Opposition Brief — Collabo Innovations, Inc., Petitioner v. Sony Corporation, et al.
Supreme Court briefFeb 7, 2020
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No. 19-601
IN THE
Supreme Court of the United States
COLLABO INNOVATIONS, INC.,
v.
Petitioner,
SONY CORPORATION, ET AL.
Respondents.
On Petition for Writ of Certiorari to the
United States Court of Appeals
for the Federal Circuit
BRIEF IN OPPOSITION
JOHN C. O’QUINN
MEGAN M. WOLD
KIRKLAND & ELLIS LLP
655 Fifteenth Street, NW
Washington, DC 20005
(202) 879-5000
MATTHEW A. SMITH
ELIZABETH A. LAUGHTON
SMITH BALUCH LLP
1100 Alma Street
Suite 109
Menlo Park, CA 94025
(202) 669-6207
ANDREW S. BALUCH
Counsel of Record
SMITH BALUCH LLP
700 Pennsylvania Avenue, SE
Suite 2060
Washington, DC 20003
(202) 880-2397
baluch@smithbaluch.com
Counsel for Respondent
February 7, 2020
i
QUESTIONS PRESENTED
In 2011, Congress enacted the Leahy-Smith
America Invents Act, Pub. L. 112-29, 125 Stat. 284
(2011) (“AIA”) and created a prospective procedural
mechanism for challenging issued patents called inter
partes review. Two years later, Petitioner Collabo
Innovations, Inc. acquired U.S. Patent 5,952,714 (the
“’714 patent”) and then asserted it against Sony
Corporation. Sony responded by asking the U.S.
Patent & Trademark Office (“PTO”) to institute inter
partes review of the ’714 patent, applying the
procedural mechanism as the AIA allowed. Collabo
did not argue that the PTO should not institute or
render a final written decision on the grounds that
applying inter partes review to its patent would be
unconstitutional. The PTO instituted inter partes
review and concluded that, under the substantive
patentability standards applicable at the time of the
patent’s issuance in 1999, the ’714 patent’s claims
were not patentable and should never have issued.
The questions presented are as follows:
1. Does a party waive its Fifth Amendment
Takings Clause and Due Process Clause challenges
when it does not present them to the agency when the
agency has the ability to grant relief on those
grounds?
2. Does it violate the Takings Clause of the Fifth
Amendment for the PTO to apply the inter partes
review procedure to determine whether a patent,
which issued before Congress enacted the AIA, was
ii
properly issued under the substantive legal standards
applicable at the time of issuance?
3. Does it violate the Due Process Clause of the
Fifth Amendment for the PTO to apply the inter
partes review procedure to determine whether a
patent, which issued before Congress enacted the
AIA, was properly issued under the substantive legal
standards applicable at the time of issuance?
iii
PARTIES TO THE PROCEEDING
The following list identifies all parties to the
proceeding in the court whose judgment is sought to
be reviewed: Collabo Innovations, Inc., Sony
Corporation, and Andrei Iancu, Under Secretary of
Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
CORPORATE DISCLOSURE
Respondent Sony Corporation has no parent
corporation. No publicly held company owns 10% or
more of Respondent’s stock.
iv
TABLE OF CONTENTS
QUESTIONS PRESENTED........................................ i
PARTIES TO THE PROCEEDING .......................... iii
CORPORATE DISCLOSURE ................................... iii
TABLE OF CONTENTS ........................................... iv
TABLE OF AUTHORITIES ...................................... vi
INTRODUCTION ....................................................... 1
STATEMENT OF THE CASE ................................... 4
A.
History of PTO’s Post-Issuance Review
Procedures ................................................. 4
B.
Collabo Acquires the ’714 Patent .............. 8
C.
PTO Proceedings ....................................... 9
D.
Appeal ...................................................... 10
REASONS FOR DENYING THE WRIT ................. 11
I.
II.
This Petition Is Particularly Unsuitable For
Review. ............................................................. 11
A.
Collabo Waived its Constitutional
Challenges By Failing to Raise Them
With the Board. ...................................... 12
B.
The ’714 Patent Is Expired. .................... 16
C.
The ’714 Patent Belongs to a Small and
Rapidly Diminishing Group of Patents to
Which Inter Partes Reexamination Never
Applied. .................................................... 17
The Decision Below Implicates No Split Of
Authority. ......................................................... 19
v
A.
The Federal Circuit Has Consistently—
and Unanimously—Rejected
Constitutional Arguments Like Collabo’s.
.................................................................. 19
B.
Collabo Cannot Point to Any Broader Split
in Authority Outside the Federal Circuit.
.................................................................. 24
III. Inter Partes Review Is A Prospective Procedural
Mechanism Not Materially Different From
Previous Review Procedures............................ 25
A.
Inter Partes Review Is a Prospective
Application of Procedure, Not a
Retroactive Application of Substantive
Law........................................................... 26
B.
Collabo Has No Vested Right in Any
Particular Post-Issuance Review
Procedure. ................................................ 28
IV. Even If Applications Of Inter Partes Review
Were Viewed As Retroactive, There Is No Fifth
Amendment Violation. ..................................... 30
A.
Inter Partes Review Is Not Materially
Different From Other Post-Issuance
Review Procedures. ................................. 30
B.
Applying Inter Partes Review to the ’714
Patent Does Not Violate the Takings
Clause. ..................................................... 32
C.
Applying Inter Partes Review to the ’714
Patent Does Not Violate the Due Process
Clause. ..................................................... 36
CONCLUSION ......................................................... 38
vi
TABLE OF AUTHORITIES
Cases
Arthrex, Inc. v. Smith & Nephew, Inc.,
935 F.3d 1319 (Fed. Cir. 2019) .......................... 23
Bethune-Hill v. Va. State Bd. of Elections,
137 S. Ct. 788 (2017) .......................................... 15
Bonito Boats v. Thunder Craft Boats,
489 U.S. 141 (1989) ............................................ 34
Bowen v. Georgetown Univ. Hosp.,
488 U.S. 204 (1988) ............................................ 27
Celgene Corporation v. Peter,
931 F.3d 1342 (Fed. Cir. 2019) .............. 11, 22, 24
Collabo Innovations, Inc. v. Sony Corp.,
778 Fed. Appx. 954 (Fed. Cir. 2019) .................. 23
Cuozzo Speed Techs., LLC v. Lee,
136 S. Ct. 2131 (2016) ................................ passim
Danforth v. United States,
308 U.S. 271 (1939) ...................................... 15, 26
Denver & Rio Grande W. R.R. Co. v. Bhd. of R.R.
Trainmen,
387 U.S. 556 (1967) ............................................ 28
Enzo Life Scis., Inc. v. Becton, Dickinson & Co.,
780 Fed. Appx. 903 (Fed. Cir. 2019) .................. 23
Ex parte Collett,
337 U.S. 55 (1949) .............................................. 28
Graham v. Goodcell,
282 U.S. 409 (1931) .................................... passim
vii
In re Rambus Inc.,
694 F.3d 42 (Fed. Cir. 2012) .............................. 17
Joy Techs. v. Manbeck,
959 F.2d 226 (Fed. Cir. 1992) ...................... 10, 21
Landgraf v. USI Film Prods.,
511 U.S. 244 (1994) ...................................... 24, 27
Oil States Energy Services, LLC v. Greene’s Energy
Group, LLC,
138 S. Ct. 1365 (2018) ................................ passim
OSI Pharms., LLC v. Apotex Inc.,
939 F.3d 1375 (Fed. Cir. 2019) .......................... 23
Paramino Lumber Co. v. Marshall,
309 U.S. 370 (1940) ............................................ 24
Patlex Corp. v. Mossinghoff,
758 F.2d 594 (Fed. Cir. 1953),
modified on other grounds on reh’g,
771 F.2d 480 (Fed. Cir. 1985) .......... 10, 20, 25, 33
Penn Central Transportation Co. v. New York City,
438 U.S. 104 (1978) ........................................... 21
Phillips v. AWH Corp.,
415 F.3d 1303 (Fed. Cir. 2005) (en banc) .......... 17
United States v. L.A. Tucker Truck Lines, Inc.,
344 U.S. 33 (1952) .............................................. 12
United States v. Singer Mfg. Co.,
374 U.S. 174 (1963) .............................................. 5
Statutes
35 U.S.C. § 102(b) ..................................................... 26
35 U.S.C. § 103(a) ..................................................... 26
viii
35 U.S.C. § 135(a) (1999) ...................................... 5, 28
35 U.S.C. § 154 ......................................................... 35
35 U.S.C. § 251 ......................................................... 16
35 U.S.C. § 282 ......................................................... 31
35 U.S.C. § 302 ............................................... 5, 28, 31
35 U.S.C. § 307(a) ....................................................... 5
35 U.S.C. § 311(a) ..................................................... 29
35 U.S.C. § 311(b) ..................................................... 31
35 U.S.C. § 315(e) ..................................................... 33
35 U.S.C. § 316 ..................................................... 7, 31
35 U.S.C. § 318 ................................................... 16, 33
35 U.S.C. § 6 ............................................................... 7
Leahy-Smith America Invents Act,
Pub. L. 112-29, 125 Stat. 284 (2011) ............. 7, 28
Optional Inter Partes Reexamination Procedure Act
of 1999,
Pub. L. 106-113, §§ 4601-4608, 113 Stat. 1501A567 to 1501A-572.................................. 5, 6, 18, 37
Patent Act of 1836,
ch. 357, 5 Stat. 117 (1836).................................... 4
Patent Law Amendments Act of 1984,
Pub. L. 98-622, 98 Stat. 33833 (1984) ..... 5, 20, 29
Pub. L. 96-517, 94 Stat. 3015 (1980).................... 5, 29
Other Authorities
157 Cong. Rec. S1374 (daily ed. Mar. 8, 2011)
(statement of Sen. Kyl) ...................................... 36
ix
H.R. Rep. No. 112-98 (2011) ............................... 30, 36
Jan G. Laitos, Legislative Retroactivity, 52 Wash. U.
J. Urb. & Contemp. L. 81 (1997)........................ 24
PTO Performance and Accountability Report FY2019
............................................................................ 34
PTO Report to Congress on Inter Partes
Reexamination (2004) .................................... 6, 37
Saurabh Vishnubhakat, The Mixed Case For a PTAB
Off-Ramp, 18 Chi.-Kent J. Intell. Prop. 514
(2019) .................................................................. 18
Regulations
37 C.F.R. § 1.291......................................................... 4
37 C.F.R. § 1.530(j) ................................................... 16
37 C.F.R. § 42.5(b) .................................................... 14
77 Fed. Reg. 48756 (Aug. 14, 2012) (PTAB Trial
Practice Guide) ................................................... 31
BPAI Standing Order (Mar. 8, 2011) ....................... 31
1
INTRODUCTION
As this Court explained most recently in Oil
States Energy Services, LLC v. Greene’s Energy
Group, LLC, 138 S. Ct. 1365, 1373 (2018), “the grant
of a patent is a matte[r] involving public rights.”
(internal quotation omitted).
More specifically,
“patents are public franchises” that “give[] the patent
owner the right to exclude others from making, using,
offering for sale, or selling the invention throughout
the United States.” Id. at 1373-74 (internal quotation
omitted).
Precisely because it is a “qualified”
“franchise,” a patent remains “subject[] to the express
provisions of the Patent Act.” Id. at 1375.
One such qualification has long been the PTO’s
authority to review patents post-issuance to
determine their patentability. That includes the
possibility of canceling claims that should never have
been granted.
The AIA’s inter partes review
procedure is only the most recent in a series of
procedures Congress has created for the PTO to
perform this most basic function. That procedure is
not retroactive as applied to any patent, regardless of
the patent’s issue date, because inter partes review is
merely—as the name says—a review of an issued
patent based on the patentability standards that
existed when the patent was granted. As this Court
has already explained, “[i]nter partes review is a
‘second look at an earlier administrative grant of a
patent.’” Oil States, 138 S. Ct. at 1374 (quoting
Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131,
2144 (2016)). It “involves the same interests as the
determination to grant a patent in the first instance.”
Id.
2
The so-called “retroactive” application of inter
partes review does not present an issue warranting
this Court’s review, least of all in this case. As an
initial matter, Collabo acquired its patent two years
after Congress adopted the inter partes review
procedures, and thus knew the patent would be
subject to such review.
More fundamentally,
however, Collabo never raised its Takings or Due
Process Clause arguments during the inter partes
review proceedings before the PTO, even though the
PTO possessed complete discretion over whether to
institute inter partes review. Instead, Collabo first
raised an undeveloped version of its constitutional
arguments at the Federal Circuit, leaving most of its
legal arguments to appear first in Collabo’s certiorari
petition.
The ’714 patent has also expired, which undercuts
key arguments Collabo makes for why inter partes
review insufficiently protects its patent. Collabo
cannot complain about the inability to amend its
patent, which was expired and ineligible for
amendment anyway. Nor can Collabo complain about
the claim construction standard that applied here
when the ’714 patent was reviewed under the most
patentee-favorable standard, precisely because the
patent had expired.
Collabo’s petition is flawed in yet another way:
The ’714 patent admittedly belongs to a small and
ever-diminishing pool of patents to which inter partes
reexamination (the closest immediate predecessor to
inter partes review) never applied. Collabo admits
that only 8% of patents challenged in inter partes
review last year were like the ’714 patent in this
3
respect, and Collabo cannot deny that that number is
rapidly approaching zero. Yet Collabo relies on this
unusual attribute as (purportedly) demonstrating
how different inter partes review is from other forms
of post-issuance review that existed when the ’714
patent was granted. That means any decision here
would not be conclusive as to the overwhelming
majority of existing pre-AIA patents, which were
subject to inter partes reexamination.
Vehicle problems aside, Collabo’s petition does
not present questions worthy of this Court’s review.
Collabo points to no division of authority, whether
among the circuits or even among the judges of the
Federal Circuit, who have unanimously rejected
arguments like Collabo’s in every case to present
them for four decades. This broad agreement makes
sense because Collabo’s arguments here are wrong.
There is nothing retroactive about Congress granting
the agency responsible for reviewing patents new
procedures by which it may perform its public
function, while applying the same substantive
standards applicable at the time the patent was
initially examined. And even if viewed as retroactive,
under long-settled precedent of this Court, inter
partes review neither violates Due Process nor the
Takings Clause.
The petition for certiorari should be denied.
4
STATEMENT OF THE CASE
A. History of PTO’s Post-Issuance Review
Procedures
“[F]rom the founding to today, Congress has
authorized the Executive Branch to grant patents
that meet the statutory requirements for
patentability.” Oil States, 138 S. Ct. at 1374. For at
least the past forty years, Congress has also created
procedures for reviewing the patentability of claims
after a patent has issued. These post-issuance review
procedures “involve[] the same interests as the
determination to grant a patent in the first instance,”
and can result in the PTO cancelling patent claims or
revoking a previously issued patent. Id.
1. Reissues. Since 1836, a patent holder could
seek reissue of a patent at the Patent Office to correct
a defect in the patent, including where the original
claims were not novel. See Patent Act of 1836, ch. 357,
§ 13, 5 Stat. 117 (1836). During this reissue process,
any member of the public can file a “protest”
challenging the claims as unpatentable. See 37 C.F.R.
§ 1.291.
2. Interferences. Before the AIA, patents were
awarded to the first person to have invented the thing
claimed rather than the first person to have filed a
patent application. To determine the first inventor
among competing applicants, the Patent Office since
1836 has conducted a proceeding known as an
“interference.” See Patent Act of 1836, ch. 357, § 16,
5 Stat. 123-124. An interference is “an adversary
proceeding between the rival applicants,” United
5
States v. Singer Mfg. Co., 374 U.S. 174, 198 (1963)
(White, J., concurring), which “resemble[s] district
court litigation,” Cuozzo, 136 S. Ct. at 2145. In 1984,
Congress amended the Patent Act to authorize the
PTO to “determine questions of patentability” in an
interference, too. Patent Law Amendments Act of
1984, Pub. L. 98-622, § 202, 98 Stat. 33833, 3386-87
(1984). In all interferences, the PTO’s “final judgment
adverse to a patentee” “shall constitute cancellation
of the claims involved in the patent.” Id.; see
35 U.S.C. § 135(a) (1999). A private party can initiate
an interference proceeding. See Oil States, 138 S. Ct.
at 1378 n.5.
3. Ex parte reexamination. Congress created ex
parte reexamination in 1980. See Pub. L. 96-517, § 1,
94 Stat. 3015 (1980). Ex parte reexamination allows
“[a]ny person at any time” to request the PTO to
reexamine an issued patent based on “prior art.”
35 U.S.C. § 302. At the end of the reexamination, if
the PTO has finally determined that the claims are
unpatentable, and after the patent owner has
exhausted its appeal rights, the PTO will issue a
certificate “canceling any claim of the patent finally
determined to be unpatentable.” Id. § 307(a).
4. Inter partes reexamination. Congress created
inter partes reexamination in 1999. See Optional
Inter Partes Reexamination Procedure Act of 1999,
Pub. L. 106-113, §§ 4601-4608, 113 Stat. 1501A-567
to 1501A-572.
Inter partes reexamination only
applied to patents that issued from applications filed
after the statute’s enactment. Id. § 4608(a), 113 Stat.
1501A-572.
6
Procedurally, inter partes reexamination was
“similar” to ex parte reexamination but allowed “third
parties greater opportunities to participate in the
Patent Office’s reexamination proceedings,” Cuozzo,
136 S. Ct. at 2137, by permitting the third-party
requester to respond to the patent owner’s arguments
and to appeal to the Board. See 35 U.S.C. §§ 311-318
(2000).
Five years after the statute’s enactment, the PTO
submitted to Congress its report on the agency’s
implementation of inter partes reexamination. See
Pub. L. 106-113, 113 Stat. 1501A-571, § 4606
(mandating report).
The report explained that
although the agency had “projected to receive
approximately 400 inter partes reexamination
requests in the first year,” in actuality “only 53 inter
partes reexamination requests were filed” during the
“nearly five years that the procedure has been
available.” PTO Report to Congress on Inter Partes
Reexamination, at 5 (2004) (hereinafter “PTO
Report”). Among the reasons for this shortfall, the
PTO identified the legislation’s inapplicability to
patents filed before November 29, 1999, and as a
result, “inter partes reexamination cannot be used to
challenge most patents that are currently in effect.”
Id. at 7. “Making all enforceable patents eligible for
inter partes reexamination,” the PTO explained,
“would greatly increase the patent pool from which to
generate inter partes reexamination requests.” Id. at
7-8.
5. Inter partes reviews.
The Leahy-Smith
America Invents Act (“AIA”) was enacted on
September 16, 2011. Pub. L. 112-29, 125 Stat. 284
7
(2011). Among other things, the AIA phased out inter
partes reexamination in favor of inter partes review.
Id. at § 6, 125 Stat. 299.1 Beginning one year after
enactment, any third party could ask the PTO to
reexamine a patent through inter partes review. See
Cuozzo, 136 S. Ct. at 2137. During the review, a panel
of administrative patent judges from the Patent Trial
and Appeal Board (“Board”)—all of whom are
required to have scientific training—reexamines the
issued patent’s validity. 35 U.S.C. §§ 6, 316(c). The
initiating third party can participate in the
proceedings, and both “the petitioner and the patent
owner are entitled to certain discovery, § 316(a)(5); to
file affidavits, declarations, and written memoranda,
§ 316(a)(8); and to receive an oral hearing before the
Board, § 316(a)(10).” Oil States, 138 S. Ct. at 1371.
An inter partes review may eventually conclude with
the PTO publishing a certificate that cancels
unpatentable claims, confirms those claims deemed
patentable, and incorporates into the patent any new
or amended patentable claims. Id. at 1372.
Congress specified that the AIA’s inter partes
review procedure “shall apply to any patent issued
before, on, or after” September 16, 2012 (the effective
date). Pub. L. 112-29, § 6(c)(2)(A), 125 Stat. 304.
1 In addition to inter partes review, the AIA also created four
new PTO post-issuance correction procedures: (1) derivations,
applicable to first-inventor-to-file patents and applications, Pub.
L. 112-29, § 3(i), 125 Stat. 289; (2) post-grant reviews, applicable
to first-inventor-to-file patents, id. § 6(d), 125 Stat. 305; (3)
supplemental examination, applicable to all patents, id. § 12,
125 Stat. 325; and (4) a transitional program for covered
business method patents, applicable to “covered business
method patents,” id. § 18, 125 Stat. 329.
8
From then, all existing patents were open to inter
partes review.
B. Collabo Acquires the ’714 Patent
U.S. Patent 5,952,714 (“the ’714 patent”) claims
an image-sensing apparatus and manufacturing
method for video cameras. Pet.App.4a.2 Collabo
acquired it in December 2013, more than two years
after Congress enacted the AIA, and more than one
year after inter partes reviews took effect. Collabo
acquired the ’714 patent when its parent company,
Wi-LAN Inc., acquired Panasonic’s patent portfolio.3
After acquiring the ’714 patent, Collabo could
have protected its investment by invoking PTO
procedures to voluntarily narrow its claims through
reissuance or in patent owner-initiated forms of
reexamination (for example, ex parte reexamination,
supra at 5). Instead, Collabo asserted the ’714 patent
as-is against Sony in a district court infringement
complaint. Pet.App.20a.
2 “Pet.App.” refers to the appendix to the Petition.
“CA.App.” refers to the court of appeals joint appendix, Fed.
Cir. No. 18-1311 (filed Oct. 3, 2018).
3 Collabo recorded the assignment of the ’714 patent with
the PTO. See PTO Assignment, http://legacyassignments.uspto.gov/assignments/assignment-pat-33021806.pdf. Wi-LAN reported the deal to the SEC. See Wi-LAN
Press Release (Dec. 16, 2013),
https://www.sec.gov/Archives/edgar/data/1518419/00011442041
3067600/v363242_ex99-1.htm.
9
C. PTO Proceedings
Sony then petitioned the PTO for inter partes
review of the ’714 patent in April 2016. CA.App.130.
Sony’s petition explained that the ’714 patent’s claims
were unpatentable as either anticipated or obvious
under the pre-AIA statutory standards that applied
when the ’714 patent issued. CA.App.90, 95, 98, 114,
117, 119, 123 (referring to “pre-AIA 35 U.S.C.
§ 102(b)” and “pre-AIA 35 U.S.C. § 103(a),”
respectively). Sony also explained that the ’714
patent’s 20-year term would expire in July 2016, and
therefore Sony conceded the Board should apply the
same “ordinary and customary meaning” standard
used in district court litigation (more favorable to
patent owners), rather than the broadest reasonable
interpretation
standard
(more
favorable
to
petitioners). CA.App.81.
In October 2016, the PTO granted Sony’s petition
and instituted inter partes review of the ’714 patent
(“institution” is a term of art that refers to the PTO
opening an inter partes review). CA.App.430. During
the inter partes review, Collabo defended its patent in
a 54-page opposition brief, supported with evidence,
including its own expert declaration. Collabo crossexamined Sony’s expert. CA.App.482-535. Collabo
sought no additional discovery and did not move to
exclude any of Sony’s evidence. Collabo requested
and received an oral hearing before the Board.
CA.App.1008. The Board admitted all of the evidence
that Collabo introduced.
In October 2017, the Board issued its final written
decision.
The Board determined that, by a
10
preponderance of the evidence, each of the challenged
claims was unpatentable based on the statutory
standards existing when the ’714 patent originally
issued. Pet.App.20a.
Collabo did not raise any Fifth Amendment
argument before the Board. Collabo also did not move
to amend its patent claims (or confer with the Board
about whether it could do so given the patent’s July
2016 expiration date). Collabo did not request
rehearing from the Board.
D. Appeal
Collabo appealed the Board’s inter partes review
decision to the Federal Circuit, primarily challenging
the Board’s claim constructions and factual findings.
Collabo also raised Fifth Amendment Takings and
Due Process Clause challenges for the first time in
that appeal, devoting only four total pages of briefing
to these arguments. Collabo did not even address the
seminal Federal Circuit cases, Patlex and Joy
Technologies, both of which found other post-issuance
revocation procedures to be constitutional when
applied to previously-issued patents. See Patlex Corp.
v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1953),
modified on other grounds on reh’g, 771 F.2d 480 (Fed.
Cir. 1985); Joy Techs. v. Manbeck, 959 F.2d 226 (Fed.
Cir. 1992).
The Federal Circuit affirmed the Board’s decision
and rejected all of Collabo’s arguments. Mirroring
Collabo’s briefing, the Federal Circuit primarily
focused on the claim construction and factual issues,
holding in favor of Sony. The Federal Circuit also
11
rejected Collabo’s underdeveloped constitutional
arguments, holding that the court’s recent decision in
Celgene Corporation v. Peter, 931 F.3d 1342 (Fed. Cir.
2019) “forecloses Collabo’s argument.” Pet.App.16a.
As the Federal Circuit explained, “[l]ike the patent at
issue in Celgene, when the ’714 patent issued, patent
owners already expected that their patents could be
challenged in district court and ‘[f]or forty years’ had
expected that ‘the [Patent Office] could reconsider the
validity of issued patents on particular grounds,
applying a preponderance of the evidence standard.’”
Pet.App.16a (quoting Celgene, 931 F.3d at 1362-63)
(alterations in original). The Federal Circuit thus
held that applying inter partes review to Collabo’s
patent “on grounds that were available for Patent
Office reconsideration when the patent was issued
and under the same burden of proof” created no
constitutional issues. Pet.App.16a.
Collabo did not request rehearing from the
Federal Circuit.
REASONS FOR DENYING THE WRIT
I.
This Petition Is Particularly Unsuitable
For Review.
Even if Collabo’s petition presented grant-worthy
questions (and as explained further below, infra 1938, it does not), this case, involving an expired patent,
presents numerous waived arguments and vehicle
flaws that make it particularly unsuitable for this
Court’s review.
12
A. Collabo Waived its Constitutional
Challenges By Failing to Raise Them
With the Board.
As an initial matter, Collabo waived its
constitutional challenges by failing to raise them with
the PTO before, during, or after the inter partes
review. That waiver is reason enough to deny review
in this case. “Simple fairness to those who are
engaged in the tasks of administration, and to
litigants, requires as a general rule that courts should
not topple over administrative decisions unless the
administrative body not only has erred but has erred
against objection made at the time appropriate under
its practice.” United States v. L.A. Tucker Truck
Lines, Inc., 344 U.S. 33, 37 (1952).
As this Court recognized in Cuozzo, Congress
gave the PTO broad discretion to decide whether to
institute inter partes review. Collabo was free to raise
its purported constitutional concerns before the Board
reached an adverse decision—and even after, in the
form of rehearing. The PTO could have considered
these issues—including the fact that the ’714 patent
is part of a narrow and shrinking class of patents that
were never subject to inter partes reexamination—in
deciding whether to institute an inter partes review.
Now, however, the PTO has rendered a decision that
benefits the public—not just Sony. And, even under
Collabo’s theory, the PTO would be entitled to
consider the same evidence and render the same
decision if anyone filed a request for ex parte
reexamination. The time for Collabo to raise its
constitutional challenge was while this matter was
pending before the agency.
13
Anticipating this issue, Collabo asserts that “it
did not raise its constitutional challenges to inter
partes review with the Board” because doing so
“would have been futile.” Pet.36. Not so. The agency
was not powerless to consider Collabo’s constitutional
arguments. Indeed, Collabo’s argument elsewhere
belies its futility claim. See Pet.36. The PTO Director
“has independent authority to decide whether to
institute an inter partes review,” Pet.28-29, and the
Director’s discretion is broad. At the very least,
Collabo could have made its constitutional arguments
to the Director when Sony filed its petition to institute
an inter partes review proceeding, including its
argument that the ’714 patent was never subject to
inter partes reexamination. It was not futile to raise
such arguments because the Director could have
exercised his broad discretion to deny institution,
particularly here, where a small and diminishing
number of patents would be situated similarly to the
’714 patent. Having failed to pursue this available
relief before the agency, Collabo should be deemed to
have waived its constitutional arguments—which is
reason enough to deny this petition.
Moreover, much of Collabo’s constitutional
arguments boil down to complaints about the
procedural parameters of inter partes review. See
Pet.24-30. Yet, at no point did Collabo ask the Board
for any process that it did not receive or register any
complaint about the procedures themselves. Instead,
Collabo received everything it asked for: Collabo
deposed Sony’s expert, filed its own expert
declaration, submitted a 54-page response to Sony’s
petition, and received an oral hearing before the
Board. The Board admitted all of the evidence
14
Collabo introduced at trial and Collabo sought no
additional discovery. Collabo did not move to exclude
any of Sony’s evidence. Collabo thus has waived any
procedural objections it failed to make, which is yet
another reason to deny review.
If Collabo believed that applying inter partes
review procedures raised constitutional concerns—
because they were inconsistent with Collabo’s
expectations, or otherwise—it could have sought
relief. Indeed, under the PTO’s rules for inter partes
review, any rule or procedure can potentially be
“waive[d] or “suspend[ed],” in the interests of justice.
37 C.F.R. § 42.5(b). Collabo’s failure to act to protect
its rights below deprived the Board of the opportunity
to give Collabo the process it would have considered
fair, and is another reason why this case presents a
poor vehicle for a grant of certiorari.
Compounding these waivers before the agency,
Collabo failed to materially raise its constitutional
arguments on appeal. A dispassionate review of the
briefing below shows that Collabo sandbagged its
constitutional arguments, devoting only four pages to
them in its opening brief and describing them only in
the barest terms, without referring to the relevant
caselaw. And while asserting that inter partes review
was impermissibly retroactive and that Collabo
should “at least [be] entitled to just compensation for
the loss of its rights in the ’714 patent,” [Opening Br.
66], it said not a word in its opening brief about any
of the specific concerns about inter partes review now
delineated in its petition: the adversarial nature, the
specific procedures employed, the ability to amend
15
claims, or the claim
(previously) applied.4
construction
standard
To be sure, the Federal Circuit did pass on the
issue, but it did so (quite reasonably) by rejecting
Collabo’s underdeveloped constitutional arguments
only briefly. This Court is a court of last review, not
first view, Bethune-Hill v. Va. State Bd. of Elections,
137 S. Ct. 788, 800 (2017), and should not grant a
petition founded on complaints that were never raised
at any stage of the proceedings below.
That is particularly so given that Collabo
acquired the ’714 patent in December 2013—more
than two years after Congress enacted the AIA in
September 2011. Even if it were true (and it is not)
that “no one could have anticipated that Congress
would retroactively make the ’714 patent subject to a
wholly new procedure like inter partes review,”
Pet.34, Collabo affirmatively knew that Congress had
done just that when it acquired the ’714 patent. If
Congress’s decision to make inter partes review
applicable to all existing patents diminished the
value of those patents, Collabo was fully aware of it
when it purchased the ’714 patent. Accord Danforth
v. United States, 308 U.S. 271, 284 (1939). And yet,
armed with this knowledge, after acquiring the
patent, Collabo presented to the agency none of the
arguments it is now making to the agency, and took
no steps to obtain “narrower claims” via reissue or
reexamination—claims Collabo speculates a patent
Through a subsequent rule change, all inter partes
review proceedings now apply the same claim construction
standard as district courts.
4
16
owner would have originally obtained if it had had
knowledge of the AIA. Pet.34. At a minimum,
Collabo’s post-AIA acquisition of the patent and
subsequent conduct in these proceedings make this a
poor vehicle for addressing the issues it purportedly
presents.
B. The ’714 Patent Is Expired.
The Court should also deny review because the
’714 patent expired in July 2016, just months after
Sony initiated these inter partes review proceedings.
Pet.App.28a. Consequently, two of the purportedly
“important safeguards” that Collabo asserts are
“absent in inter partes review” (Pet.24)—namely, an
“unfettered
right
to
amend ... claims”
in
reexamination and a broader claim construction
standard than in district court litigation (Pet.27)—are
simply not applicable. In other words, not only did
Collabo waive its concerns about the procedural
parameters of inter partes review by failing to raise
them before the Board, but due to its unusual fact
pattern, this case never even presented many of the
petition’s specific concerns in the first place.
First, although Collabo asserts that the ability to
amend is an important procedural safeguard that
inter partes review lacks, Collabo could not have
amended the ’714 patent—either here in the inter
partes review, or in a reissue or ex parte
reexamination—because the patent expired in July
2016. See 35 U.S.C. § 318(c) (inter partes review
amendment shall have the same effect as that of a
reissue patent); id. § 251(a) (reissue operative “for the
unexpired part of the term of the original patent”);
17
37 C.F.R. § 1.530(j) (reexamination rules providing
that “[n]o amendment may be proposed for entry in
an expired patent”).
Second, although inter partes review (until
recently)
applied
the
“broadest
reasonable
construction” standard to challenged claims, Collabo’s
’714 patent was never subject to this broader
standard.
Because expired patents cannot be
amended, they have always been construed under the
“plain and ordinary meaning” standard, whether in
inter partes review, inter partes reexamination, ex
parte reexamination, or district court litigation.
Collabo acknowledges this is the standard the Board
applied to the ’714 patent, and is the same standard
that applies in district court, but somehow complains
that inter partes review improperly subjects pre-AIA
patents to a broader construction. Pet.27 n.12;
Pet.App.8a (“Because the ’714 patent has expired, the
claim construction standard set forth in Phillips v.
AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc)
applies.”) (citing In re Rambus Inc., 694 F.3d 42, 46
(Fed. Cir. 2012) (“[T]he Board’s review of the claims
of an expired patent is similar to that of a district
court’s review.”)). Needless to say, this Court does not
take cases to review issues not actually presented.
C. The ’714 Patent Belongs to a Small and
Rapidly Diminishing Group of Patents
to Which Inter Partes Reexamination
Never Applied.
The fact that the ’714 patent had expired when
the PTO instituted these proceedings not only makes
this case a procedurally unusual vehicle to take up
18
Collabo’s issues, it also means that the ’714 patent is
differently situated from the overwhelming majority
of patents pre-dating the AIA. By Collabo’s own
admission, the ’714 patent is “so old,” that it “would
not have been eligible even for inter partes
reexamination.” Pet.19. Almost all patents that predate inter partes reexamination have now expired or
will soon. This is because, in order to pre-date inter
partes reexamination, a patent like the ’714 patent
must have issued from an original application filed
before November 29, 1999, see Pub. L. 106-113,
§ 4608(a), 113 Stat. at 1501A-572, and such patents
normally have a term of 20 years measured from
filing, plus any extensions, see 35 U.S.C. §§ 154-156
(2010). Indeed, Collabo itself cites statistics showing
that patents pre-dating inter partes reexamination,
like the ’714 patent, made up less than 8% of all
patents challenged in inter partes review, as of nearly
two years ago (in May 2018).
See Saurabh
Vishnubhakat, The Mixed Case For a PTAB OffRamp, 18 Chi.-Kent J. Intell. Prop. 514, 535 (2019).5
This number continues to drop, and eventually will
equal zero. Thus, the ’714 patent is part of a small
and rapidly diminishing category of patents that were
eligible for inter partes review but were never eligible
for
its
similar
predecessor,
inter
partes
reexamination.
Thus, if the Court were to grant Collabo’s petition
and reverse, it would shed little light on whether inter
5 This 8% figure has likely dropped precipitously since this
study, given that November 28, 2019 marked the natural
expiration of the typical 20-year patent filed on the last possible
day before inter partes reexamination became available.
19
partes review is unconstitutionally retroactive or a
“taking” when applied to patents already subject to
inter partes reexamination. In other words, a decision
as to this patent would not be dispositive as to the
overwhelming majority of patents now in existence.
The precise questions that Collabo’s petition presents
are of diminishing importance because they apply
only to a soon-to-be extinct class of patents. If the
Court is interested in taking up the questions this
petition presents, it should choose a case that
presents a better vehicle—one that represents the
vast majority of current patents (and someday, all
patents predating the AIA) that were subject to inter
partes reexamination before being subject to inter
partes review.
II. The Decision Below Implicates No Split Of
Authority.
Even if Collabo had preserved the issues raised in
its petition, there is no division of authority that
warrants this Court’s intervention—much less a
reason to upset the settled expectations arising from
the lower courts’ consistent approach to the law.
A. The Federal Circuit Has Consistently—
and Unanimously—Rejected
Constitutional Arguments Like
Collabo’s.
Collabo points to no division within the Federal
Circuit on the questions it presents, nor any reason
for this Court to upset nearly forty years of settled
law.
The Federal Circuit has repeatedly and
unanimously upheld Congress’s choice to apply new
20
post-issuance review processes to all existing patents.
It is Collabo who asks this Court to upend settled
expectations and the consistent application of the law.
The Federal Circuit first considered a
“retroactivity” challenge to a new post-issuance
review process (ex parte reexamination) in Patlex
Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985).
There, the owner of two patents raised various
constitutional arguments against the “retrospective
effect of patent reexamination,” including claims
under the Due Process Clause of the Fifth
Amendment like those Collabo asserts. Patlex, 758
F.2d at 598. In a decision by Judge Newman, the
Federal Circuit unanimously rejected those claims
then, and nothing has called that decision into
question in the intervening decades.
In Patlex, the Federal Circuit acknowledged that
“[a]t the time [the] patents were issued, there was no
way the PTO or private persons could have forced
these patents back into the examination phase
against [the patentee’s] will (except for their
involvement in an interference).” Id. at 601.6 Here,
of course, the ’714 patent was subject to being
“forced … back” into review by the PTO even before
Congress adopted inter partes review.
Nevertheless, despite the absence of any prior
involuntary PTO review when Congress created ex
parte reexamination, Patlex applied this Court’s test
Beginning in 1984, the Board in an interference could
decide “questions of patentability,” in addition to questions of
priority. Pub. L. 98-622, § 202, 98 Stat. 3386-87.
6
21
under Penn Central Transportation Co. v. New York
City, 438 U.S. 104 (1978), and had no trouble
concluding that Congress’s “overriding public
purposes ... in enacting the [ex parte] reexamination
law with retroactive effect are entitled to great
weight” and were not “arbitrary or irrational.” Id. at
602-03. Among Congress’s purposes in creating ex
parte reexamination was “reinforc[ing] investor
confidence in the certainty of patent rights by
affording the PTO a broader opportunity to review
doubtful patents.” Id. at 602 (internal citations
omitted).
The ex parte reexamination statute,
therefore, belonged to “the class of ‘curative’ statutes,
designed to cure defects in an administrative system.”
Id. at 603 (citing Graham v. Goodcell, 282 U.S. 409,
429 (1931)). Patent owners challenging the curative
nature of ex parte reexamination were asserting a
vested right in a “mistake of officers purporting to
administer the law in the name of the Government.”
Id. (citing Graham, 282 U.S. at 429). A patent owner
had no vested right in a PTO mistake, however, so the
Constitution did not prevent Congress “from curing
the defect in administration simply because the effect
may be to destroy causes of action which would
otherwise exist.” Id. So it is here.
In 1992, the Federal Circuit revisited its Patlex
decision in Joy Technologies, Inc. v. Manbeck, 959
F.2d 226 (Fed. Cir. 1992). There, a patent owner
argued that reexamining and cancelling some claims
of its issued patent violated the Fifth Amendment’s
Takings and Due Process Clauses, and the patent
owner asked the court to reconsider its holdings in
Patlex. Id. at 228. The Federal Circuit disagreed and
reaffirmed Patlex: “the issuance of a valid patent is
22
primarily a public concern,” and “cases involving
‘public rights’ may constitutionally be adjudicated by
legislative courts and administrative agencies,”
including
in
post-issuance
reexamination
proceedings. Id.
In 2019, the Federal Circuit considered and
unanimously rejected, yet again, Fifth Amendment
retroactivity arguments under both the Due Process
and Takings Clauses, this time in a “retroactivity”
challenge to the AIA’s inter partes review procedures.
Celgene Corp. v. Peter, 931 F.3d 1342 (Fed. Cir. 2019),
reh’g denied (Fed. Cir. Dec. 9, 2019). In Celgene, the
owner of two patents (issued in 2000 and 2001)
argued that applying inter partes review to its patents
effected an unconstitutional taking under the Fifth
Amendment. The Federal Circuit explained that
although Patlex and Joy Technologies “control the
outcome here,” the court would reach the same
outcome in the case for an additional reason: that
inter partes review does not “differ from the pre-AIA
review
mechanisms
significantly
enough,
substantively or procedurally, to effectuate a taking.”
Celgene, 931 F.3d at 1358 & n.13 (“On this basis, we
reject Celgene’s challenge even apart from the
rationales of our prior decisions.”) (citing Patlex and
Joy Techs.); id. at 1363 (“Although differences exist
between
[inter partes reviews]
and
their
reexamination predecessors, those differences do not
outweigh the similarities of purpose and substance
and, at least for that reason, do not effectuate a taking
of Celgene’s patents.”).
Subsequent panels have unanimously followed
Celgene and have rejected similar Fifth Amendment
23
challenges against inter partes review. See, e.g., OSI
Pharms., LLC v. Apotex Inc., 939 F.3d 1375, 1386
(Fed. Cir. 2019); Arthrex, Inc. v. Smith & Nephew,
Inc., 935 F.3d 1319, 1332-33 (Fed. Cir. 2019), reh’g
denied (Fed. Cir. Nov. 8, 2019); Enzo Life Scis., Inc. v.
Becton, Dickinson & Co., 780 Fed. Appx. 903, 911
(Fed. Cir. 2019), reh’g denied (Fed. Cir. Dec. 4, 2019);
Collabo Innovations, Inc. v. Sony Corp., 778 Fed.
Appx. 954, 961 (Fed. Cir. 2019).
Accordingly, in the nearly 40 years since the
Federal Circuit first took up constitutional arguments
like Collabo’s, the Federal Circuit has consistently
rejected Collabo’s position unanimously. Not a single
member of that court has dissented from or
questioned the correctness of the decisions in Patlex
(1985), Joy Technologies (1992), or Celgene (2019).
The Federal Circuit has denied en banc rehearing in
these cases unanimously, too. See Arthrex, 935 F.3d
1319, reh’g denied (Nov. 8, 2019); Enzo, 780 Fed.
Appx. 903, reh’g denied (Dec. 4, 2019); Celgene, 931
F.3d 1342, reh’g denied (Dec. 9, 2019). In fact, the
Federal Circuit said in Celgene that patent owners’
Fifth Amendment arguments had grown weaker, not
stronger, over time:
The patent owners in Patlex and Joy
Technologies had a stronger argument than
Celgene does here because, before the
creation of ex parte reexaminations, there
were no PTO reexamination procedures. In
contrast, pre-AIA patent owners, including
Celgene, have known for almost forty years
that their patents were issued subject to
24
substantively similar
reexamination.
forms
of
PTO
Celgene, 931 F.3d at 1358 n.13.
B. Collabo Cannot Point to Any Broader
Split in Authority Outside the Federal
Circuit.
Collabo not only fails to identify any division
within the Federal Circuit, but also fails to identify
any split among the federal Courts of Appeals in any
similar or analogous context. To the contrary, it is
well-settled that “so-called ‘curative legislation’,” like
the AIA’s inter partes review procedures, “will be
upheld when the legislation ... retroactively cures
defects in an administrative system.” Jan G. Laitos,
Legislative Retroactivity, 52 Wash. U. J. Urb. &
Contemp. L. 81, 95 (1997). “Retroactive curative rules
are acceptable because of the strong public interest in
a fair government system, and because they merely
produce the same result that would have occurred had
the lawmaker (usually an agency) promulgated the
original rule correctly.” Id. See Landgraf v. USI Film
Prods., 511 U.S. 244, 267-268 (1994) (“Retroactivity
provisions often serve entirely benign and legitimate
purposes, [including] to correct mistakes ....”);
Paramino Lumber Co. v. Marshall, 309 U.S. 370
(1940) (upholding Act of Congress enacted to cure a
defect in the administration of a statutory claim);
Graham v. Goodcell, 282 U.S. 409, 429 (1931)
(upholding “a curative statute aptly designed to
remedy mistakes and defects in the administration”).
25
Significantly, this Court’s favorable view of
“curative” legislation, as expressed in Graham v.
Goodcell, was one of the reasons the Federal Circuit
in Patlex upheld the reexamination statute there
against a retroactivity challenge. Patlex, 758 F.2d at
603. In Patlex, the Federal Circuit relied on the fact
that “the class of ‘curative’ statutes, designed to cure
defects in an administrative system … have received
relatively favored treatment from the courts even
when applied retroactively.” Id. (citing Graham, 282
U.S. at 429).
In sum, Collabo has not identified any split of
authority on the questions its petition presents—
neither intra-circuit nor inter-circuit. The Court
should deny Collabo’s petition for a writ of certiorari.
III. Inter Partes Review Is A Prospective
Procedural Mechanism Not Materially
Different
From
Previous
Review
Procedures.
The petition should also be denied because the
positions it advances are simply wrong. Collabo’s
petition is premised on the notion that Congress
unfairly changed the landscape for post-issuance
review of pre-AIA patents because “no one”—not even
Collabo—“could have anticipated that Congress
would retroactively make the ’714 patent subject to a
wholly new procedure like inter partes review.”
Pet.34; see Pet.26 (“[t]he patent owner could not
foresee that Congress would subsequently pass a new
law”). Not so.
26
That argument is false as to Collabo in this case
because Collabo knowingly purchased the ’714 patent
two years after Congress created the inter partes
review procedure in the AIA. Supra 8 & n.3; see
Danforth v. United States, 308 U.S. 271, 284 (1939).
Yet even abstracting Collabo’s argument from the
facts of this case, it still founders on the notion that
patent owners were unfairly surprised when
Congress created inter partes review. Inter partes
review is simply another post-issuance review
procedure that is not materially different from the
other post-issuance review procedures that predated
it.
A. Inter Partes Review Is a Prospective
Application of Procedure, Not a
Retroactive Application of Substantive
Law.
Inter partes review is a prospective application of
procedure, not a retroactive application of substantive
law, and Collabo’s petition entirely fails to contend
with this fact.
When it enacted the AIA, Congress did not change
the substantive standards of patentability under
which pre-AIA patents would be judged. 35 U.S.C.
§§ 101-103. To survive the inter partes review below,
the ’714 patent needed only to satisfy the same
patentability standards that had existed when the
patent originally issued in 1999. Indeed, Sony’s
petition for inter partes review expressly invoked
“pre-AIA 35 U.S.C. § 102(b)” and “pre-AIA 35 U.S.C.
§ 103(a),” as the grounds for challenging the claims of
27
the ’714 patent. CA.App.90-123. Collabo does not and
cannot dispute this fact.
Congress’s choice to apply the inter partes review
procedure to existing patents is simply the
prospective application of a new procedural
mechanism for deciding the propriety of past
administrative action; it is not retroactive at all.
“Changes in procedural rules may often be applied in
suits arising before their enactment without raising
concerns about retroactivity.” Landgraf, 511 U.S. at
275. “Because rules of procedure regulate secondary
rather than primary conduct, the fact that a new
procedural rule was instituted after the conduct
giving rise to the suit does not make application of the
rule at trial retroactive.” Id; see Bowen v. Georgetown
Univ. Hosp., 488 U.S. 204, 219-220 (1988) (Scalia, J.,
concurring) (explaining that a new rule providing for
“taxation of future trust income” would have
“exclusively future effect” (imposing “future income
tax liability” for trust income derived in the future),
even though the rule “can unquestionably affect past
transactions (rendering the previously established
trusts less desirable in the future)”).
Here, applying inter partes review procedures to
existing patents is not a “retroactive” application of
law at all—much less an impermissible one—because
Congress did not change the substantive rules
governing patentability that applied when the ’714
patent was originally issued in 1999.
Indeed,
Congress was aware of and respected this critical
difference, and when it made changes to the
substantive standards for patentability elsewhere in
the AIA, it made those changes prospectively
28
applicable only to patents issued after the AIA’s
effective date. Pub. L. 112-29, § 3(n), 125 Stat. 293.
B. Collabo Has No Vested Right in Any
Particular Post-Issuance Review
Procedure.
This Court has long held that “‘[n]o one has a
vested right in any given mode of procedure.’” Denver
& Rio Grande W. R.R. Co. v. Bhd. of R.R. Trainmen,
387 U.S. 556, 563 (1967) (quoting Ex parte Collett, 337
U.S. 55, 71 (1949)). Without “a vested right in any
given mode of procedure,” Collabo cannot complain
that Congress violated the Constitution by adding
new post-issuance patent review procedures to those
that existed in 1999.
In the AIA, Congress did not attempt
“retroactively to create liabilities for transactions
which, fully consummated in the past, are deemed to
leave no ground for legislative intervention.”
Graham, 282 U.S. at 429.
Rather, Congress
continued empowering the PTO not only to issue
patents but also to review previously issued patents
for mistakes. When the ’714 patent issued in 1999,
“[a]ny person at any time” could have challenged the
’714 patent “on the basis of any prior art” patents and
printed publications. 35 U.S.C. § 302 (ex parte
reexamination). The Board was also empowered to
cancel the claims of the ’714 patent in an adversarial
trial-like proceeding on the basis of priority or
“patentability,” 35 U.S.C. § 135(a) (1999), if an
eligible party caused an “interference.” In 1999,
patent owners knew that the original patentability of
their claims was subject to these forms of curative
29
review “designed to remedy mistakes and defects in
the administration of government.” Graham, 282
U.S. at 429. And patent owners in 1999 knew that
when Congress had created these procedures in the
past, Congress made them applicable to all thenexisting patents.7 To the extent Collabo’s argument
is grounded in a private party’s ability to initiate inter
partes review, Collabo disregards the procedures
Congress created. As this Court observed in Oil
States, “[t]o be sure, a private party files the petition
for review. 35 U.S.C. § 311(a). But the decision to
institute review is made by the Director and
committed to his unreviewable discretion.”
Oil
States, 138 S. Ct. at 1378 n.5.
What Collabo claims here to be its “vested right,”
is, in fact, not a right to a patent, per se, but a right to
preserve the PTO’s mistake in granting a patent. This
Court has long held that such an “asserted vested
right, not being linked to any substantial equity,” will
not prevent Congress “from curing the defect in
administration simply because the effect may be to
destroy causes of action which would otherwise exist.”
Graham, 282 U.S. at 429.
Collabo has no
constitutional entitlement to shield the PTO’s
mistake from correction. Neither the Due Process
Clause nor the Takings Clause is implicated by
7 See Pub. L. 96-517, § 8(b), 94 Stat. 3027 (making ex parte
reexamination applicable “to patents in force as of [July 1, 1981]
or issued thereafter”); Pub. L. 98-622, § 106(a), 98 Stat. 3385
(adding “questions of patentability” to interferences and making
this change applicable “to all United States patents granted
before, on, or after the date of enactment”).
30
revisions to the procedures for PTO patentability
review.
IV. Even If Applications Of Inter Partes
Review Were Viewed As Retroactive,
There Is No Fifth Amendment Violation.
Even if Collabo could demonstrate that it held a
vested property right in the PTO procedures for
reviewing the mistaken issuance of the ’714 patent,
Collabo has not established a Fifth Amendment
violation under either the Takings or the Due Process
Clause.
A. Inter Partes Review Is Not Materially
Different From Other Post-Issuance
Review Procedures.
Inter partes review serves the same basic
purposes as inter partes reexamination and ex parte
reexamination, and it resembles long-standing
interference proceedings, which in turn resemble
district court litigation. Inter partes review is merely
a variation on a long-standing theme of Congress
creating mechanisms for the PTO to revisit previously
issued patents and re-determine whether their claims
were originally patentable.
Substantively, inter partes review serves the
same “basic purposes” as both inter partes and ex
parte reexamination—“namely, to reexamine an
earlier agency decision” granting a patent. Cuozzo,
136 S. Ct. at 2144; see H.R. Rep. No. 112-98, at 39-40
(2011) (describing inter partes review as a “system for
challenging patents that should not have issued”); Oil
States, 138 S. Ct. at 1370 (describing reexaminations
31
as “administrative processes that authorize the PTO
to reconsider and cancel patent claims that were
wrongly issued”). In an inter partes review, a
petitioner is limited to grounds “under section 102 or
103,” which provide some of the original conditions of
patentability, “and only on the basis of prior art
consisting of patents or printed publications.”
35 U.S.C. § 311(b); see 35 U.S.C. §§ 101-103. These
are the same grounds and prior art that a requester
can assert against a patent in an ex parte
reexamination, see id. § 302, or as a defense in district
court, see id. § 282(b)(2). Third parties can request
the PTO to initiate or can themselves participate in
(or both) ex parte reexamination, inter partes
reexamination, or inter partes review.
Procedurally, inter partes reviews also resemble
interferences—and both “resemble district court
litigation.” Cuozzo, 136 S. Ct. at 2145 (citing Brief for
Generic Pharmaceutical Association et al. as Amici
Curiae 7-16 (describing “similarities between
interference proceedings and adjudicatory aspects of
inter partes review”)); see Oil States, 138 S. Ct. at
1378 n.5. Both inter partes review and interferences
are adjudicated in a trial-like adversarial setting
before a panel of administrative patent judges who
are members of the PTO’s Patent Trial and Appeal
Board. In both proceedings, the parties file motions
and expert declarations, conduct discovery and crossexamination, receive an oral hearing before the
Board, and the patent owner can seek to amend the
patent with new claims by motion (not by right). See
35 U.S.C. § 316(a), (c); 77 Fed. Reg. 48756 (Aug. 14,
2012) (PTAB Trial Practice Guide); BPAI Standing
Order
(Mar.
8,
2011),
available
at
32
https://www.uspto.gov/sites/default/files/ip/boards/bp
ai/interf/forms/standingordermar2011.pdf.
Any differences that inter partes review presents
when compared to pre-existing forms of post-issuance
patent review are differences of degree, not kind, and
do not materially alter the public right that any
patent owner holds.
B. Applying Inter Partes Review to the
’714 Patent Does Not Violate the
Takings Clause.
To be clear, Collabo’s “takings” argument is not
predicated on the PTO’s act of cancelling its patent
claims per se—the same act the PTO was empowered
to perform on the ’714 patent in an ex parte
reexamination or interference. Supra 4-5. Rather,
Collabo challenges new regulatory procedures
through which the PTO can revisit its initial
patentability decision under the same standards used
to issue the patent originally. Yet, in Collabo’s
underdeveloped “takings” argument below, Collabo
never cited Penn Central, much less conducted any
analysis of the sort this Court requires. Doing so for
the first time now, Collabo badly misapplies the Penn
Central factors. Pet.23-31.
“The first Penn Central factor,” according to
Collabo, “looks to Collabo’s continued ability, after the
government action, to earn a reasonable return on its
investment.” Pet.23. Collabo analyzes this as one
having lost the inter partes review, arguing that it
“can no longer enforce the challenged claims against
Sony and earn a return on its investment.” Pet.23-24.
33
Collabo ignores, however, that inter partes review can
strengthen patents when a patent owner prevails in
the review, as they often do. Patents upheld in inter
partes review will receive a PTO-issued “certificate ...
confirming any claim of the patent determined to be
patentable,” 35 U.S.C. § 318(b), and an “estoppel” that
attaches against the petitioner and related parties,
precluding them from challenging the same claims in
the future on “any ground that the petitioner raised
or reasonably could have raised during that inter
partes review,” id. § 315(e)(1),(2). See Patlex, 758
F.2d at 603 (weighing Penn Central factors and noting
“the benefits that may accrue to Gould following
successful reexamination of the patents”). Collabo’s
poor return on its investment is not a consequence of
the inter partes review process but rather of the
inadequacy of the ’714 patent’s claims when set
against the standards for patentability on the date
the patent issued.
“The second Penn Central factor,” according to
Collabo, “looks to the patent owner’s reasonable
investment-backed expectations.” Pet.24. On this
point, Collabo asserts: “Obviously, there was no
expectation that Congress would unilaterally and
impermissibly change the patent bargain after closing
the deal by creating a patent ‘death squad’ like the
Board.” Pet.30. But Collabo purchased the ’714
patent two years after the AIA created the “death
squad” which Collabo now claims it could not have
expected.
That fact alone destroys Collabo’s
arguments
about
its
“investment-backed
expectations” not foreseeing a procedure like inter
partes review.
34
Equally hollow is Collabo’s suggestion that patent
owners might have “forego[ne] patent protection
altogether” if they had known about the AIA. Pet.34.
Collabo itself obviously did not forego acquiring its
AIA-encumbered patent in December 2013. Nor is
there any evidence to suggest that the AIA has caused
other patent owners to “forego patent protection
altogether” in the United States. To the contrary,
fiscal year 2019 saw an all-time record-high number
of U.S. patents issued by the PTO (370,434) and an
all-time record-high number of U.S. patent
applications filed by applicants (665,231), both up
significantly from the pre-AIA period in the late
2000s. See PTO Performance and Accountability
Report FY2019, at 167, 169, available at
https://www.uspto.gov/sites/default/files/documents/
USPTOFY19PAR.pdf.
Even if Collabo had purchased its patent before
Congress created inter partes review, Collabo’s
investment-backed expectations argument would still
be misplaced because Collabo again misunderstands
the origin of its harm. The “patent bargain” it speaks
of is premised on the “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.” Bonito Boats v. Thunder Craft
Boats, 489 U.S. 141, 151 (1989) (emphases added).
But the ’714 patent disclosed no “new” or
“nonobvious” invention at the time it was filed. Nor
would investors fail to expect that a mistake like the
issuance of the ’714 patent could be corrected in the
future; patent owners had already come to expect
post-issuance revocation of patents lacking novelty
and non-obviousness for the past forty years.
35
Pet.App.16a (“Like the patent at issue in Celgene,
when the ’714 patent issued, patent owners already
expected that their patents could be challenged in
district court and “[f]or forty years” had expected that
“the [Patent Office] could reconsider the validity of
issued patents on particular grounds.”) (alterations in
original).
“The third Penn Central factor,” according to
Collabo, “examines the character of the government
action.” Pet.30. In Penn Central, the Court divided
“governmental
action”
into
two
categories:
(1) “physical invasion by government,” and (2) “some
public program adjusting the benefits and burdens of
economic life to promote the common good.” 438 U.S.
at 124. Collabo asserts that inter partes review is
“more akin to a physical invasion of property,” Pet.31,
but that farfetched claim does not withstand scrutiny.
A patent does not entitle a patent owner to
affirmatively do anything, much less to any physical
thing: it is not a right to actually make or market the
patented invention, for example, which may be illegal
or layered with regulatory restrictions. Rather, a
patent is a public franchise that only gives its owner
“the right to exclude others from making, using,
offering for sale, or selling the invention throughout
the United States.” Oil States, 138 S. Ct. at 1374
(quoting 35 U.S.C. § 154(a)(1)). When Congress
authorizes post-issuance review procedures like inter
partes review, it does not interfere with a physical
property right of a patent owner but merely “adjust[s]
the benefits and burdens of economic life to promote
the common good” by determining whether and when
a patent owner is entitled to exclude others from
making, using, and selling its claimed invention.
36
Such an act does not violate Penn Central’s takings
factors.
C. Applying Inter Partes Review to the
’714 Patent Does Not Violate the Due
Process Clause.
Collabo concedes (correctly) that it bears the
burden, as the party complaining of a due process
violation, to establish that the legislature acted in an
“arbitrary and irrational way.” Pet.32. But Collabo
is wrong that “Congress’ decision to make inter partes
review apply retroactively to all patents is both
arbitrary and irrational.” Id.
Rather, Congress advanced logical and legitimate
goals in creating inter partes review, as the legislative
history attests.
Congress viewed the limited
application of inter partes reexamination to post-1999
patents as a demerit, and thus “Repeal of the 1999
limit” was one of the “improvements” that the
Committee Report on the bill that eventually became
the AIA touted over inter partes reexamination. H.R.
Rep. No. 112-98, at 47. During Senate floor debates,
Senator Jon Kyl also discussed the purpose of
repealing the 1999 limit as benefitting accused
infringers:
Accused infringers, however, also will
benefit from some of the changes made by
the present bill. The bill … removes the
bar on challenging pre-1999 patents in
inter partes proceedings. All patents can
now be challenged in inter partes review.
157 Cong. Rec. S1374 (daily ed. Mar. 8, 2011)
(statement of Sen. Kyl).
37
Congress also received the PTO’s Report to
Congress on Inter Partes Reexamination, as
mandated by Pub. L. 106-113, § 4606, 113 Stat.
1501A-571. It noted that “only 53 inter partes
reexamination requests were filed” during the “nearly
five years that the procedure has been available,” and
explained that “[m]aking all enforceable patents
eligible for inter partes reexamination would greatly
increase the patent pool from which to generate inter
partes reexamination requests.” PTO Report, at 5, 78.
Congress’s decision to open all existing patents to
inter partes review—patents already subject to ex
parte reexamination—was not arbitrary and
irrational. There is nothing arbitrary or irrational
about Congress improving administrative procedures,
particularly when it comes to correcting agency
mistakes. Congress’s chosen approach (1) is grounded
in having scientifically-trained individuals review the
PTO’s own work to correct the agency’s existing
mistakes; (2) allows the PTO to leverage the efforts of
private parties in reviewing the PTO’s mistakes,
rather than laboring in isolation; and (3) is simpler for
the PTO to administer without the 1999 limit because
it obviates the need to check the filing date or issue
date of the challenged patent. These logical purposes
are consistent with the “basic purposes” motivating
inter partes review that this Court has already
recognized, Cuozzo, 136 S. Ct. at 2144, as well as the
administrative procedures that were applicable to the
’714 patent even before Congress adopted the AIA.
This Court has said that inter partes review “helps
protect the public’s paramount interest in seeing that
patent monopolies … are kept within their legitimate
38
scope” by establishing “an efficient system for
challenging patents that should not have issued.” Id.
(internal citations omitted). The “determination to
grant a patent is,” after all, “a ‘matte[r] involving
public rights.’” Oil States, 138 S. Ct. at 1373-74.
The same purpose of improving the patent system
motivated Congress to create ex parte reexamination,
which Collabo admits Congress “arguably had a
rational basis for retroactively applying” to previously
issued patents. Pet.6. That purpose is imminently
reasonable and far from being irrational or arbitrary.
Inter partes review raises no legitimate Due Process
Clause concerns.
CONCLUSION
For the foregoing reasons, Collabo’s petition
should be denied.
February 7, 2020
Respectfully submitted,
JOHN C. O’QUINN
MEGAN M. WOLD
KIRKLAND & ELLIS LLP
655 Fifteenth Street, NW
Washington, DC 20005
ANDREW S. BALUCH
Counsel of Record
SMITH BALUCH LLP
700 Pennsylvania Avenue, SE
Suite 2060
Washington, DC 20003
MATTHEW A. SMITH
ELIZABETH A. LAUGHTON
SMITH BALUCH LLP
1100 Alma Street
Suite 109
Menlo Park, CA 94025
Counsel for Respondent
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.