Amicus Curiae Brief — Oil States Energy Servs., LLC v. Greene's Energy Grp., LLC, 138 S. Ct. 350 (2017) (No. 16-712)

— upon eune w

BRIEFS chs OCT 30 2017

= Serer. ERK

IN THE

Supreme Court of the Hnited States

OIL STATES ENERGY SERVICES, LLC,

Petitioner,

Uv.

GREENE’S ENERGY GROUP, LLC, ET AL.,

Respondents.

On Writ Of Certiorari To

The United States Court Of Appeals

For The Federal Circuit

BRIEF OF DELL INC., FACEBOOK, INC., AGILENT

TECHNOLOGIES, INC., ARISTA NETWORKS, INC.,

CLOUDFLARE, INC., EDWARDS LIFESCIENCES

CORP., HEWLETT PACKARD ENTERPRISE CoO. ,

HTC CORPORATION, JCPENNEY CORPORATION,

INC., LIMELIGHT NETWORKS, INC., RED HAT,

INC., SMITH & NEPHEW, INC., TWITTER, INC.,

AND VARIAN MEDICAL SYSTEMS, INC. AS

AMICI CURIAE IN SUPPORT OF RESPONDENTS

KRISHNENDU GUPTA THEODORE B. OLSON

MICHELE K. CONNORS Counsel of Record

THOMAS A. BROWN AMIR C. TAYRANI

DELL INC. BLAIR A. SILVER

One Dell Way GIBSON, DUNN & CRUTCHER LLP

Round Rock, Texas 78682 1050 Connecticut Avenue, N.W.

(512) 728-3186 Washington, D.C. 20036

COLIN STRETCH (30m) Ses-Soue

FACEBOOK, INC. tolson@gibsondunn.com

1601 Willow Road

Menlo Park, CA 94025

(650) 543-4800

Counsel for Amici Curiae

TABLE OF CONTENTS

Page

Ty CO PRES WIE Be cscccecdecvccrsccerscecceaccdedanndecsesvscéuc ii

INTEREST OF AMICI CURIAE ............0.....c0cccccccececcecceees 1

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

PT sy MERA ERIE ey. Geel AUR Se Oe tar Se ee 5

1. PATENT REVOCATION By THE PRIvy

COUNCIL IS THE CLOSEST HISTORICAL

ANALOGUE TOJ/NTER PARTES REVIEW............. 5

A. Patent Revocation Was Historically

A Royal Prerogative Exercised By

Pe II eriiidis se ccccnnccenciscclnecs iéouads. 6

B. The Writ Of Scire Facias Is Not An

Historical Analogue To Patent-

Claim Cancellation And Was Itself

A Matter Of Public Right ....................... 10

C. The Defense Of Invalidity Is Not

An Historical Analogue To Patent-

CRIES CPIOOTIRIIOE ......cccccccccnsvcscoscscceess.:: 14

Il. INTER PARTES REVIEW PROMOTES

INNOVATION By REMOVING ARTIFICIAL

PATENT BARRIERS AND REDUCING

WASTEFUL LITIGATION COSTS ...................-04- 17

ee Leia SS ence AER ee ee eee BE ee 25

£3

TABLE OF AUTHORITIES

Cases

ACQIS, LLC v. EMC Corp.,

109 F. Supp. 3d 352 (D. Mass. 2015).......

Advanced Micro Devices, Inc. v. LG

Elecs., Inc., No. 14-cv-01012,

2015 WL 545534 (N.D. Cal. Feb. 9,

Arctic Cat Inc. v. Polaris Indus. Inc.,

No. 13-3579, 2015 WL 6757533

CED. BOM. FUOW. Gi, Wie isesestsatenivasctinsaisness

Atlas Roofing Co. v. Occupational Safety

& Health Review Comm'n,

SD UTD. SE RF Cites icstipssarencsshinnneladions

B.E. Tech, L.L.C. v. Facebook, Inc.,

No. 12-cv-02769 (W.D. Tenn.)..................

Blonder-Tongue Labs., Inc. v. Univ. of

Ill. Found.,

GE UF: BR CRT BS sce cc mievsscccbincvsndasttemiaas

Crowell v. Benson,

arr

Cuozzo Speed Techs., LLC v. Lee,

TOD BD. CC, BEBE Ci acs csccecssscccsesivccsveness

EveryMD LLC v. Facebook, Inc.,

No. 13-cv-06208 (C.D. Cal.) .......0.0 ee.

Granfinanciera, S.A. v. Nordberg,

GEE WD. FS CA i esses stncsronsiniansisesiowwens

Page(s)

sosneneptied 19

selena 19

ill

Intellectual Ventures I, LLC v. Lenovo

Group Ltd., No. 16-10860-PBS

(D. Mass. July 13, 2017) ...................04.

Mowry v. Whitney,

81 U.S. (14 Wall.) 434 (1871)............... |

Murray’s Lessee v. Hoboken Land &

Improvement Co.,

59 U.S. (18 How.) 272 (1856)................

N. Pipeline Constr. Co. v. Marathon

Pipe Line Co.,

i iriceicecinhasesostionvunstcoses

Neste Oil OYJ v. Dynamic Fuels, LLC,

No. 12-1744-GMS, 2013 WL 3353984

(D. Del. July 2, 2013) ............cceccccesce-se

PersonalWeb Techs., LLC v. EMC Corp.,

5:13-cv-01358-EJD

(N.D. Cal. Jan. 13, 2014) ..............

PersonalWeb Techs., LLC v. Facebook,

Inc., 5:13-cv-01356-EJD

(N.D. Cal. Jan. 13, 2014) ......................

Realtime Data, LLC v. Dell, Inc.,

6:16-cv-89-RWS-JDL

GES US IN, Gy BRED vacccccccecsesconeneess

Stern v. Marshall,

4

In re Tech. Licensing Corp.,

423 F.3d 1286 (Fed. Cir. 2005).............

United States v. Am. Bell Tel. Co.,

ae Ps SY CID ecernecnsnasecesssesesscenscens

iv

Constitutional Provisions

U.S. Const., art. I, § 8, cl. 8....... NP PRS ean tae ee 4,17

Statutes

Bs SND ierasecmsssnumsacenkceempscnesieccainanankaes 16, 24

Se A I ssn nisctcinianiineinsipivoncibimadaebbandiinasaaeie 14

hs i I i inicnsteseesneeseniendenievianmnbcepmetimnsdaes 20

IED dssiceninpiectdnindnneinausticacedainnenion 15, 21

Se I is ciecincicsedpnanasrienmatpunenscennncnbaninnll 15

Patent Law Amendment Act, 1852, 15

& 16 Vict., c. 83 (Eng.), at

https://cdn. patentlyo.

com/media/2017/08/PL-Amendment-

Act-15-16-Victoria-c.83-1852.pdf...........0000......00.. 8

Pub. L. No. 112-29, 125 Stat. 284 (2011).................. 17

Regulations

Se Oe I ci iccenceonvesonicnhsstnsijesesnncetcneasiiniasionpscensin 21

Other Authorities

157 Cong. Rec. $131 (daily ed. Jan. 25,

RE NR ba te: Sceriac we SS «ATES, ee 17

157 Cong. Rec. S5409 (Sept. 8, 2011) ................. 17

Am. Intell. Prop. L. Ass’n, 2015 Report

of the Economic Survey (2015), at

http://files.ctctedn. com/e79ee274201/

b6ced6c3-d1lee-4ee7-9873-

RN iil sictbiegcianensidibciianlnthinmeniiias 20

William Blackstone, Commentaries.............. 11, 12,13

Vv

Oren Bracha, Owning Ideas: A History

of Anglo-American Intellectual

Property (June 2005) (unpublished

Ph. D. thesis, Harvard Law School),

at https:/law.utexas.edu/faculty/

obracha/dissertation/pdf/

CEE i A

Lauren Cohen et al., The Growing

Problem of Patent Trolling, 352

a abcaitbionclannes

NST EE eR, RRS

Be Ms SI, Mea deine neecehictinticieet ecient

William Hands, The Law and Practice

of Patents for Inventions (London, W.

Clarke & Sons 1808).........................0.00000.

William Holdsworth, A History of

eee

E. Wyndham Hulme, Privy Council Law

and Practice of Letters Patent for

Invention from the Restoration to

1794 (Part II), 33 L.Q.R. 180 (1917).........

William Martin, The English Patent

EC a a ie oe ee

RPX Corp., NPE Litigation: Costs by

Key Events (2015), at

http://www.rpxcorp.com/wp-

content/uploads/sites/2/

2015/05/Final-NPE-Litigation-Costs-

REPUTE SUI go eciovanecceccontonscnessoteneves

sient 20

vi

Success Rates on Request to Stay

Pending IPR, CBM, or PGR Through

2016, DocketReport (2017), at

http://docketreport.blogspot.com/

2017/02/success-rates-on-requests-

(le

C. Violante, Law360’s Federal Circuit

Snapshot: By The Numbers, Law360

(Mar. 1, 2017), at https://www.

law360.com/newsroon/articles/

58ade8f20857780a37005e0e ....... oe...

Edward C. Walterscheid, The Early

Evolution of the United States Patent

Law: Antecedents (Part 4), 78 J. Pat.

Trademark Off. Soc’y 77 (1996).................

Brian T. Yeh, Cong. Research Serv.,

R42668, An Overview of the “Patent

TE I CIID eieieteeneccocccncvSusbiecesicscss

INTEREST OF AMICI CURIAE!

As leading companies in the computer technolo-

gy, consumer electronics, medical device, retail, so-

cial media, and software fields, amici have a signifi-

cant interest in defending the constitutionality of the

inter partes review procedure before the Patent Trial

and Appeal Board (“PTAB”). Amici have all benefit-

ed from the availability of inter partes review—either

directly as successful petitioners in inter partes re-

view proceedings or indirectly through a reduction in

patent-infringement litigation and the cancellation of

unpatentable claims imposing roadblocks to their in-

novative enterprises. Amici are also patent owners

themselves—collectively holding tens of thousands of

patents—and have confidence in the ability of the

PTAB to decide any challenges to the patentability of

their own claims in an evenhanded and accurate

manner. In amici’s experience, inter partes review

provides a cost-effective, efficient, and fair mecha-

nism for resolving patentability questions, and

thereby fosters innovation, promotes economic

growth, and preserves the finite resources of the fed-

eral courts.

Dell Inc. (“Dell”) is one of the world’s largest

technology companies. The Dell family of businesses

innovates across devices, ecosystems, and services to

1 Pursuant to this Court’s Rule 37.3(a), amici state that the

parties have filed letters with the Clerk granting blanket con-

sent to the filing of amicus briefs. Pursuant to this Court’s Rule

37.6, amici state that no counsel for a party authored this brief

in whole or in part, and no counsel or party made a monetary

contribution intended to fund the briefs preparation or submis-

sion. No person other than amici or their counsel made a mon-

etary contribution to the brief’s preparation or submission.

2

design solutions specifically for the way people

work—from award-winning thin clients, tablets, and

laptops to powerful workstations and rugged devices.

Dell’s products include personal computers, servers,

enterprise storage systems, and computer and net-

work security products. Dell and its affiliates own

more than 20,000 patents and applications world-

wide, and recognize the importance of protecting val-

id intellectual-property rights. To date, Dell and its

subsidiary EMC Corp. have participated in 86 inter

partes reviews and similar post-grant proceedings

before the PTAB.

Facebook, Inc. provides a free social media ser-

vice that gives more than 2 billion people around the

globe the power to build communities and bring the

world closer together. People use Facebook to stay

connected with friends and family, to build commu-

nities, to discover what is going on in the world, and

to express what matters to them. The service is now

provided in more than 100 languages and dialects.

Facebook has participated in 76 inter partes reviews

and similar post-grant proceedings.

A full list of amici can be found on the cover of

this brief.

SUMMARY OF ARGUMENT

I. This Court has “long recognized that, in gen-

eral, Congress may not ‘withdraw from judicial cog-

nizance any matter which, from its nature, is the

subject of a suit at the common law, or in equity, or

admiralty.” Stern v. Marshall, 564 U.S. 462, 484

(2011) (quoting Murray’s Lessee v. Hoboken Land &

Improvement Co., 59 U.S. (18 How.) 272, 284 (1856)).

But if a matter was not subject exclusively to a suit

at common law, equity, or admiralty at the time of

3

the Founding, Congress may assign it for resolution

by a non-Article III decision-maker.

Petitioner’s arguments that inter partes review

violates Article III and the Seventh Amendment rest

on the premise that there is an historical analogue to

cancellation of patent claims that was available in

the common-law or chancery courts of England at the

time of the Founding, and, conversely, that there was

no sucht: procedure available outside the English

court system. That premise is doubly flawed.

Patent revocation did not rest within the exclu-

sive province of the common-law and chancery courts

of England at the time of the Founding. Prior to the

Founding—and for more than a century thereafter—

the Crown’s Privy Council had broad authority to re-

voke patents outside of a judicial proceeding, includ-

ing for a variety of reasons related to patentability,

such as lack of novelty. Because this non-judicial

body had the authority to revoke patents when the

Constitution was framed, neither Article III nor the

Seventh Amendment requires that patentability

challenges be decided solely by courts.

Moreover, while England’s common-law and

chancery courts also possessed authority to consider

the validity of patents, neither of the pre-Founding

judicial procedures for evaluating patent validity is

an historical analogue to cancellation of patent

claims through inter partes review. The writ of scire

facias was a partial delegation of the Privy Council’s

patent-revocation authority to the chancery court,

but it was not comparable to claim cancellation

based on lack of novelty or obviousness because scire

facias addressed only issues akin to inequitable con-

duct. In addition, the right to seek patent revocation

4

through a writ of scire facias was itself a public right,

rather than a purely private one, because the writ

was pursued in the name of the Crown, required the

permission of the Crown, and involved the participa-

tion of the Crown in the judicial proceeding.

Nor was the defense of invalidity in a patent-

infringement suit an historical analogue to cancella-

tion of patent claims through inter partes review.

Invalidity was traditionally a personal defense to an

infringement action and, unlike the cancellation of a

claim through inter partes review, did not prevent

the patent holder from asserting its rights against

another defendant in a subsequent infringement

suit.

Multiple features of the historical record there-

fore make clear that neither Article III nor the Sev-

enth Amendment limits claim cancellation to judicial

proceedings.

II. Congress’s decision to authorize the PTAB to

cancel patent claims through inter partes review is

not only consistent with Article IIIf and the Seventh

Amendment, but also advances the Patent Clause’s

objective of “promotling] the Progress of Science and

useful Arts.” U.S. Const., art. I, § 8, cl. 8. In amici’s

collective experience, inter partes review has

strengthened the patent system by providing a cost-

effective, fair, and efficient mechanism for weeding

out unpatentable claims that would otherwise stand

as barriers to innovation and be used by non-

practicing entities to extort settlements in patent-

infringement litigation. And even those patent-

infringement actions that are filed are often much

simpler as a direct result of inter partes review,

which can limit the claims at issue, estop defendants

5

from raising certain arguments challenging claims

upheld by the PTAB, and streamline the district

court’s claim construction. In each of these respects,

inter partes review has reduced wasteful litigation

expenses and enabled amici to redeploy resources

away from legal fees to research and development.

In short, inter partes review enables technology

companies to focus on innovation, not litigation.

ARGUMENT

I. PATENT REVOCATION By ‘THE £PRIVY

CouNCcIL IS THE CLOSEST HISTORICAL

ANALOGUE TO INTER PARTES REVIEW.

When deciding whether it is permissible to as-

sign a dispute to a non-Article III decision-maker,

this Court looks to whether the proceeding “is made

of ‘the stuff of the traditional actions at common law

tried by the courts at Westminster in 1789.” Stern v.

Marshall, 564 U.S. 462, 484 (2011) (quoting N. Pipe-

line Constr. Co. v. Marathon Pipe Line Co., 458 U.S.

50, 90 (1982) (Rehnquist, J., concurring in the judg-

ment)). If it is, then “the responsibility for deciding

that suit rests with Article III judges in Article III

courts” because, “in general, Congress may not

‘withdraw from judicial cognizance any matter

which, from its nature, is the subject of a suit at the

common law, or in equity, or admiralty.” Jd. (quot-

ing Murray’s Lessee v. Hoboken Land & Improvement

Co., 59 U.S. (18 How.) 272, 284 (1856)).

Article III does not bar inter partes review before

the PTAB because the Privy Council possessed the

authority to revoke patents at the time of the Found-

ing, including for lack of novelty and other reasons

related to patentability. In fact, there is no historical

6

analogue whereby common-law or chancery courts

could revoke patents for lack of novelty or obvious-

ness. And because Article III does not prevent Con-

gress from assigning claim cancellation to a non-

judicial decision-maker, the Seventh Amendment—

which applies only to suits at common law—is neces-

sarily inapplicable.

A. Patent Revocation Was Historically A

Royal Prerogative Exercised By The

Privy Council.

In eighteenth-century England, patents were is-

sued by the Privy Council, the body of advisors to the

Crown, pursuant to the Statute of Monopolies. See

Edward C. Walterscheid, The Early Evolution of the

United States Patent Law: Antecedents (Part 4), 78 J.

Pat. Trademark Off. Soc’y 77, 83-84 (1996). Prior to

1753, the Privy Council was also the primary venue

for revoking patents. See E. Wyndham Hulme, Privy

Council Law and Practice of Letters Patent for Inven-

tion from the Restoration to 1794 (Part ID), 33 L.Q.R.

180, 193-94 (1917). The Privy Council could revoke

patents for a number of reasons, including reasons

related to patentability. Specifically, the Privy

Council “decided such questions as, [wlho of two

2 Even if a matter was tried exclusively by the common-law or

chancery courts at the time of the Founding, Congress can still

assign it to a non-judicial decision-maker if it is a matter of

“public right.” See Stern, 564 U.S. at 488. Although the public-

rights doctrine is largely beyond the scope of this brief, amici

note their agreement with the position of respondents that

“[platents are quintessential public rights,” U.S. Cert. Brief 9,

and that patent claims can therefore be cancelled outside of a

judicial proceeding for this additional reason. See Greene's

Merits Br. 29-39; U.S. Merits Br. 18-29.

7

claimants was the first inventor, [w|hether a patent-

ee was working his patent, [w)hether the invention

was really new, [and wjhether it was in the public

interest to grant a patent.” 6 William Holdsworth, A

History of English Law 331 (1924) (footnotes omit-

ted). Thus, like the PTAB, the Privy Council was a

non-judicial body charged with the responsibility to

assess patent validity based on criteria that included

the novelty of the invention.

In 1753, after a particularly messy revocation

proceeding, the Privy Council granted the chancery

court concurrent authority to revoke patents through

the writ of scire facias. See Hulme, supra, at 189-91,

193-94. But the writ of scire facias was only a partial

delegation of the Privy Council’s authority to revoke

patents. The Privy Council continued to possess con-

current authority to revoke patents until the early

twentieth century. See Oren Bracha, Owning Ideas:

A History of Anglo-American Intellectual Property

21 n.35 (June 2005) (unpublished Ph. D. thesis, Har-

vard Law School) (citing William Martin, The Eng-

lish Patent System 16 (1904)), at https:/Aaw.utexas.

edu/faculty/obracha/dissertation/pdf/chapter1l.pdf. In

fact, the Patent Law Amendment Act of 1852 set out

a statutory form to be included in all patent grants

that expressly reserved the right of the Privy Council

(or the Queen) to revoke the patent. It stated, in rel-

evant part:

Provided always, and these Our Letters Pa-

tent are and shall be upon this Condition,

that if at any Time during the said Term

hereby granted it shall be made appear to Us,

Our Heirs or Successors, or any Six or more of

8

Our or their Privy Council, that this Our

Grant is contrary to Law, or prejudicial or in-

convenient to Our subjects in general, or that

the said Invention is not a new Invention as

to the public Use and Exercise thereof, or that

the said is not the true and first Inventor

thereof within this Realm as aforesaid, these

Our Letters Patent shall forthwith cease, de-

termine, and be utterly void to all Intents and

Purposes, anything herein before contained to

the contrary thereof in anywise notwithstand-

ing.

Patent Law Amendment Act, 1852, 15 & 16 Vict., c.

83 (Eng.) (emphasis added), at https://cdn.patentlyo.

com/media/2017/08/PL-Amendment-Act-15-16-

Victoria-c.83-1852.pdf.

Because a patent could be revoked by a body oth-

er than a common-law or chancery court at the time

of the Founding, Article III does not limit Congress’s

power to authorize a non-Article III decision-maker

such as the PTAB to cancel patent claims. See Stern,

564 U.S. at 484. And where Article III is not impli-

cated, the Seventh Amendment is necessarily inap-

plicable. See Granfinanciera, S.A. v. Nordberg, 492

U.S. 33, 53-54 (1989) (“if Congress may assign the

adjudication of a statutory cause of action to a non-

Article III tribunal, then the Seventh Amendment

poses no independent bar to the adjudication of that

action by a nonjury factfinder”).

Petitioner does not dispute that the Privy Council

had the authority to revoke patents at the time of the

Founding. Petitioner instead contends that patent

revocations by the Privy Council were “rare” and

9

“ceased entirely by 1779.” Pet. Br. 25. But the fre-

quency with which the Privy Council exercised its

authority to revoke patents has no bearing on the

constitutional question, which turns on whether the

common-law and chancery courts were the exclusive

forum in which a patent could be revoked at the time

of the Founding. If so, then “the responsibility for

deciding [such a} suit rests with Article III judges in

Article III courts.” Stern, 564 U.S. at 484. If not,

then Congress can permissibly assign the matter to a

non-Article III decision-maker. /d.

Petitioner misreads Granfinanciera in arguing

that Article III requires that a federal court adjudi-

cate every matter that was “typically resolved” in the

common-law or chancery courts at the time of the

Founding, even if the matter was “occasionally re-

solved” in a non-judicial setting. Pet. Br. 26. Gran-

financiera—which addressed the applicability of the

Seventh Amendment to a bankruptcy trustee’s action

to recover a fraudulent monetary transfer—did not

endorse any such restriction on Congress’s authority

to assign matters to non-judicial decision-makers. In

the passage invoked by petitioner, the Court dis-

missed the contention of the bankruptcy trustee—

who was arguing against the applicability of the Sev-

enth Amendment—‘that courts of equity sometimes

provided relief in fraudulent conveyance actions.”

Granfinanciera, 492 U.S. at 43. That “assertion,” the

Court explained, “hardly suffice[d] to undermine [the

defendant’s] submission that the present action for

monetary relief would not have sounded in equity

200 years ago in England.” Jd. at 43. In other

words, the historical record supported the defend-

ants’ request for a jury not because actions to recover

10

fraudulent transfers were only “occasionally re-

solved” in equity courts, Pet. 26 (emphasis omitted),

but because they were never resolved there when a

fraudulent transfer of money was at issue. Granfi-

nanciera, 492 US. at 43.

The relevant constitutional question for purposes

of Article III and the Seventh Amendment is there-

fore whether, at the time of the Founding, patents

could be revoked—whether typically, occasionally, or

even rarely—by a non-judicial decision-maker. The

answer to that question is emphatically “yes” be-

cause persons seeking to challenge the validity of a

patent could seek relief from the Privy Council for

more than a century after the Founding. In fact, as

explained next, they could only secure that relief

from the Privy Council at the time of the Founding

when seeking to invalidate a patent for lack of novel-

ty. See infra Parts I.B-L.C.

B. The Writ Of Scire Facias Is Not An

Historical Analogue To Patent-Claim

Cancellation And Was Itself A Matter Of

Public Right.

The Privy Council’s authority to revoke patents at

the time of the Founding is fatal to petitioner’s posi-

tion that Article ITI and the Seventh Amendment bar

the PTAB from cancelling patent claims through in-

ter partes review. But petitioner’s position is doubly

flawed because not only does petitioner improperly

discount the Privy Council’s patent-revocation au-

thority but it also fails to identify an historical ana-

logue by which the common-law or chancery courts

could revoke patents for obviousness or lack of novel-

ty.

11

Petitioner’s reliance on the writ of scire facias as

a supposed historical analogue to inter partes review

is misplaced in multiple respects. Pet. Br. 24. The

writ of scire facias emerged from the Privy Council’s

partial delegation of its patent-revocation authority

to the chancery court in 1753. Through a petition for

a writ of scire facias, a party could ask the chancery

court to revoke a patent that had been “issued with-

out authority” and that warranted repeal “for the

good of the public and right and justice.” Mowry v.

Whitney, 81 U.S. (14 Wall.) 434, 440 (1871); see also 3

William Blackstone, Commentaries *260-61 (“Where

the Crown hath unadvisedly granted any thing by

letters patent, which ought not to be granted, or

where the patentee hath done an act that amounts to

a forfeiture of the grant, the remedy to repeal the pa-

tent is by writ of scire facias in chancery.”) (footnotes

omitted).

The Court outlined in Mowry the three classes of

cases where scire facias could be used to revoke a pa-

tent:

(i) When the king by his letters-patent has

by different patents granted the same

thing to several persons, the first pa-

tentee shall have a scire facias to repeal

the second.

(ii) When the king has granted a thing by

false suggestion, he may by scire facias

repeal his own grant.

(iii) When he has granted that which by law

he cannot grant, he... . may have a scire

facias to repeal his own letters-patent.

81 U.S. at 439-40; see also 4 Coke’s Institutes 88.

12

None of these categories is analogous to cancel-

ling a patent’s claims due to lack of novelty or obvi-

ousness in inter partes review. A scire facias pro-

ceeding inquired into the existence of competing is-

sued patents, false statements in the original patent

petition, or ultra vires action by the King—not lack of

novelty or obviousness. Mowry, 81 U.S. at 439-40.

In fact, the Federal Circuit has explained that, given

the limited areas of inquiry by the chancery court,

the “writ of scire facias was not analogous to a suit

for a declaration of invalidity” at all, “but was more

akin to an action for inequitable conduct.” Jn re

Tech. Licensing Corp., 423 F.3d 1286, 1290 (Fed. Cir.

2005).

Moreover, even if the writ of scire facias were a

relevant historical antecedent to inter partes review,

the writ was extensively intertwined with the inter-

ests of the Crown and was thus analogous to the ad-

judication of a “public right” that could be assigned

to a non-Article III decision-maker under this Court’s

precedent. Cf. Atlas Roofing Co. v. Occupational

Safety & Health Review Comm’n, 430 U.S. 442, 450

(1977) (public-rights doctrine extends to “cases in

which the Government sues in its sovereign capacity

to enforce public rights created by statutes within

the power of Congress to enact”).

Scire facias was one of the prerogative writs,

which, as their name implies, have roots in the royal

prerogative of the Crown. See 1 Blackstone, supra,

at *232 (“[T]he prerogative is that law in case of the

king, which is law in no case of the subject.”). The

Privy Council’s delegation of authority to the chan-

cery court to issue the writ of scire facias meant that

the court had concurrent authority with the Council

to revoke patents on certain grounds, but every as-

13

pect of the scire facias proceeding was stil] infused

with the Crown’s interests.

For example, although a writ of scire facias could

be sought by a private party, it was issued in the

“name of the king.” United States v. Am. Bell Tel.

Co., 128 U.S. 315, 360 (1888); see also 3 Blackstone,

supra, at *261 (petition for a writ of scire facias “may

be brought either on the part of the king . . . or, if the

grant be injurious to the subject, the king is bound of

right to permit him (upon his petition) to use his

royal name for repealing the patent in a scire faci-

as”). In fact, the Crown’s interest in the proceeding

was so great that the Attorney General had to grant

leave to issue the writ and was a party to the case in

which the writ was sought. See William Hands, The

Law and Practice of Patents for Inventions 16 (Lon-

don, W. Clarke & Sons 1808) (“[A] writ of scire facias

... issues out of the Court of Chancery, at the in-

stance of any private person, but in the name of the

King[;] leave to issue it must therefore be previously

obtained from the Attorney General.”).®

Because the writ of scire facias only existed by

delegation from the Crown, was issued in the name

3 In contrast, most other writs available to private parties did

not require approval and participation by the Crown, and their

issuance ultimately rested within the sole discretion of the

courts. For example, habeas corpus “issuled] out of the court of

king’s bench .. . by a fiat from the chief justice or any other of

the judges.” 3 Blackstone, supra, at *131. Certiorari was

granted “as a matter of right” when claimed by the prosecutor

and “as a matter of discretion” of the court when sought by a

defendant. 4 id. at *316. Mandamus likewise could be issued

by a court as “a command ... in the king’s name” but did not

require authorization from or involvement by the Crown. 3 id.

at *110.

14

of the Crown, and required permission from a repre-

sentative of the Crown who was a party to the case, a

chancery court proceeding on a petition for scire faci-

as would fit squarely within this Court’s definition of

a matter of “public right.” Cf. Crowell v. Benson, 285

U.S. 22, 50 (1932) (a public right is “between the

government and persons subject to its authority in

connection with the performance of the constitution-

al functions of the executive or legislative depart-

ments”). Thus, even if scire facias is a relevant his-

torical analogue to cancellation of patent claims, the

writ underscores that claim cancellation is the type

of public-rights proceeding that can be heard by a

non-judicial decision-maker and lends no support to

petitioner’s attempt to restrict the resolution of pa-

tentability challenges to Article III courts.

C. The Defense Of Invalidity Is Not An

Historical Analogue To Patent-Claim

Cancellation.

Petitioner fares no better when pointing to the de-

fense of invalidity in patent-infringement actions as

a purported historical analogue to the cancellation of

patent claims. As with scire facias, there are several

salient distinctions between the defense of invalidity

at the time of the Founding and the cancellation of

claims for obviousness or lack of novelty.

As this Court has recognized, the “basic pur-

pose[ |” of inter partes review is to take “a second

look at an earlier administrative grant of a patent.”

Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131,

2144 (2016). A petitioner in an inter partes review

proceeding seeks cancellation of claims due to un-

patentability. See 35 U.S.C. § 311(b) (“petitioner in

an inter partes review may request to cancel as un-

15

patentable 1 or more claims of a patent”). The result

of a successful petition in inter partes review is a cer-

tificate “canceling any claim of the patent finally de-

termined to be unpatentable.” Jd. § 318(b). The can-

celled claim cannot be invoked by the patent owner

against the petitioner or any other person.

In contrast, the invalidity defense to a patent in-

fringement action was historically an individual de-

fense that would not preclude the patent owner from

invoking its rights against any person other than the

defendant in the infringement action. See Hands,

supra, at 16 (explaining that in an infringement suit

a patent may be “avoided” by raising defects in the

patent, but under the writ of scire facias a patent is

“absolutely vacated”) (emphasis omitted). Indeed,

patent owners in eighteenth-century England could

repeatedly sue for patent infringement even after a

court had declared the patent to be invalid on one or

more occasions. That is exactly what transpired, for

instance, in the well-known Arkwright cases until

the patent was ultimately revoked by writ of scire

facias in the King’s name. See Walterscheid, supra,

at 101 n.132 (discussing the Arkwright cases).4

There are also several other significant distinc-

tions between cancellation of a patent through inter

partes review and the historic defense of invalidity.

For example, claims can be amended during inter

partes review in order to avoid cancellation, 35

4 A judicial finding of invalidity had similarly narrow effect in

the United States until 1971 when this Court held that a judg-

ment of invalidity generally bars the patent owner from re-

litigating invalidity in future lawsuits through defensive, non-

mutual collateral estoppel. See Blonder-Tongue Labs., Inc. v.

Univ. of Ill. Found., 402 U.S. 313, 350 (1971).

16

U.S.C. § 316(d)(1), but a patent holder could not

amend his patent in court in response to a defense of

invalidity. Moreover, a petitioner need not be the

subject of a patent-infringement claim to initiate in-

ter partes review. See id. § 311(a) (“a person who is

not the owner of a patent may file with the Office a

petition to institute an inter partes review”). The in-

validity defense, in contrast, could not be raised out-

side the confines of an infringement action.

For each of these reasons, the defense of invalidi-

ty is not an historical analogue to the cancellation of

a patent claim in inter partes review and therefore

does not impose an Article II or Seventh Amend-

ment barrier to Congress’s assignment of cancella-

tion to the PTAB.

* * %

Nothing in the historical record tied Congress’s

hands in seeking to devise a cost-effective, efficient

administrative procedure for identifying and weeding

out unpatentable claims. In fact, when Congress es-

tablished inter partes review, it adopted a model of

concurrent agency and court jurisdiction over select-

ed patentability issues that bears many similarities

to the concurrent jurisdiction exercised by the Privy

Council and the English courts at the time of the

Founding. Neither Article III nor the Seventh

Amendment prevented Congress from following that

time-tested historical model.

17

II. INTER PARTES REVIEW PROMOTES

INNOVATION BY REMOVING ARTIFICIAL

PATENT BARRIERS AND REDUCING

WASTEFUL LITIGATION COSTS.

Inter partes review is not only consistent with

Article III and the Seventh Amendment, but it also

advances the Patent Clause’s objective of “pro-

mot[ing] the Progress of Science and useful Arts.”

U.S. Const., art. I, § 8, cl. 8. In amici’s experience,

inter partes review provides an efficient, low cost,

and evenhanded means of eliminating unpatentable

claims that would otherwise constitute a barrier to

innovation.

Congress created inter partes review in the

Leahy-Smith America Invents Act (“AIA”), Pub. L.

No. 112-29, 125 Stat. 284 (2011), “to ensure that the

poor-quality patents can be weeded out through ad-

ministrative review,” 157 Cong. Rec. S5409 (Sept. 8,

2011) (Sen. Schumer). Congress sought to “providle]

quick and cost effective” administrative procedures

for challenging the validity of patent claims, to “im-

prove patent quality,” and to “restore confidence in

the presumption of validity.” H.R. Rep. No. 112-98,

pt. 1, at 48. Congress charged the PTAB with elimi-

nating “low quality and dubious” patent claims and

“separatl[ing] the inventive wheat from the chaff.”

157 Cong. Rec. $131 (daily ed. Jan. 25, 2011) (Sen.

Leahy).

Inter partes review has proved to be tremendous-

ly successful in securing these legislative objectives

and in “help[ing] protect the public’s paramount in-

terest in seeing that patent monopolies ... are kept

within their legitimate scope.” Cuozzo Speed Techs.,

136 S. Ct. at 2144 (ellipsis in original; internal quo-

18

tation marks omitted). Where the Patent and

Trademark Office (“PTO”) issues patents for claims

that were not novel or that were obvious, those pa-

tents stand as obstacles to technological progress. In

the absence of inter partes review, innovators who

are threatened with an infringement suit by the

owner of an improperly issued patent generally are

required either to pay for a license from the patent

owner or to absorb the costs and delay of litigating

the claims’ validity in court.

These impediments to technological progress

were exacerbated in the years preceding enactment

of the AIA by the proliferation of non-practicing enti-

ties that hoard patents with no intention of actually

using them to develop new inventions. As a recent

study by the Congressional Research Service found,

“(patent assertion entity] activity cost defendants

and licensees $29 billion in 2011, a 400 percent in-

crease over $7 billion in 2005,” and “the losses are

mostly deadweight, with less than 25 percent flowing

to innovation and at least that much going towards

legal fees.” Brian T. Yeh, Cong. Research Serv.,

R42668, An Overview of the “Patent Trolls” Debate 2

(2013); see also Lauren Cohen et al., The Growing

Problem of Patent Trolling, 352 Science 521, 521

(2016) (finding that after settling with non-practicing

entities, firms on average reduce their research and

development investment by 25%). Inter partes re-

view allows innovative companies like amici to clear

the patent underbrush in an efficient manner and, in

turn, to devote a greater proportion of their resources

to research and development, or licensing valuable

patents addressed to useful technologies, rather than

litigation regarding overly broad, invalid patents.

19

Amici’s firsthand experiences with inter partes

review, both as petitioners and patent owners, con-

firm that the process has fulfilled its promise of

providing a quick, cost-effective, and fair mechanism

to resolve patentability questions. Jnter partes re-

view narrows or eliminates disputes about the pa-

tentability of claims and reduces associated costs in

at least four ways.

First, as a direct result of inter partes review, pa-

tent owners are less likely to threaten litigation or

file an infringement suit based on patent claims that

they know or suspect to be unpatentable. Indeed,

since passage of the AIA, amici have seen a material

change in the nature of their patent-litigation dock-

ets. Patent owners who threaten or file suit merely

to seek cost-of-litigation settlements have become far

less prevalent because the availability of inter partes

review has reduced the cost, and increased the speed,

of obtaining a determination of unpatentability.

Second, if inter partes review proceedings are

necessary as a result of threatened or ongoing litiga-

tion, the proceedings may culminate in PTAB’s can-

cellation of all asserted claims. That outcome will

prevent litigation from ever being filed or, if it has

already been initiated, put an end to ongoing litiga-

tion at a fraction of the cost that would have been in-

curred to litigate the case through trial. See, e.g.,

B.E. Tech, L.L.C. v. Facebook, Inc., No. 12-cv-02769

(W.D. Tenn.) (all claims asserted by plaintiff can-

celled by PTAB in inter partes review while in-

fringement case was stayed); EveryMD LLC v. Face-

book, Inc., No. 13-cv-06208 (C.D. Cal.) (plaintiff vol-

untarily dismissed infringement suit after initiation

of inter partes review that ultimately cancelled all

asserted claims).

20

A full-blown patent-infringement case in district

court can cost anywhere between $2 million and $10

million or more, while a typical inter partes review

proceeding, from petition through final written deci-

sion, typically costs less than $500,000. See Am. In-

tell. Prop. L. Ass’n, 2015 Report of the Economic

Survey 37-38 (2015), at http://files.ctctedn.

com/e79ee27420 1/b6ced6c3-d lee-4ee7-9873-

352dbe08d8fd.pdf; RPX Corp., NPE Litigation: Costs

by Key Events 3 (2015) (costs upwards of $10 million

for the 90th percentile of patent litigation), at

http:/Awww.rpxcorp.com/wp-content/uploads/sites/2/

2015/05/F inal-NPE-Litigation-Costs-by-Key-Events1.

pdf. Those substantial litigation costs are conserved

when the PTAB cancels the asserted claims or where

the initiation of inter partes review prompts a set-

tlement between the parties. See Arctic Cat Inc. v.

Polaris Indus. Inc., No. 13-3579, 2015 WL 6757533,

at *3 (D. Minn. Nov. 5, 2015) (granting a stay pend-

ing the resolution of inter partes review because, “as

the parties jointly argue, [inter partes review] may

encourage a settlement without the further use of

the Court”) (internal quotation marks omitted).

Third, where the PTAB does not cancel all as-

serted claims, statutory estoppel may limit the inva-

lidity defenses that the defendant is permitted to

raise in litigation and thereby narrow the issues to

be resolved by the district court. See 35 U.S.C.

§ 315(e)(2) (barring defendants from challenging the

validity of a claim on “any ground that [it] raised or

reasonably could have raised during thle] inter

partes review”). Moreover, the PTAB’s reasoning in

rejecting an unpatentability argument may make

clear that certain elements of the claimed invention

were in the prior art, but that a particular feature

21

was key to patentability. Where that occurs, the

parties’ damages presentations are appropriately fo-

cused on the incremental value of that feature, ra-

ther than on those elements of the invention that

were in the prior art. Damages presentations may

also be curtailed where the patent holder amends the

relevant claims during inter partes review to avoid

cancellation, id. § 316(d)(1), which bars the patent

holder from recovering pre-amendment damages.

Finally, the PTAB proceedings may narrow the

claim-construction issues to be decided by the district

court. A district court’s claim construction may be no

broader than the PTAB’s claim construction because

the PTAB is required to give a claim “its broadest

reasonable construction.” 37 C.F.R. § 42.100(b).

Thus, the PTAB’s construction of a claim term—even

an unasserted claim—may inform and facilitate the

district court’s subsequent construction of the same

term.

Inter partes review can also narrow the in-

fringement issues to be resolved by the district court

where the patent owner, in defending the patentabil-

ity of its claims before the PTAB, makes arguments

that have the effect of disavowing claim scope. The

patent holder is barred from retracting that disa-

vowal during litigation regarding those claims. This

is yet-another example of the many ways in which

the patent owner’s arguments and the PTAB’s con-

clusions clarify and streamline the issues to be de-

cided in litigation. See Arctic Cat Inc., 2015 WL

6757533, at *3 (“the PTAB’s written determinations

may clarify the scope of the patents and prior art,

thus narrowing the disputes and limiting the

breadth of discovery”).

22

District courts have repeatedly recognized that

inter partes review has the potential to narrow the

issues to be resolved in litigation and sometimes

even put an end to litigation altogether. District

courts grant motions to stay litigation after an inter

partes review or similar proceeding has been initiat-

ed approximately 50% of the time. See, e.g., Success

Rates on Request to Stay Pending IPR, CBM, or PGR

Through 2016, DocketReport (2017) (reporting statis-

tics from major patent venues for stay motions

granted in full or in part), at http://docketreport.

blogspot.com/2017/02/success-rates-on-requests-to-

stay.html. In fact, in a recent hearing involving one

of the amici, the district court judge commented that

inter partes review “is, in my view, a great advance.”

Tr. of Status Conf. at 3:21-23, Intellectual Ventures I,

LLC v. Lenovo Group Ltd., No. 16-10860-PBS (D.

Mass. July 13, 2017). The judge explained that she

would carefully consider the PTAB’s claim-

construction rulings, in light of the special technical

expertise of the PTAB, id. at 28:7-11, and commented

that it would be “a sad day for a Federal District

Court” if inter partes review is found unconstitution-

al. Id. at 22:14-15.5

These sentiments are widely shared. As another

district court explained, the expertise of the PTAB in

inter partes review proceedings may substantially

simplify issues in pending litigation because

5 The expertise of the PTAB is evident in its affirmance rate.

The Federal Circuit affirmed approximately 72% of the appeals

from the PTAB in 2016. C. Violante, Law360’s Federal Circuit

Snapshot: By The Numbers, Law360 (Mar. 1, 2017), at

https://www.law360.com/newsroom/articles/

58ade8f20857780a37005e0e.

23

(1) all prior art presented to the court at trial

will have been first considered by the PTO

with its particular expertise, (2) many dis-

covery problems relating to the prior art can

be alleviated, (3) if [the] patent is declared

invalid, the suit will likely be dismissed, (4)

the outcome of the [inter partes review] may

encourage a settlement without further in-

volvement of the court, (5) the record of the

[inter partes review] would probably be en-

tered at trial, reducing the complexity and

the length of the litigation, (6) issues, de-

fenses, and evidence will be more easily lim-

ited in pretrial conferences and (7) the cost

will likely be reduced both for the parties

and the court.

Neste Oil OYJ v. Dynamic Fuels, LLC, No. 12-1744-

GMS, 2013 WL 3353984, at *4 (D. Del. July 2, 2013)

(internal quotation marks omitted); see also Arctic

Cat Inc., 2015 WL 6757533, at *3 (“[A] stay pending

inter partes review] will likely simplify the litigation

and facilitate trial.”). Indeed, courts have recognized

that “complex infringement lawsuit|s]” are “precisely

the type of [cases] that stand[] to benefit from the

streamlining effects of” inter partes review. Ad-

vanced Micro Devices, Inc. v. LG Elecs., Inc., No. 14-

ev-01012, 2015 WL 545534, at *4 (N.D. Cal. Feb. 9,

2015); see also id. at *5 (granting a stay where plain-

tiff asserted nine patents and forty-five claims); AC-

QIS, LLC v. EMC Corp., 109 F. Supp. 3d 352, 358 (D.

Mass. 2015) (granting stay because “the IPRs are

likely to simplify the issues in this case, regardless of

the specific outcomes of the IPRs”) (footnote omitted);

D.E. #113, Realtime Data, LLC v. Dell, Inc., 6:16-cv-

89-RWS-JDL (E.D. Tex. Feb. 3, 2017) (staying in-

24

fringement action pending the outcome of inter

partes review); D.E. #55, PersonalWeb Techs., LLC v.

Facebook, Inc., 5:13-cv-01356-EJD (N.D. Cal. Jan. 13,

2014) (same); D.E. #41, PersonalWeb Techs., LLC v.

EMC Corp., 5:13-cv-01358-EJD (N.D. Cal. Jan. 13,

2014).

Amici have also found that inter partes review is

a valuable tool for protecting their customers and us-

ers from infringement liability. It is not uncommon

for a patent holder to threaten or sue customers or

users of a product supplied by a manufacturer. Be-

cause the customer or user may be using the manu-

facturer’s technology as only one component of a

larger system, the manufacturer might not be sus-

ceptible to the same infringement allegations and

therefore might lack standing to bring a declaratory-

judgment action challenging the validity of the pa-

tent claims at issue.

In the absence of post-grant proceedings like in-

ter partes review, the manufacturer is confronted

with two unpalatable options: voluntarily defend its

customers in litigation, at an expense of potentially

tens of millions of dollars depending on the number

of customers who have been sued, or decline to do so

and risk alienating its customers. Inter partes re-

view provides a solution because, even without being

accused of infringement itself, the manufacturer has

the ability to protect its customers in a cost-effective

way by challenging the validity of the asserted

claims before the PTAB. See 35 U.S.C. §311(a). If

the manufacturer prevails in the inter partes review,

it will have succeeded in avoiding substantial legal

fees for both itself and its customers, and will have

preserved and strengthened its business relation-

25

ships. That outcome would not be possible in the ab-

sence of inter partes review.

+ * *

As patent holders themselves, amici would not

support inter partes review if the procedure failed to

afford adequate safeguards for patent holders’ rights.

In amici’s experience, however, the PTAB has amply

demonstrated that it is able to strike an appropriate

balance between cancelling unpatentable claims that

stand as barriers to innovation, on the one hand, and

preserving the legitimate property rights of patent

owners whose claims are novel and non-obvious, on

the other. These benefits have led to a far more effi-

cient and fair patent system that reduces wasteful

litigation costs and fosters innovation through proce-

dures that are fully compatible with the Constitu-

tion.

CONCLUSION

A decision invalidating inter partes review would

stymy tecl.nological progress, encourage unwarrant-

ed infringement litigation and extortionate settle-

ments, and expand the caseload and backlog of the

federal courts. Nothing in Article III or the Seventh

Amendment compels saddling the American economy

and the federal judiciary with that innovation-

killing, litigation-spawning outcome.

The Court should affirm the judgment below.

Respectfully submitted.

26

KRISHNENDU GUPTA THEODORE B. OLSON

MICHELE K, CONNORS Counsel of Record

THOMAS A. BROWN AMIR C. TAYRANI

DELL INC. BLAIR A. SILVER

One Dell Way GIBSON, DUNN & CRUTCHER LLP

Round Rock, Texas 78682 1050 Connecticut Avenue, N.W.

(512) 728-3186 Washington, D.C. 20036

(202) 955-8500

COLIN STRETCH tolson@gibsondunn.com

FACEBOOK, INC.

1601 Willow Road

Menlo Park, CA 94025

(650) 5643-4800

Counsel for Amici Curiae

October 30, 2017