Amicus Curiae Brief — Centripetal Networks, Inc., Petitioner v. Cisco Systems, Inc.
Supreme Court briefOct 14, 2022
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No. 22-246
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In The
Supreme Court of the United States
---------------------------------♦--------------------------------CENTRIPETAL NETWORKS, INC.,
Petitioner,
v.
CISCO SYSTEMS, INC.,
Respondent.
---------------------------------♦--------------------------------On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Federal Circuit
---------------------------------♦--------------------------------BRIEF AMICUS CURIAE
ON BEHALF OF FAIR INVENTING FUND
IN SUPPORT OF PETITIONER
---------------------------------♦--------------------------------LEWIS HUDNELL
Counsel of Record
HUDNELL LAW GROUP
800 W. El Camino Real
Suite 180
Mountain View, CA 94040
Phone: 650-564-3698
lewis@hudnelllaw.com
ROBERT GREENSPOON
DUNLAP, BENNETT & LUDWIG, PLLC
333 N. Michigan Avenue
Suite 2700
Chicago, IL 60601
Phone: 312-551-9500
rgreenspoon@dbllawyers.com
================================================================================================================
COCKLE LEGAL BRIEFS (800) 225-6964
WWW.COCKLELEGALBRIEFS.COM
i
AMICUS CURIAE’S STATEMENT
OF THE QUESTION PRESENTED
Whether the Federal Circuit’s inconsistently-applied
intolerance for the appearance of “judicial bias,” in conflict with rulings of other circuits, undermines public
confidence in that appellate court’s decision making,
evidences a two-class system, upends the Liljeberg
harmless error analysis, and merits this Court’s review.
ii
TABLE OF CONTENTS
Page
AMICUS CURIAE’S STATEMENT OF THE
QUESTION PRESENTED ..................................
i
TABLE OF CONTENTS ...........................................
ii
TABLE OF AUTHORITIES ......................................
iii
AMICUS CURIAE’S STATEMENT OF INTEREST ...................................................................
1
SUMMARY OF THE ARGUMENT .....................
3
ARGUMENT ........................................................
4
I.
II.
The Year-End Report Underscores How
This Case’s Facts Did Not Generate Concerns that Would Warrant Recusal, Much
Less Vacatur ..............................................
5
Patents Are a Key to Economic Mobility
for Small Innovators, And Previously Underrepresented Groups Have Still Not Realized Their Promise .................................. 12
CONCLUSION..................................................... 20
iii
TABLE OF AUTHORITIES
Page
CASES
Centripetal Networks, Inc. v. Cisco Sys., Inc.,
38 F.4th 1025 (Fed. Cir. 2022) ...................................5
In re B.E. Tech., No. 2022-114, 2022 U.S. App.
LEXIS 3809 (Fed. Cir. Feb. 11, 2022)............ 5, 11, 19
Liljeberg v. Health Services Acquisition Corp.,
486 U.S. 847 (1988) ....................................... 9, 19, 20
Mobility Workx, LLC v. Unified Patents, LLC,
15 F.4th 1146 (Fed. Cir. 2021) ....................... 5, 11, 19
Oil States Energy Svcs., LLC v. Greene’s Energy
Group, LLC, 138 S. Ct. 1365 (2018) ........................18
CONSTITUTIONAL PROVISIONS
U.S. Const. amend. XIII ..............................................14
U.S. Const. amend. XIV ..............................................14
STATUTES
28 U.S.C. § 455 ................................................ 6, 8, 9, 11
28 U.S.C. § 455(f ) ................................................ 4, 8, 20
35 U.S.C. § 311 et seq. .................................................18
Courthouse Ethics and Transparency Act (Pub.
L. 117-125) .................................................................7
Patent Act of 1790, Ch. 7, 1 Stat. 109-112 (Apr.
10, 1790) ..................................................................12
iv
TABLE OF AUTHORITIES—Continued
Page
Sec. 1, Patent Act of 1793, Ch. 11, 1 Stat. 318323 (Feb. 21, 1793) ..................................................13
SUCCESS Act, Pub. L. 115-273, 132 Stat. 4158
(2018) ............................................................. 2, 15, 20
REGULATIONS AND RULES
5 C.F.R. § 2640.202(a)(2) ...............................................8
U.S. Sup. Ct. R. 33.1 ......................................................1
U.S. Sup. Ct. R. 37.2(a) .................................................1
U.S. Sup. Ct. R. 37.6 ......................................................1
OTHER AUTHORITIES
Chief Justice Roberts, 2021 Year-End Report on
the Federal Judiciary ............................................ 6, 7
“From George Washington to the United States
Senate and House of Representatives, 8 January
1790,” https://founders.archives.gov/documents/
Washington/05-04-02-0361 (last viewed Oct.
10, 2022) ..................................................................13
Henry J. Friendly, “Some Kind of Hearing,” 123
U. PENN. L. REV. 1267 (1975) ....................................4
https://usinventor.org/assessing-ptab-invalidityrates/ (last visited Oct. 5, 2022) ..............................18
https://www.invent.org/inductees/mary-dixonkies (last visited Oct. 2, 2022) .................................14
v
TABLE OF AUTHORITIES—Continued
Page
https://www.ipwatchdog.com/2014/03/24/ptabdeath-squads-are-all-commercially-viablepatents-invalid/id=48642/ (last visited Oct. 5,
2022) ........................................................................18
https://www.ipwatchdog.com/2016/02/25/ted-cruzhas-such-in-common-with-abraham-lincolnthanks-to-patents/id=66515/ (last visited Oct.
5, 2022) ....................................................................14
https://www.ipwatchdog.com/2020/08/07/usinventor-amicus-new-vision-gaming-octobereffect-subjective-apj-evaluations-support-dueprocess-argument-ptab/id=123858/ (last visited Oct. 2, 2022) .....................................................11
https://www.ipwatchdog.com/2022/09/14/amicicite-relevance-gao-report-empirical-data-newvisions-claim-aia-review-structure-violates-dueprocess/id=151362/ (last visited Oct. 2, 2022) ........10
Justin T. Callais and Vincent Geloso, “Economic
Freedom Promotes Upward Income Mobility,”
in Economic Freedom of the World: 2021 Annual Report (Fraser Institute, 2021) ......................15
Jyoti Madhusoodanan, Why Do Women Inventors Win Fewer Patents? YALE INSIGHTS, Apr.
09, 2018 (last visited Oct. 5, 2022) (https://
insights.som.yale.edu/insights/why-do-womeninventors-win-fewer-patents) .................................17
Matthew Bultman, For Black Inventors, Road to
Owning Patents Paved with Barriers, BLOOMBERG LAW (2020)......................................................16
vi
TABLE OF AUTHORITIES—Continued
Page
Shontavia Jackson Johnson, “The Colorblind
Patent System and Black Inventors,” Landslide (Mar./Apr. 2019), available at https://www.
americanbar.org/groups/intellectual_property_
law/publications/landslide/2018-19/march-april/
colorblind-patent-system-black-inventors/ (last
visited Oct. 2, 2022) ........................................... 13, 14
Paul R. Gugliuzza, The Supreme Court Bar at
the Bar of Patents, 95 NOTRE DAME L. REV.
1233 (2020) ................................................................8
Ron D. Katznelson, “The Pecuniary Interests of
PTAB Judges—Empirical Analysis Relating
Bonus Awards to Decisions in AIA Trials”
(2021), available at https://papers.ssrn.com/sol3/
Delivery.cfm/SSRN_ID3880715_code706742.pdf?
abstractid=3871108&mirid=1 (last visited Oct.
5, 2022) ....................................................................10
“The Patent Trial and Appeal Board After 10
Years: Impact on Innovation and Small Businesses,” https://judiciary.house.gov/calendar/event
single.aspx?EventID=4967 (testimony at 33:5534.26) (last viewed Oct. 12, 2022) .............................1
USPTO, “Progress and Potential: 2020 update on
U.S. women inventor-patentees” (from the Office of the Chief Economist, July 2020) ..................16
USPTO, “Progress and Potential: A profile of
women on U.S. patents” (from the Office of the
Chief Economist), Feb. 2019 ...................................16
USPTO, “Report to Congress Pursuant to Pub. L.
115-273, SUCCESS Act,” Oct. 2019 ... 15, 16, 17, 18, 19
1
AMICUS CURIAE’S STATEMENT OF INTEREST
Amicus Fair Inventing Fund1 was established in
2020 to advocate for the rights of people who invent
but who are not equally and/or equitably represented
in the patent ecosystem. Creating, commercializing,
and patenting new technology is capital-intensive.
That poses barriers for those without access to capital—disproportionately women, people of color, veterans, and people from socioeconomically disadvantaged
areas—discouraging them from engaging in the patent
ecosystem.
Petitioner is one of Amicus’s constituents. Centripetal’s COO Jonathan Rogers testified before the House
of Representatives in June 2022 at a hearing explicitly focused on the impact of certain aspects of the patent system on small businesses: “The Patent Trial and
Appeal Board After 10 Years: Impact on Innovation
and Small Businesses.” Mr. Rogers testified that he
is a co-founder of Centripetal along with his father,
and are each veterans who devoted their cryptography skills to protecting our nation. https://judiciary.
house.gov/calendar/eventsingle.aspx?EventID=4967
(testimony at 33:55-34.26) (last viewed Oct. 12,
2022). Mr. Rogers explained that Centripetal has
1
Under this Supreme Court Rule 37.6, Amicus affirms that
no counsel for any party authored this brief in whole or in part,
and that no person other than Amicus, its members, and its counsel made a monetary contribution to its preparation or submission. Under Supreme Court Rule 37.2(a), the parties received
timely notice and have consented to the filing of this brief. Under
Supreme Court Rule 33.1, Amicus affirms that the instant brief
does not exceed 6,000 words.
2
invested $200M in R&D, has 50 patents, and has 100
employees. (Id. at 34:50-35:15). When Centripetal files
for patents, it properly claims entitlement to “small entity” status to obtain discounted government patenting
fees.
Congress, on a bipartisan and bicameral basis, has
recognized in the context of a user fee setting authority
bill, the need to “promote the participation of women,
minorities, and veterans in entrepreneurship activities
and the patent system.” SUCCESS Act, Pub. L. 115273, 132 Stat. 4158 (2018). The United States Patent
and Trademark Office (“USPTO”) runs only on user
fees, not taxpayer dollars. Both President Biden and
former President Trump have embraced the SUCCESS Act, with President Trump having created a
commission on diversity, equity and inclusion in the
patent system and President Biden having continued
and expanded it.
This appeal squarely implicates these interests.
The innovative startup Petitioner asserting the patents-in-suit is a small company co-founded by veterans. The ruling under review sends a discouraging
signal to all small innovative startups: if you win at
the trial court, the appellate court will use arbitrary
non-merits reasons outside of your control to take
away your victory. Meanwhile, in the larger context
of all judicial bias rulings from the Federal Circuit,
the message to small innovators is discouragement.
Such rulings risk imposing a burden on inventors that
will fall inequitably on women, minority and veteran
3
inventors, and those from socioeconomically disadvantaged areas.
---------------------------------♦---------------------------------
SUMMARY OF THE ARGUMENT
Amicus agrees with Petitioner that “the decision
below [will] chill the enforcement of valid patents by
small inventors,” enhance the power of “entrenched incumbents” in a marketplace to impose “devastating
burden[s] for innovative startups,” and lead individual
and startup innovators to “conclude that the deck is
stacked.” (Pet. 33). As Congress has recognized, burdens such as these rest disproportionately on the
shoulders of previously underrepresented innovator
groups. Data show that women, minorities and veterans continue to show only anemic progress in realizing
the economic benefits of the patent system, such as
access to capital to form new enterprises. Confidence
degrades, and incentives to enter the patent system
diminish, when an appeals court takes away an aggrieved small innovator’s courtroom success for seemingly arbitrary reasons. If the deck is stacked against
a Petitioner whose evidence led to the largest patent
damages judgment in our nation’s history (Pet. 33), it
is even more so against previously underrepresented
innovators.
---------------------------------♦---------------------------------
4
ARGUMENT
“[A]n unbiased tribunal is a necessary element in
every case where a hearing is required. . . .” Henry J.
Friendly, “Some Kind of Hearing,” 123 U. PENN. L. REV.
1267, 1279 (1975). Amicus submits that the Federal
Circuit has deepened an invidious, apparent bias with
the decision under review, not cured one. The present
case calls for Supreme Court intervention to ensure
that Federal Circuit “bias” decisions themselves demonstrate lack of bias—what Judge Friendly labeled a
“necessary element” for the cause of due process in a
just civil society.
Granting the Petition in this case will correct preposterous notions that late-discovered stock ownership by a federal judge’s wife, transferred to a blind
trust, might diminish public confidence in the courts.
All agree that such judge harbored no actual bias, and
he ruled against the interests of his wife’s company
shares. Reversal of the Federal Circuit decision will
breathe meaning into 28 U.S.C. § 455(f ) (the recusalexception statute). This Court’s grant of the Petition
will preserve and even restore confidence in our judicial institutions. Lifting of any barrier to small innovators making use of the patent system helps previously
underrepresented groups to an even greater degree.
Granting the Petition will also allow the Court to
examine an apparent anti-innovator tilt in Federal
Circuit decision making. The Federal Court strains to
find vacatur-worthy “bias” where there is none, when
vacatur favors a technology incumbent. The same
5
court does nothing when shown proven actual financial
bias by agency judges, when that judicial bias incentivizes patent rights degradation. This case is one of a series of outliers by the Federal Circuit on judicial bias.
Several Federal Circuit judicial bias rulings have come
down recently whose only consistent thread is that
they disfavor the small innovator.2 Judicial bias decisions should not be used as a one-way ratchet against
small patentees. The Court should grant the Petition,
in service of the sanctity of property rights, economic
mobility, access to justice, and confidence in the courts.
I.
The Year-End Report Underscores How
This Case’s Facts Did Not Generate Concerns that Would Warrant Recusal, Much
Less Vacatur
The Federal Circuit vacatur here overcorrects
against perceptions of judicial bias, even as the rest of
its jurisprudence undercorrects against actual judicial
bias when pointed out by patentees. To be sure, judicial
bias is in the news. The public has an interest in fair
proceedings in both federal and agency courts. But that
2
See Centripetal Networks, Inc. v. Cisco Sys., Inc., 38 F.4th
1025 (Fed. Cir. 2022) (the instant case, finding trial judge apparent bias meriting vacatur); In re B.E. Tech., No. 2022-114, 2022
U.S. App. LEXIS 3809 (Fed. Cir. Feb. 11, 2022) (denying mandamus petition against PTAB institution of IPR trial that showed
structural due process financial bias based on patent judge payroll bonus incentives); Mobility Workx, LLC v. Unified Patents,
LLC, 15 F.4th 1146 (Fed. Cir. 2021) (denying due process challenge against PTAB structure based on details of how it is a feegenerating business unit of the USPTO).
6
is little reason to jettison balance and accumulated
wisdom when applying recusal law. This brief will contrast the Federal Circuit’s anything-goes/nothing-tosee-here approach when agency proceedings are infected with actual financial bias against patentees,
with the zero-tolerance result of the present case
which involved no evidence of actual bias (i.e., the twoclass system). In this larger context, the appellate
court discourages small innovators from meaningfully
pursuing and exercising patent rights.
In his 2021 year-end report, Chief Justice Roberts
turned focus to Wall Street Journal reports that had
recently discussed nine years of stock ownership by
federal judges. In 685 instances (0.03% of all cases in
the period), federal judges presided incorrectly over
cases in which they owned shares in a party. Chief
Justice Roberts, 2021 Year-End Report on the Federal
Judiciary, at 3. The Chief Justice noted that the judiciary has the capacity to address these issues with robust institutions already in place, which Chief Justice
Taft first built in the early part of the 20th Century. Id.
at 1-3.
Chief Justice Roberts made several salient points
about the Journal report, underscoring that the concern surrounding stock ownership is a concern that
potential rulings “actually financially benefitted the
judge,” while the main thrust of § 455 is “the public’s
confidence in the independence of the courts:”
7
•
“I do want to put these lapses in context.”
•
“Those sorts of isolated violations likely
entailed unintentional oversights in which
the judge’s conflict-checking procedures
failed to reveal the financial conflict.”
•
“Significantly, for all the conflicts identified, the Journal did not report that any
affected the judge’s consideration of a
case or that the judge’s actions in any of
those cases—often just routine docket
management—actually financially benefited the judge.”
•
“Our systems of conflict checking should
make the most of technology to help prevent the kinds of problems that can impair the public’s confidence in the
independence of the courts.”3
Id. (emphasis added). The inquiry in these situations,
therefore, should always be whether a reasonable perception exists about a judge financially benefitting
from a ruling, and whether vacatur of rulings wrongly
made actually degrades the public’s confidence in an
independent judiciary.
3
President Biden signed into law the Courthouse Ethics
and Transparency Act on May 13, 2022 (Pub. L. 117-125) to
establish a more robust public database to assist in judicial
conflicts-checking, and to enhance public confidence in the
Courts. It was a Republican-led bill that passed the Senate
with no opposition, and the House adopted the Senate bill with
no opposition.
8
The Federal Circuit lost sight of these aims. As
Petitioner supports, the judge in the present case obtained no financial benefit. He likely spent as much
money on his personal lawyer to create the blind trust
as the 100 Cisco shares were worth. By comparison,
those shares (worth between $4,000 and $5,000) fell
far below the $15,000-value reporting threshold applicable to general government employees who are not
federal judges. 5 C.F.R. § 2640.202(a)(2). Just as much,
nothing about the facts in this case called into question
the independence of the judge, whom Petitioner convincingly argues had, to a near certainty, already made
up his mind about the case outcome before his discovery of his wife’s shares.
But enter the Federal Circuit, which applied an
extraordinary zero-tolerance policy.4 Zero tolerance of
recusal-worthy stock ownership is a lofty goal. But the
recusal exception provision of § 455(f ) shows Congress’s concern that such strong medicine might be
worse than the disease. Specifically, as long as there is
prompt “divestment” of the asset, a judge who has
4
Petitioner explains cogently how the Federal Circuit in the
instant case deepened a conflict with other appeals courts in its
application of § 455. (Pet. 28-30). The Federal Circuit’s use of
patent-specific rules to split from other circuits when applying
general federal law is a recognized recurring problem. Paul R.
Gugliuzza, The Supreme Court Bar at the Bar of Patents, 95
NOTRE DAME L. REV. 1233, 1234-35 (2020) (“[T]he Supreme
Court’s recent patent decisions read like a campaign to eliminate
what is often referred to as ‘patent exceptionalism’—rulings
(usually by the Federal Circuit) that exempt patent law from
transsubstantive principles of jurisdiction, procedure, and remedies that govern in other areas of federal litigation.”).
9
performed substantial work in the case does not need
to order a recusal.
Similarly, even where a judge has not strictly complied with § 455, harmless error analysis is required
under Liljeberg v. Health Services Acquisition Corp.,
486 U.S. 847 (1988). Liljeberg shows that the law does
not always require unflinching vacatur. When a record
lacks any whiff of the main concern of the recusal statute (financial benefit to a judge who rules in favor of
his or her asset), and when that record never created
an appearance that the independence of the courts was
in jeopardy, the appeals court errs to require recusal
and/or to vacate.
With no small irony, the Federal Circuit’s ruling
purporting to protect the justice system from bias actually underscores Federal Circuit apparent bias against
small innovators. Recent revelations about the Patent
Trial and Appeal Board (“PTAB”) (part of the USPTO
that presides over patentability trials) have (unlike
the present case) revealed actual financial judicial bias
problems within the administrative agency. But did
the Federal Circuit respond with vacatur orders? Resoundingly not.
•
A 2022 Government Accountability Office
report to Congress described PTAB management secretly, without attribution and
without knowledge by the adversarial
parties, forcing changes to particular decisional outcomes—exposing Soviet-style
“telephone justice” inconsistent with
10
traditional notions of due process. See
https://www.ipwatchdog.com/2022/09/14/
amici-cite-relevance-gao-report-empiricaldata-new-visions-claim-aia-review-structureviolates-due-process/id=151362/ (last visited Oct. 2, 2022).
5
•
Statistical analyses of PTAB financial operations and salary structures have
emerged that reveal incentives PTAB
judges have to rule against patent owners. PTAB judges have an annual average
pecuniary bias totaling $5,760 out of an
average annual bonus of $21,166 in favor
of anti-patentee rulings. Ron D. Katznelson, “The Pecuniary Interests of PTAB
Judges—Empirical Analysis Relating Bonus Awards to Decisions in AIA Trials”
(2021), available at https://papers.ssrn.com/
sol3/Delivery.cfm/SSRN_ID3880715_code
706742.pdf?abstractid=3871108&mirid=1
(last visited Oct. 5, 2022).5
•
A different set of statistical analyses of
judging behavior by PTAB judges demonstrates an unusual “October Effect,”
whereby the change of the fiscal year
(which coincides with resetting to zero
one of the metrics governing performance
The study reports that PTAB patent judges receive bonuses
potentially above $40,000 per year. The PTAB is fee-based and
pays such bonuses from petition fees. A two-phase payment structure at the PTAB guarantees a much larger retained fee upon institution of a PTAB trial (triggering high probability of patent
cancellation) versus denial of an PTAB trial (rejection of a patentability challenge).
11
reviews and bonuses) shows statistically
significant changes in judging behavior.
See https://www.ipwatchdog.com/2020/08/07/
us-inventor-amicus-new-vision-gamingoctober-effect-subjective-apj-evaluationssupport-due-process-argument-ptab/id=
123858/ (last visited Oct. 2, 2022) (identifying behaviors to “refill their decisional
unit pipeline” with grants of trial institution to guarantee work, and thus good
performance reviews, for the upcoming
year).
The Federal Circuit has fielded due process challenges
raising most of these aspects of agency adjudication judicial bias. In each case so far, the Federal Circuit has
refused all relief, brushing aside disturbing facts and
giving the agency ample leeway to do as it pleases. In
re B.E. Tech., No. 2022-114, 2022 U.S. App. LEXIS 3809
(Fed. Cir. Feb. 11, 2022); Mobility Workx, LLC v. Unified
Patents, LLC, 15 F.4th 1146 (Fed. Cir. 2021).
The takeaway for small innovators is discouraging. Compare the outcome of the present case with the
outcome in each of the PTAB bias cases so far. At the
Federal Circuit, if a patentee overcomes all obstacles
to win at trial, the appeals court will strain to apply
§ 455 to take away that Article III award on the slightest non-merits provocation, even when all parties and
all jurists acknowledge no actual bias exists. Yet if a
patent owner has lost its property right entirely at the
PTAB, and seeks to remedy a due process deprivation
arising out of demonstrated actual bias within that
institution, the same court withholds relief. This is a
12
one-way ratchet. The decision in the present case
proves that judicial bias decisions at the Federal Circuit seem to go in only one direction: against the small
innovator.
II.
Patents Are a Key to Economic Mobility for
Small Innovators, And Previously Underrepresented Groups Have Still Not Realized
Their Promise
This Federal Circuit’s apparent bias when dealing
with bias weakens the United States patent system in
ways that disproportionately harm women, minorities,
veterans and people from socioeconomically disadvantaged areas. This unnecessarily adds another level to
the struggle for such groups to realize their rightful
share of benefits from the patent system. From its earliest days, the patent system held great promise to lift
up minorities and women. Its implementation has
been a different story altogether.
The Patent Act of 1790 was only the third Act of
Congress ever passed. Its text contains a strikingly
modern concept—men, women and inventor-groups
can obtain patents (inventors may be “he, she, or
they”), without any textual filter or bar concerning
race, background or status of servitude. Patent Act of
1790, Ch. 7, 1 Stat. 109-112 (Apr. 10, 1790). The first
Patent Act was a highlight for our new government:
The first session of the 1st Congress took place in 1789
and focused on simply getting the new legislature up
and running. President Washington delivered his first
13
State of the Union speech to Congress on January 8,
1790. His speech was only 1,096 words but he devoted
77 words to patents and he stressed the need to have
the patent system reach all Americans, especially
those in far-flung, hard to reach communities:
The advancement of agriculture, commerce,
and manufactures by all proper means will
not, I trust, need recommendation; but I can
not forbear intimating to you the expediency
of giving effectual encouragement as well to
the introduction of new and useful inventions
from abroad as to the exertions of skill and genius in producing them at home, and of facilitating the intercourse between the distant
parts of our country by a due attention to the
post-office and post-roads.
“From George Washington to the United States Senate
and House of Representatives, 8 January 1790,” available
at https://founders.archives.gov/documents/Washington/
Washington/05-04-02-0361 (last viewed Oct. 10, 2022).
When amended in 1793, the Act preserved gender
neutrality (now reciting “any person or persons”). But
it added a United States citizenship requirement. Sec.
1, Patent Act of 1793, Ch. 11, 1 Stat. 318-323 (Feb. 21,
1793). This excluded African-Americans held in involuntary servitude, since they could not be citizens and
indeed would not be recognized as able to own property.
Shontavia Jackson Johnson, “The Colorblind Patent
System and Black Inventors,” Landslide (Mar./Apr.
14
2019).6 The infamous Dred Scott decision in 1857 went
further, by calling into question whether any Black
person (even freed slaves) could rightfully obtain a patent (at least until the passage of the Thirteenth and
Fourteenth Amendments), on grounds that such persons would not be construed as citizens of the United
States. Id.
But by then, the USPTO had already granted the
first patent to a Black man. Thomas Jennings received
that award in 1821 for an innovative dry cleaning
method, one that proved lucrative for him and led
him to own one of New York City’s largest clothing
stores. Id. Meanwhile, Mary Kies was the first woman
in the United States awarded a patent, an invention
for weaving straw with silk, granted in 1809. See
https://www.invent.org/inductees/mary-dixon-kies (last
visited Oct. 2, 2022).7
From an economic perspective, it is understandable why Blacks and women bought into the promise of
6
Available at https://www.americanbar.org/groups/intellectual_
property_law/publications/landslide/2018-19/march-april/colorblindpatent-system-black-inventors/ (last visited Oct. 2, 2022).
7
The Great Emancipator, President Abraham Lincoln, fled
poverty and judicial corruption in land surveying and property
recordation in rural Kentucky to pursue a law career in rural
southern Illinois, including litigating patent cases. The income he
made defending inventors fueled his first political campaign in
which he ran for the U.S. House of Representatives. President
Lincoln remains the first and only president to be an inventor and
patent owner. https://www.ipwatchdog.com/2016/02/25/ted-cruzhas-much-in-common-with-abraham-lincoln-thanks-to-patents/
id=66515/ (last visited Oct. 5, 2022).
15
the early patent system, tentative and sputtering
though it was. Property ownership is a recognized generator of social and economic mobility among previously underrepresented groups. See Justin T. Callais
and Vincent Geloso, “Economic Freedom Promotes Upward Income Mobility,” in Economic Freedom of the
World: 2021 Annual Report 189, 201 (Fraser Institute,
2021) (“Over 77% of the variation in social mobility can
be explained by the quality of legal systems and protection of property rights.”). Patent ownership is one
such type of property ownership that can potentially
aid social mobility, as Mr. Jennings’ success as a clothing merchant bears out. Congress clearly thinks so. It
enacted the SUCCESS Act, Pub. L. 115-273, 132 Stat.
4158 (2018), in an effort to document the issues faced
by previously underrepresented inventors in obtaining
such properties, such as non-White, female, military
veteran and innovators living in socioeconomically
challenged communities.
In October 2019, the USPTO released its “Report to Congress Pursuant to Pub. L. 115-273, SUCCESS Act.” (hereafter, “USPTO SUCCESS Report”).
The USPTO SUCCESS Report noted the “impediments” that African-American inventors have traditionally faced “including the lack of financing for
development and commercialization of inventions[.]”
USPTO SUCCESS Report, at 12. This trend continues
today as “Blacks or African Americans and Hispanics
born in the U.S. are significantly underrepresented
among innovators” when compared to their white
counterparts. Id. (noting that, “Blacks or African
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Americans represent 11.3% of U.S.-born Americans
and only 0.3% of the innovators who responded to their
survey.”). And, the USPTO further noted “that observed gaps in patenting rates between Whites and
racial/ethnic minorities cannot be explained by differences in parental income or performance on school
tests.” Id. The statistics regarding participation of
African-Americans are troubling: “African-Americans
make up 13% of the U.S. native-born population but
comprised less than 1% of the U.S.-born innovators it
surveyed.” Matthew Bultman, For Black Inventors,
Road to Owning Patents Paved with Barriers, BLOOMBERG LAW (2020).
In a companion report, in February 2019, the
USPTO also noted such disparities between males and
females in a report titled “Progress and Potential: A
profile of women on U.S. patents” (from the Office of the
Chief Economist). The report observed that female participation is small—in 2016 only 12.1% of all inventors
on U.S. patents. Id. at 3. In a 2020 update that added
three more years of data, the USPTO noted that this
rate “improved from 12.1% in 2016 to 12.8% by 2019,”
but also noted that the “share of male science and engineering job holders who are inventor patentees was
three times higher” than the share of women, meaning
that welcoming more women into science and engineering jobs alone “is not sufficient to increase the participation of women and inventor-patentees.” “Progress
and Potential: 2020 update on U.S. women inventorpatentees” (from the Office of the Chief Economist, July
2020). Additional studies demonstrate that women’s
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patent applications were “more likely to be rejected
than those filed by teams of men.” Jyoti Madhusoodanan,
Why Do Women Inventors Win Fewer Patents? YALE
INSIGHTS, Apr. 09, 2018 (last visited Oct. 5, 2022)
(available at https://insights.som.yale.edu/insights/whydo-women-inventors-win-fewer-patents) (“Essentially
women inventors must pass greater degrees of scrutiny.”).
In its otherwise-bleak reporting, the USPTO recognized the extraordinary and essential role that patenting plays for small startups generally, while
correctly linking those same small startup interests
to the interests of minorities, women and military
veterans.
Applying for and receiving a patent confers
many potential benefits to individual inventors and to the companies they own or work
in. Inventor-patentees may experience personal benefits, including improved prestige,
income and job-related opportunities. Applying for and obtaining a patent helps individuals and companies gain access to financial
capital, find licensees, stimulate innovation,
and facilitate growth. Some of these benefits
are documented by empirical studies, but few
studies characterize these benefits specifically
for women, minorities, or veterans, or for the
companies women, minorities, or veterans
own.
USPTO SUCCESS Report, at 2. But disappointingly,
the USPTO SUCCESS Report did not address the impact of legal rulings of the recent past that diminish
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the strength of the patent right for all stakeholders.
Instead, it recommended no changes to patent law, or
adjustments of errant court decisions. Among its recommendations to promote inclusion of previously underrepresented groups, the USPTO recommended
that the government “[c]reate a commemorative series of quarters and postage stamps to be placed in
circulation” that would “feature a spectrum of American inventor-patentees from a variety of backgrounds,
including those from underrepresented groups.” Id.
at 3.
It might have been more helpful for the USPTO to
look in the proverbial mirror than ponder new designs
for quarters and stamps. Simultaneous with its SUCCESS Act work, the USPTO has amplified threats to
the interests of small startup inventors within its
PTAB adjudicatory branch. As mentioned, the PTAB
administers “trials” under the America Invents Act,
such as Inter Partes Review. See 35 U.S.C. § 311 et seq.
As well documented, the PTAB is an agency tribunal
that operates as a “patent death squad,” with invalidation rates in instituted trials hovering around 84%.
https://usinventor.org/assessing-ptab-invalidity-rates/
(last visited Oct. 5, 2022) (methodology for calculating the statistic); https://www.ipwatchdog.com/2014/
03/24/ptab-death-squads-are-all-commercially-viablepatents-invalid/id=48642/ (last visited Oct. 5, 2022)
(“death squad” label coined by Federal Circuit Chief
Judge); see also Oil States Energy Svcs., LLC v. Greene’s
Energy Group, LLC, 138 S. Ct. 1365, 1380 (2018)
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(Gorsuch, J., dissenting) (“Consider just how efficient
the [PTAB] statute before us is.”).
Neither the PTAB in its SUCCESS Report, nor the
Federal Circuit in its B.E. Tech. and Mobility Workx
rulings that turn a blind eye to PTAB judicial financial
bias, offer anything meaningful to help women, minorities and veterans navigate or circumvent this 84%
death squad invalidation rate. Instead, the Federal
Circuit plows ahead with rulings such as that on review. Something is broken when a double standard
over judicial bias almost always, somehow, leads to rulings that favor large technology incumbents over small
innovators.
This is the broader context within which to understand the Federal Circuit’s mishandling here of harmless error. Under Liljeberg, one of the three key factors
for a court to consider in deciding harmless error is
whether vacatur would improve or impair public perception of the courts. Liljeberg, 486 U.S. at 864. Here,
small innovators and previously underrepresented innovator groups cannot win. When the most successful
among them in court loses its judgment on flimsy
grounds where no real threat to judicial independence
was ever possible, that sends a discouraging message.
When in different cases, the same court shuts its ears
to proven financial bias that operates against a small
innovator, that drives the point home. Bias rulings only
favor large technology incumbents. The patent system
is unwelcoming and hostile, at least as communicated
in Federal Circuit rulings.
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Amicus therefore agrees with Petitioner that a
proper Liljeberg analysis should result in a conclusion
of harmless error here. The Federal Circuit’s ruling signals to small innovators (especially those made up of
previously underrepresented groups) to keep away
from patenting. The deck is stacked. No matter how
good your case when you discover infringement, the
hurdles put in your way will be arbitrary and unfair.
This is precisely the opposite message from that which
the courts should send, and contrary to the sense of
Congress under the SUCCESS Act. Under Liljeberg,
it is non-vacatur (as opposed to vacatur) that will send
a message of fairness and balance to improve public
perception of the courts.
---------------------------------♦---------------------------------
CONCLUSION
Nothing could be more important than an unbiased judiciary. But when actual bias is absent, Congress established 28 U.S.C. § 455(f ) as a safe harbor to
preserve balance and protect against unneeded overcorrection of an otherwise well-functioning judicial
process. The Federal Circuit failed to heed either the
letter or spirit of § 455(f ). Viewed in context of its anything-goes approach to proven, actual, financial bias at
the PTAB, only one conclusion is apparent to Amicus
and its constituency—it is the Federal Circuit who
demonstrates bias that undermines public confidence
in the justice system, degrading further an alreadyhostile environment favoring incumbents over innovative startups.
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The Court should grant the writ of certiorari.
Respectfully submitted,
LEWIS HUDNELL
Counsel of Record
HUDNELL LAW GROUP
800 W. El Camino Real
Suite 180
Mountain View, CA 94040
Phone: 650-564-3698
lewis@hudnelllaw.com
ROBERT GREENSPOON
DUNLAP, BENNETT & LUDWIG, PLLC
333 N. Michigan Avenue
Suite 2700
Chicago, IL 60601
Phone: 312-551-9500
rgreenspoon@dbllawyers.com
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.