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

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0724%3A32

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2017

## Text

— 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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0724%3A32. Public record. Not legal advice.