Amicus Curiae Brief — SSL Services, LLC, Petitioner v. Cisco Systems, Inc.

No. 18-468

In The

Supreme Court of the United States

SSL SERVICES, LLC, Petitioner

V.

CISCO SYSTEMS, INC., Respondent

On a Petition for a Writ of Certiorari to The United

States Court of Appeals for the Eleventh Circuit

AMICUS BRIEF OF USIJ IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

ROBERT P. TAYLOR

Counsel of Record

RPT LEGAL STRATEGIES, PC

2443 Fillmore Street, Ste. 332

San Francisco, CA 94115

Tel: 415.447.3975

robert.taylor@rptstrategies.com

Counsel for Amicus Curiae

i

TABLE OF CONTENTS

Page

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

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

ARGUMENT ...............................................................6

I. THE LEGISLATIVE HISTORY OF THE

AIA MAKES CLEAR THAT PATENTS

SHOULD NOT BE SUBJECTED TO

MULTIPLE ATTACKS ..........................................6

II. THIS CASE IS AN EGREGIOUS

EXAMPLE OF UNFETTERED ATTACKS

ON PATENTS ......................................................10

III.THE SYSTEMATIC WEAKENING OF

PATENT PROTECTION UNDERMINES

THE FUNDAMENTAL REASONS FOR

HAVING PATENTS AT ALL ..............................14

IV. RELIABLE PATENT PROTECTION

REQUIRES MORE THAN LIP SERVICE..........17

A. Reliability and Respect Are Essential

Aspects of the Property Right Conferred

by a Patent ......................................................17

B. The U.S. Patent System Must Be

Accessible to All Companies, Not Just

Large Ones ......................................................19

V. CONCLUSION .....................................................21

APPENDIX ................................................................1a

ii

TABLE OF AUTHORITIES

Page(s)

Cases

Bonito Boats, Inc. v. Thunder Craft

Boats, Inc.,

489 U.S. 141 (1989) ................................................ 8

Chi. & S. Air Lines, Inc. v. Waterman

S.S. Corp.,

333 U.S. 103, 68 S.Ct. 431, 92 L. Ed.

568 (1948) ............................................................. 10

Cuozzo Speed Tech. v. Lee,

136 S. Ct. 2131 (2016) .......................................... 12

SSL Servs., Inc. v. Citrix Systems, Inc.,

769 F.3d 1073 (2017) (E.D.Tx 2014) ................ 5, 11

Statutes

35 U.S.C. § 315(e) ........................................................ 2

35 U.S.C. § 325 .......................................................... 11

35 U.S.C. § 325(d) .............................. 2, 3, 4, 5, 8, 9, 10

35 U.S.C. § 327(c) ........................................................ 8

Other Authorities

157 Cong. Rec. S936-S953 ........................................... 9

iii

Congressional Record, Vol. 154 (2008),

Part 16 .................................................................... 8

Economics and Statistics

Administration & United States

Patent and Trademark Office,

United States Department of

Commerce, Intellectual Property and

the U.S. Economy: Industries in

Focus (March 2012) ........................................ 18, 19

Phillip S. Johnson, A Lookback at the

Legislative Origins of IPRs, IP

Watchdog (September 20, 2017) ............................ 3

Senate Report 110-259, The Patent

Reform Act of 2007, 110th Congress,

to accompany S. 1145 ............................................. 8

United States Chamber of Commerce,

US Chamber International IP Index

(February 2018) ................................................... 15

1

INTEREST OF AMICUS CURIAE

USIJ is a coalition of 30 startup companies and

their affiliated executives, inventors and investors

that depend on stable and reliable patent protection

as an essential foundation for their businesses. A list

of USIJ members is attached as Appendix A.

USIJ was formed in 2012 to address concerns that

legislation, policies and practices adopted by the U.S.

Congress, the Federal Judiciary and the U.S. Patent

& Trademark Office (“PTO”) were placing individual

inventors and research-intensive startups (“the

invention community”) at an unsustainable

disadvantage relative to their larger incumbent rivals

and others that would misappropriate their

inventions, both domestic and foreign.

USIJ’s

fundamental mission is to assist and educate

Members of Congress, leaders in the Executive branch

and the Federal Judiciary regarding the critical role

that patents play in our nation’s economic system. In

this endeavor, USIJ works with other groups and

coalitions within the invention community to insure

that protection of the creative role played by

individual inventors, universities, startups and small

companies is recognized as a primary objective of the

U.S. Constitution, which provides the foundation for

the U.S. patent system.1

No counsel for a party authored this brief in whole or in part,

and no such counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief. No

person other than amicus curiae or its counsel made a monetary

contribution to its preparation or submission. The parties have

consented in writing to the filing of this brief.

1

2

SUMMARY OF ARGUMENT

Inter Partes Review (“IPR”) procedures were

created by Congress as an economical way to

eliminate

“bad

patents”

through

expedited

administrative proceedings at the PTO instead of

litigation in a district court. Whatever success IPRs

may have had in nullifying bad patents, the PTO’s

processes have expansively allowed IPRs to be

instituted against meritorious patents that already

survived multiple challenges. The outcome in this

case is a direct reflection of that indifference and cries

out for this Court’s guidance. The PTO struck down

the SSL patent after the same agency, using the same

or nearly identical prior art, had affirmed its validity

on six separate occasions and after a district court and

the Federal Circuit had also affirmed the validity of

the same claims in an infringement case.

The failure of the PTO to implement Sections

315(e) and 325(d) in a meaningful way at the outset

has allowed abuse of IPRs on a grand scale. Large

infringers have been permitted to mount wave after

wave of challenges to the same patent claims. What

was envisioned by Congress as limited to “one bite at

the apple” – i.e., a single challenge to a patent claim –

became instead a system wherein a single patent

claim can be attacked by even the same challenger

with two, three, four, five, six, or more petitions. That

same challenger, often a large corporation, also can

coordinate its challenges with those of other

challengers who file their own separate salvos against

3

the same claim.

Not surprisingly, a crop of

enterprising profiteers, funded principally by a

network of large technology companies, has emerged

to file separate petitions pretending to be independent

of the real party in interest and thereby hoping to

avoid the estoppel provisions of the AIA.

Congress never intended the post grant

challenges to patent validity created by the AIA to be

used as weapons to raise the cost of litigation for

inventors and small companies.

Indeed, the

legislative history of the AIA is to the contrary, with

numerous expressions of concern, through successive

sessions of Congress, about the ability of large

infringers to use post grant challenges to harass

“brilliant inventors” and small companies by

attacking their patents. Congress understood clearly

that if the very best patent imaginable is subjected to

a sufficient number of probabilistic challenges, as all

litigation inevitably becomes, sooner or later the

patent will be held invalid.2

35 U.S. §325(d) was included in the final version

of the AIA for the very purpose of preventing

infringers from forcing a patent owner to defend

multiple proceedings whenever it tried to enforce its

An article by Phillip S. Johnson, formerly Senior Vice

President, IP Policy and Strategy, Johnson & Johnson,

chronicles the manner in which the IPR process was allowed to

create what he referred to as a “killing field.” See, “A Lookback

at the Legislative Origins of IPRs,” IP WATCHDOG, September 20,

2017.

https://www.ipwatchdog.com/2017/09/20/look-backlegislative-origin-iprs/id=88075

2

4

patents.

Allowing multiple attacks eviscerates

doctrines such as stare decisis and res judicata that

have existed for decades to settle contested issues

with finality and to provide repose to the parties.

Section 325(d) is a clear statement by Congress that

the interests of legitimate patent owners must be

taken into account and balanced against the statutory

objective of eliminating so-called “bad patents.” After

a patent claim has been subjected to an IPR challenge

once without falling, that patent no longer can be

considered a “bad patent,” and infringers should be

required in most cases to use the district courts to

adjudicate any further assertions of invalidity.

Section 325(d) is particularly applicable to the

situation here. Prior to the ruling at issue in this case,

the SSL patent had survived ex parte reexamination

brought by an infringer on three prior occasions, two

of which were based upon the identical prior art that

later was used by the PTO to invalidate the SSL

patent. Each of the three proceedings was followed by

an additional de novo review requested by SSL, and

each of these affirmed the patent’s validity with

written opinions. Thereafter, the SSL patent was

asserted against the same infringer who raised, as a

defense in the district court, the same primary

reference that it had used unsuccessfully in each of

the reexaminations, this time in combination with

RFC1508 (a portion of the internet specification). The

jury found, as the PTO had previously held, that the

prior art did not invalidate the patent.

That

5

judgement of the district court was affirmed on appeal

by the Federal Circuit.3

Against this backdrop and in light of Section

325(d), it is unacceptable for the PTO simply to ignore

its own conclusions in six prior reviews of the same

question and to reject the final ruling of an Article III

district court, affirmed by an Article III court of

appeals. Equally important, it is both shocking and

surprising that the Federal Circuit, in issuing a Rule

36 affirmances without opinion, did not provide any

substantive guidance on this critical question of

separation of powers. An Article I administrative

tribunal should never be allowed to override the

conclusions of prior tribunals of the same agency and

the final rulings of two Article III courts.

There must be meaningful restraints on the

willingness of the PTO to accept multiple challenges

seeking to invalidate a patent that already has

survived a post-issuance challenge, particularly

where the prior art on which the later challenge is

based is the same or substantially the same as in the

prior challenge. The unfairness in such a process is

evident to anyone. Sooner or later, a panel of judges

will be found that will conjure up a justification to kill

a patent, as happened here, despite numerous

contrary rulings by the same agency. A single

unfavorable panel is all it takes to destroy an

SSL Servs., Inc. v. Citrix Systems, Inc. , 769 F.3d 1073 (2014),

aff’g 940 F.Supp. 2d 480 (E.D.Tx 2014).

3

6

important and highly valuable property right.4 It is

not the “bad patents” that have become the focus of

IPRs, but now it is the most meritorious.

It is difficult to gauge the damage that this type of

outcome has had on those inventors and

entrepreneurs who would risk economic livelihood,

time and monetary resources in the pursuit of critical

breakthrough technololgies.

The inventor and

investor communities increasingly despair about the

cost and uncertainties of genuine patent protection. It

is this community that USIJ represents and that is in

great need of some good news.

ARGUMENT

I.

THE LEGISLATIVE HISTORY OF THE

AIA MAKES CLEAR THAT PATENTS

SHOULD NOT BE SUBJECTED TO

MULTIPLE ATTACKS

Throughout the course of debate over the AIA and

its predecessor bills, Congress reiterated its

commitment to avoiding repeated attacks on a patent.

This commitment, as established below, is codified in

the AIA but was widely ignored by the PTO during the

Obama Administration, as exemplified in the instant

case.

PTO records show that Patent No. 7,237,634 has been the

subject of 16 IPR petitions. The best patent one could conceive

is severely at risk facing such repetitive attacks.

4

7

In the debates surrounding the proposed Patent

Reform Act of 2007, a legislative predecessor of the

AIA, the Senate Report explicitly referenced concern

about multiple attacks on a patent. These comments

were directed to what at the time were being

characterized as “first window” and “second window”

opportunities to initiate post-grant review (“PGR”)

proceedings.

This “second window” was the

forerunner of the now-enacted IPR provisions.

Congress plainly saw the potential for abuse of

IPR proceedings as a costly delaying tactic that large

companies could exploit to bankrupt small inventors:

“A few words about second window: opening up a

second window for administrative challenges to a

patent only makes sense if defending a patent in

such proceedings is not unduly expensive, and if

such proceedings substitute for a phase of districtcourt litigation. If second-window proceedings are

expensive to participate in, a large manufacturer

might abuse this system by forcing small holders

of important patents into such proceedings and

waiting until they run out of money. Defending

oneself in these proceedings requires

retention of patent lawyers who often

charge $600 an hour, quickly exceeding the

means of a brilliant inventor operating out

of his garage – or even of a university or

small research firm.

“Second, if estoppel rules are unduly liberalized,

second-window proceedings could easily be used

as a delaying tactic.”

8

Senate Report 110-259, “The Patent Reform Act of

2007,” 110th Congress, to accompany S. 1145, at 66

(emphasis supplied).

Recognizing that duplicative petitions are “one of

the worst evils” of administrative proceedings,

Congress sought to all-but-eliminate such proceedings

(allowing for repeat proceedings only in extreme

cases, such as in cases of collusion between the patent

owner and the petitioner):

“Subsection (c) of section 327 applies a successivepetition bar of sorts to second or successive

petitions for second-period review. It is a rare

patent that should be twice subjected to secondwindow proceedings….

“Lengthy and duplicative proceedings are

one of the worst evils of other systems of

administrative review of patents. During

the pendency of such proceedings, a patent

owner is effectively prevented from

enforcing his patent. Subsection (c) should

ensure that second or successive secondperiod proceedings are few and far

between.”

Congressional Record, Vol. 154 (2008), Part 16, Pages

22620-22632 (Senator Kyl speech on Patent Reform)

(emphasis supplied). The substance of Section 327(c)

of the bill then pending became Section 325(d) of the

AIA.

Congressional determination to prohibit multiple

petitions continued through the 2011 debates and

9

enactment, with both the Senate and House

reiterating the goal of precluding repetitive and

abusive challenges. Senator Grassley explained:

“In addition, the bill would improve the current

inter

partes

administrative

process

for

challenging the validity of a patent …. It would

also include a strengthened estoppel standard to

prevent petitioners from raising in a subsequent

challenge the same patent issues that were raised

or reasonably could have been raised in a prior

challenge.

The bill would significantly

reduce the ability to use post-grant

procedures for abusive serial challenges to

patents.”

Senate Debate 2-28-2011 (157 Cong. Rec. S936-S953)

(comments of Senator Grassley) (emphasis supplied).

Congress’ intent that patents not be subjected to

repeated attacks was codified in 35 U.S.C § 325(d),

quoted below.

This provision expresses the

incontrovertible intent of Congress to avoid the kind

of repetitive attacks that characterize the instant

case. And while the decision to implement an IPR

proceeding is entrusted to the PTO, we respectfully

submit that it was an abuse of discretion, on the facts

here, for the PTO to implement the IPR that the

patent owner appeals from and a further failure by

the Federal Circuit to address the injustice. We urge

this Court to grant the petition for a writ of certiorari

and allow the patent owner the benefit of a

substantive review on the merits.

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II.

THIS CASE IS AN EGREGIOUS

EXAMPLE

OF

UNFETTERED

ATTACKS ON PATENTS

The AIA provides that in considering whether to

implement an IPR based on substantially the same

prior art or arguments that previously were presented

to the PTO, the Director should consider rejecting the

petition:

“In determining whether to institute or order a

proceeding under this chapter, chapter 30, or

chapter 31, the Director may take into account

whether, and reject the petition or request

because, the same or substantially the same

prior art or arguments previously were

presented to the Office.”

35 U.S.C. Section 325(d) (emphasis supplied).

This section, which is promulgated under Chapter

32 of the AIA directed to post-grant review

proceedings, is equally applicable by its terms to

Chapter 31, concerning institution of IPR

proceedings. While this congressional directive may

be discretionary, discretion is not boundless. When

the same prior art has been so thoroughly considered

in multiple PTO proceedings, as is the case here, there

must be an end to the PTO’s willingness to entertain

yet another attack on the same grounds. This is

particularly true where an Article III court, supported

by a jury verdict and the affirmation of the Federal

Circuit, has already upheld the patent’s validity. See

Chi. & S. Air Lines, Inc. v. Waterman S.S. Corp., 333

U.S. 103, 113, 68 S.Ct. 431, 92 L. Ed. 568 (1948)

11

("Judgments, within the powers vested in courts by

the Judiciary Article of the Constitution, may not

lawfully be revised, overturned or refused faith and

credit by another Department of Government.").

In this case, the Alden and Takahashi references

used by the PTO had already been asserted against

the SSL patent in multiple reexamination

proceedings. The Federal Circuit specifically found

the Takahashi reference inapplicable.

See SSL

Servs., LLC v. Citrix Sys., 769 F.3d 1073, 1089 (Fed.

Cir. 2014) (“We agree with SSL that substantial

evidence supports the finding that Takahashi does not

disclose the authentication and encryption software at

the applications level.”).

Nonetheless, by now adding two additional prior

art references to the combination, Cisco was

successful in challenging the patent based on a

combination of four prior art references, still grounded

on the the same Takahashi and Alden references that

had already been evaluated by the PTO.

If that

practice establishes the legal standard governing this

Federal agency – i.e., the ability of an infringer to

assert a claim of obviousness by locating a tertiary

and quaternary reference to bootstrap alreadylitigated prior art – then there is no meaningful limit

to the PTO’s discretion to subject patent owners to yet

another expensive attack on their inventions. Section

325 thus becomes a dead letter.

The present attack on this patent owner’s rights

is symptomatic of the much larger problem with how

the PTO administered the IPR provisions of the AIA

12

during the Obama Administration.5

Following

enactment of the AIA in 2011, and notwithstanding

the legislative history referred to in Part I, above, the

PTO began to implement procedures that were

weighted heavily in favor of anyone wishing to

extinguish the rights of a patent owner.

The reality is that the IPR process has been

weaponized by large infringers to raise the cost of

patent litigation to levels that only the largest and

most profitable companies can afford. It has become

predictable and almost routine for certain large

companies – in many situations contrary to the patent

statute – to invoke IPR procedures in tandem with

judicial proceedings, and to subject a patent to

multiple IPR challenges.

We call the Court’s attention to a White Paper

prepared by Amicus USIJ and posted to its website,

The current director of the PTO, Andrei Iancu, took office on

February 5, 2018. Director Iancu has expressed concerns about

some of the policies and procedures left over from the Obama

Administration that were in place when he arrived and has taken

steps to remedy some of the problems for the future. That change

in approach, however, should not be a reason for this Court to

deny certiorari here. In Cuozzo Speed Tech. v. Lee, 136 S.Ct.

2131 (2016), this Court affirmed the broad discretion of the PTO

to adopt rules governing the institutions of IPRs, and we do not

quarrel with that. That discretion, however, must have some

limits, and we submit that implementation of an IPR in this case

on its face exceeded that discretion. Moreover, for the Federal

Circuit to refuse to assert its own jurisdiction and at least

consider the merits of the outcome in the PTO is an assault on

fundamental principles of res judicata and stare decisis, to say

nothing of constitutionally protected property rights.

5

13

entitled “How ‘One Bite at the Apple’ Became Serial

Attacks on High Quality Patents at the PTAB”

https://www.usij.org/research/2018/serial-attacks.

The White Paper is based on an analysis of published

data showing the rampant abuse of the IPR process by

the five largest filers of IPRs – Apple (397), Samsung

(270), Google (213), Microsoft (134) and LG

Electronics (130). The analysis shows that 56% of the

IPR petitions filed by Apple are overlapping of

another Apple petition against at least one patent

claim. That is, a patent owner fighting Apple will be

faced with more than one Apple petition against a

single claim over half the time. Likewise, the four

next most frequent filers routinely file two or more

petitions against a single patent claim, with the

percentages of such overlapping petiitons at 59% for

Microsoft, 38% for Samsung, 38% for Google, and 34%

for LG. Far from a single “bite at the apple,” it is now

routine practice to file 2, 3, 4, 5 or more petitions

against even a single patent claim. This is exactly

the burden on patent owners that Congress sought to

restrain but is nonetheless rampant today.

The burden represented by the present case is

exemplary of this much broader assault on inventors.

The Court should grant certiorari to make clear that

the PTO’s willingness to entertain wave after wave

of attacks against a single patent must have some

limits.

14

III.

THE SYSTEMATIC WEAKENING OF

PATENT

PROTECTION

UNDERMINES THE FUNDAMENTAL

REASONS FOR HAVING PATENTS AT

ALL

The end result of undermining the integrity and

reliability of U.S. patents should come as no surprise

to anyone who understands how incentive systems

operate in the real world.

The willingness of

entrepreneurs and investors who once were willing to

take on the high-risk challenges required for the

development of disruptive new technologies has

waned, as later stage companies and those that are

less reliant on patents attract ever larger portions of

risk capital. USIJ recently analyzed venture capital

investing trends over the period from 2004 to 2017.

That

study,

which

can

be

viewed

at

https://www.usij.org/research/2018/7/9/us-startupcompany-formation-and-venture-capital-fundingtrends-2004-to-2017, shows that while the total

amount of venture capital invested in the U.S.

increased by a factor of four over that 14-year period,

the portions invested in many of our most important

and strategically critical industries showed

substantial declines.

In 2004, for example,

investments in semiconductors accounted for 1.2% of

all the companies that received venture capital

funding and 2% of all the venture capital dollars

invested. By 2017, the number of companies that

received funding had fallen by an order of magnitude

and the dollar commitment was negligible.

15

This particular statistic should be a wake up call

to Americans in light of the challenge being mounted

to U.S. dominance of strategically important areas of

science and technology by China and others.

Semiconductor technology would rank high on almost

any list of the most critical technologies for

cybersecurity, artificial intelligence, national defense

and virtually every other economic activity that

depends on computational progress.

Nor are the declines limited to just

semiconductors – the USIJ study shows that

entrepreneurial investments in network equipment,

wireless communications, pharmaceutical and other

patent dependent industries are declining while the

shares dedicated to investments in wearing apparel,

entertainment, hotels, food products and restaraunts

are rising. This is not to suggest that those other

industries are not economically important, but they

are not the strategic industries that will maintain this

country’s dominance of science and technology.

Although it may be many years before the full

implications of this shift away from strategic

technologies is apparent, we already can see some of

the important fallout. For example,the U.S. Chamber

of Commerce has for several years published an

annual assessment of the relative effectiveness of the

patent systems of industrial countries, worldwide, to

incentivize invention and investment. Published in

February 2018, “US Chamber International IP Index

https://www.theglobalipcenter.com/wpcontent/uploads/2018/02/GIPC_IP_Index_2018.pdf

looks at whether "a given economy's intellectual

16

property system [will] provide a reliable basis for

investment in the innovation and creativity lifecycle."

In 2017, the U.S. patent system was dropped from 1st

in the world to 10th. In 2018, it was dropped further

to 13th. https://www.patentdocs.org/2018/02/us-dropsto-13th-in-worldwide-patent-protection-according-tostudy-released-by-us-chamber-of-commerc.html. The

U.S. ranking of 13th puts our country behind the

Netherlands, Spain, Sweden and Italy, among others.

Similarly, the Bloomberg Innovation Index of

countries ranks the U.S. 12th in the world, behind

South

Korea,

Singapore

and

others.

https://www.bloomberg.com/news/articles/2018-0122/south-korea-tops-global-innovation-rankingagain-as-u-s-falls.

A recent report by CB Insights shows that 48% of

all worldwide investment in artificial intelligence

went to China, while less that 40% was invested in our

country. This is consistent with figures from the

National Venture Capital Association showing that

over the past 15 years, the portion of venture capital

invested in the United States has fallen from 84% to

54%.

If the United States is to retain (or regain) its

leadership position in the development of strategically

important technologies, it is imperative that this

Court reverse the enforcement trends of the last

fifteen years and recognize the real world linkage

between strong patent enforcement and the behavior

of individuals with the motivation, skill and resources

17

needed to develop disruptive new technologies having

long development cycles.

IV.

RELIABLE PATENT PROTECTION

REQUIRES MORE THAN LIP

SERVICE

A. Reliability and Respect Are Essential

Aspects of the Property Right Conferred

by a Patent

The ability of inventors and investors to rely on

the protectability of what they invent is a

fundamental component of the incentive mechanism

that patents are supposed to create. The current

Director of the PTO, Andrei Iancu, in one of his public

appearances earlier this year, emphasized the critical

importance of reliability if patent are to play a proper

role in our economy. In an address before the U.S.

Chamber of Commerce Patent Policy Conference,

Director Iancu noted the decline in the Chamber’s

assessment of the U.S. patent system and spoke to

ways of reversing the trend. Director Iancu’s address,

entitled “Role of U.S. Patent Policy in Domestic

Innovation and Potential Impacts on Investment,” can

be found at https://www.uspto.gov/about-us/newsupdates/remarks-director-andrei-iancu-us-chambercommerce-patent-policy-conference. Needless to say,

a patent subject to an unbounded number of IPR

challenges by infringers is hardly a “reliable” for

investing time and resources in new technology.

18

Few people would quarrel with the observation

that for more than 200 years, our patent system has

provided the essential protections that allowed

inventors and their investors to take the risks

associated with bringing disruptive new technologies

into being. As noted by this Court in Bonito Boats,

Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 15051 (1989):

“The federal patent system thus embodies a

carefully crafted bargain for encouraging the

creation and disclosure of new, useful, and

nonobvious advances in technology and design in

return for the exclusive right to practice the

invention for a period of years.”

As further noted in a 2012 report fom the U.S.

Department of Commerce,

“[t]he granting and protection of intellectual

property rights is vital to promoting innovation

and creativity and is an essential element of our

free-enterprise, market-based system.”

Economics and Statistics Administration & United

States Patent and Trademark Office, United States

Department of Commerce, Intellectual Property and

the U.S. Economy: Industries in Focus, (March 2012)

(“Commerce Department Report”), available at

http://1.usa.gov/IkztGg. The same report goes on to

note:

“The investments necessary to develop IP are

often quite substantial.

Firms and

individuals, in order to invest the necessary

19

resources, need some assurance that they will

benefit from and recover the costs of the

creation of intellectual property.”

Commerce Department Report at 1.

Despite such widespread pronouncements by

policy makers extolling the virtues and successes of

the U.S. patent system, those views are no longer

shared by the most important audience that the

patent system was designed to incentivize – people

who would develop disruptive new technologies that

challenge the dominance of incumbents and

monopolies. When small companies are forced to

forego patent protection because of the extraordinary

cost of enforcement – which is the natural result of

repetitive challenges and unreliability – the incentive

mechanism is lost. Patents only work if they are

respected.

Without widespread acceptance and

submission to the property rights of others, no system

of property rights will work properly, and patents are

no exception.

B. The U.S. Patent System Must Be

Accessible to All Companies, Not Just

Large Ones

The invention of disruptive new technologies that

save lives and protect our national security are far

more likely to come from individual inventors and the

companies that they start than from incumbent large

corporations with their own established lines of

products and intense focus on existing markets. This

phenomenon is well documented and sometimes

referred to as “The Innovator’s Dilemma,” a reference

20

to Clayton Christianson’s widely read book detailing

the many factors that constrain large incumbent

companies from undertaking high risk investments.

That does not gainsay the valuable innovative

contributions to manufacturing, marketing and

worldwide distribution that large organizations can

provide, but it is a mistake to expect established

incumbents to promote disruptive new ideas and

inventions that challenge the primacy (and bonuses)

of their most important executives whose careers have

rewarded them richly for doing things they know will

work.

It is difficult and perilous to start any new

company from scratch. The process requires visionary

people willing to give up secure jobs, take risks and

join companies that have a high probability of failure.

It also requires investors with a strong understanding

of risk who are willing to invest in an often distant

prospect of a return sufficient to justify such risk.

Most importantly – for those products and

technologies having a long development cycle – these

prerequisite conditions can only exist within the

security ambit provided by a properly functioning

patent system.

Reliable and enforceable patents are essential to

protect startups and small companies from the

predatory behavior of incumbents and would-be

competitors that are anxious to copy any new product

or technology once its feasibility is proven – and

without the costs of development.

Enforceable

patents are also essential to allow these inventors and

entrepreneurs to attract capital needed to build the

21

companies that will bring such products to market.

Without enforceable patents, there is no incentive for

investors or entrepreneurs to assume the risks

involved in challenging entrenched market players

with entirely new technologies.

V.

CONCLUSION

Individual inventors have defined indelibly a

pantheon of American heroes.

Thomas Edison,

Samuel Morse, the Wright Brothers, Alexander

Graham Bell, Charles Goodyear, James Watson, Ray

Dolby, Chester Carlson and countless other lesser

known names have contributed enormously to our

country’s well being and its dominance of technology

for two centuries. USIJ submits that maintaining an

environment where future American heroes can

emerge is paramount to the future of our country.

To that end, we strongly urge this Court to grant

the writ requested by Petitioner and, at the very least,

send this case back to the Federal Circuit for further

consideration of the wisdom of subjecting a patent to

multiple validity challenges that continue until a

court or an agency finds the patent invalid – with the

customary in rem finality for all future purposes that

is triggered by such a finding. The inventor and

investor communities are increasingly of the view that

their patents are worthless and serve no purpose.

That view spells a long term disaster for our country

that already is becoming apparent. We need the

invention community and its creative energies.

22

Respectfully submitted,

ROBERT P. TAYLOR

Counsel of Record

RPT LEGAL STRATEGIES, PC

2443 Fillmore Street, Ste. 332

San Francisco, CA 94115

Tel: 415.447.3975

robert.taylor@rptstrategies.com

Counsel for Amicus Curiae

APPENDIX

1a

Appendix COMPANIES

APPENDIX — MEMBER

• Juno Therapeutics

• Direct Flow Medical

• EnterVault

• Siesta Medical

• Roxwood Medical

• NeoTract

• The Foundry

• Autonomic Technologies

• MedicalCue

• Tallwood Venture

Capital

• Materna

• Puracath Medical

• ExploraMed

• Precision Biopsy

• Fogarty Institute for

Innovation

• Pulsar Vascular

• Moximed

• Prescient Surgical

• Rearden Studios

• Arrinex, Inc

• ConnectCloud

• BioCardia

• MiramarLabs

2a

Appendix

• Ceterix Orthopaedics

• Zipline Medical

• CyberHeart

• Soraa

• Aegea Medical

• Solar Junction

• EarLens Croporation