Amicus Curiae Brief — Merck & Co., Inc., et al., Petitioners v. Gilead Sciences, Inc.

No. 18-378

IN THE

Supreme Court of the United States

MERCK & CO., INC., MERCK SHARP & DOHME CORP.,

AND IONIS PHARMACEUTICALS, INC.,

Petitioners,

v.

GILEAD SCIENCES, INC.,

Respondent.

On Petition for Writ of Certiorari

to the United States Court of Appeals

for the Federal Circuit

BRIEF OF CELGENE CORPORATION AS

AMICUS CURIAE IN SUPPORT OF

PETITIONERS

ANTHONY M. INSOGNA

JONES DAY

4655 Executive Drive

San Diego, CA 92121

RITA J. YOON

JONES DAY

77 West Wacker Drive

Chicago, IL 60601

JENNIFER L. SWIZE

Counsel of Record

JONES DAY

51 Louisiana Avenue, N.W.

Washington, D.C. 20001

(202) 879-3939

jswize@jonesday.com

October 24, 2018

Counsel for Amicus Curiae

i

QUESTION PRESENTED

Whether the Federal Circuit erred by creating an

exception in patent cases that uses the equitable

doctrine of unclean hands to overturn a jury’s verdict

awarding legal relief in the form of damages to the

patent owner.

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED ........................................... i

INTEREST OF AMICUS CURIAE ............................ 1

INTRODUCTION AND

SUMMARY OF ARGUMENT............................. 2

ARGUMENT ................................................................. 4

I.

THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION TO THE TRADITIONAL

AMERICAN RULE IS RIPE FOR REVIEW ................. 4

II.

THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION DISREGARDS THIS COURT’S

LONGSTANDING PRECEDENT HOLDING

THAT THE EQUITABLE DOCTRINE DOES

NOT BAR LEGAL RELIEF, INCLUDING IN

PATENT CASES ....................................................... 7

III. THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION DISREGARDS THIS COURT’S

RECENT PRECEDENT IN INTELLECTUAL

PROPERTY CASES HOLDING THAT OTHER

EQUITABLE DOCTRINES DO NOT BAR LEGAL

RELIEF.................................................................... 9

IV. THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION FINDS NO SUPPORT IN THE

PATENT ACT ......................................................... 10

V.

THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION IS CONTRARY TO THE PURPOSE

OF THE EQUITABLE DOCTRINE AND OTHER

LEGAL RIGHTS ..................................................... 12

CONCLUSION............................................................ 15

iii

TABLE OF AUTHORITIES

Page(s)

CASES

Beacon Theatres, Inc. v. Westover,

359 U.S. 500 (1959).................................................14

Bruesewitz v. Wyeth LLC,

562 U.S. 223 (2011).................................................11

Commil USA, LLC v. Cisco Sys., Inc.,

135 S. Ct. 1920 (2015) ..............................................5

Deweese v. Reinhard,

165 U.S. 386 (1897)...................................................7

eBay Inc. v. MercExchange, L.L.C.,

547 U.S. 388 (2006)............................................ 4, 10

Festo Corp. v. Shoketsu Kinzoku Kogyo

Kabushiki Co.,

535 U.S. 722 (2002)...................................................5

Hazel-Atlas Glass Co. v. Hartford-Empire

Co.,

322 U.S. 238 (1944).............................................. 3, 8

Johnson v. Yellow Cab Transit Co.,

321U.S. 383 (2006)..................................................13

Keystone Driller Co. v. Gen. Excavator Co.,

290 U.S. 240 (1933)........................................ 7, 8, 13

Kitchen v. Rayburn,

86 U.S. (19 Wall.) 254 (1873) ...................................7

Mfrs.’ Fin. Co. v. McKey,

294 U.S. 442 (1935).............................................. 2, 7

iv

TABLE OF AUTHORITIES

(continued)

Page(s)

Octane Fitness, LLC v. ICON Health &

Fitness, Inc.,

134 S. Ct. 1749 (2014) ..............................................5

Oil States Energy Servs., LLC v. Greene’s

Energy Grp., LLC,

138 S. Ct. 1365 (2018) ............................................14

Petrella v. MGM,

134 S. Ct. 1962 (2014) ................................... passim

Precision Instrument Mfg. Co. v. Auto.

Maint. Mach. Co.,

324 U.S. 806 (1945).......................................... 3, 6, 8

Ross v. Bernhard,

396 U.S. 531 (1970).................................................14

SAS Institute v. Iancu,

138 S. Ct. 1348 (2018) ............................................10

SCA Hygiene Prods. Aktiebolag v. First

Quality Baby Prods., LLC,

137 S. Ct. 954 (2017) ..................................... passim

Teva Pharm. USA, Inc. v. Sandoz, Inc.,

135 S. Ct. 831 (2015) ........................................... 4, 5

Tull v. United States,

481 U.S. 412 (1987).................................................13

U.S. Gypsum Co. v. Nat’l Gypsum Co.,

352 U.S. 457 (1957)...................................................6

Weinberger v. Romero-Barcelo,

456 U.S. 305 (1982).............................................. 8, 9

v

TABLE OF AUTHORITIES

(continued)

Page(s)

CONSTITUTIONAL PROVISIONS AND STATUTES

U.S. Const. Amend. VII ...............................................14

15 U.S.C. § 1115............................................................12

35 U.S.C. § 261..............................................................14

35 U.S.C. § 281..............................................................10

35 U.S.C. § 282..............................................................11

35 U.S.C. § 283 .............................................................11

35 U.S.C. § 284 .............................................................11

OTHER AUTHORITIES

Samuel L. Bray,

The System of Equitable Remedies,

63 UCLA L. Rev. 530 (2016) ............................. 7, 14

P.J. Federico,

Commentary on the New Patent Act,

35 U.S.C.A. 1 (West 1954)......................................11

Richard Francis,

Maxims of Equity (1st ed. 1728) ..............................7

1

INTEREST OF AMICUS CURIAE 1

Amicus curiae Celgene Corporation (Celgene) is

an innovator biopharmaceutical company that

discovers, develops, and delivers truly innovative and

life-changing therapies for patients afflicted with

cancer and severe immune-inflammatory diseases.

Since its founding in 1986, Celgene has developed a

number of such innovative therapies, including for the

treatment of acute myeloid leukemia, lung cancer,

pancreatic cancer, mantle cell lymphoma, multiple

myeloma, myelodysplastic syndromes, psoriasis, and

psoriatic arthritis.

These groundbreaking therapies are the result of

billions of dollars in research and development efforts

by Celgene. Celgene relies on patents and the

protections of the United States patent laws to

continue its investments in and discovery of lifechanging therapies for patients.

Celgene believes the Federal Circuit’s special

patent rule on the equitable doctrine of unclean hands

is erroneous and threatens rather than encourages

innovation. This case exemplifies the erroneous

application of this equitable doctrine beyond equity to

extinguish patent rights and punish patent owners at

law.

Pursuant to Supreme Court Rule 37.2, counsel of record

for all parties in this case received notice of the intention to file

this brief at least 10 days before its due date. Pursuant to

Supreme Court Rule 37.6, amicus and its counsel certify that no

party’s counsel authored this brief in whole or in part, and no

person or entity, other than amicus, made a monetary

contribution for the preparation or submission of this brief. All

parties have consented to the filing of this brief.

1

2

Celgene therefore respectfully urges this Court

to grant the petition for writ of certiorari and reverse

the ruling of the Federal Circuit.

INTRODUCTION AND

SUMMARY OF ARGUMENT

The judgment at issue, from the U.S. Court of

Appeals for the Federal Circuit in a patentinfringement case, permits the equitable doctrine of

unclean hands to overturn a jury’s verdict and

extinguish the patent owner’s legal rights in valid and

infringed patents.

That rule departs from

jurisprudence in this Court and is contrary to

traditional American rules and jury verdicts. This

Court’s review is warranted.

For innovators like Celgene, whose intellectual

property is of tremendous importance and value, it is

simply not the proper role of the Federal Circuit to

create judge-made exceptions to longstanding

Supreme Court precedent and traditional American

rules and principles. As important, the Federal

Circuit’s rule engenders uncertainty in a patent

owner’s rights to valid and admittedly infringed

patents and particularly threatens biopharmaceutical

innovators, like Celgene, from investing the billions of

dollars over decades in research and development

needed to discover new drugs.

The traditional rule in American law is that

unclean hands is an equitable doctrine that does not

apply to legal claims for damages. See, e.g., Mfrs.’ Fin.

Co. v. McKey, 294 U.S. 442, 453 (1935) (holding that

legal rights are not “subject to denial or curtailment

in virtue of equitable principles applicable only

against one who affirmatively has sought equitable

3

relief”).

Patent law is no exception. Even after the

procedural merger of law and equity with the

enactment of the Federal Rules of Civil Procedure in

1938, this Court continued to distinguish between

equitable and legal relief, including in patent cases.

See Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322

U.S. 238, 270 (1944) (holding that patent owner’s

“unclean hands” barred its claims for equitable relief),

overruled on other grounds by Standard Oil Co. v.

United States, 429 U.S. 17, 18 (1976); Precision

Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324

U.S. 806, 819 (1945) (holding that patent owner’s

unclean hands barred its “suit in equity”).

This Court recently reaffirmed this traditional

American rule in two intellectual property cases, SCA

Hygiene Products Aktiebolag v. First Quality Baby

Products, LLC, 137 S. Ct. 954 (2017), and Petrella v.

MGM, Inc., 134 S. Ct. 1962 (2014). In both cases, this

Court held the equitable doctrine of laches does not

bar a legal claim for damages when brought within

the applicable statute of limitations. In both cases,

the Court based its holding on the traditional

American rule distinguishing between legal and

equitable relief. SCA Hygiene, 137 S. Ct. at 965

(holding that “a patentee, during the period in

question, could always sue for damages in law, where

the equitable doctrine of laches did not apply”);

Petrella, 134 S. Ct. at 1974 (holding that “laches

cannot be invoked to bar legal relief” in copyright

cases).

The Federal Circuit’s decision below disregards

this longstanding, binding precedent and creates a

dangerous exception to the traditional American rule.

4

Courts already have broad discretion in deciding

equitable issues, but subject to the boundaries of law

and equity. If the Federal Circuit’s decision is left to

stand, its broad doctrine will allow judges to

extinguish a patent owner’s legal rights in valid and

infringed patents.

This departure from wellestablished, principled boundaries presents a

profound threat to innovation in the United States.

Review is warranted here.

ARGUMENT

I.

THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION TO THE TRADITIONAL AMERICAN

RULE IS RIPE FOR REVIEW

This Court has repeatedly cautioned the Federal

Circuit against creating special, judge-made rules and

exceptions in patent cases.

In eBay Inc. v.

MercExchange, L.L.C., 547 U.S. 388 (2006), this Court

did so in the equity context relevant here, rejecting

the notion that special rules apply to patent cases:

“[F]amiliar equitable principles apply with equal force

to disputes arising under the Patent Act.” Id. at 39192.

The Court’s direction has been clearly repeated

since then. In Teva Pharmaceuticals USA, Inc. v.

Sandoz, Inc., 135 S. Ct. 831 (2015), this Court again

rejected the Federal Circuit’s special patent rule,

which called for de novo review of factual findings in

claim construction. Id. at 833. This Court cautioned

the Federal Circuit that “there is no convincing

ground for creating an exception here” from the

“ordinary rule governing appellate review of factual

matters.” Id.

5

Again in Commil USA, LLC v. Cisco Systems,

Inc., 135 S. Ct. 1920 (2015), this Court rejected the

Federal Circuit’s special rule, this time regarding the

role of scienter in patent cases. Id. at 1930 (explaining

that “[o]ur law is . . . no stranger to the possibility that

an act may be ‘intentional’ for purposes of civil

liability”) (quoting Jerman v. Carlisle, McNellie, Rini,

Kramer & Ulrich, L.P. A., 559 U.S. 573, 582-583,

(2010)); see also Octane Fitness, LLC v. ICON Health

& Fitness, Inc., 134 S. Ct. 1749, 1758 (2014)

(“reject[ing] the Federal Circuit’s requirement that

patent litigants establish their entitlement to fees

under § 285 by ‘clear and convincing evidence” and

replacing it with the preponderance of the evidence

“standard generally applicable in civil actions”).

The Court’s intervention is likewise warranted

here. The Federal Circuit has created a special patent

rule for unclean hands without basis in Supreme

Court precedent or the Patent Act.

Moreover, the time for review is now. As this

Court has recognized, a “patent holder should know

what he owns.” Festo Corp. v. Shoketsu Kinzoku

Kogyo Kabushiki Co., 535 U.S. 722, 730-731 (2002).

“[L]ike any property right, its boundaries should be

clear. This clarity is essential to promote progress,

because it enables efficient investment in innovation.”

Id. (emphasis added); Teva, 135 S. Ct. at 848 (2015)

(explaining that “the patent is perhaps better

characterized as a reward for feats already

accomplished”).

The breadth of the Federal Circuit’s decision

undermines the clarity intended by the patent system.

It incentivizes accused infringers to pursue myriad

theories of unclean hands and demand bench trials to

6

nullify jury verdicts. This threatens not only the

certainty of jury verdicts, but also the certainty of

valid and infringed patents. If an admitted infringer

can use unclean hands to extinguish a jury’s verdict of

patent validity and damages, then the boundaries of a

patent are no longer clear.

This deleterious impact on innovators and patent

owners, like Celgene, and on the courts, is not merely

theoretical. Though this Court has not had the

opportunity to address unclean hands in patent cases

for more than 70 years, see Precision Instrument, 324

U.S. at 819, 2 unclean hands is a commonly pled

defense in patent cases.

Accordingly, without this Court’s review, the

Federal

Circuit’s

decision

will

deprive

biopharmaceutical innovators, like Celgene, of the

clarity needed to invest billions of dollars in research

and development over decades to discover new drugs.

It also destabilizes the entire lifecycle of a drug, by

injecting uncertainty from the early phases of

research and development to patent issuance, patent

enforcement, and a jury verdict.

Because the Federal Circuit has unique

jurisdiction over patent cases, only this Court can

resolve

this

outcome-determinative

patent

controversy. Celgene therefore respectfully urges this

Court to grant the petition for writ of certiorari and

return this defense to its traditional equitable domain.

2 U.S. Gypsum Co. v. Nat’l Gypsum Co., 352 U.S. 457,

465 (1957), had only a passing discussion of unclean hands. This

case did not turn on unclean hands, but rather the defense of

patent misuse in an antitrust case and thus is not relevant here.

7

II.

THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION

DISREGARDS

THIS

COURT’S

LONGSTANDING PRECEDENT HOLDING THAT

THE EQUITABLE DOCTRINE DOES NOT BAR

LEGAL RELIEF, INCLUDING IN PATENT CASES

The origins of the centuries-old equitable

doctrine of unclean hands is the maxim: “He who

comes into equity must come with clean hands.”

Keystone Driller Co. v. Gen. Excavator Co., 290 U.S.

240, 241 (1933); Richard Francis, Maxims of Equity 58 (1st ed. 1728) (reporting the unclean hands maxim

290 years ago). The purpose of the equitable doctrine

is to preclude plaintiffs from using “a court of equity

to derive an advantage from their own wrong.”

Kitchen v. Rayburn, 86 U.S. (19 Wall.) 254, 263 (1873).

In keeping with the traditional distinction

between law and equity, this equitable doctrine

prevents plaintiffs with unclean hands from obtaining

equitable—as opposed to legal—relief. See Mfrs.’ Fin.

Co., 294 U.S. at 453 (holding that legal rights are not

“subject to denial or curtailment in virtue of equitable

principles”); Deweese v. Reinhard, 165 U.S. 386, 390

(1897) (“A court of equity acts only when and as

conscience commands; and, if the conduct of the

plaintiff be offensive to the dictates of natural justice,

then, whatever may be the rights he possesses, and

whatever use he may make of them in a court of law,

he will be held remediless in a court of equity.”);

Samuel L. Bray, The System of Equitable Remedies, 63

UCLA L. Rev. 530, 541 (2016) (“Even though remedies

have sometimes traveled under the heading of

‘procedure,’ no merger of legal and equitable remedies

was effected by the Federal Rules of Civil Procedure.”).

This Court has addressed unclean hands in three

8

patent cases. In all three decisions, both before and

after the procedural merger of law and equity, this

Court followed the traditional American rule

distinguishing between equitable and legal relief.

In Keystone Driller Co. v. General Excavator Co.,

this Court “appl[ied] the maxim requiring clean hands

only where some unconscionable act of one coming for

relief has immediate and necessary relation to the

equity that he seeks.” 290 U.S. at 245 (emphasis

added). After the merger of law and equity in 1938,

this Court continued to apply unclean hands to

plaintiff’s equitable claims for relief. Hazel-Atlas

Glass Co. v. Hartford-Empire Co., 322 U.S. at 270

(barring patent owner’s equitable claims for unclean

hands). Similarly, in its most recent opportunity to

address unclean hands—the Court’s 1945 decision in

Precision Instrument—the Court held that a patent

owner’s unclean hands barred its “suit in equity.” 324

U.S. at 819.

But here, the Federal Circuit departed from this

Court’s longstanding and binding precedent. Instead

of using the equitable doctrine to bar plaintiff’s

equitable claims for relief, the Federal Circuit used

unclean hands to overturn a jury’s legal damages

award and extinguish a patent owner’s legal rights in

valid and infringed patents. This is despite the fact

that the defendant admitted to infringement and the

jury, after an 11-day trial, found the asserted patents

to be valid and determined that the patent owner was

entitled to $200 million in damages for the

defendant’s admitted infringement. Pet. Br. 11, 13.

As this Court has recognized, “a major departure

from the long tradition of equity practice should not

be lightly implied.” Weinberger v. Romero-Barcelo, 456

9

U.S. 305, 320 (1982). This is such a case meriting

review.

III. THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION DISREGARDS THIS COURT’S RECENT

PRECEDENT IN INTELLECTUAL PROPERTY

CASES HOLDING THAT OTHER EQUITABLE

DOCTRINES DO NOT BAR LEGAL RELIEF

Complementing the Court’s unclean hands cases

that date back nearly a century are two recent cases

that further cement the parity that equitable

doctrines demand, and from which the Federal

Circuit’s rule departs. In SCA Hygiene and Petrella,

the Court held that the equitable defense of laches

does not bar a legal claim for damages when brought

within the applicable statute of limitations. While

SCA Hygiene and Petrella concern the equitable

defense of laches (in a patent and copyright case,

respectively), the Court’s reasoning applies equally to

the equitable defense of unclean hands. In both cases,

the Court based its holding on the traditional rule in

American law distinguishing between legal and

equitable relief:

In SCA Hygiene, the Court declared that “a

patentee, during the period in question, could always

sue for damages in law, where the equitable doctrine

of laches did not apply, and could thus avoid any

possible laches defense.” SCA Hygiene, 137 S. Ct. at

965 (emphasis added). Likewise, in Petrella, this

Court relied on the traditional American rule to hold

that “laches cannot be invoked to bar legal relief” in

copyright cases. Petrella, 134 S. Ct. at 1974 (emphasis

added).

The Federal Circuit’s decision here cannot be

10

reconciled with SCA Hygiene and Petrella. This is

reason alone to grant review.

IV. THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION FINDS NO SUPPORT IN THE PATENT

ACT

Nothing in the text or history of the Patent Act

justifies a special rule for unclean hands that would

bar legal relief in patent cases. This Court has

cautioned against the notion that Congress means

anything other than what it says in the plain text of

the Patent Act. For example, in eBay, this Court

rejected the Federal Circuit’s special patent rule on

injunctions in part because “[n]othing in the Patent

Act indicates that Congress intended such a

departure” from “the long tradition of equity practice.”

547 U.S. at 391-392.

Recently, in SAS Institute, Inc. v. Iancu, 138 S.

Ct. 1348 (2018), this Court again cautioned the

Federal Circuit against creating exceptions to the

plain text of the Patent Act. “We find that the plain

text of § 318(a) [of the Patent Act] supplies a ready

answer.” Id. at 1354.

Likewise, the plain text of the Patent Act

supplies a ready answer here. In its provisions on

“Remedies for Infringement of Patent” in Part III,

Chapter 29, the Patent Act follows the traditional

American rule by expressly distinguishing legal from

equitable remedies and making clear the patent

owner’s legal right to damages for infringement.

To start, § 281 commands that “[a] patentee shall

have remedy by civil action for infringement of his

patent.” 35 U.S.C. § 281. Section 282 expressly sets

forth the statutory defenses to patent infringement,

11

including “[n]oninfringement” and “unenforceability.”

35 U.S.C. § 282(b)(1). In § 283, the Patent Act

expressly provides that federal courts “may grant

injunctions in accordance with the principles of equity.”

35 U.S.C. § 283 (emphasis added). And in § 284, the

Patent Act specifies the legal remedy for infringement:

“in no event less than a reasonable royalty for the use

made of the invention by the infringer.” 35 U.S.C. §

284. The statutory language is clear that damages

shall be awarded for infringement, and makes no

reference to unclean hands as a defense that bars

damages.

Respondent may point to post-enactment

commentary by P.J. Federico (Federico commentary)

of the U.S. Patent and Trademark Office in 1954 to

argue that “unenforceability” in § 282 codified

preexisting case law that supposedly applied

equitable defenses to damages claims. P.J. Federico,

Commentary on the New Patent Act, 35 U.S.C.A. 1

(West 1954) (stating that defenses in § 282 would

include “equitable defenses such as laches, estoppel

and unclean hands”). The Federico commentary,

however, was made two years after the Patent Act was

enacted. It is well settled that “[p]ost-enactment

legislative history (a contradiction in terms) is not a

legitimate tool of

statutory interpretation.”

Bruesewitz v. Wyeth LLC, 562 U.S. 223, 242 (2011).

Moreover, this Court rejected just such a

proposition in SCA Hygiene. In SCA Hygiene, this

Court disagreed with the Federal Circuit that, when

Congress enacted the Patent Act in 1952, it codified

preexisting case law that supposedly applied laches to

damages claims. This Court “closely examined the

cases on which the Federal Circuit rel[ied]” and

12

concluded “they are insufficient to support the

suggested interpretation of the Patent Act.” 137 S. Ct.

at 963. This Court held that “[t]he most prominent

feature of the relevant legal landscape at the time of

enactment of the Patent Act was the well-established

general rule, often repeated by this Court, that laches

cannot be invoked to bar a claim for damages incurred

within a limitations period specified by Congress.” Id.

Even assuming arguendo that “unenforceability”

includes unclean hands, nothing in the text or history

of the Patent Act suggests Congress intended to

expand unclean hands beyond its traditional

equitable domain to extinguish legal rights. Where

Congress intends to make such an exception to the

traditional American rule, it does so expressly, as it

did in the 1946 Lanham Act. See 15 U.S.C. § 1115(b)(9)

(expressly providing for “equitable principles,

including laches, estoppel, and acquiescence” as

defenses to trademark infringement).

When it

enacted the 1952 Patent Act only a few years later,

Congress did not include such an exception.

Not only is the Federal Circuit’s special patent

rule for unclean hands inconsistent with this Court’s

precedent, it is inconsistent with the plain text of the

Patent Act. Review is warranted for this further

reason.

V.

THE FEDERAL CIRCUIT’S UNCLEAN HANDS

EXCEPTION IS CONTRARY TO THE PURPOSE OF

THE EQUITABLE DOCTRINE AND OTHER LEGAL

RIGHTS

Review is also warranted because the Federal

Circuit’s special rule raises fundamental policy

concerns.

13

First, the Federal Circuit’s special rule runs

headlong into the purpose of equitable doctrines: to

specifically target the misconduct, and not punish.

Importantly, “[t]he maxim that he who comes into

equity must come with clean hands is not applied by

way of punishment.” Johnson v. Yellow Cab Transit

Co., 321 U.S. 383, 388 (1944) (emphasis added); see

also Keystone Driller, 290 U.S. at 245 (“[A]pply the

maxim, not by way of punishment.”). “Remedies

intended to punish culpable individuals … were

issued by courts of law, not courts of equity.” Tull v.

United States, 481 U.S. 412, 422 (1987).

Instead of targeting the alleged misconduct, the

Federal Circuit’s special rule punished the patent

owner by extinguishing its property rights in two

separate patents for which the defendant admitted

were infringed and the jury found valid. Pet. Br. 11,

13.

Further, the alleged misconduct here was

primarily directed to only one of the two infringed

patents. Pet. Br. 10, 14. Yet the Federal Circuit’s

expansive rule allowed unclean hands to go beyond

the alleged misconduct related to that patent to

extinguish property rights in the other, untainted

patent. This disproportionate use of unclean hands

clearly exceeded the bounds of equity into the realm

of punishment. Even if this Court finds there is power

in equity to “punish” and extinguish a right to

monetary damages for conduct in connection with one

patent, at a minimum, there is no right to level

punitive sanctions against another patent untainted

by unclean hands.

Second, the Federal Circuit’s special rule is

contrary to patents as property rights. There is no

14

question that patents are a property right. The

Patent Act provides that “patents shall have the

attributes of personal property.” 35 U. S. C. § 261; see

also Oil States Energy Servs., LLC v. Greene’s Energy

Grp., LLC, 138 S. Ct. 1365, 1375 (2018) (“[P]atents are

‘entitled to protection as any other property,

consisting of a franchise.’”) (citation & emphasis

omitted).

By allowing the trial court to use unclean hands

to overturn the jury’s verdict and $200 million

damages award to compensate the patent owner for

the defendant’s admitted infringement, the Federal

Circuit did far more than target the alleged

misconduct. The Federal Circuit punished a patent

owner whose patented invention was undisputedly

copied by an infringer and upheld by the jury as valid.

Third, by allowing an equitable doctrine to defeat

the jury’s verdict on legal damages claims, the Federal

Circuit’s decision raises serious Seventh Amendment

concerns. See Bray, The System of Equitable Remedies,

63 UCLA L. Rev. at 542-543 (explaining that “when a

jury trial is requested, the Seventh Amendment of the

U.S. Constitution effectively compels a classification

of the relief sought. That amendment ‘preserves’ the

right of trial by jury in ‘Suits at common law.’”). This

Court has recognized that the Seventh Amendment’s

“right to a jury trial of legal issues” should not be “lost

through prior determination of equitable claims.”

Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 511

(1959); see also Ross v. Bernhard, 396 U.S. 531, 537538 (1970) (The Seventh Amendment’s “right to jury

trial on the legal claims . . . must not be infringed

either by trying the legal issues as incidental to the

equitable ones or by a court trial of a common issue.”).

15

Thus, review is further warranted here because

the Federal Circuit impermissibly allowed an

equitable doctrine to be used as a punitive sanction

against a patent owner by extinguishing its property

rights in the asserted patents and its right to a jury

trial.

CONCLUSION

The petition for writ of certiorari should be

granted.

October 24, 2018

Respectfully submitted,

ANTHONY M. INSOGNA

JONES DAY

4655 Executive Drive

San Diego, CA 92121

JENNIFER L. SWIZE

Counsel of Record

JONES DAY

51 Louisiana Ave., N.W.

Washington, D.C. 20001

(202) 879-3939

jswize@jonesday.com

RITA J. YOON

JONES DAY

77 W. Wacker Drive

Chicago, IL 60601

Counsel for Amicus Curiae