in China 2025” policy, which works in parallel with Chinese government “demand[s] that American companies cut the licensing fees that they charge for key patents.” Bradsher’s article discusses the connections between the American and Chinese economies and their companies and noted that the Trump administration’s investigation could lead the United States to “impose steep tariffs on Chinese imports, rescind licenses for Chinese companies to do business in the United States, or take other measures.” (Link) On August 4, in the shadow of the Trump administration’s preparations to investigate “potential violations of American intellectual property” in China, David Barboza reported on the links between U.S. companies, such as Qualcomm, and Chinese IP and technology policies and practices and Chinese companies, in an article entitled, “How This U.S. Tech Giant Is Backing China’s Tech Ambitions.” Barboza stated that “[t]o gain access to the Chinese market, American companies are being forced to transfer technology, create joint ventures, lower prices and aid homegrown players.” The relationship between the Chinese government, Chinese companies, and Qualcomm that is the main subject of Barboza’s article ironically emerged from a settlement of the prior Chinese investigation into Qualcomm’s patent licensing practices and market power relating to mobile phone chips in China, a market that Barboza states “accounted for more than half of [Qualcomm’s] global revenue.” (Link) On August 14, Javier Hernandez published a complementary piece entitled, “Seeking Greater Global Power, China Looks to Robots and Microchips,” which discusses various issues relating to Chinese IP and trade practices from both the American and Chinese perspectives. Hernandez reported that “China takes conflicting positions on intellectual property, ignoring it in some cases while upholding it in others,” but that “President Xi Jinping is in the midst of an effort to strengthen laws on patents, copyrights and trademarks, giving fledgling firms in China new sources of revenue and prestige.” Hernandez discusses a variety of Chinese IP issues and technology‑focused trade practices over the years, including offensive and defensive IP enforcement issues in “specialized courts to handle intellectual property disputes” and Chinese government subsidies to “entrepreneurs who file patent applications.”(Link) On August 22, Sui-Lee Wee published an article entitled, “New Balance Wins $1.5 Million in Landmark China Trademark Case,” “in what lawyers said was the largest trademark infringement award ever granted to a foreign business in China.” This is the latest in a series of lawsuits brought by New Balance in mainland China to protect its trademarks, but Wee reports that “[t]he $1.5 million ruling is a product of new legislation in China,” passed in 2014, which increased the amount of statutory damages for trademark infringement. Wee believes that “[t]he court ruling reflects the Chinese government’s determination to confront the problem of piracy, which has long plagued many companies in a country where fake shoes, bags — and even meat — are widely available.” She quoted New Balance’s counsel for intellectual property, Daniel McKinnon, as stating that the “ruling has given the company a renewed confidence in our aggressive intellectual-property protection strategy within China.’” (Link)
Increasing Trademark Scams Discussed at USPTO Forum By: James L. Bikoff and Darlene Klinksieck
In late July, the USPTO and TPAC (the Trademark Public Advisory Committee) hosted a public roundtable entitled “Fraudulent Solicitations to Trademark Owners.” The roundtable was chaired by Mary Denison, Commissioner for Trademarks; opening remarks were provided by Joseph Matal (currently performing the functions and duties of the Under Secretary of Commerce for Intellectual Property and Director of the USPTO). Members of the public were invited to attend and participate in the roundtable. Speakers included both outside counsel and corporate practitioners and representatives of other organizations. Increasingly over the last few years, many U.S. trademark application/registration owners are being solicited by questionable entities who have obtained trademark information from the USPTO public databases offering to provide unnecessary --and in some instances non-existent-- services in connection with U.S. trademark protection. These entities use “official-sounding” names such as U.S. Trademark Compliance Office to confuse the trademark owners into believing that: 1) they are being contacted by an authorized governmental entity, and 2) that the services are required or at least highly desirable for proper trademark protection. All such solicitations request payment (in amounts far exceeding the “norm” for U.S. practice and oftentimes within 14 days so as to instill a sense of urgency) – typically by check or wire. In some instances the services are never provided after payment; in other cases, dubious and unnecessary services are provided. These solicitations are typically received by U.S. Mail from U.S. and European locations. It is not uncommon for the scammers to open a P.O. Box and send out 10,000 solicitations with the hope of getting 150 responses (i.e., checks). USPTO Director Matal advised attendees that “we all need to work together to corral and fix this problem.” Representatives from the U.S. Department of Justice (Criminal Division, Fraud Section), the Federal Trade Commission (Division of Marketing Practices), the U.S. Postal Inspection Service, U.S. Customs and Border Patrol and the Small Business Administration filled the panel; the USPTO has worked with all of these groups in an attempt to combat the fraudulent solicitations. Early last year, the Department of Justice secured criminal convictions in federal court in the Darbinyan case on charges of mail fraud, money laundering, conspiracy and other crimes in California related to one of these scams (LA Times Article). That scheme defrauded more than 4,400 trademark owners out of $1.66 million. Apparently, crucial evidence in the Darbinyan case was the fact that albeit victims in several instances were assured that their U.S. trademark registrations had been recorded with Customs and Border Protection (a simple procedure that can be done online for $190) for amounts far exceeding the actual cost, the Customs database demonstrated that in fact the registrations had NOT been recorded. Ironic to think that a $1.66 million fraud scheme was “taken down” by the failure to spend $190 on a Customs recordal. Representatives from both the Postal Service and the Federal Trade Commission stressed that it is imperative that these scams be reported, noting that “if we don’t get complaints, we won’t know and can’t do anything.” That said, many of these instances go sadly unreported because the victims have already lost money and do not wish to admit that they’ve been “taken”. Should a seemingly fraudulent solicitation of this nature be received, both the Postal Service and Federal Trade Commission representatives stressed the importance of maintaining the envelope in which the solicitation was received and a copy of the cancelled check for the lost amount. The USPTO has taken numerous steps to alert potential victims of these activities, including providing information to trademark owners during the registration process, maintaining a web page describing the problem (https://www. uspto.gov/trademarks-getting-started/non- usptosolicitations) and providing a list of entities known to have made fraudulent solicitations as well as an email address (TMFeedback@uspto.gov) for suggested additions to the list. The USPTO has also produced a video highlighting the potential harm posed by non-USPTO solicitations (https://www.uspto.gov/ trademarksgetting-started/process-overview/ trademark-information-network). The best advice for any trademark owner receiving one of these letters and/or invoices from anyone other than their trademark counsel is to contact their trademark counsel or the USPTO to establish whether the solicitation is legitimate prior to making any payment to any of these third parties.
If you are a master of IP trivia, you may know that our nation’s longest-lived, active federal judge was also a patent lawyer. Judge Giles S. Rich of the U.S. Court of Appeals for the Federal Circuit passed away at ninety-five years old, having spent nearly half his life on the Bench. You may, however, not know who was, for at least several years, considered to be the longest-lived patent lawyer, nor how long it was that he lived. His name was Charles Yardley Chittick, and he lived until the mind-bogglingly ripe age of one hundred-and-seven and two-thirds; a record even in this age of modern medicine. Born in Newark, New Jersey on October 22, 1900, C. Yardley became a registered patent lawyer on February 1, 1934. Later in his life, C. Yardley was befriended by one of our Association’s members, Joseph Catanzaro. From time to time, Joe would visit C. Yardley at this home in New Hampshire, including on the occasion of the celebration of his hundredth birthday. Joe spoke about that visit in the July 20, 2008 issue of the Concord Monitor, as follows: “He was hanging balloons...He always wore his red MIT jacket. Joe said, ‘Maybe you should check your jacket and get more comfortable.’ And he said, ‘You take care of your business and I’ll take care of mine.’ He was a very determined individual who called them like he saw them.” Apparently C. Yardley called it like he saw it when he had a run-in with a classmate at Phillips Academy, namely Humphrey Bogart. Their mutual distaste was memorialized in Darwin Porter’s book entitled The Secret Life of Humphrey Bogart: The Early Years (1899-1931). One passage puts it bluntly: “The only boy on the floor who Hump disliked intensely was a nerd who wore thick wire-rimmed glasses, Charles Yardley Chittick. Whenever they would meet in the hallway, neither spoke to each other.” When push came to shove, it was Bogie who threw the first punch. Later, Bogie was expelled (or rather “fired,” as C. Yardley liked to say) from Phillips on account of bad grades. Meantime, C. Yardley graduated from Phillips in 1918, went on to study mechanical engineering and run track at MIT, and then got his law degree in Washington, D.C. Early in his career, Thomas Edison offered C. Yardley a job in his lab. As a prelude to that offer, according to the June 8, 2008 issue of the Eagle-Tribune, Edison “sat him down in his office with a punishing 150-question test. Applicants had to answer questions like: ‘What language is generally spoken in Brazil?’ ‘What did Lewis and Clark do?’ ‘What is black ink made of?” and ‘what three letters occur most frequently in the English language?’” Although he didn’t take Edison’s job offer, C. Yardley maintained an avid interest in technology throughout his life. Not only did he obtain patents for a large number of inventors, he also obtained some naming himself as inventor such as U.S. Patents 2,236,894, entitled “Means For Determining Miniature Railroad Track Layout” (issued April 1, 1941); 2,450,716 entitled “Kitchen Utensil” (issued October 5, 1948); and 2,642,372 entitled “Flexible Corrugated Sheet Material and Method of Fabricating Same” (issued June 16, 1953). By all accounts, C. Yardley had a full and productive life. In the winter of his years, he clearly enjoyed the celebrity associated with being our country’s longest living patent lawyer. In 2005, he was awarded an honorary degree from Franklin Pierce Law Center, which is now part of the University of New Hampshire. He passed away on July 18, 2008, a few weeks after attending his 90th class reunion from Phillips Academy.
C. Yardley Chittick at his 90th PA Class Reunion
By : Dale carlson
AS TIME GOES BY - IP & LONGEVITY
HISTOrIAN'S CORNER
On June 12, 2017, the United States Supreme Court granted Oil States Energy Services’ (“Oil”) petition for certiorari to review the Federal Circuit’s summary affirmance of a Patent and Trial Appeal Board (“PTAB”) decision. The grant of certiorari was to determine: “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.”[1] The petition also sought review of the PTAB’s process for allowing amendments and its “broadest reasonable interpretation of patent claims.” Although these other issues raise valid concerns, the Court chose not to address them, and they are not considered here. The petitioner Oil makes two main arguments in challenging the constitutionality of inter partes review (“IPR”): (1) Patent “infringement cases today must be tried to a jury, as their predecessors were more than two centuries ago.” Markman v. Westview Instruments, Inc., 517 U.S. 370, 377 (1996) (emphasis added). At a minimum, the Constitution requires that an Article III judge adjudicate all cases in law and in equity arising under federal law. U.S. CONST. art. III. (Pet. 11) (emphasis added). (2) Patents create property rights, protected by the Constitution. Once a patent is granted, it “is not subject to be revoked or cancelled by the President, or any other officer of the Government” because “[i]t has become the property of the patentee, and as such is entitled to the same legal protection as other property.” McCormick Harvesting Mach. Co. v. C. Aultman & Co., 169 U.S. 606, 608-09 (1898). (Pet. 17) (emphasis added) Analysis of both arguments shows that they do not support the conclusion that IPRs are unconstitutional. In particular, patent infringement cases are not patent validity cases (although validity can be a subsidiary issue), and the selected statements from old cases relied on by Oil do not establish that patents are private rights, which can only be revoked by an Article III court with a jury. 1. Patent Validity Does Not Need to be Determined in an Article III Court Before a Jury Controversies that may be decided in the federal courts are identified in Article III, Section 2 of the Constitution, and include “all Cases, in Law and Equity, arising under [the] Constitution, the Laws of the United States, and Treaties made, or which shall be made.” Certainly, patent validity is within the purview of the federal courts.[2] Also, the Seventh Amendment provides a constitutional right to a jury trial if such a right existed at common law in 1791.[3] It is clear that at common law before 1791, and up until today, an Article III judge and jury could decide the validity of a patent; however, what is not clear is whether they are the only ones who can do so. In other words, although an Article III judge and jury are sufficient to determine validity, are they necessary? a. An Article III Court is Not Necessary for a Patent Validity Determination The Supreme Court has “long recognized that, in general, Congress may not ‘withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty.’”[4]. If a suit is within federal jurisdiction, then the test for Article III is whether the case “is made of ‘the stuff of the traditional actions at common law tried by the courts at Westminster in 1789.’”[5] In order to “preserve the integrity of judicial decisionmaking,” Congress cannot “confer the Government’s ‘Judicial Power’ on entities outside Article III.”[6] The cases relied upon by Oil, however, are patent infringement cases. IPRs are patent validity cases, not infringement cases. At most, patent validity may be determined in a modern patent infringement case as an affirmative defense to infringement. In England in the eighteenth century, only chancery courts had the power to revoke a patent upon request of a private citizen. The chancery court was not a law court at Westminster. See Mark A. Lemley, Why Do Juries Decide If Patents Are Valid?, 99 Va. L. Rev. 1673, 1684 (Dec. 2013) (“Lemley”). What an Article III judge has that an Article I administrative judge lacks is lifetime tenure and no diminution of compensation. This protects the Article III judge from undue political influence. What the typical Article III judge lacks in determining patent validity is a relevant technical background and an in-depth knowledge of patent law, backgrounds that the Administrative Patent Judges (APJs) of the PTAB must have. Thus, the public is more likely to get a proper determination of the validity of the patent from the Article II proceeding than from the Article III one.[7] Concern about political influence on ALJs is moderated by the fact that the patent would not exist at all if the same agency judging it had not granted it in the first place. b. A Jury is Not Necessary for a Patent Validity Determination The Seventh Amendment ensures a jury trial right if that right existed in 1791. Curtis v. Loether, 415 U.S. 189, 193 (1974). Professor Lemley provides a detailed analysis of the use of juries in eighteenth-century England: [I]n England in the eighteenth century, only chancery courts had the power to revoke a patent upon request of a private citizen. And chancery courts had no power to convene a jury. [However, juries] could pass on the validity of a patent in two circumstances. First, a chancery court might seek the advice of a jury in assessing the facts underlying a scire facias petition. . . . Second, and more commonly, when a patentee sued for damages at common law rather than seeking an injunction in equity, matters of fact—including what factual issues existed concerning validity—were given by the law courts to the jury. . . . [A] ruling in the law courts could not invalidate a patent altogether, as a ruling of invalidity does today. In the law courts, invalidity as we understand it today didn’t exist. The doctrines we think of today as rendering a patent invalid instead provided personal defenses to a particular infringer. Lemley at 1684-86. Since there was no right to a jury in a pure invention patent validity case in 1791, there is no requirement for a jury trial for a patent validity determination now. An Article III jury trial in which patent validity is determined is essentially judicial review of an administrative agency action, i.e., the original grant of the patent by the Patent Office. The Supreme Court has held that there is no constitutional right to jury review of administrative agency decisions. See Atlas Roofing Co. v. Occupational Safety & Health Review Comm’n, 430 U.S. 442, 455 (1977); Cox v. United States, 332 U.S. 442, 453 (1947). The Supreme Court has also held that the Patent Office is an administrative agency subject to the normal rules of the Administrative Procedure Act. Dickinson v. Zurko, 527 U.S. 150, 154–55 (1999). In 1791, juries did evaluate the validity of patents in infringement cases, but they did not review the work of an administrative agency in the sense they do today. Further, a jury’s determination that a patent was invalid in 1791 simply provided a personal defense to infringement; it did not mean (as it does today) that the patent was nullified. Judgments in England during this time period that a patent was invalid as to everyone were the province of the writ of scire facias, which required petitioning the King (i.e., the executive). See Lemley at 1683-84. Therefore, there is no right to a jury in a pure patent-validity determination. 2. The Status of Patent Rights as Property Does Not Mean that all Determinations about Patents must be Handled by an Article III Court Oil relies heavily on the language in McCormick, i.e., “[o]nce a patent is granted, it ‘is not subject to be revoked or cancelled by the President, or any other officer of the Government’ because ‘[i]t has become the property of the patentee, and as such is entitled to the same legal protection as other property.’” Pet. 17 (citing 169 U.S. at 608-09) (emphasis added). Oil takes this language out of context to assert that the Patent Office cannot determine the validity of a patent and that such a determination must be made by a jury in an Article III court. a. The Limitations of the Language in McCormick There are at least three problems with reliance on McCormick. First, McCormick dealt with a reissue situation in which the patentee had asked the PTO to correct the patentee’s error, not a re-examination situation in which the PTO is being asked to correct its own error. In contrast, the IPR is a curative statute invoked by a third party to correct an error made by the Patent Office in granting an invalid patent. The fact that it is the government’s mistake that is being corrected speaks to the public nature of the right in question. Second, in McCormick, the context of the statement is important in order to understand it. During a reissue proceeding, the Examiner found invalid certain original claims of the patent. Rather than appeal that decision, McCormick withdrew the request for reissue and obtained a return of its original patent. In a later infringement suit, the defendant tried to get the court to determine that these claims were invalid based on the determination during the reissue proceeding. The Supreme Court determined that since the reissue request had been withdrawn and the original patent had been returned, the determination of the Examiner had no effect. Third, the Supreme Court in McCormick did not rule on the constitutionality of the reissue procedure, and the quoted statement is dicta. This case from 1898 is of questionable value in determining the constitutionality of an agency tribunal. Under current Supreme Court analysis, this question turns on whether the right adjudicated by the agency is a “public right” or a “private right.” See Stern v. Marshall, 564 U.S. 462 (2011). The determination of the validity of a patent by the Patent Office is a determination of a public right. However, a suit for infringement of the patent against a third party is the exercise of a private right, which must be handled by an Article III forum. Additionally, a jury is required if requested by the parties. b. The Nature of the Patent Property Right If the patent right is taken to be a property right that is indistinguishable from other property rights for all purposes, then it is a private right and can only be taken away from the owner by an Article III court and thus the IPR procedure is unconstitutional. However, a close examination of the property right in an idea as established by a patent shows that it is primarily a creation of government and is much different from other property, such as real estate or even copyright. In fact, a patent is a federally created property right and thus a public right. See MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284, 1291 (Fed. Cir. 2015); Patlex Corp v. Mossinghoff, 758 F.2d 594, 604 (Fed. Cir. 1985). Land exists without the need for government, and ownership of land existed even before government. The government’s role in real estate is to register the ownership of land so that in a proceeding involving it by an Article III court or a state court, it is easier to determine the true owner. This is especially true in the face of changes in ownership due to sales and inheritance. See e.g. Martin v. Hunter’s Lessee, 14 U.S. 304 (1816). Copyright is similar. A person can create a work of art without the government, and that work exists independent of government. Government registration of a copyright merely aids in a determination of the owner. Certainly people can get ideas for new and useful machines without government. However, no protection is provided for ideas in the abstract. In fact, society has always valued the free exchange of ideas. For example, if a farmer operating a gristmill with the power of horses were to have the idea to substitute a water mill on a stream for the horse, no protection for that idea would be extended to the farmer. Neighboring farmers would be free to create the same type of mill on their property. At best, without government, ideas can be protected by keeping them secret. But where that is not possible, they can be copied by all for the benefit of society. The patent right is created by government action as the statement from McCormick even acknowledges. At least in the United States, the granting of a patent is not a registration process. Rather, a patent application is examined to ensure that the claim that will be protected is directed to a physical embodiment of the idea, not an abstract idea. In fact, the claim defines the right that is created. In contrast, the right to a copyright is defined by the creation of the work of art. A patent claim is often analogized to a description of the metes and bounds in a real estate deed. However, in real estate, the land exists without the deed, and the metes and bounds are merely an attempt to define what exists in nature. Without the government grant of a patent claim, there is no patent property. In the patenting process, a determination is made that the idea expressed in the claim is new and not obvious. In this determination, the claim as presented is compared to prior art patents, publications, and public uses. In the case of real estate, the land is not new. It always just was. A piece of land in another county has no effect on the land in question. In copyright, the requirement is originality, not novelty. The creation of a similar work in another county has no effect on the copyright. Thus, unlike other property, the patent right is created by government to protect some ideas created by individuals in a limited way. Patlex, 758 F.2d at 604. c. The Holding in McCormick Explained McCormick states that once a patent has issued “it has passed beyond the jurisdiction of [the Patent] Office and is not subject to be revoked or cancelled by the . . . Government. It has become the property of the patentee, and as such is entitled to the same legal protection as other property.” 169 U.S. at 608-09. Thus, the McCormick court did not engage in the “public” versus “private” right analysis required by Stern. Also, McCormick seems to take the position that the quality of the right changes upon issuance by the Patent Office. This suggests that it was a public right during its creation but somehow changed to a private right for some undisclosed reason upon issuance. The cases that the McCormick court relies upon for the cited statement do not support the broad interpretation that Oil asserts. For example, United States v. Schurz, 102 U.S. 378 (1880), involved the ownership of land, not patents on an invention. In Seymour v. Osborne, 78 U.S. (11 Wall.) 516, 533 (1870), the Court held that “inventions secured by letters patent are “property” of the patentee, and as such are entitled to protection as any other property, consisting of a franchise, during the term for which the franchise or the exclusive right is granted.” It did not relate to whether those rights could be adjudicated in the very agency that granted them. To the same effect is Cammeyer v. Newton, 94 U.S. 225 (1876). However, in Cammeyer, the issue was whether the government could make use of the invention with compensation to the patentee. In United States v. American Bell Telephone Co., the Court held that the United States could bring an action in federal court to cancel a patent allegedly procured by fraud—i.e., it authorized “the power of the government of the United States to get rid of a patent obtained from it by fraud and deceit.” 128 U.S. 315, 373 (1888). Thus, McCormick cannot be taken as holding that government has no power to revoke a patent. 3. Analysis of IPRs Under the “Public Rights” Exception Shows that They are Constitutional a. Under the Principles Set Forth in Stern, the Patent Right is a Public Right Although McCormick did not address it, the Supreme Court in Stern v. Marshall did address the “public right” exception; the Court recognized that its prior decisions held: that there [is] a category of cases involving “public rights” that Congress could constitutionally assign to “legislative” courts for resolution. [This] “public rights” exception extend[s] “only to matters arising between” individuals and the Government “in connection with the performance of the constitutional functions of the executive or legislative departments . . . that historically could have been determined exclusively by those” branches. 564 U.S. at 485 (citations omitted). Stern confirmed that Congress cannot “withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty.” Id. at 489 (citations omitted). The Court also recognized that “[a]t the same time there are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determination, but which congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper.” Id. at 507 (citations omitted). The “public right” exception extends to cases “where the Government is involved in its sovereign capacity under . . . [a] statute creating enforceable public rights,” while “[w]holly private tort, contract, and property cases, as well as a vast range of other cases . . . are not at all implicated.” Id. at 490 (citations omitted). The Court has continued, however, to limit the exception to cases in which the claim at issue derives from a federal regulatory scheme, or in which resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within the agency’s authority. Id. at 490-92. The Stern Court set forth a number of factors to be considered on the issue of whether the right is considered public or private, which include the following: (a) the assertion of agency authority involves only “a narrow class of common law claims” in a “particularized area of law”; (b) the area of law in question was governed by “a specific and limited federal regulatory scheme” as to which the agency had “obvious expertise”; and (c) orders were “enforceable only by order of the district court.” Id. at 491 (citations omitted). Applying these factors to the IPR proceeding shows that a determination of patent validity is a determination of a public right which the PTO can make under legislative direction. In support of its petition, Oil notes that Supreme Court precedent holds that patent infringement cases must be tried to a jury in an Article III court. (Pet. 11). However, the IPR proceeding does not involve infringement decisions—it involves only validity, which may be a defense in an infringement action. Thus, the IPR involves only “a narrow class of common law claims,” i.e., the invalidity defense in an infringement case. Further, patent law certainly is a “particularized area of law.” Patent validity is an area of law governed by “a specific and limited federal regulatory scheme” as to which the agency has “obvious expertise.” The entirety of Title 35 of the U.S. Code establishes the federal regulatory scheme by which patents are granted. Without this scheme there are no patents to inventions. Not only does the Patent Office in general have obvious expertise in the determination of patent validity, since that is its main function, the PTAB of the PTO has exceptional expertise. In order to perform their job, Examiners must have a technical education and knowledge of patent law. Such Examiners make validity determinations on their own when they reach Primary status. The Administrative Patent Judges (APJ) of the PTAB have similar or even more technical education than Examiners and typically have more training in patent law than Examiners. Examiners are not required to be patent attorneys, but the APJs are. Finally, PTAB decisions are made by three APJs, as opposed to a single examiner. Compare this to a jury trial in an Article III court where neither the judge nor jury is required to have a technical background or experience in patent law. Finally, the decision of the PTAB declares that: (1) the patent claims are maintained; (2) some of them are canceled (or, in rare cases, amended); or (3) all of the claims are found to be invalid. The PTAB, however, takes no further action. It would require a district court to give effect to the ruling by dismissing a suit brought on a patent whose claims are determined to be invalid. While the Supreme Court has never directly addressed the issue of whether a PTO procedure determining validity is constitutional, several Federal Circuit cases have applied the “public rights” doctrine to make such a determination. b. The Federal Circuit has Properly Applied the “Public Rights” Exception to Find Reexamination and IPR Constitutional. In Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985), the court applied a “public rights” exception analysis to determine whether the patent reexamination statute at the time violated the Constitution. The Federal Circuit in that case affirmed “the constitutionality of legislative courts and administrative agencies created by Congress to adjudicate cases involving ‘public rights’” and found that “the grant of a valid patent is primarily a public concern.” Id. at 604. The court noted that “[t]he reexamination statute’s purpose is to correct errors made by the government, to remedy defective governmental (not private) action, and if need be to remove patents that should never have been granted.” Id. at 604. Also, Patlex distinguished McCormick on the basis that it did not “forbid[ ] Congress [from] authoriz[ing] reexamination to correct governmental mistakes, even against the will of the patent owner. A defectively examined and therefore erroneously granted patent must yield to the reasonable Congressional purpose of facilitating the correction of governmental mistakes.” Id. In Joy Technologies, Inc. v. Manbeck, the court held that “the issuance of a valid patent is primarily a public concern and involves a ‘right that can only be conferred by the government’ even though validity often is brought into question in disputes between private parties.” 9 59 F.2d 226, 228 (Fed. Cir. 1992) (quoting and citing Patlex, 758 F.2d at 604). More recently in MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015), the Federal Circuit specifically applied the Supreme Court’s “public rights” analysis from Stern v. Marshall to find that an IPR proceeding is constitutional. The MCM Court cited Thomas v. Union Carbide Agricultural Products Co., 473 U.S. 568, 571 (1985), which held that the statutory scheme in the Federal Insecticide, Fungicide, and Rodenticide Act, which allows the Environmental Protection Agency to determine compensation between private parties, does not violate Article III. The MCM court noted that “[m]any matters that involve the application of legal standards to facts and affect private interests are routinely decided by agency action with limited or no review by Article III courts.” 812 F.3d at 1290 (citing 473 U.S. at 583). It also cited Commodity Futures Trading Commission v. Schor, 478 U.S. 833, 854 (1986), in which the Supreme Court upheld the constitutionality of adversary proceedings in the Commodity Futures Trading Commission (“CFTC”) for customers of commodity brokers seeking reparations from their brokers for violation of the Commodity Exchange Act (“CEA”) or agency regulations. The MCM court then concluded that patent reexamination and inter partes review are indistinguishable from the agency adjudications held permissible in the Thomas and Schor cases. The PTAB’s involvement in the determination of patent validity “is thus a quintessential situation in which the agency is adjudicating issues under federal law.” MCM, 812 F.3d at 1291. “Congress devised an ‘expert and inexpensive method for dealing with a class of questions of fact which are particularly suited to examination and determination by an administrative agency specially assigned to that task.’” Id. (citing Stern, 564 U.S. at 494 (quoting Crowell v. Benson, 285 U.S. 22, 46 (1932))). The teachings of the Supreme Court in Thomas, Schor, and Stern compel the conclusion that assigning review of patent validity to the PTO is consistent with Article III. 4. Conclusion The decision in Oil will turn on whether the patent right in the context of a validity determination is considered a “private” or a “public” right. Reference to common law in eighteenth-century England should not determine the case since there were no cases based only on the invalidity of a patent of invention that was tried at law before a jury. As explained above, the better analysis is that it is a “public” right and IPRs are constitutional. Some of the other issues raised by the petition but not taken up by the Court deserve some consideration in some forum. [1] Oil States Energy Services LLC v. Greene’s Energy Group, LLC., 639 Fed. App’x 639 (Fed. Cir 2016), petition for cert. filed, 2016 WL 6995217 (U.S. Nov. 23, 2016) (No. 16-712). [2] See U.S. CONST. art. I, § 8, cl. 8; 35 U.S.C. § 1 et seq. [3] Curtis v. Loether, 415 U.S. 189, 193 (1974). [4] Stern v. Marshall, 564 U.S. 462, 484 (2011) (quoting Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 284 (1855)). [5] Stern, 564 U.S. at 484 (quoting N. Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 90 (1982) (Rehnquist, J., concurring)). [6] Stern, 564 U.S. at 484. [7] This assumes the PTAB uses fair procedures and does not engage in the actions that the Petitioner was unable to get the Supreme Court to hear.
IPRs Are a Constitutional Exercise of Congressional Authority to Empower an Administrative Agency to Determine the Validity of Patents By: Melvin C. Garner
INTRODUCTION “[C]ommunal ownership violates every instinct of human nature. It destroys initiative, nullifies free agency, suppresses inventive exploration, minimizes the dignity of the individual and makes a god out of an abstract thing called ‘The State’- to which is delegated complete, unrestricted control over life, liberty and property. . . . Like so many other weak systems of government, it can survive only in an atmosphere of a slave state, ruled by a king or a dictator.” ~W. Cleon Skousen, The First 2,000 Years: From Adam To Abraham This article addresses the issue before the United States Supreme Court in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, which concerns the constitutionality of the America Invents Act of 2011 (“AIA”) post-grant inter partes review (“IPR”). The views expressed herein are based upon the constitutional jurisprudence related to the question, which analyzes the status of the patent right as a public property right or a private property right. The conclusions and views also comprise the interpretation of the Patent & Copyright Clause of the United States Constitution; the intent and purpose of the clause as articulated by the Framers of the Constitution; and an understanding of the natural law attributes of life, liberty and property. The article provides an analysis and conclusions suggested by a review of the principles, precepts, and concepts outlined above. It does not present, and should not be interpreted as presenting, an expression of any opinion regarding the utility of a legislatively promulgated post-grant review proceeding that is properly constructed in fidelity with the U.S. Constitution. Nor does it address the thousands of hardworking U.S. Patent & Trademark Office (“USPTO”) patent examiners toiling to issue high quality patents, and the hundreds of dedicated, thoughtful and highly competent Patent Trial and Appeals Board (“PTAB”) Administrative Patent Judges (“APJ”) tasked to conduct PTAB IPR trials within the confines and administrative construct of Congress’ mandate in the AIA. Instead, this article specifically addresses the question of whether a provision of a statute (e.g., the AIA), enacted by an Article I Congress and executed by an Article II Executive Agency (the USPTO) violates the U.S. Constitution Article III Separation of Powers and the Bill of Rights’ Seventh Amendment right to a jury. I. Administrative Agency IPRs are an Unconstitutional Usurpation of, and Intrusion on, the Article III Separation of Powers and a Denial of the Seventh Amendment Right to a Jury Trial A. It is Improper for an Administrative Agency Adjudicative Body to Invalidate Patents because It Violates the Article III Separation of Powers The separation of powers under the United States Constitution is the backbone of our tripartite system of government. Conflicts between and among the three branches of government arise in many circumstances relating to the governance of the People and the constitutional authority for a particular branch to exercise its power. Recent twenty-first century examples include conflicts over war powers, health care and immigration.[2] Ultimately, these conflicts are resolved by the Supreme Court. Oil States illustrates another such conflict between the three branches of government with respect to the constitutionality of adjudicating patent validity disputes in administrative tribunals created under Article I enumerated powers and operating in Article II Agencies rather than the constitutionally required Article III Court adjudication of those disputes. The Supreme Court’s jurisprudence, deciding the constitutionality of conflicting jurisdictional authority among the three branches, in this instance is based on an analysis addressing “public rights” (e.g., disputes between a private party and the government or between private parties concerning public property rights) and “private rights” (e.g., disputes between private parties concerning private property rights). The public/private property rights dichotomy, and the conflict among the three branches of government have presented themselves in this case involving the adjudication of a dispute between private parties concerning the validity of rights secured to an individual inventor under a lawfully issued United States patent certificate. The patent certificate was issued based upon the sovereign’s promise of exclusivity for a limited period of time in exchange for the individual inventor’s disclosure of his private creative thoughts and ideas. B. Background of the Patent Law Adjudication Conflict Issue Article I, Section 8, Clause 8, of the United States Constitution provides the explicitly enumerated power of Congress to secure for inventors the exclusive right to their inventions for a fixed period of time in exchange for disclosure of the invention to the public: To promote 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. United States patent laws developed through the common law and from an early act of Congress. In 1952, Congress codified much of today’s U.S. patent law (the Patent Act of 1952). With few exceptions, the law remained as codified in the Patent Act of 1952 until 2011 when Congress enacted a major overhaul in the law in the form of the AIA. Pursuant to the AIA, Congress authorized, inter alia, the Article II executive branch agency that administers the United States patent system, the Commerce Department’s USPTO, to establish an administrative tribunal proceeding to decide challenges to the validity of a U.S. patent issued by the USPTO. The administrative agency tribunal charged with this function is the PTAB. These Article II administrative agency proceedings are referred to as IPRs and are conducted by Article I APJs. This change in the patent law is troublesome because prior to the AIA any adversarial challenge to the validity of a U.S. patent and determination to revoke or cancel the patent was decided by the Article III courts. Additionally, it is significant to note that besides running afoul of historical precedent, the IPR proceedings function without a jury, operate under different evidentiary standards and presumptions, and employ different methods of interpreting the language of the patent. Additionally, as noted above, there is no Seventh Amendment right to a jury, which is common with Article I-created administrative agency tribunal proceedings. These distinctions between the Article III court adjudication of disputed patent validity and Article II administrative tribunals inform the question that is before the Supreme Court in Oil States: whether separation of powers and the Seventh Amendment are violated by a congressional act (e.g., the AIA) empowering an Article II administrative agency tribunal to assert judicial power concerning the property rights between private parties embroiled in a private dispute, and whether those property rights are “private” property rights or “public” property rights. C. The Integrity of the U.S. Patent System and Fidelity to the Constitutional Imperative to Incentivize Innovation and Creative Aspirations, Secure the Intellectual Property Rights to Individuals, and Provide Uniform and Stable Patent Laws Rely upon the Proper Separation of Powers in Enforcing Those Rights So great moreover is the regard of the law for private property, that it will not authorize the least violation of it; no, not even for the general good of the whole community. ~ William Blackstone The question of the constitutionality of administrative agency adjudication of patent validity is of utmost importance in preserving the integrity of the United States patent system and the viability of the constitutional imperative to promote progress and innovation.[3] This important mandate is clearly stated by James Madison in Federalist Paper No. 43, in the section referring to the enumerated power: A power “to promote the progress of science and useful arts, by securing for a limited time, to authors and inventors, the exclusive right, to their respective writings and discoveries.” The utility of this power will scarcely be questioned. The copyright of authors has been solemnly adjudged in Great Britain to be a right at common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases, with the claims of individuals. The States cannot separately make effectual provisions for either of the cases, and most of them have anticipated the decision of this point, by laws passed at the instance of Congress.[4] There is no greater evidence of the success of this constitutional imperative than the United States’ position as the leading worldwide economic and technological powerhouse. The success of the U.S. patent system, relying on the quid pro quo of disclosure by the individual of his/her most private and intimate creative thoughts in exchange for the promise of a limited period of time for exclusivity over the use of those private thoughts has spurred innovation through inspiration of others to build upon and/or around disclosed inventions to achieve the proverbial “better mouse trap.” As recognized by the Framers of the Constitution, the right to inventions is a natural right that belongs to inventors not to the public. Thus, there can be no mistake that the right is a “private” right, rather than a “public” right. D. An Inventor’s Disclosure of His/Her Private Creative Thoughts Should Enjoy the Same Protection as Disclosure of any Other Private Thoughts “Every man has a property in his own person. This nobody has a right to, but himself.” ~ John Locke In other contexts, the Supreme Court recognizes the Constitution’s guarantees that an individual’s innermost private thoughts (the genesis of all intangible intellectual property) are private and entitled to protection from compelled or induced disclosure (e.g., Fifth Amendment right against self-incrimination). Likewise, once expressed or disclosed, these private thoughts are afforded protection as well (e.g., First Amendment free speech and Fourth Amendment protection against illegal search and seizure). Private property rights emanating from an individual’s private thoughts and ideas should be afforded no less constitutional protection merely because they involve intellectual property thoughts. In fact, these should arguably carry greater weight since the government induces the individual inventor to disclose such private thoughts and ideas in exchange for the promise of limited exclusivity. The mere fact that the government issues a patent, evidencing this agreement between the inventor and the government, is insufficient in itself to transform these valuable private rights into a public right. In fact, the patent laws recognize the distinction in that disclosed but not claimed subject matter is considered dedicated to the public domain rather than retained by the disclosing inventor.[5] Similarly, once a patent expires, the claimed private rights are then considered public domain. Congress has recently affirmed the necessity to protect these private thoughts as private property rights by passing legislation, with overwhelming bipartisan support, nationalizing trade secret protection.[6] Simultaneously trivializing the rights as public property rights after inducing the individual to disclose these nationally protected valuable secrets (inventions) denies the proper constitutional protection for those private thoughts and rights and renders the quid pro quo of the Patent/Copyright clause agreement illusory. The founding fathers recognized the necessity for the independence of the third branch of government by providing for lifetime appointment and non-diminution of compensation for judges.[7] In Federalist Paper No. 10, James Madison articulated the important recognition of the “faction” impact on a democracy and a republic.[8] In Federalist Paper No. 51, Madison emphasized the importance of the separation of powers among the three branches of the republic.[9] And in Federalist Paper No. 78, Hamilton provided his most significant essay, which described the judiciary as the weakest branch of government and sought the protection of its independence, providing the underpinnings for judicial review as recognized thereafter in Marbury v. Madison.[10] Congressional enactment of the AIA followed many years of lobbying for its enactment. Those efforts promoted and pushed for the legislation that, in the case of IPRs, runs counter to the constitutional imperative behind congressional authority to enact laws that promote the progress of innovations by providing strong, stable protection for intellectual property. The evidence that IPRs have the opposite effect and weaken intellectual property protection is undeniable. Furthermore, the combination of IPR patent invalidation rates, recent legislation nationalizing trade secret protection, and curtailment of patent-eligible subject matter, further depletes patent protection and disincentivizes promoting innovation and progress—all contrary to the constitutional imperative. E. IPRs Violate the Three Principles of Article I, Section 8, Clause 8 of the U.S. Constitution The constitutional imperative of Article I, Section 8, Clause 8, as gleaned from its plain language and recognized by the Framers, provides three specific purposeful goals: (1) Incentivizing innovation and creative aspirations; (2) Securing intellectual property rights to the individual (rather than the state or the public); (3) Uniformity of Protection for Intellectual Property Rights.[11] The administrative agency adjudication of patent validity in an IPR proceeding is counter to the constitutional imperative and violates its three principles. 1. Incentivizing Innovation and Creative Aspirations There is an ample body of evidence that the IPR’s 80% patent invalidation rate disincentivizes innovation and creative aspirations. Confidence in the valuation of patented technology has all but disappeared. The expense of acquiring a patent that has a mere 20% chance of surviving a validity challenge post-issuance deters the necessary investment in research and development required for innovation. Roulette wheels in Las Vegas casinos offer better odds for a return on investment. IPR proceedings violate the incentivizing principle of the constitutional imperative. 2. Securing Intellectual Property Rights to the Individual Rather Than the State (the Public) Inducing an inventor to disclose his/her private creative thoughts in exchange for securing those rights to the individual, in accordance with the constitutional guarantee of securing the rights to the individual, requires the sovereign to honor and protect those rights as private (belonging to the individual), rather than confiscating them, post-issuance of the patent certificate, as public property. Anything less violates the securing principle of the constitutional imperative. 3. Uniformity of Protection for Intellectual Property Rights The bizarre reality of two different adjudicative standards for the same determination (e.g., patent invalidity) by the administrative agency in PTAB trials and by Article III courts deciding patent disputes is counter to the uniformity principle underlying the constitutional imperative (e.g., PTAB broadest reasonable interpretation (“BRI”) or BRI claim construction based upon preponderance of the evidence and absence of presumption of validity, compared with Article III courts’ Phillips’ ordinary meaning claim construction based upon clear and convincing standard and presumption of validity). The inconsistency, derived from a lack of uniformity, is compounded by the unpredictability of finality and binding authority in those patent validity determinations that occur with multiple parallel-tracked validity determinations in the two separate fora concerning validity of the same challenged patent claims. Congressional exercise of its enumerated powers in this context has violated the principles behind the constitutional imperative and exceeded its authority by usurping the authority of the third branch to set uniform standards for adjudicating patent validity disputes consistent with the constitutional imperative. F. IPRs are not the Talismanic Solution in the Quest for Improved Patent Quality and Patent Law Reform To be sure, patent quality is in the best interest of all stakeholders and the integrity of the United States patent system. It is commendable that Congress has attempted to achieve this goal. Unfortunately, IPRs, while paved with good intentions, have put the patent system on a dangerous road to a chaotic demise. Solutions for improving patent quality need to be accomplished at the front-end administrative process and not at the expense of the constitutional imperative and the separation of powers on the back-end enforcement regime. Robust and comprehensive examination practices at the application stage achieves the goal consistent with congressional authority and the constitutional mandate. For its part, the Supreme Court has rendered recent decisions in patent cases that reign in “bad actors” on the enforcement back end.[12] These cases equip trial courts with the necessary tools to combat abusive patent enforcement tactics without stifling the incentive to innovate, entrepreneurial investment in new technologies, and the disclosure of the private thoughts of inventors and innovators. Unfortunately, the system has gone off the rails with Congress’ empowerment of an administrative agency to assume the heretofore judicial function of adjudicating private party disputes over patent validity simultaneously with the Article III courts under vastly different and inconsistent procedures. G. The Constitutional Imperative of the Patent System is Not Disputed The issue of constitutionally guaranteed patent protection for individual inventors is non-controversial from a right or left political perspective. It is about what is right and wrong with IPRs and its adverse impact on the U.S. patent system vis-a-vis the balance of power between the branches of our tripartite form of government. As evidenced by many of the Supreme Court’s unanimous opinions in patent cases, the fundamental constitutional rights emanating from Article I, section 8, Clause 8, provide a singular foundation of principles that cannot be denied. The strength of these protections for the individual has been the lynchpin of the superior technological progress and economic success enjoyed over the history of our republic. One need only compare American progress with that of repressive regimes that do not honor and support strong protection for the private intellectual property rights of the individual to realize the genius of the Founding Fathers and Framers behind the constitutional imperative. The basis for the constitutional provision has served the country well throughout our history and should provide the basis for determining whether an act of Congress achieves or violates the constitutional imperative. And when, as here, it is evident that an act of Congress (i.e., the AIA provision establishing the IPR administrative agency adjudication of patent validity disputes and cancellation) is contrary to the constitutional imperative, the Supreme Court’s historical precedent, and the antecedent common law, then that provision must be struck down as an unconstitutional violation of the separation of powers and the Seventh Amendment right to a jury trial. The Court has recognized in many other cases involving the Bill of Rights and separation of powers that Congress and/or the Executive has over-stepped its authority. Here, the separation of powers and the Seventh Amendment are at the heart of this case. If the judicial branch does not abide and protect its own constitutional independence and authority and the individual’s protections under the Bill of Rights, no other branch can. II. Evolution of Public Property Rights v. Private Property Rights A. Article III Separation of Powers In 1855, in Murray's Lessee v. Hoboken Land & Improvement Co., the Supreme Court declared that Congress has the power to delegate disputes over public rights to non-Article III courts.[13] The Court specifically held that “there are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them . . . but which congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper.” Id. at 281. This Article I public rights carve-out from Article III courts was first recognized by the Court in the context of disputes between the government and private parties. Id. In 1921, in Block v. Hirsh, the Court extended the doctrine to disputes between private parties concerning public rights.[14] The Court upheld the constitutionality of a District of Columbia statute authorizing an administrative agency to determine fair rents for holdover tenants as provided by the statute in a dispute between a private party landlord and private party tenants. Id. In 1929, in Ex parte Bakelite Corp., the Court held that an adversarial proceeding by a company against a competitor for unfair importation practices under federal law did not need to be heard in an Article III court.[15] In Bakelite, the Court addressed the question of the constitutionality of “legislative courts.” Id. at 451-52. The case concerned executive power to levy tariffs and create a Tariff Commission to conduct hearings pursuant to the Tariff Act of 1922. Id. at 446. Determinations by the Tariff Commission were appealable to the Court of Customs Appeals. The Court declared that the Court of Customs Appeals was a legislative court, i.e., an Article I court. Thus, regarding matters purely within the scope of the legislative or executive branches, they may reserve to themselves the power to create new forums to decide disputes or delegate the adjudicatory function to administrative agency tribunals. Id. at 451. More recently, in 1985, the Supreme Court in Thomas v. Union Carbide Agricultural Products Co., upheld the binding arbitration scheme of the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”).[16] Under FIFRA, pesticide manufacturers seeking to register a pesticide were required to submit health, safety, and environmental data to the Environmental Protection Agency (“EPA”). Id. at 571-72. The data could be utilized by the EPA in approving registrations by other manufacturers, but compensation for its use was owed to the earlier registrant. The amount could be determined by agency arbitration instead of in an Article III court. The Court in Thomas held that this statutory scheme does not violate Article III, noting that “[m]any matters that involve the application of legal standards to facts and affect private interests are routinely decided by agency action with limited or no review by Article III courts.” Id. at 583. It followed that “Congress, acting for a valid legislative purpose to its constitutional powers under Article I, may create a seemingly ‘private’ right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary.” Id. at 593-94. The following year, in 1986, the Court in Commodity Futures Trading Commission v. Schor used the same rationale to uphold the constitutionality of adversary proceedings in the Commodity Futures Trading Commission (“CFTC”), for customers of commodity brokers to seek reparations from their brokers for violation of the Commodity Exchange Act (“CEA”) or agency regulations.[17] The Court expanded the Article I and Article II administrative agency adjudication of disputes between private parties concerning arguably private property rights in reliance upon its asserted nexus between the private rights and the public regulatory scheme or moreover the governmental interest in the outcome and resolution of those disputes. One can question this rationale and whether it presents an “open-ended” basis for unfettered expansion of regulatory control by the two political branches of the U.S. Government without the checks and balances of the co-equal non-political third branch. Certainly, a connection can be drawn between these cases and the massive expansion of Article I and Article II regulatory agencies and regulatory power over daily activities related to private property rights. Concern over the open-endedness of this unfettered power is evident in the 2011 case Stern v. Marshall, 564 U.S. 462 (2011), in which the Court issued its most expansive pronouncement on the standard for applying the public rights doctrine. In Stern, the Court continued to apply the analysis of public rights doctrine to disputes between private parties in “cases in which the claim at issue derives from a federal regulatory scheme, or in which resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within the agency's authority. . . . [W]hat makes a right ‘public’ rather than private is that the right is integrally related to particular federal government action.” Id. at 498. The Court, however, held that the dispute between the parties in Stern concerned a claim sounding in tort, and thus, could not be adjudicated by an Article I bankruptcy court. Id. at 494. Rather, under Article III, an Article I bankruptcy court could not enter judgment on a state law counterclaim sounding in tort because state law counterclaims “[do] not flow from a federal statutory scheme, . . . [are] not completely dependent upon adjudication of a claim created by federal law,” and do not involve “a situation in which Congress devised an expert and inexpensive method for dealing with a class of questions of fact which are particularly suited to examination and determination by an administrative agency specially assigned to that task.” Id. at 493-94 (citations omitted). Most notably, under the Stern analytical framework, Article I and Article II tribunal adjudications are prohibited if the federal claim had antecedents in the common law in 1789, and those agency tribunals acting as factfinder in private disputes must receive plenary review in an Article III court to be considered constitutionally sound. See id. at 484-85. This “historical antecedents” test is determined by examining whether a claim existed at common law in 1789, and if so, its resolution implicates the “judicial power,” and thus a non-Article III tribunal may not finally adjudicate it at the trial level. The Article III purpose, its system of checks and balances, and the integrity of judicial decision making would be denied if the other branches of the federal government could confer the government’s “judicial power” on entities outside Article III. That is why since Murray’s Lessee it has long been recognized that Congress may not “withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty.” 59 U.S. 272 (1856). When a suit is made of “the stuff of the traditional actions at common law tried by the courts at Westminster in 1789” and is brought within the bounds of federal jurisdiction, the responsibility for deciding that suit rests with Article III judges in Article III courts. Stern, 564 U.S. at 484. The Constitution assigns that job—resolution of “the mundane as well as the glamorous, matters of common law and statute as well as constitutional law, issues of fact as well as issues of law” —to the judiciary. Id. at 495. Nevertheless, the Court went on to recognize that Article III precedent “has not been entirely consistent.” Id. at 497. As Justice Scalia’s concurrence stated, this realization of how the Stern outcome was reconciled with every “not . . . entirely consistent” holding of the past has led reasonable jurists to believe that there were no less than seven distinct legal standards announced in the majority opinion. Id. at 507 (Scalia, J., concurring). It is important to note that none of the public rights cases involve the disclosure of private thoughts induced by the sovereign, and, under the historical antecedent test, non-Article III tribunals may not finally adjudicate patent disputes at the trial level. Also, as in Stern, under the common law, violations of patent rights have been treated as a tort. It is also noteworthy that the Court has recently held in Matal v. Tam, 137 S. Ct. 1744, 1760-61 (2017), in the context of trademark rights, that like copyrights, trademarks are “private” speech. Additionally, as pointed out by Justice Thomas (joined by Justice Scalia) in his dissenting opinion in B&B Hardware, Inc. v. Hargis Indus., 135 S. Ct. 1293 (2015): [T]he right to adopt and exclusively use a trademark appears to be a private property right that “has been long recognized by the common law and the chancery courts of England and of this country.” Trade-Mark Cases, 100 U. S. 82, 92, 25 L. Ed. 550, 1879 Dec. Comm'r Pat. 619 (1879). As the Court explained when addressing Congress’ first trademark statute, enacted in 1870, the exclusive right to use a trademark “was not created by the act of Congress, and does not now depend upon it for its enforcement.” Ibid. “The whole system of trademark property and the civil remedies for its protection existed long anterior to that act, and have remained in full force since its passage.” Ibid. Thus, it appears that the trademark infringement suit at issue in this case might be of a type that must be decided by “Article III judges in Article III courts.” Stern, 564 U. S. at 484, 131 S. Ct. 2594, 180 L. Ed. 2d 475, 495. B&B Hardware, 135 S. Ct. 1293, 1317 (emphasis added). The same is true for patent rights since the patent law developed from the common law. B. Article III Separation of Powers in Invention and Land Patent Cases In addition to patents for inventions, the U.S. government has issued patents for land grants. United States v. Stone, 69 U.S. 525, 535-38 (1864). Patents for invention and patents for land are treated the same way under the relevant law. United States v. Am. Bell Tel. Co., 128 U.S. 315, 358-59 (1888). The Supreme Court in several cases during the nineteenth century declared that a patent for either invention or land, once issued, is private property that has left the authority of the granting office. The Court in American Bell Telephone Company compared Article I, Section 8, Clause 8, with Article IV Section 3, Clause 2, and stated that “the power . . . to issue a patent for an invention, and the authority to issue such an instrument for a grant of land, emanate from the same source, and although exercised by different bureau or officers under the government, are of the same nature, character and validity. . . .” Id. The Court held that to take away a patent after issuance invokes “private” rights—namely, fully vested property rights. Id. at 370. The Court found that the invention “has been taken from the people, from the public, and made the private property of the patentee. . . .” Id. The Court has held, with respect to both patents for invention and patents for land, that it is an unconstitutional encroachment on Article III courts for the executive to affect an issued patent in any way. Id. In American Bell Telephone Company, the Court found that a patent is “the highest evidence of title, and is conclusive as against the Government, and all claiming under junior patents or titles, until it is set aside or annulled by some judicial tribunal. . . .” Id. at 365. Any determinations as to whether a patent has been improvidently granted must be made by courts of law. The agency that issues the patent provides evidence of a grant by an officer who issues it acting magisterially and not judicially. Id. Such office or officer is not competent to cancel or annul the act of his predecessor. Id. That is a judicial act, and requires the judgment of a court. Id. The Supreme Court in McCormick Harvesting Machine Co. v. C. Aultman & Co., 169 U.S. 606, 609 (1898), held that a patent, upon issuance, is not supposed to be subject to revocation or cancellation by any executive agent. Id. The Court held that it is an invasion of the province of Article III courts for the executive branch to revoke or cancel a patent as invalid. Id. at 612. The Court reasoned that when a patent has received the signature of the Secretary of the Interior, countersigned by the Commissioner of Patents, and has had affixed to it the seal of the Patent Office, it has passed beyond the control and jurisdiction of that office, and is not subject to be revoked or cancelled by the President, or any other officer of the government. Id. at 608-09. It has become the property of the patentee, and as such is entitled to the same legal protection as other property. Id. The court noted that the only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatsoever, is vested in the courts of the United States, and not in the department which issued the patent. And in this respect a patent for an invention stands in the same position and is subject to the same limitations as a patent for a grant of land. There are numerous land patent cases preceding the invention patent cases that reached the same conclusion. In United States v. Stone, 69 U.S. 525, 535 (1864), the Court determined that an Article I tribunal lacked the authority to void a patent for land. In Moore v. Robbins, 96 U.S. 530 (1878), the Court decided a dispute as to whether the Secretary of the Interior could rescind a patent for land where multiple parties claimed ownership over the same tract. Id. The Court reasoned that Article III courts are the sole venue for adjudication once a patent has been issued and become the private property of the patentee. The question of contested rights is within the jurisdiction of the land patent granting authority (the Land Office), but once the patent has been awarded to one of the contestants, and has been issued, delivered, and accepted, all right to control the title or to decide on the right to the title has passed from the Land Office and the executive. Id. at 532-33. Any disputes concerning the land patent must be decided by Article III courts. Id. Similarly, in Iron Silver Mining Co. v. Campbell, 135 U.S. 286, 293 (1890), the Court, relying on the same rationale to prevent officers of the Land Department from requiring two competing land owners to appear regarding the patents’ validity, stated that it “is always and ultimately a question of judicial cognizance.” Id. The Court held that only the Article III courts could hear the case. Id. at 301-02. In both the invention and land patent cases, the dispute arose as a result of a challenge to the validity of the granted patent. Whether the challenge is fueled by the issuing body’s mistake or negligence, the same consequence obtains—the issuing agency cannot adjudicate the dispute. Once the grant has occurred, the right is a private property right. Any dispute as to the patentee’s private property must be heard by an Article III tribunal. Otherwise, it violates the Article III separation of powers. The harm to the rule of law that arises whenever persons other than Article III judges wield the judicial power is not overstated. The presumption of lifetime tenure and the prohibition against salary diminution is that it eliminates or minimizes the political influence on Article III judges. The lifetime tenure and no salary diminution requirement of Article III provide the greatest opportunity to maintain the independence of the federal judiciary. Also, the Article II advise and consent role for Senate confirmation of Presidential nominees to Article III courts guarantees the People a representative voice in the vetting process. These protections do not exist in the administrative agencies of the Executive branch, whose employees perform their duties within the bureaucracy subject to the power and authority of agency leaders, the President, and/or Congress. C. The Public Rights Exception Violates the Seventh Amendment Right to a Jury The Seventh Amendment provides that “[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . . .”[18] The public rights exception for administrative agency tribunals runs afoul of the Seventh Amendment right to a trial by jury with respect to the PTAB IPRs challenging the validity of patents. As pointed out in the discussion of the Supreme Court’s invention patents and land patents, the dispute is one that should be viewed as a private property rights case and not a public property rights case. Moreover, historically in the United States, the issues of patent validity have been adjudicated in Article III courts. Additionally, the Seventh Amendment right to a jury trial is violated under the Court’s historical antecedent test. Under the English Common law of the eighteenth century (at the time of the framing of the United States Constitution), the validity of patents sounded in common law. Such was the case whether incident to an infringement action or as a direct action to revoke in the Chancery Court of law and equity (since the factual determinations were actually tried in the common law courts because only they had the power to empanel juries).[19] Accordingly, any distinction between validity determinations and infringement actions is misplaced. Patent infringement actions inherently rely upon the validity of the patent at issue. This is true whether decided by adjudication of the affirmative defense, counterclaim, stipulation, or the presumption of validity. The issues of patent infringement and patent validity are inextricably linked. Congress recognized this aspect of patent enforcement in the AIA one-year time bar for IPR petitions when the patent at issue is the subject of a patent infringement lawsuit.[20] Similarly, since the right to a jury trial is waivable, any patent dispute conducted by an Article III judge without a jury differs significantly from the PTAB IPR proceeding in that the litigants engage in the process knowing that their voluntary conduct waives the jury right. Patent holders faced with the challenge in IPRs are not afforded the opportunity to waive the jury right. And, of course, the separation of powers constitutional deficiency is not present since the matter is still tried as an Article III adjudicated proceeding. While no Supreme Court case has addressed the specific question raised regarding the Seventh Amendment violation posed by PTAB IPRs (prior to the pending case), guidance may be gleaned from the Court’s decision in Granfinanciera, S.A. v. Nordberg. 492 U.S. 33 (1989): Although "the thrust of the Amendment was to preserve the right to jury trial as it existed in 1791," the Seventh Amendment also applies to actions brought to enforce statutory rights that are analogous to common law causes of action ordinarily decided in English law courts in the late 18th century, as opposed to those customarily heard by courts of equity or admiralty. Id. at 41- 42 (citations omitted). [Congress] lacks the power to strip parties contesting matters of private right of their constitutional right to a trial by jury . . . to hold otherwise would be to permit Congress to eviscerate the Seventh Amendment's guarantee by assigning to administrative agencies or courts of equity all causes of action not grounded in state law, whether they originate in a newly fashioned regulatory scheme or possess a long line of common-law forebears. The Constitution nowhere grants Congress such puissant authority. "[L]egal claims are not magically converted into equitable issues by their presentation to a court of equity," nor can Congress conjure away the Seventh Amendment by mandating that traditional legal claims be brought there or taken to an administrative tribunal. Id. at 51-52 (emphasis added). In Granfinanciera, a common law claim arose in an Article I bankruptcy court. Id. The Court held that a bankruptcy trustee was constitutionally entitled to a jury trial in an action to recover a fraudulent conveyance, as such suits are matters of private rights. Id. at 55-56. The Court found that although the common law claim arose in an Article I (bankruptcy) court, the Seventh Amendment right to a jury still applied. Id. at 63-64. III. Resolution of the Critical Constitutional Issues Raised by IPRs is Necessary to Insure the Integrity and Strength of the United States Patent System “Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.” ~Frederic Bastiat The passage of the AIA was a culmination of efforts spanning several years of congressional efforts; and the product of a push by the companies at the forefront of the twenty-first century new technology business titans. The legislation brought about monumental changes in the patent law in the way that patents are procured (first inventor to file instead of first to invent) and how they are enforced (the administrative challenges to patent validity through the PTAB IPRs). The 113th and 114th Congresses also grappled with then newly proposed patent law reforms that, if enacted, would have presented additional tectonic shifts in the patent law. Major provisions of the proposals included: fee-shifting measures (requiring loser pays legal fees—counter to the American rule); strict detailed pleadings requirements, promulgated without the traditional Rules Enabling Act procedure, which exceed those of the Twombly/Iqbal standard applied to all other civil matters in federal courts; and the different standards applicable to patent claim interpretation between the PTAB IPR proceedings and Article III court litigation concerning patent validity. The executive and administrative branch have also been active in the patent law arena. President Obama was a strong supporter of the AIA and in his 2014 State of The Union Address essentially stated that, with respect to the proposed patent law reforms aimed at “patent troll” issues, we must innovate rather than litigate. Additionally, the USPTO has embarked upon an energetic overhaul of its operations in terms of patent quality and PTO performance in granting patents, and the PTAB has expanded to over 250 administrative law judges in concert with the AIA IPRs’ strict timetable requirements. The Supreme Court, along with the other branches of the U.S. government, has raised the profile of patent cases to historical heights. From 1996 to the present term, there has been a steady increase in the number of patent cases decided by the Court. For example, patent cases decided during the 2014-2015 term the patent cases constituted almost ten percent of the Court's docket. Prior to the last two decades, the Supreme Court would rarely include more than one or two patent cases in a docket that was much larger than those we have become accustomed to over the more recent terms. The need for strong protection of intellectual property rights is greater now than it was at the dawn of our Republic. Our Forefathers and the Framers of the U.S. Constitution recognized the need to secure those rights in Article 1, Section 8, Clause 8. James Madison provides clear insight for its significance in the Federalist Paper No. 43 (the only reference to the clause in the Federalist Papers). It is contained in the first Article section dedicated to the enumerated powers of Congress. The clause recognizes the need for uniformity of the protection of IP rights; securing those rights for the individual rather than the state; and incentivizing innovation and creative aspirations. Underlying this particular enumerated power of Congress is the same struggle that the Framers grappled with throughout the formulation of the new Republic: how to promote a unified nation while protecting individual liberty. The fear of tyranny and protection of the “natural law” of individual liberty is a driving theme for the Constitution and throughout the Federalist Papers. In Federalist Paper No. 10, James Madison articulated the important recognition of the “faction” impact on a democracy and a republic. In Federalist Paper No. 51, Madison emphasized the importance of the separation of powers among the three branches of the republic. And in Federalist Paper No. 78, Alexander Hamilton provided his most significant essay, which described the judiciary as the weakest branch of government and sought the protection of its independence providing the underpinnings for judicial review as recognized thereafter in Marbury v. Madison. All of these related themes are relevant to Article I, Section 8, Clause 8, and at the center of intellectual property protections then and now. The Federalist Paper No. 10 recognition that a faction may influence the law has been playing itself out in the halls of Congress in the time period leading up to the AIA and in connection with more recent patent law reform debate. The large tech companies of the past, new tech, new patent-based financial business model entities, and pharma factions have been the drivers, proponents, and opponents of certain of these efforts. To be sure, some change is inevitable, and both beneficial and necessary in an environment of rapidly changing technology where the law needs to evolve or conform to new realities. However, changes not grounded in the founding principles of the Constitution and the Patent/Copyright Clause (i.e., uniformity, secured rights for the individual, incentivizing innovation and protecting individual liberty) run afoul of the intended purpose of the constitutional guarantee. Although the Sovereign does not benefit directly from the fruits of the innovator, enacting laws that empower the King, and enables the King to remain so, has the same effect as deprivation and diminishment of the individual’s rights and effectively confiscates them from him/her. Specifically, with respect to intellectual property rights, effecting change to the laws that do not adhere to these underlying principles, in favor of the faction that lobbies the most and the best in the quid pro quo of political gain to the governing body threatens to undermine the individual’s intellectual property rights and hinder the greatest economic driver and source of prosperity in the country. All of these vital intersecting factors are resonating with the critical issues to be decided regarding the constitutionality of PTAB IPRs. The public property rights/private property rights jurisprudence can be clarified, and vital issues related to the strength of invention patent protection in the United States can be secured, through resolving the fundamental question of the constitutionality of Article II versus Article III adjudication of invention patent validity. IV. CONCLUSION IPRs, as promulgated by Congress and as currently administered, are an unconstitutional usurpation of the Article III separation of powers and violate the Seventh Amendment’s right to a jury. [1] © 2017 Robert J. Rando. [2] See, e.g., Hamdan v. Rumsfeld, 548 U.S. 557 (2006) (war powers); Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566 (2012) (Affordable Care Act); Zivotofsky v. Kerry, 135 S. Ct. 2076 (2015) (naturalization/immigration). [3] See U.S. CONST. art. I, § 8, cl. 8. [4] The Federalist No. 43 (James Madison) (emphasis added). [5] Miller v. Brass Co., 104 U.S. 350, 352 (1882) (“[T]he claim of a specific device or combination, and an omission to claim other devices or combinations apparent on the face of the patent, are, in law, a dedication to the public of that which is not claimed. It is a declaration that that which is not claimed is either not the patentee's invention, or, if his, he dedicates it to the public.”) (emphasis added). [6] Defend Trade Secrets Act, Pub. L. 114-153, 130 Stat. 376 (2016) (codified at 18 U.S.C. § 1836 et seq.). [7] U.S. CONST. art. III, § 1. [8] The Federalist No. 10 (James Madison). [9] The Federalist No. 51 (James Madison). [10] 5 U.S. 137 (1803). [11] The Federalist No. 43 (James Madison). [12] See, e.g., Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) (district court’s discretion to award enhanced damages and appellate review by abuse of discretion standard); Highmark Inc. v. Allcare Mgmt. Sys., 134 S. Ct. 1744 (2014) (abuse of discretion standard for appellate review of attorney’s fees award); Octane Fitness v. ICON Health & Fitness, 134 S. Ct. 1749 (2014) (“exceptional case” standard for award of attorney’s fees). [13] 59 U.S. 272 (1855). [14] 256 U.S. 135 (1921). [15] 279 U.S. 438, 460-61 (1929). [16] 473 U.S. 568, 571 (1985). [17] 478 U.S. 833, 854 (1986). [18] See U.S. CONST. amend. VII. [19] See Ex Parte Wood & Brundage, 22 U.S. 603, 614-615 (1824). [20] See 35 U.S.C.§ 315 (2012).
Oil States Energy Services, LLC v. Greene’s Energy Group, LLC: Patent Rights, Public or Private and Whose Thoughts and Ideas are They Anyway?[1] By: Robert J. Rando
Questions Presented: 1. Where a design patent includes unprotected non-ornamental features, should a district court be required to limit that patent to its protected ornamental scope? 2. Where a design patent is applied to only a component of a product, should an award of infringer's profits be limited to those profits attributable to the component?
Supreme Court 2016-2017 IP Case Review By: Charles R. Macedo, Chester Rothstein, Jung S. Hahm, Marion P. Metelski, Jessica A. Capasso, David P. Goldberg, Amster, Rothstein & Ebenstein LLP
INTRODUCTION In the past term, the Supreme Court continued to show a keen interest in intellectual property issues. The Court issued opinions in five patent cases, one design patent case, one trademark case, one copyright case and even a trade secret case. The Court, in its decisions: Redefined the scope of damages in design patent case (Samsung), and both limited (Life Technologies) as well as expanded (SCA) the damages available utility patent cases; Reinforced a broad scope of eligibility in copyright law for functional articles (Star Athletica); Created a patent specific rule for “residency” to determine venue in patent case (TC Heartland); Clarified that service by mail is proper under the Hague Convention in the context of a trade secret case (Water Splash); Expanded the scope of patent exhaustion for conditional and international sales of goods (Lexmark); Substantially limited the utility of the procedures set forth for challenging biologic patents (Sandoz); and Struck down the disparagement clause of the Lanham Act as unconstitutional in view of the First Amendment (Tam). This past term, the Supreme Court not only addressed many intellectual property issues, but also redefined the landscape in significant ways. The Association, through its Amicus Briefs Committee, offered friendly advice to the Court at the merits stage in the Lexmark, Star Athletica and Tam cases, and closely monitored the remaining cases. We address each of these decisions in the order they were decided by the Court: Samsung Electronics Co., Ltd. v. Apple Inc., No. 15-777, 137 S.Ct. 429, Argued October 11, 2016, Decided December 6, 2016 Issue: Design Patent Law – Damages In what has turned into a roller coaster ride for tech titans Apple Inc. and Samsung Electronics, the Supreme Court took for review the damages portion of the design patent infringement case based on Apple’s iPhone design. Patent holder Apple owns design patents directed to a portion of its iPhone design. Samsung was found to infringe those patents. After the last round of appeals, the district court entered an award of $399 million in damages for Samsung’s design patent infringement, based on the entire profit Samsung earned from its sale of infringing products. The Federal Circuit affirmed that award. The Court reversed the decision of the Federal Circuit as inconsistent with Section 289 of the Patent Act and remanded the case for further proceedings consistent with the opinion of the Court. 137 S.Ct. at 435–36. Pursuant to Section 289 of the Patent Act, damages specific to design patent infringement are as follows: Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties. Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement. 35 U.S.C. § 289. The issue decided by the Court was whether, in the case of a multicomponent product, the term “‘article of manufacture’ must always be the end product sold to the consumer or whether it can also be a component of that product.” 137 S.Ct. at 434. Here, the distinction was between the smartphone in its entirety or the portion of the smartphone that was the subject of the patented design (e.g., the front face). Relying upon the text of the statute and the ordinary meaning of the terms, the Court found that “the term ‘article of manufacture’ is broad enough to encompass both a product sold to a consumer as well as a component of that product. . . . That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture.” Id. at 435. The Court noted that this reading is consistent with 35 U.S.C. § 171(a) which allows for design patent protection for only a component of a multicomponent part, as well as 35 U.S.C. § 101 which permits patent protection for “any new and useful . . . manufacture,” including parts of a machine separate from the machine itself. Id. The Court thus set forth a new “two step” test for “[a]rriving at a damages award under § 289”: 1. “identify the ‘article of manufacture’ to which the infringed design has been applied”; and 2. “calculate the infringer’s total profit made on that article of manufacture.” Id. at 434. With respect to the first step, the Court declined to set forth a test for identifying the relevant article of manufacture. Id. at 436. Life Technologies Corp. v. Promega Corp., No. 14-1538, 137 S.Ct. 734, Argued December 6, 2016, Decided February 22, 2017 Issue: Patent Law – Infringement by Supplying a Single Component of a Multicomponent Invention From the U.S. for Manufacture Abroad. On February 22, 2017, the U.S. Supreme Court issued its decision in Life Technologies Corp. v. Promega Corp., unanimously reversing the U.S. Court of Appeals for the Federal Circuit’s decision that the supply of a single component of a multicomponent invention for manufacture abroad may trigger liability for patent infringement under 35 U.S.C. § 271(f)(1). The full text of Section 271(f)(1) reads as follows: Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer. 35 U.S.C. § 271(f)(1) (emphasis added). The patent at issue claims a genetic testing toolkit. The kit can be used to take small samples of genetic material and then generate DNA profiles that can be used by law enforcement agencies for forensic identification and by clinical and research institutions for other purposes. As pertinent here, the kit covered by the patent has five components, one of which, an enzyme known as Taq polymerase was made in the United States. The other four components of the kit were made in the United Kingdom. Life Technologies shipped Taq polymerase from the United States to its United Kingdom manufacturing facility, where it was combined with the other four components to assemble the kit. Promega alleged that this supply of Taq polymerase from the United States triggered infringement liability under 35 U.S.C. § 271(f)(1). In the proceedings below, the jury found willful infringement. The district court then reversed the jury’s verdict and granted Life Technologies’ motion for judgment as a matter of law, agreeing with its contention that “there could be no infringement under § 271(f)(1) because Promega’s evidence at trial showed at most that one component of all of the accused products, [the Taq] polymerase, was supplied from the United States.” 137 S.Ct. at 739 (internal quotation marks and citation omitted). The district court ruled that “a substantial portion of the components” referenced in Section 271(f)(1) ”does not embrace the supply of a single component.” Id. The Federal Circuit reversed the district court’s decision, holding that “there are circumstances in which a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States.” Id. (internal quotation marks and citation omitted). Based on its interpretation that “a single important component can be a ’substantial portion of the components’ of a patented invention,” the Federal Circuit ruled that “the single Taq polymerase component was a substantial component as the term is used in § 271(f)(1).” Id. (citations omitted). The issue before the Supreme Court was “whether the supply of a single component of a multicomponent invention is an infringing act under 35 U.S.C. § 271(f)(1).” Id. Relying heavily upon grammar of the relevant statue, the Supreme Court held that it is not, reversing the Federal Circuit’s judgment and remanding the case for further proceedings. First, the Supreme Court determined that the term “substantial portion” in the statute refers to a quantitative measurement rather than a qualitative measurement. Id. at 739–40. The Court then tackled the question of “whether, as a matter of law, a single component can ever constitute a ‘substantial portion’ so as to trigger liability under § 271(f)(1).” Id. at 741. After examining the text, context, and structure of Section 271(f)(1), the Court concluded that Section 271(f)(1) does not cover the supply of a single component of a multicomponent invention. See id. at 741–42. The Court, however, provided no guidance as to how many components of a multicomponent invention would be required to constitute “a substantial portion” to trigger liability under Section 271(f)(1): We do not today define how close to “all” of the components “a substantial portion” must be. We hold only that one component does not constitute “all or a substantial portion” of a multicomponent invention under § 271(f)(1). Id. at 742. The concurring opinion by Justices Alito and Thomas further emphasized this point: [W]hile the Court holds that a single component cannot constitute a substantial portion of an invention’s components for § 271(f)(1) purposes, I do not read the opinion to suggest that any number greater than one is sufficient. In other words, today’s opinion establishes that more than one component is necessary, but does not address how much more. Id. at 743 (Alito, J., concurring) (emphasis in original). SCA Hygiene Products Aktebolag v. First Quality Baby Products, LLC, No. 15-927, 137 S.Ct. 954, Argued November 1, 2016, Decided March 21, 2017 Issue: Patent Law – Laches as a Defense to a Damages Claim for Patent Infringement The U.S. Supreme Court issued a 7-1 decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, No. 15-927, 137 S.Ct. 954 (2017) (“SCA”), regarding the defense of “laches” in patent law. Laches is a judge-made doctrine that bars a plaintiff’s claim when there has been unreasonable, prejudicial delay in commencing suit. The Supreme Court in SCA eliminated the defense of “laches” in patent law against a claim for damages incurred prior to the initiation of the lawsuit. Under Section 286 of the Patent Act, a patent owner can collect up to 6 years of past damages for infringement that occurred prior to bringing his lawsuit. Prior to the Supreme Court’s decision in SCA, laches was a well-recognized (although infrequently used) defense in patent law against such claims for past damages. If a patent owner waited more than 6 years to bring his lawsuit after the patent owner knew or should have known of the alleged infringement, it was presumed that the laches defense applied. In that situation, the patent owner could not collect damages incurred prior to the initiation of the lawsuit unless it was shown that there was a reasonable excuse for the patent owner’s delay in bringing suit or that the delay did not result in material harm to the defendant. If the patent owner’s delay in bringing suit was less than 6 years, a defendant could still assert a laches defense. In that situation, however, it was the defendant’s burden to prove that the patent owner’s delay was unreasonable and resulted in material prejudice. The Supreme Court in SCA eliminated this laches defense for past damages in patent law. The Court had previously eliminated the laches defense in copyright law in Petrella v. Metro-Goldwyn-Mayer, Inc., No. 12-1315, 134 S.Ct. 1962 (2014) (“Petrella”), in which the Court held that laches cannot preclude a claim for damages incurred within the Copyright Act’s 3-year limitations period on bringing suit. In SCA, the Supreme Court stated that it was following its reasoning in Petrella that, when a statute provides a rule for determining whether a claim is timely enough to permit relief—for example, the 6-year limitation in the Patent Act on the collection of past damages—a judge cannot override that rule with the judge-made laches doctrine. 137 S.Ct. at 960–61. Justice Breyer dissented, arguing that laches does not conflict with the Patent Act and its 6-year time limitation on past damages. The dissenting opinion explained that the laches doctrine co-existed with the 6-year time limitation on damages for more than 50 years prior to the current 1952 Patent Act, and that Congress was aware of and intended to codify the laches doctrine in the 1952 Patent Act. Id. at 967–71. However, the majority opinion in SCA rejected this argument, finding that there were not enough cases prior to 1952 to show that there was a settled, uniform practice of applying laches to damages claims in patent law. Id. at 963-67. Accordingly, the majority was “not convinced” that Congress intended to codify laches in contrast to the “general rule” that laches cannot bar a claim for damages incurred within a statutory limitations period. Id. at 966. Star Athletica, L.L.C. v. Varsity Brands, Inc., No. 15-866, 137 S.Ct. 1002, Argued October 31, 2016, Decided March 22, 2017 Issue: Copyright Law – Eligibility of Copyright Protection for Functional Articles On March 22, 2017, the Supreme Court of the United States issued its decision in Star Athletica, L.L.C. v. Varsity Brands, Inc., affirming the decision of the United States Court of Appeals for the Sixth Circuit which held that graphic designs appearing on cheerleading uniforms were copyrightable. 137 S.Ct. at 1007. The Court provided long sought after clarification as to what constitutes “separability” in the context of clothing, holding that an artistic feature incorporated into the design of clothing “is eligible for copyright protection if the feature: (1) can be perceived as a two- or three-dimensional work of art separate from the useful article and (2) would qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article.” Id. at 1016. The Copyright Act provides protection for “original works of authorship fixed in any tangible medium of expression,” including “pictorial, graphic, and sculptural works.” 17 U.S.C. § 102(a)(5). However, useful articles are not entitled to copyright protection. Accordingly, the Copyright Act provides that “the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” 17 U.S.C. § 101 (emphasis added). The emphasized language was the crux of the dispute, and where categories of goods have long been found to include “separable” and thus, copyrightable designs (such as lamps, belt buckles, and jewelry), clothing has generally been immune. {{page}} Here, Varsity Brands, Inc., Varsity Spirit Corporation, and Varsity Spirit Fashions & Supplies, Inc. (collectively, “Varsity Brands”) filed suit against Star Athletica, LLC (“Star Athletica”) asserting copyright infringement of five two-dimensional designs such as chevrons that are sewn onto the surface of cheerleading uniforms. In response, Star Athletica argued that the designs did not qualify as protectable pictorial, graphic, or sculptural works. The District Court for the Western District of Tennessee agreed and entered summary judgement for Star Athletica on the ground that “it is not possible to physically or conceptually sever Varsity’s designs from the utilitarian function of the resulting cheerleading uniforms.” Varsity Brands, Inc. v. Star Athletica, LLC, No. 10-2508, 2014 U.S. Dist. LEXIS 26279, at *26 (W.D. Tenn. Mar. 1, 2014). In reviewing the district court’s decision, the United States Court of Appeals for the Sixth Circuit reversed and concluded that the graphic features of Varsity Brand’s designs are copyrightable subject matter. Varsity Brands, Inc. v. Star Athletica, LLC, 799 F.3d 468, 492 (6th Cir. 2015). The Court of Appeals held that “the Copyright Act protects the ‘pictorial, graphic, or sculptural features’ of a design of a useful article even if those features cannot be removed physically from the useful article, as long as they are conceptually separable from the utilitarian aspects of the article.” Id. at 483 (emphasis added). The Court of Appeals rejected the argument that Varsity Brand’s designs were “inextricable intertwined with the utilitarian aspects of a cheerleading function.” Id. at 490. Rather, “the arrangement of stripes, chevrons, color blocks, and zigzags are ‘wholly unnecessary to the performance of’ the garment’s ability to cover the body, permit free movement, and wick moisture.” Id. at 492. In affirming the Court of Appeals decision, the Supreme Court looked to the history and text of the Copyright Act which indicates that the exclusive right of a copyright owner to reproduce copyrighted work “includes the right to reproduce the [copyrighted] work in or on any kind of article, whether useful or otherwise.” 137 S.Ct. at 1010–11. Thus, the Supreme Court considered the mirror image of this language in Section 101 to clearly extend copyright protection to pictorial, graphic, and sculptural works regardless of whether they were created as features of useful articles. Id. at 1011. Thus, “a feature of the design of a useful article is eligible for copyright if, when identified and imagined apart from the useful article, it would qualify as a pictorial graphic, or sculptural work either on its own or when fixed in some other tangible medium.” Id. at 1012. The Supreme Court (per Justice Thomas) found that the application of this rule to Varsity Brand’s designs was “straightforward” since they have “pictorial, graphic, or sculptural qualities” and if separated from the cheerleading uniforms would qualify for copyright protection as a two-dimensional work of art. Id. The Supreme Court rejected the argument that an artistic feature may exist independently only if the useful article from which it was extracted would remain equally useful. Id. at 1013–14. Likewise, the Supreme Court rejected Star Athletica’s argument that its test should incorporate two objective components such as “whether the design elements can be identified as reflecting the designer’s artistic judgment exercised independently of functional influence,” and whether the design feature “would still be marketable to some significant segment of the community without its utilitarian function.” Id. at 1015. Finally, the Supreme Court rejected the argument that allowing “surface decorations to qualify as a ‘work of authorship’ is inconsistent with Congress’ intent to entirely exclude industrial design from copyright.” Id. at 1015–16. In her concurrence, Justice Ginsburg explained that consideration of the separability test was unwarranted since the designs at issue are not designs of useful articles, but rather are copyrightable pictorial or graphic works themselves which are reproduced on useful articles. Id. at 1018–19. Justice Breyer, joined by Justice Kennedy, dissented on the basis that Varsity Brand’s designs do not meet the majority’s test for copyrightability since they could not exist independently of the utilitarian aspects of the cheerleading uniform. Id. at 1030–31. TC Heartland LLC v. Kraft Foods Group Brands LLC., No. 16-341, 137 S.Ct. 1514, Argued March 27, 2017, Decided May 22, 2017 Issue: Patent Law – Definition of “Resides” for Patent Venue Statue The U.S. Supreme Court issued a unanimous (8-0) decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. __ (May 22, 2017) addressing venue in patent infringement cases. The patent venue statute, 28 U.S.C. § 1400(b), provides that: “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” In Fourco Glass Co. v Transmirra Products Corp., 353 U.S. 222 (1957), the United States Supreme Court held that, for purposes of § 1400(b), a defendant that is a domestic corporation “resides” only in its state of incorporation. In rendering its decision in Fourco, the Court rejected an argument that §1400(b) incorporated the definition of corporate “residence” that was found in the general venue statute, 28 U.S.C. § 1391(c). Since the Court’s decision in Fourco, § 1400(b) has not been amended, but Congress has amended § 1391 twice, in 1988 and again in 2011. The current version of § 1391 reads as follows: (a) Applicability of Section.—Except as otherwise provided by law—… (c) Residency.—For all venue purposes—… an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question … . In TC Heartland, the Court held that “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute [28 U.S.C. § 1400(b)].” 137 S.Ct. at 1517. The Court reversed the decision of the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) below and remanded the case to the Federal Circuit for further proceedings. Thus, TC Heartland reverses a line of authority from the Federal Circuit which dates back to at least 1990 in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990). Unlike other recent patent cases where the Supreme Court has chastised the Federal Circuit for not making patent law conform with other areas of law, in this case the Supreme Court took the opposite approach and found that the definition of “resides’ in the patent venue statue should have a different meaning than Congress set forth for the same term in the general venue statue. The Supreme Court’s reasoning for this seemingly contrary approach rests on its view that its prior precedent trumped congressional action. In particular, the Court reasoned that Congress has not amended § 1400(b) since Fourco, and there was no clear indication in the text of § 1391 that Congress intended to change the meaning of §1400(b) as interpreted by Fourco when it amended § 1391. In particular, the Court reasoned that the current version of § 1391(c)—whose default applicability is ‘[f]or all venue purposes’—is essentially the same as the version that was at issue in Fourco—whose default applicability was ‘for venue purposes’. The Court pointed out that in Fourco it rejected the argument that such language in § 1391 includes patent venue. The Court also relied upon the inclusion of a “saving clause” in the current version of § 1391, which states that § 1391 is inapplicable when “otherwise provided by law”. Id. at 1521. The Court reasoned that by including this clause, Congress recognizes that other venue statutes may include a definition of ‘resides’ which conflicts with the default definition provided in § 1391(c). Finally, the Court found no indication that the 2011 amendments to § 1391 ratified the Federal Circuit’s decision in VE Holding. In particular, in 1988 Congress amended §1391(c) so that on its face it was applicable ‘[f]or purposes of venue under this chapter’. 28 U.S.C. § 1391(c) (1988). The Court reasoned that Congress’s amendment of § 1391 in 2011 deleted the phrase ‘under this chapter’ from § 1391(c) and thus returned § 1391 to the almost identical language it had in its original version, thereby undermining the Federal Circuit’s rationale in VE Holding. Id. Significantly, the Court’s decision deals only with the definition of the word “resides” in the first clause of the patent venue statute, quoted above. The Court’s decision does not address the second clause of the patent venue statute, i.e., the definition of a “regular and established place of business.” Presumably, venue in patent infringement actions will continue to lie “where the defendant has committed acts of infringement and has a regular and established place of business,” a factual scenario not directly addressed by the Court’s decision in TC Heartland. Cf. Id. at 1517–18. The Court noted that its decision deals with proper venue for corporations, in particular domestic corporations. The Court did not address unincorporated entities (see id. at n.1) or foreign corporations (see id. at n.2). Those issues remain open for another day. Water Splash v. Menon, No. 16-254, 137 S.Ct. 1504, Argued March 22, 2017, Decided May 22, 2017 Issue: Trade Secret Law – Service by Mail Under the Hague Convention Water Splash, Inc. (“Water Splash”) sued respondent Menon, a former employee, in a Texas state court, alleging that she had begun working for a competitor while still employed by Water Splash. Because Menon resided in Canada, Water Splash obtained permission to effect service by mail. After Menon declined to answer or otherwise enter an appearance, the trial court issued a default judgment for Water Splash. The trial court subsequently denied Menon’s motion to set aside the judgment on the ground that she had not been properly served. The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, Nov. 15, 1965 (“the Hague Service Convention”), 20 U. S. T. 361, T. I. A. S. No. 6638, specifies certain approved methods of service and “pre-empts inconsistent methods of service” wherever it applies. Water Splash addressed the issue of whether servic of process by mail is prohibited by the Hague Service Convention. Article 10 of the Hague Service Convention provides in its English text as follows: “Provided the State of destination does not object, the present Convention shall not interfere with— “(a) the freedom to send judicial documents, by postal channels, directly to persons abroad, “(b) the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination, “(c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination.” 20 U. S. T. at 363 (emphasis added). The Court examined the plain language of Article 10, noting that Articles 10(b) and 10(c) “by their plain terms, address additional methods of service”, but Article 10(a) “does not expressly refer to ‘service.’” The issue presented was whether “send[ing] judicial documents” under Article 10(a) encompasses sending judicial documents for purposes of service. The Court concluded that Article 10(a) encompasses sending judicial documents for the purpose of service, since, inter alia, that “the scope of the Convention is limited to service of documents.” 137 S.Ct. at 1510. The Court looked to the preamble and Article I of the Convention to make this point, as well as the Court’s own prior precedent in Volkswagenwerk AG v. Schlunk, 486 U.S. 694 (1988), to support this point. With this point weighing heavily on the scale of applying Article 10(a) to service, the Court also confirmed that is textual analysis did not weigh against such an application. Impression Products, Inc. v. Lexmark Int’l, Inc., No. 15-1189, 137 S.Ct. 1523, Argued March 21, 2017, Decided May 30, 2017 Issue: Patent Law – Exhaustion In Impression Products, Inc., v. Lexmark International, Inc., 581 U.S. ___ (2017), the U.S. Supreme Court was asked to address two important questions regarding the scope of the doctrine of patent exhaustion: 1. Whether a patentee that sells an item under an express restriction on the purchaser’s right to reuse or resell the product may enforce that restriction through an infringement lawsuit; and 2. Whether a patentee exhausts its patent rights by selling its products outside the U.S., where American patent laws do not apply. In contrast to the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”), the Court concluded “that a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale.” 137 S.Ct. at 1529. In arriving at this conclusion, the Court (per Chief Justice Roberts) observed that while its decision does not preclude a patentee (or its licensee) from imposing lawful restrictions on the use of patented items, the only recourse for the patentee or a licensee for violation of those restrictions is through contract law rather than through a patent infringement lawsuit. Justice Ginsburg issued her own opinion, in which she concurred “in the Court’s holding regarding domestic exhaustion” but dissented “from the Court’s holding on international exhaustion.” According to Justice Ginsburg, “[a] foreign sale ... does not exhaust a U. S. inventor’s U.S. patent rights.” Id. at 1538. Justice Ginsburg’s dissent is consistent with her dissent in Kirstaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013), in which she was also of the view that foreign sales of a copyrighted book should not exhaust a U.S. copyright. The Association submitted an Amicus Brief at both the Federal Circuit and the Supreme Court in this case, copies of which are available at the associations website on its Amicus Briefs page. Sandoz Inc. v. Amgen, Inc., Nos. 15-1039, 15-1195, 137 S.Ct. 1664, Argued April 26, 2017, Decided June 12, 2017 Issue: Patent Law – Mandatory Nature of Biologics Price Competition and Innovation Act of 2009 In Sandoz v. Amgen, 582 U.S. ___ (2017), the Supreme Court addressed the “plain language” of a “carefully crafted and detailed enforcement scheme” relating to “biologic” drugs. This complex statute was enacted as part of the Patient Protection and Affordable Care Act, often referred to as “ObamaCare,” as an effort to get generic biosimilar and interchangeable biologic drugs on the market more quickly if the patent hurdle can be overcome. On a bottom line basis, the Court adopted a view that will likely encourage more biosimilar and interchangeable biologic drugs to come to market more quickly despite the existence of issued patents covering the original biologic drugs. Sandoz addressed two important questions regarding the processes for both obtaining FDA approval of a biosimilar and resolving a patent dispute between the manufacturer of a biosimilar (“applicant”) and the manufacturer of a licensed reference biologic (“sponsor”): 1. Whether the requirement of the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) that an applicant seeking a license to manufacture a biosimilar under the FDA’s abbreviated review process set forth in 42 U.S.C. § 262(k) must provide its application and manufacturing information to the sponsor is enforceable by an injunction under either federal or state law. The Court held that an injunction was not available under Federal Law, although it left open the possibility on remand or otherwise as to whether an injunction may be available under state law (in particular, California law) or a preliminary injunction based on other parts of the patent statute. 137 S.Ct. at 1674, n.2. 2. Whether an applicant must provide notice of the commercial marketing of a biosimilar to the sponsor of the reference biologic under the BPCIA only after the licensing of the biosimilar, or if it may provide notice before the biosimilar has been licensed. The Court held that the applicant need not wait for a license to meet the notice requirement, thus accelerating the speed to which an applicant can get a proposed biosimilar to market. Id. at 1677–78. The Court agreed with the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) that an injunction under federal law is not available to enforce the BPCIA’s requirement that the applicant must provide its application and manufacturing information to the sponsor. Id. at 1674. However, the Court relied on a different rationale than the Federal Circuit. Id. at 1674–75. In reaching its conclusion, the Court (per Justice Thomas) held that, under the language and context of the BPCIA, an injunction is not available under 35 U.S.C. § 271(e)(4) if an applicant fails to provide its application and manufacturing information to the sponsor because such failure does not constitute patent infringement under 35 U.S.C. § 271(e)(2)(C). Id. The Court further held that the sole remedy provided in the BPCIA for such failure by the applicant is that the sponsor can immediately file a declaratory judgment action for infringement under 35 U.S.C. § 271(e)(2)(C)(ii). Id. at 1675. Interestingly, the Court “express[ed] no view” as to whether a U.S. District Court could take into account an applicant’s failure to provide its application and manufacturing information to the sponsor when it decides whether to grant a preliminary injunction against the applicant’s marketing of the biosimilar. Id. at n.2. The answer to this question will no doubt be left unresolved by the Court for many more years. The Court declined to resolve the issue of whether an injunction is available under California’s unfair competition law, since “it does not present a question of federal law.” Id. at 1676. The Federal Circuit had concluded that an injunction was unavailable under California law, but the Court stated that the Federal Circuit’s holding was based on its incorrect interpretation that an applicant’s failure to provide its application and manufacturing information to a sponsor constitutes patent infringement under the BPCIA. Id. The Court remanded this issue to the Federal Circuit, and also instructed the Federal Circuit to consider whether federal law preempts an injunction under California’s unfair competition law if such an injunction were to be available. Id. at 1676–77. The Court also held that an applicant may provide notice of commercial marketing of a biosimilar to the sponsor “either before or after receiving FDA approval.” Id. at 1677. The Court reasoned that the plain language and context of the BPCIA require only that a biosimilar be licensed on the date it is first marketed commercially. Id. at 1677–78. This holding favors earlier disclosure and will likely accelerate the speed to which an applicant can get a proposed biosimilar to market. Justice Breyer issued a short concurring opinion, in which he concurred in the Court’s “reasonable interpretation” of the terms of the statute, but he presented his view that the FDA may have the authority to substitute its own interpretation of the statutory terms if “a different interpretation would better serve the statute’s objectives.” Id. at 1678. Matal v. Tam, No. 15-1293, 137 S.Ct. 1744, Argued January 18, 2017, Decided June 19, 2017 Issue: Trademark Law – Constitutionality of the Disparagement Clause of the Lanham Act The U.S. Supreme Court issued a decision in Matal v. Tam, 582 U.S. __ addressing the “disparagement” clause of the Lanham Act, 15 U.S.C. § 1052(a). (Justice Gorsuch took no part in the consideration of the case. 137 S.Ct. at 1765.) The disparagement clause of the Lanham Act provides that: “No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it— (a) Consists of or comprises . . . matter which may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute . . . .” 15 U.S.C. § 1052(a). In its decision, the Court held that the disparagement clause “violates the Free Speech Clause of the First Amendment. It offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.” 137 S.Ct. at 1751–52. The Court affirmed the en banc decision of the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”), which held that the disparagement clause was facially unconstitutional under the First Amendment’s Free Speech Clause. In re Tam, 808 F.3d 1321 (Fed. Cir. 2015). As a threshold issue, the Court’s decision addresses whether the disparagement clause applies to marks that disparage the members of a racial or ethnic group. 137 S.Ct. at 1755–57. Based on the “plain terms” of the disparagement clause, which applies to marks that disparage “persons,” the Court held that the disparagement clause applied to the members of a racial or ethnic group because such members were “persons.” Id. at 1756. “Thus, the clause is not limited to marks that disparage a particular natural person.” Id. Significantly, the Court also based its decision on its conclusion that “[t]rademarks are private, not government, speech.” Id. at 1760. As such, the Free Speech Clause of the First Amendment, which applies only to private speech, applies to the disparagement clause. Id. at 1757–61. The Court noted that a contrary conclusion—that trademarks are government speech—would have a “most worrisome implication” for the U.S. copyright system. Id. at 1760. The Court also rejected arguments that the disparagement clause could be saved by analyzing it as a type of subsidized speech, or as a type of government program in which some restrictions on content and speech are permitted. Id. at 1760–62. Finally, the Court concluded that it did not need to resolve the question of whether trademarks are commercial speech, and thus are entitled to more relaxed constitutional scrutiny, as set forth in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U. S. 557 (1980). According to the Court, the disparagement clause “strikes at the heart of the First Amendment,” and is too broadly drawn to withstand even the relaxed scrutiny for restrictions of commercial speech. 137 S.Ct. at 1763–65. In separate opinions, Justice Kennedy (joined by Justices Ginsburg, Sotomayor, and Kagan) and Justice Thomas concurred in the Court’s judgment and concurred in the majority opinion in part. Justices Kennedy and Thomas both expressed the view that the viewpoint discrimination at issue with the disparagement clause of the Lanham Act requires strict scrutiny, regardless of whether trademarks qualify as commercial speech. Id. at 1767–68 (Kennedy, J.); id. at 1769 (Thomas, J.). Justice Thomas also presented his opinion that the Court should not have considered the issue of whether the disparagement clause applies to marks that disparage the members of a racial or ethnic group, since the Court declined to grant certiorari on this question. Id. at 1769 (Thomas, J.). The Association submitted an Amicus Brief at the Supreme Court in this case, a copy of which are available at the associations website on its Amicus Briefs page. During this past term, the Association continued its strong history of representing its diverse intellectual property constituency before the Court by filing petition- and merits-stage briefs amicus curiae in a number of these matters. Of particular interest, as noted above, the Association’s Amicus Briefs Committee filed briefs on the merits in the Lexmark, Star Athletica and Tam cases. The Amicus Briefs Committee will continue to monitor and propose amicus curiae submissions, where appropriate, to be made to the Court(s). If you would like to join the Amicus Briefs Committee, please contact Co-Chairs David P. Goldberg (dgoldberg@arelaw.com) and Aron Fischer (afischer@pbwt.com), or Board Liaison Irena Royzman (iroyzman@pbwt.com). Charles R. Macedo was on the Co-Chair of the Amicus Briefs Committee and on the Board of Directors for the New York Intellectual Property Law Association, and is a Partner at Amster, Rothstein & Ebenstein LLP. Jung Hahm and Marion P. Metelski are Senior Counsel at Amster, Rothstein & Ebenstein LLP. David P. Goldberg is Co-Chair of the Amicus Briefs Committee and along with Jessica Capasso, is an Associate at Amster, Rothstein & Ebenstein LLP. Their practice specializes in intellectual property issues, including litigating patent, trademark and other intellectual property disputes.
Holding: “In the case of a multicomponent product, the relevant ‘article of manufacture’ for arriving at a § 289 damages award need not be the end product sold to the consumer but may be only a component of that product.”
Question Presented: Whether the Federal Circuit erred in holding that supplying a single, commodity component of a multicomponent invention supplied from the United States is an infringing act under 35 U.S.C. § 271(f)(1), exposing the manufacturer to liability for all worldwide sales.
Question Presented: Whether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act's six-year statutory limitations period, 35 U.S.C. § 286.
Holding: “The supply of a single component of a multicomponent invention for manufacture abroad does not give rise to § 271(f)(1) liability.”
Holding: “Laches cannot be invoked as a defense against a claim for damages brought within § 286’s 6-year limitations period.”
Question Presented: What is the appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act?
Question Presented: Whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by 28 U.S.C. § 1391(c).
Holding: “A feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work—either on its own or fixed in some other tangible medium of expression—if it were imagined separately from the useful article into which it is incorporated. That test is satisfied here.”
Question Presented: Does the Hague Service Convention authorize service of process by mail?
Holding: “As applied to domestic corporations, ‘reside[nce]’ in § 1400(b) refers only to the State of incorporation. The amendments to § 1391 did not modify the meaning of § 1400(b) as interpreted by [Fourco Glass Co. v. Transmirra Products].”
Questions Presented: 1. Whether a “conditional sale” that transfers title to the patented item while specifying post-sale restrictions on the article's use or resale avoids application of the patent exhaustion doctrine and therefore permits the enforcement of such post-sale restrictions through the patent law's infringement remedy. 2. Whether, in light of this Court's holding in Kirtsaeng v. John Wiley & Sons, Inc., 133 S.Ct. 1351, 1363 (2013), that the common law doctrine barring restraints on alienation that is the basis of exhaustion doctrine “makes no geographical distinctions,” a sale of a patented article—authorized by the U.S. patentee—that takes place outside of the United States exhausts the U.S. patent rights in that article.
Holding: The Hague Service Convention does not prohibit service of process by mail.
Question Presented: Whether notice of commercial marketing given before FDA approval can be effective and whether, in any event, treating Section 262(l)(8)(A) as a standalone requirement and creating an injunctive remedy that delays all biosimilars by 180 days after approval is improper.
Holding: 1. “Lexmark exhausted its patent rights in the Return Program cartridges that it sold in the United States. A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose. As a result, even if the restrictions in Lexmark’s contracts with its customers were clear and enforceable under contract law, they do not entitle Lexmark to retain patent rights in an item that it has elected to sell.” 2. “Lexmark also sold toner cartridges abroad, which Impression Products acquired from purchasers and imported into the United States. Lexmark cannot sue Impression Products for infringement with respect to these cartridges. An authorized sale outside the United States, just as one within the United States, exhausts all rights under the Patent Act.”
Question Presented: Whether the disparagement provision in 15 U.S.C. § 1052(a) is facially invalid under the Free Speech Clause of the First Amendment.
Holding: “Section 262(l)(2)(A) is not enforceable by injunction under federal law, but the Federal Circuit on remand should determine whether a state-law injunction is available. An applicant may provide notice under § 262(l)(8)(A) prior to obtaining licensure.”
David P. Goldberg
Jung S. Hahm
Marion P. Metelski
Charles R. Macedo
Chester Rothstein
Jessica A. Capasso
Holding: The disparagement clause of the Lanham Act violates the First Amendment's free speech clause.
Mentoring program
The NYIPLA is pleased to announce the launch of its Mentoring Program. The Program is available to NYIPLA active or corporate members who graduated law school between 2009 and 2016. This Program seeks to match interested and eligible young members with experienced NYIPLA members who can be a source of information, advice and guidance on career development and growth, and who can assist young members who wish to become more active in NYIPLA. Although we acknowledge that the scope of the interaction between mentors and mentees in the Program will vary depending on the preferences and schedules of the participants, NYIPLA expects mentors and their mentees will get together every quarter, either at an NYIPLA event, for lunch, or in another context and place chosen by them. To facilitate the process, NYIPLA will host two mentor/mentee cocktail parties per year. The deadline for this year's Mentoring Program was Monday, April 24, 2017. The next enrollment period will open in mid-April 2018.
NYIPLA’s Mentoring Program Kick-Off Event On July 11, 2017 from 6:00 p.m. to 8:00 p.m. at Latitude Bar & Lounge, the NYIPLA held a kick-off event to start its new Mentoring Program. The event was a social gathering that was open to all mentors, mentees, and NYIPLA members. The NYIPLA initiated the Mentoring Program this year to match young lawyers with experienced NYIPLA members who can be a source of information, advice and guidance on career development and growth, and assist the young lawyers in becoming more active in the NYIPLA. The NYIPLA received over two dozen requests for mentors, and matched the mentees with active law firm and corporate members who have been practicing for 10 years or more. To facilitate the mentoring process, the NYIPLA is planning to host two mentor/mentee cocktail parties per year, the first of which was the social gathering on the 11th of July. This gathering was organized to help mentors and mentees get to know one another in-person and clarify their expectations and goals of their professional relationship. The event was well-attended by mentors and mentees alike, and proved to be a successful kick-off for the new program.
The NYIPLA Sponsors Its Fourth Successful Annual Summer Associate Moot Court Program at the Court of Appeals for the Second Circuit By: Robert J. Rando
On July 18, 2017, the Court of Appeals for the Second Circuit (the Second Circuit) once again graciously hosted NYIPLA’s Annual Second Circuit Summer Associate Moot Court Argument CLE Program. This year’s hypothetical fact pattern was derived from the Supreme Court’s recent opinion in Star Athletica, LLC v. Varsity Brands, Inc., concerning whether a feature incorporated into the design of a useful article is eligible for copyright protection under the Copyright Act. The legal issues in the hypothetical case were based upon a fact pattern conceived by the participating teams and the Programs Committee and involved designs created by the popular fidget spinners toys. The fact pattern allowed the teams to address serious legal issues involving copyright law and personal jurisdiction issues in a thoughtful and light-hearted way. The judges’ panel included the Honorable Gabriel W. Gorenstein (presiding), U.S. Magistrate Judge for the Southern District of New York, the Honorable Ramon E. Reyes, Jr., U.S. Magistrate Judge for the Eastern District of New York, and the Honorable Steven I. Locke, U.S. Magistrate Judge for the Eastern District of New York. Teams from Haug Partners, Hodgson Russ LLP, Pryor Cashman LLP, and Willkie Farr & Gallagher LLP represented the Petitioners, Cross-Petitioners and Respondents, and Cross-Respondents, respectively. The oral arguments were very engaging as the panel of judges comprising a “hot bench” asked incisive questions at the heart of the copyright and jurisdictional issues. The judges also provided thoughtful and specific feedback and commentary for each of the eight oralists. The feedback and commentary also benefited the presenters and attendees. Opening remarks were provided by NYIPLA President Annemarie Hassett and the Program Moderator/NYIPLA Treasurer Rob Rando. The one-hour program was followed by a cocktail reception attended by the judges, the participants, and the attendees. A special thank you to all of the participants and their respective law firms for their hard work and support for the program, Programs Committee Co-Chairs Mike Johnson and Jenny Lee, Programs Committee Board Liaison Colman Ragan, NYIPLA’s administrative staff for their assistance in organizing the event, and NYIPLA Board Member Mark Bloomberg for his assistance in organizing the event and for performing the duties of the Courtroom Deputy.
Trademark Law and Practice Committee Presents a Half-Day Program By: Dyan Finguerra-DuCharme, Michael C. Cannata, and Frank Misiti
On July 19, 2017, the Trademark Law and Practice Committee continued its tradition of sponsoring a half-day CLE seminar and presented a program entitled “Hot Topics in IP Law.” The program was held at the Princeton Club and featured several prominent speakers from the legal community. The program began with a highly informative key note address from James Gatta, Chief of the Criminal Division for the U.S. Attorney’s Office for the Eastern District of New York. Mr. Gatta reviewed the ways in which the federal government aggressively pursues cybercriminals and provided suggestions and guidance for civil practitioners dealing with cyber issues. The key note address was followed by a robust panel discussion on whether the Varsity Brands decision has had any impact in the fashion industry in terms of potential claims against “copycat” designs. The panel was composed of Olivera Medenica, partner at Medenica Law PLLC; Viviana Mura, Intellectual Property Law Counsel at Luxottica Group; and Lisa Rosaya, a partner at Baker & McKenzie. Rob deBrauwere, a partner at Pryor Cashman, followed with an entertaining and cutting- edge presentation on the new world of augmented and virtual reality. After providing examples of such new technology on the ski slopes and on the road, Mr. deBrauwere reviewed legal issues IP practitioners are dealing with as a result of this new technology. The program next featured an engaging panel discussion focused on insurance coverage for intellectual property claims. The members of the panel included Robert W. Fletcher, President of Intellectual Property Insurance Services Corporation; Frank Misiti, a partner at Rivkin Radler LLP; and Michael C. Cannata, co-chair of the Trademark Law and Practice Committee and a partner at Rivkin Radler LLP. The panel discussed the availability of insurance for intellectual property claims under both traditional commercial general liability policies and specialty insurance products. The program continued with two industry-leading branding and consumer survey experts: Matt Ezell, a partner in Ford, Bubala & Associates; and Rob Wallace, Managing Partner in Best of Breed Branding Consortium. The two experts addressed issues regarding the design and implementation of consumer surveys in connection with trademark and trade dress infringement litigations. The Honorable Gerard F. Rogers, the Chief Administrative Trademark Judge at the Trademark Trial and Appeal Board (TTAB), was also a featured speaker at the program. This is Judge Rogers’ third year in a row participating at the half-day event, and this year attendees had the unique opportunity to ask Judge Rogers direct questions about the practices of the TTAB. Dyan Finguerra-DuCharme, co-chair of the Trademark Law and Practice Committee and a partner at Pryor Cashman LLP, moderated a “fireside chat” with the Chief Judge Rogers and they discussed emerging issues at the TTAB and the ever changing landscape of trademark practice in the USPTO. The program concluded with an informative presentation by Brent E. Routman, partner and general counsel at Merchant & Gould P.C. Mr. Routman’s presentation was well-received, especially since he recognized the perils of being the last presenter of the day. Mr. Routman focused on ethical issues connected to trademark investigations, advance consents, and terminating client relationships in a humorous manner while imparting key take-aways to audience members. The Trademark Law and Practice Committee would like to thank all of the speakers who accepted the invitation to present at this year’s program, those who attended the program, and the Princeton Club that hosted the program.
Formerly of Fitzpatrick Cella Harper & Scinto, has joined Merchant & Gould PC as a partner in its intellectual property practice.
Jonathan Berschadsky
Nancy Mertzel
The law firm of Knobbe, Martens, Olson & Bear, LLP opened a New York City office, headed by partner Robert Roby.
Frank DeLucia Jr.
MOVING UP & MOVING ON
Formerly of Paul Weiss Rifkind Wharton & Garrison LLP, has joined Freshfields Bruckhaus Deringer (US) LLP as a partner in its corporate practice, focusing on intellectual property-related matters.
Robert Roby
David Leichtman, formerly of Robins Kaplan LLP, has formed an intellectual property law firm in New York. Joining Mr. Leichtman are Richard A. Mescon, Matthew McFarlane, and Tatsuya Adachi, formerly of Robins Kaplan; David H. Brill, formerly general counsel of Gemini Trust Co.; and Shevani Jaisingh, formerly of Greenberg Traurig LLP.
Charles Cantine, formerly of Stroock & Stroock & Lavan LLP, has joined King and Spalding as a partner in its intellectual property practice. Steven Cherny, formerly of Kirkland & Ellis LLP, has joined Quinn Emanuel Urquhart & Sullivan LLP as a partner in its intellectual property litigation practice. Jeffrey H. Greene, formerly of Foley & Lardner LLP, has joined Fenwick & West LLP as a partner in its trademark practice. Sean Grygiel, formerly of Perkins Coie LLP, has joined Mintz Levin Cohn Ferris Glovsky and Popeo PC as a member in its intellectual property practice. Andrew Schapiro, former U.S. Ambassador to the Czech Republic, has rejoined the Chicago and New York offices of Quinn Emanuel Urquhart & Sullivan LLP as a partner in several of its practice groups, including intellectual property litigation. Joseph S erino and Eric Leon, formerly of Kirkland & Ellis LLP, have joined Latham & Watkins LLP as partners in its Litigation & Trial Department. Adam Siegartel, formerly of Proskauer Rose LLP, has joined Haynes and Boone LLP as a partner in its intellectual property practice group. John A. Squires, formerly of Gibson Dunn & Crutcher LLP, has joined Dilworth Paxson LLP as a partner in its intellectual property and emerging company practices.
Menachem Kaplan
Formerly of Herrick Feinstein LLP, has started the law firm of Mertzel Law PLLC..
David Leichtman, Matthew McFarlane, Tatsuya Adachi
Formerly of Stroock & Stroock & Lavan LLP, has joined King and Spalding as a partner in its intellectual property practice.
Joseph Diamante
Karen Mangasarian
Formerly of Ropes & Gray LLP, has joined Foley & Lardner LLP as a partner in its chemical, biotechnology and pharmaceutical practice areas.
Last First Membership Firm/Company/law school State Adachi Tatsuya Active 3- Leichtman Law PLLC New York Albanese Kathryn Student Villanova University School of Law New York Barlow Joshua Active 3- Haug Partners LLP Massachusetts Bayin Shiran Student Florida Coastal School of Law New York Byrnes Katherine Student Maurice A. Deane School of Law, Hofstra University New York Caceres Anna Student New York University School of Law New York Cade Ashley Student George Washington University Law School District of Columbia Chheda Mitisha Student George Washington University Law School District of Columbia Chichetti Stephanie Active 3- DLA Piper LLP New York Clark Arianna Student St. John's University School of Law New York Cocks Jonathan Active 3- Baker Botts LLP New York Dalla Val Anna Corporate Ralph Lauren Corporation New York Dave Puja Active 3- Troutman Sanders LLP New York Del Pizzo Nancy Active 3+ Rivkin Radler LLP New Jersey Deneault Jennifer Active 3- Paul, Weiss, Rifkind, Wharton & Garrison LLP New York Espada Brignoni Rocio Student University of Puerto Rico School of Law Puerto Rico Fischer Aron Active 3+ Patterson, Belknap, Webb & Tyler LLP New York Frankel Adele Active 3+ Wilmer Cutler Pickering Hale and Dorr LLP New York Friedman-Rush Andrea Student University of Toronto Canada Glancy Christopher Active 3- Goodwin Procter LLP New York Gonzalez Julian Affiliate Global Intellectual Property Agency New Jersey Hadley Mitchell Active 3- Knobbe Martens Olson & Bear LLP New York Harihar Katherine Active 3+ Troutman Sanders LLP New York Hong Zach Active 3+ Knobbe Martens Olson & Bear LLP New York Hwang Susan Student Boston College Law School Massachusetts Irazoque Reyes Laura Student Fordham University School of Law New Jersey Jang Tiffany Active 3- Haug Partners LLP New York Kim Esther Student New York University School of Law New York Knight Lisa Corporate American Express New York LaBerteaux Jason Active 3+ Ascenda Law Group PC Connecticut Landman Thomas Student Brooklyn Law School New York Laub Friedrich Active 3+ Kramer Levin Naftalis & Frankel LLP New York LeRay Dorothy Active 3+ Patterson, Belknap, Webb & Tyler LLP New York Li Yan-Xin Active 3- Baker Botts LLP New York Lisson David Associate Davis Polk & Wardwell LLP California Liu Wansheng Active 3+ Fox Rothschild LLP New Jersey Liu Zhiqiang Active 3+ Patterson, Belknap, Webb & Tyler LLP New York Mackavage Allyson Active 3- Baker Botts LLP New York Major James Active 3+ Lucas & Mercanti LLP New York Mbadugha Kristine Student American University Washington College of Law District of Columbia McCool Judith Corporate Home Box Office Inc. New York Moro Dolores Active 3+ International Trademark Association New York Morten Christopher Active 3+ Law Office of Christopher J. Glancy New York Mortimer Margaret Active 3- Dechert LLP New York Nagler Gabrielle Active 3- Cowan Liebowitz & Latman PC New York Okafor Jennifer Active 3+ New York City Law Department New Jersey Panagopoulou Anna Active 3- Pardalis & Nohavicka LLP New York Park Joon Active 3+ JP Counsel Group PLLC New York Porter Gerald Active 3- Troutman Sanders LLP New York Quenzer Frederick Corporate International Swaps and Derivatives Association Inc. New York Raymond Megan Active 3- Paul, Weiss, Rifkind, Wharton & Garrison LLP District of Columbia Reade Sydney Student Georgetown University Law Center District of Columbia Reinitz Ariel Active 3+ Schwegman, Lundberg & Woessner New York Rittenberg Joshua Active 3- Kramer Levin Naftalis & Frankel LLP New York Rushing Joshua Luke Student Pryor Cashman LLP New York Sabade Priyanka Student Boston University School of Law Massachusetts Shrewsbury Amanda Active 3- Fordham University School of Law New York Sokoloff Daniel Student Washington University in St. Louis Missouri Soman Gerad Student Benjamin N. Cardozo School of Law New York Stamatopoulos Giorgos Active 3+ Wolf Greenfield & Sacks New York Steiber David Student Benjamin N. Cardozo School of Law New York Tsai Jeff Student Kramer Levin Naftalis & Frankel LLP New York Tuccio Dominick Associate Solo Practitioner – Patent Agent New York Vibbert Jami Active 3+ Venable LLP New York Wakim Andrew Active 3+ Baker Botts LLP New York Waybourn Kathleen Active 3+ Law Office of Kathleen Ann Waybourn New York Yamada Shintaro Student Lucas & Mercanti LLP New York Zhang Zichao Active 3- Baker Botts LLP New York Zhu Frank Active 3+ Baker Botts LLP New York
WELCOME NEW MEMBERS
NYIPLA Publication Committee Editorial Team Committee Co-Chairs TaeRa Franklin and Liz Murphy Committee Members Jayson Cohen Bobby Greenfeld Mitchell Hadley Keith McWha Ben Natter Lauren Nowierski Margaret Welsh NYIPLA Executive Office 2125 Center Avenue Suite 406 Fort Lee, NJ 07024 USA Tel: 1.201.461.6603 Fax: 1.201.461.6635 Email: admin@nyipla.org Web: www.nyipla.org
