Tuesday, April 24, 2018

Oil States Energy Services, LLC v. Greene's Energy Group, LLC, Docket No. 16-712

Common law: Privy Council: Court of Chancery: Patent: Inter partes review:

(…) History does not establish that patent validity is a matter that, “from its nature,” must be decided by a court (…) There was another means of canceling a patent in 18th-century England, which more closely resembles inter partes review: a petition to the Privy Council to vacate a patent. See Lemley, infra, at 1681–1682; Hulme, Privy Council Law and Practice of Letters Patent for Invention From the Restoration to 1794, 33 L. Q. Rev. 63 (1917). The Privy Council was composed of the Crown’s advisers. Lemley, infra, at 1681. From the 17th through the 20th centuries, English patents had a standard revocation clause that permitted six or more Privy Counsellors to declare a patent void if they determined the invention was contrary to law, “prejudicial” or “inconvenient,” not new, or not invented by the patent owner. See 11 W. Holdsworth, A History of English Law 426–427, and n. 6 (1938); Davies, The Early History of the Patent Specification, 50 L. Q. Rev. 86, 102–106 (1934). Individuals could petition the Council to revoke a patent, and the petition was referred to the Attorney General. The Attorney General examined the petition, considered affidavits from the petitioner and patent owner, and heard from counsel. See, e.g., Bull v. Lydall, PC2/81, pp. 180–181 (1706). Depending on the Attorney General’s conclusion, the Council would either void the patent or dismiss the petition. See, e.g., Darby v. Betton, PC2/99, pp. 358–359 (1745–1746) (voiding the patent); Baker v. James, PC2/103, pp. 320–321, 346–347 (1752) (dismissing the petition).
The Privy Council was a prominent feature of the English system. It had exclusive authority to revoke patents until 1753, and after that, it had concurrent jurisdiction with the courts. See Hulme, 33 L. Q. Rev., at 189–191, 193–194. The Privy Council continued to consider revocation claims and to revoke patents throughout the 18th century. Its last revocation was in 1779. See id., at 192–193. It considered, but did not act on, revocation claims in 1782, 1794, and 1810. See ibid.; Board of Ordinance v. Parr, PC1/3919 (1810).
The Patent Clause in our Constitution “was written against the backdrop” of the English system. Graham, 383 U. S., at 5. Based on the practice of the Privy Council, it was well understood at the founding that a patent system could include a practice of granting patents subject to potential cancellation in the executive proceeding of the Privy Council. The parties have cited nothing in the text or history of the Patent Clause or Article III to suggest that the Framers were not aware of this common practice. Nor is there any reason to think they excluded this practice during their deliberations. And this Court has recognized that, “within the scope established by the Constitution, Congress may set out conditions and tests for patentability.” Id., at 6. We conclude that inter partes review is one of those conditions.

From the dissenting opinion (J. Gorsuch):

As I read the historical record presented to us, only courts could hear patent challenges in England at the time of the founding. If facts were in dispute, the matter first had to proceed in the law courts. See, e.g., Newsham v. Gray, 2 Atk. 286, 26 Eng. Rep. 575 (Ch. 1742). If successful there, a challenger then had to obtain a writ of scire facias in the law side of the Court of Chancery. See, e.g., Pfander, Jurisdiction-Stripping and the Supreme Court’s Power To Supervise Inferior Tribunals, 78 Texas L. Rev. 1433, 1446, n. 53 (2000); Lemley, Why Do Juries Decide If Patents Are Valid? 99 Va. L. Rev. 1673, 1686–1687 (2013) (Lemley, Juries). The last time an executive body (the King’s Privy Council) invalidated an invention patent on an ordinary application was in 1746, in Darby v. Betton, PC2/99, pp. 358–359; and the last time the Privy Council even considered doing so was in 1753, in Baker v. James, PC2/103, pp. 320–321. After Baker v. James, the Privy Council “divested itself of its functions” in ordinary patent disputes, Hulme, Privy Council Law and Practice of Letters Patent for Invention from the Restoration to 1794 (Pt. II), 33 L. Q. Rev. 180, 194 (1917), which “thereafter were adjudicated solely by the law courts, as opposed to the crown’s prerogative courts,” Mossoff, Rethinking the Development of Patents: An Intellectual History, 1550– 1800, 52 Hastings L. J. 1255, 1286–1287 (2001) (Mossoff, Rethinking Patents).
This shift to courts paralleled a shift in thinking. Patents began as little more than feudal favors. Id., at 1261. The crown both issued and revoked them. Lemley, Juries 1680–1681. And they often permitted the lucky recipient the exclusive right to do very ordinary things, like operate a toll bridge or run a tavern. Ibid. But by the 18th century, inventors were busy in Britain and invention patents came to be seen in a different light. They came to be viewed not as endowing accidental and anticompetitive monopolies on the fortunate few but as a procompetitive means to secure to individuals the fruits of their labor and ingenuity; encourage others to emulate them; and promote public access to new technologies that would not otherwise exist. Mossoff, Rethinking Patents 1288–1289. The Constitution itself reflects this new thinking, authorizing the issuance of patents precisely because of their contribution to the “Progress of Science and useful Arts.” Art. I, §8, cl. 8. “In essence, there was a change in perception—from viewing a patent as a contract between the crown and the patentee to viewing it as a ‘social contract’ between the patentee and society.” Waltersheid, The Early Evolution of the United States Patent Law: Antecedents (Part 3), 77 J. Pat. & T. Off. Soc. 771, 793 (1995). And as invention patents came to be seen so differently, it is no surprise courts came to treat them more solicitously.
See also Brief for H. Tomás Gómez-Arostegui et al. as Amici Curiae 6–37; Brief for Alliacense Limited LLC as Amicus Curiae 10–11; Gómez-Arostegui & Bottomley, Privy Council and Scire Facias 1700–1883, p. 2 (Nov. 6, 2017) (Addendum), https://ssrn.com/ abstract=3054989 (all Internet materials as last visited Apr. 20, 2018); Observations on the Utility of Patents, and on the Sentiments of Lord Kenyon Respecting That Subject 23 (2d ed. 1791) (“If persons of the same trade find themselves aggrieved by Patents taken for any thing already in use, their remedy is at hand. It is by a writ of Scire Facias”); Mancius v. Lawton, 10 Johns. 23, 24 (NY Sup. Ct. 1813) (Kent, C. J.) (noting the “settled English course” that “letters-patent . . . can only be avoided in chancery, by a writ of scire facias sued out on the part of the government, or by some individual prosecuting in its name”).
Unable to dispute that judges alone resolved virtually all patent challenges by the time of the founding, the Court points to three English cases that represent the Privy Council’s dying gasp in this area: Board of Ordnance v. Wilkinson, PC2/123 (1779); Grill [Grice] v. Waters, PC2/127 (1782); and Board of Ordnance v. Parr, PC1/3919 (1810). Filed in 1779, 1782, and 1810, each involved an effort to override a patent on munitions during wartime, no doubt in an effort to increase their supply. But even then appealing to the Privy Council was seen as a last resort. The 1779 petition (the last Privy Council revocation ever) came only after the patentee twice refused instructions to litigate the patent’s validity in a court of law. Gómez-Arostegui & Bottomley, Privy Council and Scire Facias 1700–1883, p. 6 (Nov. 6, 2017) https://ssrn.com/abstract=3054989 (citing Board of Ordnance v. Wilkinson, PC2/123 (1779), and PC1/11/150 (1779)). The Council did not act on the 1782 petition but instead referred it to the Attorney General where it appears to have been abandoned. Gómez-Arostegui & Bottomley, Privy Council and Scire Facias, supra, at 17–18. Meanwhile, in response to the 1810 petition the Attorney General admitted that scire facias was the “usual manner” of revoking a patent and so directed the petitioner to proceed at law even as he suggested the Privy Council might be available in the event of a “very pressing and imminent” danger to the public. Id., at 20 (citing PC1/3919 (1810)).
In the end, these cases do very little to support the Court’s holding. At most, they suggest that the Privy Council might have possessed some residual power to revoke patents to address wartime necessities. Equally, they might serve only as more unfortunate evidence of the maxim that in time of war, the laws fall silent. After all, the English statute of monopolies appeared to require the “force and validitie” of all patents to be determined only by “the Comon Lawes of this Realme & not otherwise.” 21 Jac. 1, c. 3, §2 (1624). So the Privy Council cases on which the Court relies may not reflect the best understanding of the British constitution.
Any lingering doubt about English law is resolved for me by looking to our own. While the Court is correct that the Constitution’s Patent Clause “ ‘was written against the backdrop’ ” of English practice, ante, at 14 (quoting Graham v. John Deere Co. of Kansas City, 383 U. S. 1, 5 (1966)), it’s also true that the Clause sought to reject some of early English practice. Reflecting the growing sentiment that patents shouldn’t be used for anticompetitive monopolies over “goods or businesses which had long before been enjoyed by the public,” the framers wrote the Clause to protect only procompetitive invention patents that are the product of hard work and insight and “add to the sum of useful knowledge.” Id., at 5–6. In light of the Patent Clause’s restrictions on this score, courts took the view that when the federal government “grants a patent the grantee is entitled to it as a matter of right, and does not receive it, as was originally supposed to be the case in England, as a matter of grace and favor.” James v. Campbell, 104 U. S. 356, 358 (1882). As Chief Justice Marshall explained, courts treated American invention patents as recognizing an “inchoate property” that exists “from the moment of invention.” Evans v. Jordan, 8 F. Cas. 872, 873 (No. 4,564) (CC Va. 1813). American patent holders thus were thought to “hold a property in their inventions by as good a title as the farmer holds his farm and flock.” Hovey v. Henry, 12 F. Cas. 603, 604 (No. 6,742) (CC Mass. 1846) (Woodbury, J.). And just as with farm and flock, it was widely accepted that the government could divest patent owners of their rights only through proceedings before independent judges.

(U.S.S.C., April 24, 2018, Oil States Energy Services, LLC v. Greene's Energy Group, LLC, Docket No. 16-712, J. Thomas)

Description de la compétence historique du Privy Council et de la Court of Chancery en matière d'annulation de brevets d'invention. Cela en rapport avec la question de savoir si un brevet peut être annulé par l'administration fédérale (ici le PTO) ou si, comme le soutient l'opinion dissidente, seule une cour de justice au sens de l'Art. III de la Constitution fédérale est compétente pour prononcer une telle annulation.

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