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

RECORD No. 16-712

BRIEFS, IN THE AUG 31 2017

Supreme Court of the Unite ee

OIL STATES ENERGY SERVICES, LLC,

Petitioner,

v.

GREENE’S ENERGY GROUP, LLC,

Respondent.

On Wait or CERTIORARI TO THE UNrrED STATES

Court or APPEALS FOR THE FEDERAL Crrcurt

——

ae

BRIEF FOR PACIFIC LEGAL FOUNDATION,

SOUTHEASTERN LEGAL FOUNDATION, AND

NATIONAL ASSOCIATION OF REVERSIONARY

PROPERTY OWNERS AS AMICI CURIAE

IN SUPPORT OF PETITIONER

Brian T. Hopces Mark F. (THor) Hearne, I

PaciFic LEGAL FOUNDATION Counsel of Record

10940 NE 33rd Place, STEPHEN 8. Davis

Suite 210 MEGHAN S. LARGENT

Bellevue, Washington 98004 Lunpsay S.C, BRINTON

(425) 576-0484 ABRAM J. PAFFORD

bth@pacificlegaL org Arent Fox, LLP

1717 K Street, NW

Counsel for Amicus Curiae Washington, DC 20006

Pacific Legal Foundation (202) 857-6000

thor@arentfox.com

(For Continuation of

Appearances See Inside Counsel for Amici Curiae

Cover)

275168 ¢

COUNSEL PRESS

JONANNA TALCOTT

PaciFic LEGAL FOUNDATION

930 G Street

Sacramento, California 95814

(916) 419-7111

Of Counsel for Amicus

Curiae Pacific Legal

Foundation

t

TABLE OF CONTENTS

Page

pe RP ae ty ne ee eer

TABLE OF CITED AUTHORITIES .............. lil

INTEREST OF AMICI CURIAE ...............4..- 1

fg 8 Lk Sys rer mn pray: ee 3

oto Fg ga gt eer

TIER G a. 6 oc eKc anced dcetautavenyanscanane 5

I. Separation of powers prohibits

Congress from delegating Article III

judicial decisions to the non-Arvicle ITI

Patent Trial and Appeal Board. .............. 5

A. Separation of powers prohibits Congress

from conferring “judicial Power” on

non-Articte lll tribunals... 2... cece 5

B. Separation of powers protects a patent-

C. ThePatent Triaiand Appeals Board is not

i ee Bee EES ov kai kcceewesehicnes 16

D. The Federal Cirenit ignores this Court’s

controlling precedent................... 18

iD

Table of Contents

Page

II. Congress cannot deny a patent owner's

Seventh Amendment right to trial

MEG Sp vnnbsbcsauesbedvcewtecexasens sy 4 23

A. The right to trial by jury is the “sacred

eg 6 ere 23

B. The Seventh Amendment right to jury

trial] includes adjudications potentially

extinguishing an owner's patent. ........ 28

C. Patents are constitutionally-

protected private property

that cannot be extinguished by a

non-Article Lil triamal........2-ccscces 32

CRIED “a cee cheese ccvccnesecndscusvesen 35

Lit

TABLE OF CITED AUTHORITIES

Page

CASES:

Army Corps of Eng’rs v. Haavkes,

Ss PE ES oo cc's Scuieaceesdcwerses ced’ 2

Bank Markazi v. Peterson,

a a ee rere 8,9, 10

Baron de Bode’s Case,

RO ee re

Bond vy. United Stales,

EE ED asd ois. o vba 6:4 wRiatn a bee aleead bor 14

Buckley v. Valeo,

Se RE Pra dnr iw tas bee needs om 7, 22

City of Monterey v.

Del Monte Dunes at Monterey, Ltd.,

PC rrr eee Oe rere Ere 30

Clinton v. City of New York,

EEGs cic cho nke'v-ce da eiwkewse nese 5-6

Commodity Futures Trading Comm'n v. Schor,

IS snc osc cus cage csmccaoues 1d, 16

Consol. Fruit Jar Co. v. Wright,

ECR do usedasecese ses vevslsauwesuns 30

wv

Cited Authorities

Page

Crowell v. Benson,

- Bie fe eye Se 8

Curtis v. Loether,

435 UF TOG 0c kee vcceces pcananenaeneenet 28

Damsky v. Zavait,

260 F:3e 46 Gad Caz. UBT) os 0 ov cvcccanvinrerenee 25

De Keyser’s Royal Hotel Ltd. v. the King,

ch. 2, pw. SER GD, 6. cc cscscacsvteusncetae earn

Decker v. Northwest Envtl, Def. Ctr.,

138 GS. Ce. THD GRIER, oie cc scccceseytuchaneee eee 1

Dolan v. City of Tigard,

GES ULB. Bee Ce 5 ok bocSctpcocntecteaeeeeee 2

Entick v. Carrington,

05 Eng. Rep. S07 (C.F. 17GB)... 2. cwsseveccencsi 3

Ex parte Bakelite Corp.,

g Bit fs | Srey ro or 9

Ex parte Wood,

BUS. @ Wheat.) GOS GRR ose vvcdvcsecntesms 32

Executive Benefits Ins. Agency v. Arkison,

134 GB. Ce, SH GN ook Sc cen venvvins eheecuven 7,8

v

Cited Authorities

Page

Fla. Prepaid Postsecondary Educ. Expense Ra. v.

Coll. Sav. Bank, 33

ea cau nts eh abies 6

Foster v. Vilsack,

820 F.3d 330 (8th Cir. 2016), cert. denied,

ee ga scgs case seve l

Calloway v. United States,

ee oc wen ee aeccceece 27, 28

Gloucester Cnty. Sch. Bd. v. G.G. ex rel. Grimm,

ee occ cucsevectace' l

Granfinanciera, S.A. v. Norberg,

ee. haa d vues 6 ake ee 8% 30

Gutierrez-Brizuela v. Lynch,

834 F.3d 1142 (10th Cir. 2016)................ 11, 35

Horne v. Dep't of Agriculture,

ES eda causes sépecdseccescac 33

INS v. Chadha,

EIS ei ce pccecsccccscce 10, 12, 13, 16

Jacob v. City of New York,

ts nc ay wap cnneecesdbsseve 23

Kendall v. United States ex rel. Stokes,

eS AN ee eaeuwneuela 12

ve

Cited Authorities

Page

Lucas v. S.C. Council,

ee Sh EES wv vculcseweeudeutsimesceeaeeen 2

Lyneh v. Household Finance Corp.,

ey RES os dacaccvanssccncvetdeccenved 4

Marbury v. Madison,

a EE 5 scalncsauswlanveneacsas 7, 13, 17

Marvin M. Brandt Rev. Trust v. United States,

Be IS 3s eas Gan vob eaGhcdsGecnenes 2

McCormick Harvesting Mach. Co. v.

Aultmun & Co.,

IS 6 ocean séoreswnbssnacve passim

MCM Portfolio, LLC v. Hewlett-Packard Co.,

812 F.3d 1284 (Fed. Cir. 2015), cert. denied,

Be ee IS we bo'a < 6b Sav be es kesnes.es 19, 20

Monongahela Navigation Co. v. United States,

ee nn gen dewe nee beds 3-4, 9, 16, 17

Morrison v. Olson,

cg cect rameaeenees been 9,14

Murr v. Wisconsin,

ee I ann cntceheuek Sh neébus el 2

Murray’s Lessee v.

vie

Cited Authorities

Hoboken Land & Improvement Co.,

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

Nat'l Ass’n of Mfrs. v. Dep't of Def.,

No. 16-299 (U.S. Supreme Court) ........

Nat'l Ins. Co. v. Tidewater Co.,

Se Se os b 6 tC bh ds csvoneeéans

National Ass’n of Reversionary Property

Owners v. Surface Transp. Bd.,

158 F.3d 135 (DC Cir. 1998) .............

Nixon v. Administrator of Gen. Servs.,

TP Rhee CEE Sadek cakwcksccewnses

NLRB vy. Noel Canning,

eee EE oa cacd tas sendiesckens

Northern Pipeline v. Marathon Pipeline Co.,

ee EG os os ce deekanetcuness

VOison v. United States,

A EE dics deseaeneswivns's

Parsons v. Bedford, Breedlove & Robeson,

RG bi veuscéewessasutaans

Patlex Corp. v. Mossinghoff,

758 F.2d 592 (Fed. Cir. 1985) ............

Puge

aeeaene 13

vere

Cited Authorities

Page

Perneli v. Southali Realty,

ee el C0 on a cranes nora wlnwe 29

Plaut v. Spendthrift Farm, Inc ,

ee ee I ec, gavaekedenneecays 10

Preseault v. Interstate Commerce Comm'n,

494 U.S. 1 (1990)....... pee ren iserdeuctinbe 2

Rapanos v. United States,

ee ne wan od oe ew eedcwls 1

Reid v. Covert,

NE oi ou nndndeghtnes ews davaeus 22

Rothe Dev., Inc. v. Dep't of Def,

No. 16-1239 (U.S. Supreme Court)................ 1

Sackett v. EPA,

ee cs 6 we edness 6 Gee kin 1

Solem v. Heim,

oe Dna eaweneecnedawwn 27

Stern v. Marshall,

EE ra pe SE oe passim

Stop the Beach Renourishment v.

Fila. Dep't of Envtt. Prot.,

eat AD er rarer eases gett 20

wx

Cited Authorities

Page

Suitum v. Tahoe Reg’l Planning Agency,

ee en Se oe eae a ve aes Sine 6 2

Tenn. Valley Auth. v. Hill,

Se eG 2

U.S. Army Corps of Eng’rs v. Hawkes Co., Inc.,

ee es I ois Soe wcls acs cceeedescn et 1

Ultratec, Ine. v. Captioncall, LLC,

__ F.3d __, 2017 WL 3687453

Se Re SE IID op coe ewroice oc tvcswosns 21, 22

United States ex rel. Toth v. Quaries,

eT Ee GS cc leads cia once co acecwows 11

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

ard waa ard ¢ wd oa he WR 3

United States v. Booker,

I Sig al c'nh oh iln eb baa ooaaened 23

United States v. James Daniel Good Real Property,

ee ee he a ere to 4

United States v. Jones,

SI I ih on ie ty Sie oe 3

United States v. Klein,

a EE eran OF Ca heat wes eo 2 10

x

Cited Authorities

Page

United States v. Nixon,

Se TEINS so kdcckebdayeasdeseSecevses 13

United States v. Will,

Sa EG co yceecoccsesesauheanceaas 7,11

United States v. Wonson,

28 F. Cas. 745 (C.C.D. Mass. 1812)..............4. 29

Wellness Int’l Nelwork, Lid. v. Sharif,

Se Cy I oo ve scvbeasspesbanas passim

Youngstown Sheet & Tube Co. v. Sawyer,

Pe EE od naveks caren Keebcapepeced 6

STATUTES AND OTHER AUTHORITIES:

eR ne voc sid bikasecahetnaWevensavuare 34

SR NG oS dae knees nawanaeecaneas soo En 34

J. Andrews, ed., Works of James Wilson (1896) ...... 15

William Blackstone, Commentaries on the Laws of

TEE DE Gada hadccvspcddadeaneaasiens 25

George Kk. Butler, II, Compensable Liberty:

A Historical And Political Model of the

Seventh Amendment Public Law Jury, 1

Notre Dame J. of Law, Ethies & Public Policy

RS FIRERNES, Aone Aen pee plimeuntes ayaa PB =. 25, 29

x2

Cited Authorities

Page

Alexis de Tocqueville, Democracy in America,

es. Err erro y irre ar 26-27

Declaration of Independence..................054- 15

Jaies W. Ely, Jr., The Guardian of Every

Other Right: A Constitutional History

of Properly Rights 8rd ed. 2008) ........-....0.5. 3

ee eG OE 5g 6.00000 ow ohn ee se whee SER ORs 26

The Federalist Papers (Clinton Rossiter

SE aso eed cca ceeews eeUree cena, passim

Eric Grant, A Revolutionary View of the Seventh

Amendment and the Just Compensation

Clause, 91 N.W.U.L.Rev. 144 (1996). ...........-. 30

Phillip Hamburger, Js Administrative Law

SI I ak i'd Oasis 3 are Wenle Boao eee as 6

Roger W. Kirst, Jury Trial and the Federal

Tort Claims Act: Time to Recognize the

Seventh Amendment Right, Texas Law Rev.

ie ee ae PN, EES os coc beac cacuicnconns 30

Leonard W. Levy, Origins of the Bill of Rights

Rea eral oa yk Dt sateradiy Wer tel ae 8 ga 24, 31

James Madison, The Complete Madison (Sau! K.

IS oa vlc wa dans iN wwe ee Rab eh oe eae

rei

Cited Authorities

Page

James Madison, Writengs 1772-1836 (The Library of

I eh doo och sdae ed cereckWoteeuenaw 26

CP Se. Be CE ik ov ccc cdeetaweacs 4, 30, 31

William S. MeKechnie, Magna Carta:

A Commentary on the Great Charter of

pe eee ee 4

Montesquieu, Spzrit of Laws, Vol. 1 (1748).........5,12

Adam Mossoff, Who Cares What Thomas Jefferson

Thought About Patents? Reevaluating the Patent

“Privilege” in Historical Context, 92 Corn. I.

Se PE Gate bale ues aay niu a eaaleads oilede se 32

Malcom P. Sharp, The Classical American Doctrine

af “The Separation of Powers,” 2 U.Chi.L.

SE SN CE ae ate an cas de bs bs bbe swe ee eto: 12

Ss es IP Divo sc ccdusacercavanasnacen 3.32

op Bo OO errr re rer ore. passim

he A NK OD os wikis owe oi ke aan Nee uesew eae sees 6

ac Re ae Bons cacy ows tate ba eiesth 32

PT oe ers a eee res Arent. 6

ert

Crted Authorities

Page

Sis Ce GU EEE OS ccc ccceveseskansscanccucs 6, 16

Re IE EE. ck weneseesteesedee 10), 11, 16

James K. Wheaton, The History of the Magna

CEE Sintessvctxekvviesburcacrnnbeae ste 31

]

INTEREST OF AMICI CURIAE’

Founded in 1973, Pacific Legal Foundation (PLF) is a

nonprofit, tax-exempt corporation providing a voice in the

courts for mainstream Americans who believe in limited

government, private property rights, individual freedom,

and free enterprise. PLF’s attorneys have participated as

lead counsel or counsel for amici in several cases before

this Court involving the role of the Article III courts as

an independent cheek on the Executive and Legislative

Branches under the Constitution’s Separation of Powers.

See, e.g., Rothe Dev. Inc. v. Dep’t of Def., No. 16-1239

(U.S. filed Apr. 13, 2017) (amici arguing against Executive

Branch’s unaccountable use of legislative power); Foster v.

Vilsack, 820 F.3d 330 (8th Cir. 2016), cert. dented, 137 S.Ct.

620 (2017) (Auer deference to agency staff testimony);

Nat’! Ass’n of Mfrs. v. Dep't of Def., No. 16-299 (U.S. filed

Sept. 2, 2016) (interpretation of Clean Water Act venue

statute); Gloucester Cnty. Sch. Bd. v. G.G. ex rel. Grimm,

136 S.C1. 2442 (2016) (Auer deference to agency guidance

letter); U.S. Army Corps of Eng’rs v. Hawkes Co., Inc., 136

S.Ct. 1807 (2016) (judicial review of agency interpretation

of Clean Water Act); Decker v. Northwest Envtl. Def. Ctr.,

133 S.Ct. 1326 (2013) (Auer deference to Clean Water Act

regulations); Sackett v. EPA, 566 U.S. 120 (2012) (same);

Rapanos v. United States, 547 U.S. 715 (2006) (agency

regulations defining “waters of the United States”).

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

part, and no such counsel or party made a monetary contribution

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

person other than amici curiae, their members, or their counsel

made a monetary contribution to its preparation or submission.

The parties have consented to the filing of this brief and such

consents are being lodged herewith.

2

Founded in 1976, Southeastern Legal Foundation

(SLF) is a national nonprofit, public-interest law firm and

policy center that advocates individual liberties, limited

government, and free enterprise in the courts of law

and public opinion. For forty years, SILLF has advocated

for the protection of private property interests from

uneonstitutional takings. SLF frequently files amzcus

curiae briefs at both the state and federal level in support

of property owners. See Murr v. Wisconsin, 1387 S.Ct. 1933

(2017); Army Corps of Hng’rs v. Hawkes, 136 5.Ct. 1807

(2016); Suitum v. Tahoe Reg’! Planning Agency, 520 U.S.

725 (1997); Dolan v. City of Tigard, 512 U.S. 374 (1994);

Lucas v. S.C. Council, 505 U.S. 1003 (1992); and Tenn.

Valley Auth. v. Hill, 437 U.S. 153 (1978).

The National Association of Reversionary Property

Owners is a Washington State non-profit foundation

assisting property owners in the defense of their property

rights. Since its founding in 1989, the Association has

assisted over ten thousand property owners and has been

extensively involved in litigation concerning landowners’

interest in the land subject to active and abandoned

railroad rights-of-way easements. See Nationa! Ass’n

of Reversionary Property Owners v. Surface Transp.

Bd., 158 F.3d 135 (DC Cir. 1998), and amicus curiae in

Preseault v. Interstate Commerce Comm’n, 494 U.S. 1

(1990), and Marvin M. Brandt Rev. Trust v. United States,

134 S.Ct. 1257 (2014).

3

INTRODUCTION

Once granted an owner’s patent “become|s| the

property of the patentee, and as such is entitled to the

same jegal protections as other property.” McCormick

Harvesting Mach. Co. v. Aultman & Co., 169 U.S. 606,

608-09 (1998). See also United States v. Am. Bell Tel. Co.,

128 U.S. 315, 370 (1888) (patents are “made the private

property of the patentee, by the action of one of the

departments of the government acting under the forms of

law”). An owner’s patent is a property interest protected

by the Fifth Amendment.

An owner’s right to be secure in his property is one

of the primary objects for which the national government

was formed. In United States v. Jones, 182 S.Ct. 945,

949 (2012), this Court reealled L.ord Camden’s holding in

Entick v. Carrington, 95 Eng. Rep. 807 (C.P. 1765), “The

great end for which men entered into society was to secure

their property.”

This Court explained, “In any society the fullness

and sufficiency of the securities which surround the

individual in use and enjoyment of his property constitute

one of the most certain tests of the character and value

of government.” Monongahela Nawgation Co. v. United

2. “Government is instituted to protect property of every

sort ***,. This being the end of government, that alone is a just

government, which impartially secures to every man, whatever

is his own ***.” James Madison, The Complete Madison (Saul K.

Padover, ed., 1953), pp. 267-68 (remarks published in National

Gazette, Mar. 29, 1792) (emphasis in original). Sec also James W.

Ely, Jr., The Guardian of Every Other Right: A Constitutional

History of Property Rights (8rd ed. 2008).

4

States, 148 U.S. 312, 324 (1898) (followed by Olson v.

United States, 292 U.S. 246, 254 (1934)).’

Chief Justice Roberts recalled the protection of

private property arises from Magna Carta:

[The Fifth Amendment] protects “private

property” without any distinction between

different types. The principle reflected in the

Clause goes back at least 800 years to Magna

Carta *** Clause 28 of that charter forbade

any “constable or other bailiff” from taking

“corn or other provisions from anyone without

immediately tendering money therefor” ***.

*** The colonists brought the principles of

Magna Carta with them to the New World,

including that charter’s protection against

uncompensated takings of personal property.

Horne v. Dep't of Agriculture,

135 S.Ct. 2419, 2426 (2015).*

This appeal asks whether Congress may vest the

exclusive authority to adjudicate (and extinguish)

ownership of a patent to a non-Article [II tribunal without

the right of trial by jury.

3. See also Lynch v. Household Finance Corp., 405 U.S.

538, 552 (1972) (“[T ]he dichotomy between personal liberties and

property rights is a false one. Property does not have rights. People

have rights ***. That rights in property are basic civil rights has

long been recognized.”); United States v. James Daniel Good Reai

Property, 510 U.S. 43, 61 (1993) (“an essential principle: Individual

freedom finds tangible expression in property rights.”).

4. Quoting Magna Carta, Cl. 28 (1215), in William S.,

McKechnie, Magna Carta: A Commentary on the Great Charter

of King John 329 (2nd ed. 1914); emphasis added.

>

SUMMARY OF ARGUMENT

A patent, once issued, is a private property interest

protected by the Constitution. Allowing a non-Article

III tribunal composed of Executive Branch appointees

to divest an owner of their previously vested property

interest in a patent without a jury trial violates both

the Seventh Amendment and the separation of powers

doctrine.

ARGUMENT

I. Separation of powers prohibits Congress from

delegating Article ITI] judicial decisions to the non-

Article ITI Patent Trial and Appeal Board.

“There is no liberty if the power of judging

he not separated from the legislateve and

executive powers.”

Alexander Hamilton,

Federalist No. 78.°

A. Separation of Powers prohibits Congress from

conferring “judicial Power” on non-Article III

tribunals.

The Framers devised this nation’s constitutional

structure in accordance with one “fundamental insight:

concentration of power in the hands of a single branch

is a threat to liberty.” Clinton v. City of New York, 524

5. The Federalist Papers (Clinton Rossiter ed. 1961), p. 466

(quoting 1 Montesquieu, Sperit of Laws, p. 181 (1748)).

6

U.S. 417, 450 (1998) (Kennedy, J., concurring) (citing

Madison, Federalist No. 47, p. 301). James Madison was

unequivocal about the degree of that threat, stating that

“an accumulation of all powers, legislative, executive, and

judiciary, in the same hands, whether of one, a few, or

many, and whether hereditary, self-appointed, or elective,

may justly be pronounced the very definition of tyranny.”

Id. The Framers were all too familiar with how the

tyrannical impulses of consolidated power could interfere

with individual pursuits of life, liberty, and property.*

Thus, the Constitution divides and separates the

power of the federal government into three coequal

branches — legislative, executive, and judicial. Article I

vests “lajll legislative Powers *** in a Congress of the

United States|;]” Article II vests the executive power “in a

President of the United States[;]” and Article ILI vests “{t|

he judicial Power of the United States *** in one supreme

Court, and in such inferior Courts as the Congress may

from time to time ordain and establish.” U.S. Const. art.

1 $1; art. 17 §1; art. ITT $1.

This structure “diffus[es| power the better to secure

liberty.” Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S.

579, 635 (1952) (Jackson, J., concurring). But the Framers

understood that mere “parchment barriers” between the

branches could not alone ensure such security. Madison,

Federalist No. 48, p. 308. Accordingly, the Constitution

“give[s] to each [branch] a constitutional control over the

6. See generally Phillip Hamburger, /s Administrative Law

Untawfnt? (2015) (detailing historical abuses of consolidated power

and describing the development of the U.S. Constitution as a response

to and protection against such abuses).

7

others,” without which “the degree of separation which

the maxim requires, as essential to a free government,

[could] never in practice be duly maintained.” /d. The

“constant aim,” Madison explained, was “to divide and

arrange the several [branches] in such a manner as that

each may be acheek on the other ***.” Madison, Federalist

No. 51, p. 322. The substantive and procedural limitations

built into this tripartite system serve as a “self-executing

safeguard against the encroachment or aggrandizement of

one branch at the expense of the other.” Buckley v. Valeo,

424 U.S. 1, 122 (1976) (per curiam).

The authority to decide cases is the “constitutional

birthright” of Article III courts which Congress cannot

deny.’ “Article ITI establishes an independent Judiciary,

a Third Branch of Government with the ‘province and

duty *** to say what the law is’ in particular cases and

controversies.” Marbury v. Madison, 5 U.S. 137, 177

(1803). The Founders understood “{a] Judiciary free from

control by the Executive and Legislature is essential if

there is a right to have claims decided by judges who

are free from potential domination by other branches of

government.” United States v. Will, 449 U.S. 200, 217-18

(1980). “As its text and our precedent confirm, Article I!

is ‘an inseparable element of the constitutional system

of checks and balances’ that ‘both defines the power

and protects the independence of the Judicial Branch.”

Northern Pipeline v. Marathon Pipeline Co., 458 U.S.

50, 58 (1982).

7. “|The authority to decide cases, which is our Constitutional

birthright, we said in Stern *** Congress can’t take that away from

us.” Bxecutive Benefits Ins. Agency v. Arkison, 134 S.Ct. 2165 (2014),

Oral Argument Trans., p. 51 (statement of Chief Justice Roberts).

8

Under “the basic concept of separation of powers, the

judicial power can no more be shared with another branch

than the Chief Executive, for example, can share with

the Judiciary the veto power, or the Congress share with

the Judiciary the power to override a Presidential veto.”

Bank Markazi v. Peterson, 136 S.Ct. 1310, 1330 (2016)

(Roberts, C.J., dissenting) (quoting Stern v. Marshall,

564 U.S. 462, 483 (2011)).

When Congress impermissibly vests Article III

“judicial Power” in a non-Article III tribunal, that

delegation of judicial authority will be struck down as

unconstitutional. See Stern and Northern Pipeline, supra.

In Executive Benefits, 134 S.Ct. at 2172, this Court

explained:

[In Stern] Congress had improperly vested the

Bankruptcy Court with the “judicial Power

of the United States,” just as in Northern

Pipeline. Because “(njo public right exception

excuse|d] the failure to comply with Article IIL,”

we concluded that Congress could not confer on

the Bankruptcy Court the authority to finally

decide the elaim.®

8. Citing Northern Pipeline, 458 U.S. at 85-86. A “public rights

exception” is inapplicable here. An owner’s property interest in a

vested patent is a “private right,” not a “public right.” See Crowell

v. Benson, 285 U.S. 22, 50 (1932) (“the distinction is at once apparent

between cascs of private right and those which arise between the

government and persons subject to its authority in connection with

the performance of the constitutional functions of the executive or

legislative departments.”). See also Northern Pipeline, 458 U.S. at 68

(“The public-rights doctrine is grounded in a historically recognized

distinction between matters that could be conclusively determincd

9

In Morrison v. Olson, 487 U.S. 654, 694 (1988), this

Court reminded us that it zealously guards the separation

of powers.

Time and again we have reaffirmed the

importance in our constitutional scheme of the

separation of governmental powers into the

three coordinate branches. *** the system of

separated powers and checks and balances

established in the Constitution was regarded

by the Framers as “a self-executing safeguard

against the encroachment or aggrandizement

of one branch at the expense of the other.” We

have not hesitated to invalidate provisions of

law which violate this principle.*

And, as Chief Justice Roberts recently reminded

us, “Hamilton warned that the Judiciary must take ‘all

possible care to defend itself against [the] attacks’ of

the other branches.” Bank Markazi, 136 S.Ct. at 1335

by the Executive and Legislative Branches and matters that are

‘inherently *** judicial”) (quoting Bx parte Bakelite Corp., 279

U.S. 438, 458 (1929)).

Determining whether a patent-owner may be divested of his

ownership in an already issued patent is not a “public right” because

the determination is an “inherently judicial” responsibility. See

Monongahela Nav. Co. v. United States, 148 U.S. 312, 327 (1893).

Sec also Wellness Int'l Network, Ltd. v. Sharif, 1868.Ct. 1932, 1963

(2015) (Thomas, J., dissenting) (“Disposition of private rights to life,

liberty, and property falls within the core of judicia! power, whereas

disposition of public rights docs not.”).

9. Citing Bowsher v. Synar, 478 U.S. 714, 725 (1986) (citing

Humphrey's Bxecutor, 295 U.S. 602, 629-30) (1935), and quoting

Buckley, 424 U.S. at 122-23).

10

(Roberts, C..J., dissenting) (quoting Federalist No. 78).

“The bedrock rule of Article III [is] that the judicial

power is vested in the Judicial Branch alone. We first

enforced that rule against an Act of Congress during the

Reconstruction era in United States v. Klein.” Id. at 1333

(citing Klein, 13 U.S. 128, 140-41 (1872)). Chief Justice

Roberts explained, “Article III vested the judicial power

in the Judiciary alone to protect against that threat to

liberty. It defined not only what the Judiciary can do, but

also what Congress cannot.” Bank Markazi, 136 S.Ct. at

1333."

The Framers designed the federal judiciary to stand

independent of the executive and legislative branches.

See Northern Pipeline, 458 U.S. at 58. The purpose of

such independence is not only to maintain checks and

balances among the three branches, but also to ensure

the impartiality of the adjudicative process itself. /d. This

helps prevent injuries to the private rights of cilizens

from “unjust and partial laws.” Hamilton, Federalist No.

78, p. 470.

tiele IL] both defines the judicial power and protects

the independence of the judiciary. It extends the judicial

power to “all Cases, in Law and Equity, arising under this

Constitution, the Laws of the United States, and Treaties

made, or which shall be made, under their Authority/.|”

U.S. Const. art. 111 §2. That power must be exercised

by courts established with certain protections defined in

Article III: “The judges, both of the supreme and inferior

10. Citing Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 218

(1995), and quoting /NS v. Chadha, 462 U.S. 919, 961 (1983) (Powell,

J., concurring).

11

Courts, shall hold their Offices during good Behaviour,

and shall, at stated Times, receive for their Services, a

Compensation, which shall not be diminished during their

Continuance in Office.” Jd.

The judiciary is charged with interpreting the law and

applying it to resolve disputes, which requires “neutral

decision makers” insulated from political pressures “who

will apply the Jaw as it is, not as they wish it to be.” See

Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1149 (10th

Cir, 2016) (Gorsuch, J., coneurring).'' The Good Behavior

Clause grants Article II] judges life tenure, subject only

to impeachment. See United States ex rel. Toth v. Quarles,

350 U.S. 11, 16 (1955). The Compensation Clause guarantees

that Article III judges receive a fixed and irreducible

salary for their services. See Will, 449 U.S. at 218-221.

Both provisions were incorporated into the Constitution to

ensure judicial] independence and impartiality.

The judicial power belongs to the judiciary.

“Preserving the separation of powers is one of this

Court’s most weighty responsibilities.” Wellness Int'l, 135

S.Ct. at 1954 (Roberts, C.J., dissenting). The Framcrs

anticipated that conflicts and encroachments between

the different spheres of power would periodically arise.

But the Framers believed (and intended) the Constitution

to give each branch the “means and personal motives”

to defend against such invasions. Madison, Federalist

11, “[W]bat would happen if politically unresponsive and

life-tenured judges were permitted to decide policy questions

for the future or try to execute those policics? The very idea of

self-government would svon be at risk of withering to the point of

pointiessness.” Gutierrez-Brizuela, 834 F.3d at 1149 (Gorsuch, J.,

concurring).

12

No. 51, p. 356. To effectively resist encroachment, cach

branch must “exercise substantially all of its appropriate

powers.” Malcom P. Sharp, The Classical American

Doctrine of “The Separation of Powers,” 2 U.Chi.L. Rev.

385, 109 (1935).

Self-defense against encroachment is especially crucial

for the judiciary, regarded by the Framers as the “weakest

of the three” branches.” See Hamilton, Federalist No. 78,

pp. 465-663. Accordingly, the judiciary was elevated to an

independent, co-equai branch. See Irving R. Kaufman,

The Essence of Judicial Independence, 80 Colum.L.Rev.

671 (1980). The judiciary is not only particularly competent

to defend against encroachment on its judicial power,

but duty hound “to defend itself, and assert its own

independence.” Kendall v. United States ex rel. Stokes, 37

U.S. 524, 537 (1838) (also holding that the executive was

both competent and duty bound to assess an encroachment

of the executive power by the judiciary).

The “hydraulic pressure inherent within each of

the separate Branches to exceed the outer limits of its

power, even to accomplish desirable objectives, must

be resisted.” JNS v. Chadha, 462 U.S. 919, 951 (1983).

Though each branch’s interpretation of its own powers is

entitled to “great respect,” in the end, “[i]t is emphatically

the provinee and duty of the judicial department to say

12. “The [executive not only dispenses the honors, but holds

the sword of the community. The legislature not only commands

the purse, but prescribes the rules by which the duties and rights

of every citizen are to be regulated. The judiciary, on the contrary,

has no influence over either the sword or the purse ***.” Hamilton,

Federalist No. 78, p. 465 (citing Montesquicu, The Sprrit of Laws

(1823)).

LS

what the law is.”” Unzted States v. Nixon, 418 U.S. 683,

703 (1974) (quoting Marbury, 5 U.S. at 177). Article ITI

protects the role of the judiciary by barring congressional

attempts “to transfer jurisdiction [to non-Article II]

tribunals| for the purpose of emasculating” constitutional

courts. Nat’l ins. Co. v. Tidewater Co., 337 U.S. 582, 644

(1949) (Vinson, C.J., dissenting).

Nevertheless, over the last century, Congress has

delegated more and more judicial authority to non-

Article III tribunals - drawing ever more power into

its “impetuous vortex.” See Madison, Federalist No.

48, p. 309. But another branch’s “willing embrace” of a

separation of powers violation does not weaken the Court’s

scrutiny. Wellness /nt’l, 135 S.Ct. at 1955 (Roberts, C.J.,

dissenting). This Court has noted that “enthusiasm” by

another branch for a separation of powers violation has

“sharpened rather than blunted’ our review.” /d. (citing

NLRB vy. Noel Canning, 134 S.Ct. at 2593 (Scalia, J.,

coneurring) (quoting Chadha, 462 U.S. at 944)).

This Court has long recognized that Congress cannot

“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.” Murray’s Lessee v. Hoboken

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

When such suits are brought within the bounds of federal

jurisdiction, the responsibility for deciding them belongs

only to Article 111 judges sitting in Article IIT courts. See

Stern, 564 U.S. at 484.

14

B. Separation of powers protects a patent-owner’s

property.

‘The power granted the three branches of government

was separated to protect individual liberty. Individuals

injured by a violation of separation of powers may vindicate

this principle. This Court explained, “Separation-of-

powers principles are intended, in part, to protect each

branch of government from incursion by the others. Yet

the dynamic between and among the branches is not the

only object of the Constitution’s concern. The structural

principles secured by the separation of powers protect the

individual as well.” Stern, 564 U.S. at 483 (quoting Bond

v. United States, 564 U.S. 211, 222 (2011).

Justice Sealia similarly observed, “The purpose of the

separation and equilibration of powers in genera! *** was

not merely to assure effective government but to preserve

individual freedom.” Morrison, 487 U.S. at 727 (Scalia,

J., dissenting on other grounds). In Bond, this Court

explained “In the precedents of this Court, the claims

of individuals — not of Government departments — have

been the principal source of judicial decisions concerning

separation of powers and checks and balances.” 564 U.S.

at 222-23.

In Stern Chief Justice Roberts explained:

Article II] protects liberty not only through

its role in implementing the separation of

powers, but also by specifying the defining

characteristics of Article [II judges. The

colonists had been subjected to judicial abuses

at the hand of the Crown, and the Framers

15

knew the main reasons why: because the King

of Great Britain “made Judges dependent on his

Will alone, for the tenure of their offices, and

the amount and payment of their salaries.” The

Declaration of Independence para. 11.

The Framers undertook in Article III to protect

citizens subject to the judicial power of the new

Federal Government from a repeat of those

abuses. By appointing judges to serve without

term limits, and restricting the ability of the

other branches to remove judges or diminish

their salaries, the Framers sought to ensure

that each judicial decision would be rendered,

not with an eye toward currying favor with

Congress or the Executive, but rather with the

“(cjllear heads *** and honest hearts” deemed

“essential to good judges.”

564 U.S. at 482-83."

The importance of this principle -— an independent

judiciary —- is at its zenith when the dispute involves an

owner defending his right to private property against a

decree of an Executive Branch board extinguishing the

owncr’s interest in his property.

13. Quoting the Declaration of Independence, para. 11 and

1, Works of James Wilson 363 (J. Andrews, ed., 1896). See also

Commodity Futures Trading Caomm’n v. Schor, 478 U.S. 833,

848 (1986) (“Article ITI, $1, serves both to protect ‘the role of the

independent judiciary within the constitutional] scheme of tripartite

government,’ and to safeguard litigants’ ‘right to have claims decided

before judges who arc frec from potential domination by other

branches of government.’”).

16

C. The Patent Trial and Appeals Board is not an

Article III court.

The Patent Trial and Appeal Board is not an

Article [11 court. There is no debate on this point.

The Board’s authority is not derived from Article III

but from congressional power. Members of the Patent

Trial and Appeal Board are appointed by the Secretary

of Commerce without Senate confirmation (or even

presidential review), are not guaranteed to serve for any

fixed term of years, have no tenure protections, and may

be discharged at any time. The members of the Board,

like the bankruptcy judges in Northern Pipeline, “do not

enjoy the protections constitutionally afforded to Article

III judges.” Northern Pipeline, 458 U.S. at 60. Indeed,

members of the Board have far less protections and less

oversight than bankruptcy judges.

Article III §2 directs, “The judicial Power shall

extend to all Cases, in Law and Iquity, arising under this

Constitution, the I.aws of the United States, and Treaties

made *** |and] to Controversics to which the United

States shall be a Party.” Article III §1 “provides that

these federal courts shall be staffed by judges who hold

office during good behavior, and whose compensation shal]

not be diminished during tenure in office.” Commodity

K'ytures, 478 U.S. at 847. The members of the Patent Trial

and Appeal Board do not fall within this description.

Delegating the exclusive authority to adjudicate -

and extinguish — an owner’s interest in a patent to the

Board violates the separation of powers and is contrary

to this Court’s holdings in Commodity Futures, Northern

Pipeline, Chadha, Monongahela, and Siern.

17

When a statutory scheme such as inter partes revicw

denies an owner his constitutionally-guaranteed right to

an Article III court and trial by jury, this Court must

invalidate the act. Chief Justice Marshall explained:

It is emphatically the province and duty of the

judicial department to say what the law is. Those

who apply the rule to particular cases, must of

necessity expound and interpret that rule. ***

This is of the very essence of judicial duty. If

then the courts are to regard the constitution;

and the constitution is superior to any ordinary

act of the legislature; the constitution, and not

such ordinary act, must govern the case to

which they both apply.

Marbury, 5 U.S. at 177-78.

Monongahela illustrates this point. In Monongahela,

the United States argued Congress, not the Judiciary,

determines the amount of compensation the United States

owed the Monongahela Navigation Company for property

the government took. This Court emphatically rejected

the government’s argument and rejected the notion that

Congress could usurp from the Judicial Branch the role of

adjudieating the compensation an owner is due when the

government takes an owner's property. See Mononguhela,

148 U.S. at 327 (“By this legislation congress seems to have

assumed the right to determine what shall be the measure

of compensation. But this is a judicial, and not a legislative,

question. *** The constitution has declared that just

compensation shall be paid, and the ascertainment of that

is a judicial inquiry.”).

18

D. The Federal Circuit ignores this Court’s

controlling precedent.

is there truly a meaningful threat to the separation

of powers where Congress confers judicial] power outside

Article JII? As in Stern, the answer is emphatically

“ves.” See Stern, 465 U.S. at 502-03. “A statute may no

more lawfully chip away at the authority of the Judicial

Branch than it may eliminate it entirely.” /d. at 502. Even

supposedly innocuous intrusions upon the judiciary’s

authority to decide “Cases” and “Controversies”

compromise structural] constitutional protections.

McCormick recognized the long-standing principle

that patents are private property which are, as any

other property right, entitled to the full protection of the

Constitution. 169 U.S. at 608-09. As such, an Executive

Branch employee, an examiner, may not invalidate a patent

or any of its claims after it has been issued. A patent is

private property that may only be extinguished by an

Article III court.

Nearly one hundred years after McCormick, the

Federal Cireuit declined to follow this binding precedent,

holding instead that a 1980 statute authorizing third-

party-initiated patent reexamination did not violate

Article III. Patlex Corp. v. Mossinghoff, 758 F.2d 592,

607 (Fed. Cir. 1985). The Patlex panel acknowledged that

McCormick established “on constitutional grounds that

*** an issued patent could not be set aside other than by

an Article III court.” /d. at 604. But instead of adhering to

McCormick's command, the Patiex panel distinguished it

based on Congress’ intent to provide authority for patent

reexaminations. “A defectively examined and therefore

19

erroneously granted patent must yield to the reasonable

Congressional purpose of facilitating the correction of

government mistakes. This Congressional purpose is

presumptively correct, and we find that it carries no insult

to the Seventh Amendment and Article II.” Patlex, 758

F.2d at 604. The Patlex panel elevated Congress’ interest

in “correcting mistakes” above one of the “fundamental

principles of constitutional law.” Nixon v. Administrator

of Gen. Servs., 433 U.S. 425, 505 (1977) (Burger, C.J.,

dissenting).

‘Thirty years after Putlex, the Federal Circuit had

another opportunity to consider this Court’s holding in

McCormick. MCM Portfolio, LLC v. Hewlett-Packard Co.

involved a constitutional challenge to the same provision

at issue here. 812 F.3d 1284 (Fed. Cir. 2015), cert. denied,

137 S.Ct. 292 (2016). In MCM, the panel followed Patlex

and found no reason to distinguish inter partes review

from the reexamination process. As such, the panel evaded

this Court’s holding in McCormick on different, but

contradictory, grounds. It declared McCormick statutory,

rather than constitutional, asserting that this Court’s

holding in McCormick “did not address Article III and

certainly did not forbid Congress from granting the PTO

the authority to correct or cance] an issued patent.” /d.

at 1289. And then the Federal Circuit went even further

to conclude that patents are “public rights” outside the

ambit of Article III.”

14. Fora discussion of the history of “public rights” and “private

rights” and why the Federal Circuit’s view of their dichotomy is

wrong, see Justice Thomas’ discussion in Wellness Int'l, 135 $.Ct.

at 1962 (Thomas, J., dissenting).

20

The Federal Circuit rested its decision in MCM

Portfolio upon the proposition that patents are “public

rights” and effectively stripped the owner of a patent of

his vested property interest and denied the owner right

to a trial by jury in an Article III court. 812 F.3d 1284,

1290-91 (Fed. Cir. 2015). The Federal Circuit concluded

patents are “public rights” based on this Court’s statement.

in Stern that “what makes a right ‘public’ rather than

private is that the right is integrally related to particular

federal government action.” 131 S.Ct. at 2613. As explained

by Justice Thomas, this view of the “public” right versus

“private” right distinction is wrong. See Wellness Int'l,

135 S.Ct. 1962 (Thomas, J., dissenting). An individual’s

ownership of property (whether a car, a home, or a patent)

is a “private right” protected by the Constitution.

The Federal Cireuit’s characterization of the U.S.

patent system — which is based solidly in common law

foundations — as a “publie regulatory scheme” subject

to administrative invalidation is a mischaracterization.

The issuance of a patent does not “regulate,” 7.e., control

behavior, at all. Instead, when the government issues

a patent it confers “the same legal protection as other

property.” McCormick, 169 U.S. at 609; see also Patlex, 758

F.2d at 599 (“It is beyond reasonable dispute that patents

are property.”). Neither Congress nor the Federa! Circuit

can extinguish established property rights in a patent.

Stop the Beach Renourishment v. Fla. Dep't of Envil.

Prot., 560 U.S. 702, 735 (2010) (Kennedy, J., concurring);

see also id. at 715 (“Ifa legislature or a court declares that

what was once an established right of private property no

longer exists, it has taken that property, no less than if

the State had physically appropriated it or destroyed its

value by regulation.”) (Scalia, J., lead opinion).

21

The Federal Circuit's recent decision in Ultratec, Jnc.

v. Captioneall, LLC, _F.3d__, 2017 WL. 3687453 (August

28, 2017) demonstrates the constitutional deficicncies

of allowing a non-Article III tribunal to adjudicate and

extinguish established property rights. In Ultratec

the patent owner’s “case proceeded to trial, where the

jury found the patents valid and infringed and awarded

damages of $44.1 million.” Slip op., p. 4. The infringer,

Captioncall, petitioned the Patent Trial and Appeal Board

for inter partes review, and five months after the jury

verdict, the “Board issued final written decisions holding

that every challenged claim was either anticipated or

would have been obvious.” Jd. at 6. The Board effectively

nullified the verdict of the Article III court and jury. And

the Board did this on the basis of a one-hour conference

call in which the Board refused to consider a sworn

inconsistent statement of Captioncall’s leading expert.

The Federal Circuit found, “the Board offers no

reasoned basis why it would not be in the interest of justice

to consider sworn inconsistent testimony on the identical

issue. *** A reasonable adjudicator would have wanted

to review this evidence.” Ultratec, slip op., p. 11. The

Federal Circuit also noted that “Live testimony is rare in

[inter partes review} hearings, which typically last only

about an hour.” Jd. And, the Federal] Circuit continued,

“a number of problems with the Board’s procedures

contributed to its errors in this case. First, the Board

lacked the information necessary to make a reasoned

decision. *** Second, the Board’s procedures allowed it to

make significant evidentiary decisions without providing

an explanation or a reasoned basis for its decisions.” /d.

at 12-18. And, the Federal Cireuit found, “The Board’s

procedures impede meaningful appellate review of the

A

agency decision-making.” /d. Finally, the Federal Circuit

noted, “ji|n district court litigation, a party dissatisfied

with a ruling excluding evidence is allowed to make an

offer of proof to preserve error. Parties in [¢nter partes

review] are not given similar protections.” Jd. at 14.

Ultratee demonstrates why allowing the non-Article

[Il Patent Trial and Appea) Board to extinguish an

owner’s right to an established patent, already held

to be valid and infringed by an Article IIT court and a

jury, violates the Seventh Amendment and separation of

powers.

“Slight encroachments create new boundaries from

which legions of power can seek new territory to capture.”

Reid v. Covert, 354 U.S. 1, 39 (1957) (plurality opinion).

In a matter of decades the Patent Office has gone from

lacking any authority to invalidate patents post-grant,

to birthing a quasi-judiciary within its ranks. In those

tribunals, patents — long understood to be constitutionally-

protected property rights — are now regarded as privileges

conferred by government grace. And, those privileges are

revocable at the whim of an arbiter who lacks any of the

Article IL] powers or protections.” In devising this scheme

Congress has strayed well beyond the limits of its power

into core judicial functions. The result is precisely what

the Framers were trying to prevent: “the encroachment

or aggrandizement of one branch at the expense of the

other.” Buckley, 424 U.S. at 122.

\h. “Article [1] could neither serve its purpose in the system

of checks and balances nor preserve the integrity of judicial

decisionmaking if the other branches of the Federal Government

could confer the (:overnment’s “judicial Power” on entities outside

Article [1T.” Stern, 664 U.S. at 484.

23

Il. Congress cannot deny a patent owner’s Seventh

Amendment right to trial by jury.

The right to trial by jury shall be preserved.

Amend. VII,

United States Constitution

A. The right to trial by jury is the “sacred

palladium” of liberty.

Since King John met the barons on the fields of

Runnymede in 1215, the right to trial by jury has been

accepted as a fundamental premise of Anglo-American

jurisprudence. This Court observed:

The right of jury trial in civi] cases at common

law is a basic and fundamental feature of

our system of federal jurisprudence which

is protected by the Seventh Amendment. A

right so fundamental and sacred to the citizen,

whether guarantced by the Constitution

or provided by statute, should be jealously

guarded by the courts.

Jacob v. City of New York,

315 U.S. 752, 752-53 (1942)."°

The Founders were very familiar with a sovereign’s

desire to deny civil jury trials. King George attempted

16. See also United States v. Booker, 543 U.S. 220, 249 (2005)

(“the right to a jury trial had been enshrined since the Magna

Carta”).

24

to circumvent American colonists’ right to jury trial by

assigning disputes over the Stamp Act tax to admiralty

courts that sat without a jury.

John Adams voiced the American reaction:

“But the most grievous innovation of all, is

the alarming extension of the power of the

eourts of admiralty. In these courts, one

judge presides alone! No juries have any

concern there! The law and the fact are both

to be decided by the same single judge.” ***

Colonists vehemently denounced admiralty

courts because they worked without juries. ***

[T]he colonists praised [Blackstone’s} remarks

fin his Commentaries) to the effect that tria!

by jury was the “sacred palladium” of English

liberties ***.”

Leonard W. Levy, Origins of the

Bill of Rights (1999), p. 226.

Blackstone explained the philosophy animating the

colonists’ desire to preserve the right to a jury trial in

civil disputes.

The impartial administration of justice, which

secures both our persons and our properties,

is the great end of civil socicty. But if that be

entirely intrusted to the magistracy, a select

body of men, and those generally selected by

the prince, or such as enjoy the highest offices

of the state, their decisions, in spite of their

own natural integrity, will have frequently an

involuntary bias toward those of their own rank

25

and dignity; it is not to be expected from human

nature, that the few should always be attentive

to the interests of the many.

William Blackstone, Commentaries on the

Laws of England, Book III, p. 379."”

High on the list of the Crown’s offenses against

American colonists, the Declaration of Independence

included “depriving us, in many cases, of the benefit of

trial by jury.” One commentator summarized why the

Founders so highly valued the right to trial by jury and

were so offended by the King’s effort to deprive them of

this right.

The basic argument is that civil jury trials were

prized by the populace chiefly for their public law

implications, that is for their utility in preventing

possible oppression in tax suits, condemnation

proceedings, and other administrative actions

and, if necessary, in obtaining redress for

consummated governmental wrongs through

collateral suits for damages against. officials."

17. Emphasis in original.

18. George EF. Butler, 11, Compensadle Liberty: A Historical

And Political Model of the Seventh Amendment Public Law Jury,

1 Notre Dame J. of Law, Ethics & Public Policy 595, 635, n.44 (1985)

(citing, among other authorities, Damsky v. Zavatt, 289 F.2d 46, 49-

KO (2nd Cir. 1971) (Friendly, J.), and Hamilton, Federalist No. 83).

26

Madison noted and explained that trial by jury in civil

litigation secured individual rights, stating, “In suits at

common law, between man and man, the trial by jury, as

one of the best securities to the right of the people, ought

to be preserved.” James Madison, Writings 1772-1836 (The

Library of America 1999), p. 444.

For these reasons the Founders included the Seventh

Amendment in the Bill of Rights. The Seventh Amendment

guarantees “{iJn suits at common law, where the value in

controversy shall exceed twenty dollars, the right of trial

by jury shall be preserved, and no fact tried by a jury,

shall be otherwise reexamined in any court of the United

States, than according to the rules of the common jaw.”

Alexis de Tocqueville observed, in Democracy in

America, that “[tlhe institution of the jury *** when

once it is introduced into civil proceedings, it defies the

aggressions of time and man. *** The civil jury did in

reality at that. time [of the Tudors] save the liberties of

England.” Tocqueville continued and noted the political

importance of the right to trial by jury in civil litigation.

The jury, and more especially the civil jury,

serves to communicate the spirit of the judges

to the minds of all citizens; and this spirit,

with the habits that attend it, is the soundest

preparation for free institutions, *** It is

especially by means of the jury in civil cases

that the American magistrates imbuc the

lower classes of society with the spirit of their

19. Fed. R. Civ. P. 38 similarly provides, “(a) Right Preserved.

The right of trial by jury as declared by the Seventh Amendment to

the Constitution — or as provided by a federal statute — is preserved

to the parties inviolate ***.”

27

profession. Thus, the jury, which is the most

energetic means of making the people rule, is

also the most efficacious means of teaching it

how to rule well.

Id. at Vol. I, Ch. XVI.

This Court has repeatedly affirmed the fundamenta!

importance of the right to trial by jury. In Galloway v.

United States, 319 U.S. 372, 398-99 (1943), Justice Black

summarized the history animating adoption of the Seventh

Amendment.”

[I]n response to widespread demands from

the various State Constitutional Conventions,

the first Congress adopted the Bill of Rights

containing the Sixth and Seventh Amendments,

intended to save trial in both criminal and

common law eases from legislative or judicial

abridgment. ***

[Patrick] Henry, speaking in the Virginia

Constitutional Convention, had expressed the

general conviction of the people of the Thirteen

States when he said, “Trial by jury is the best

appendage of freedom. *** We are told that we

are to part with that trial by jury with which

our ancestors secured their lives and property.

*** T hope we shall never be induced, by such

20. Justice Blacks’ statement was in an opinion dissenting on

other grounds. See also Solem v. Helm, 463 U.S. 277, 286 (1893)

(explaining the fundamental nature of the right to trial by jury and

tracing the origin of this right to Magna Carta).

28

arguments, to part with that excellent mode

of trial. No appeal can now be made as to fact

in common law suits. The unanimous verdict

of impartial men cannot be reversed.” The

first Congress, therefore provided for trial of

common law cases by a jury, even when such

trials were in the Supreme Court itself.”

With this history there can be little doubt that

the Seventh Amendment’s right to trial by jury is a

foundational tenet of our Anglo-American heritage

guaranteed by our Constitution. Given this point, the

inquiry turns to the question of whether this constitutional

right extends to the adjudication of an owner’s property

interest in a vested patent. For reasons we explain below,

the answer is absolutely “yes.”

B. The Seventh Amendment right to jury

trial includes adjudications potentially

extinguishing an owner’s patent.

This Court’s jurisprudence holds the “right of trial by

jury” is guaranteed as it existed under English common

law in 1791 when the Seventh Amendment was adopted.

See Curtis v. Loether, 415 U.S. 189, 198 (1974) (“{TThe

thrust of the [Seventh] Amendment was to preserve the

21. Citation omitted. Justice Black further noted, “One of the

strongest ohjections originally taken against the constitution of the

United States, was the want of an express provision securing the

right of trial by jury in civil cases.” Gelloway, 319 U.S. at n.3 (quoting

Parsons v. Bedford, Breedlove & Rubeson, 28 U.S. 433, 446 (1830)).

“Of the seven states which, in ratifying the Constitution, proposed

amendments, six included proposals for the preservation of jury

trial in civil cases.” Jd.

29

right to jury trial as it existed in 1791.”).** See also Perneil

v. Southall Realty, 416 U.S. 363 (1974).

The Seventh Amendment guarantees “the right

of trial by jury” for all suits involving legal rights — as

opposed to proceedings in admiralty or equity. See

Parsons, 28 U.S. at 446. Justice Story explained further:

The phrase “common law,” found in the clause

is used in contradistinction to equity, and

admiralty, and maritime jurisprudence. **”

By common law, |the Framers] meant *** not

merely suits, which the common law recognized

among its old and settled proceedings, but suits

in which legal rights were to be ascertained and

determined, in contradistinction to those where

equitable rights alone were recognized, and

equitable remedies were administered ***.***

In a just sense, the amendment then may well

be construed to embrace al] suits which are not

of equity and admiralty jurisdiction, whatever

may be the particular form which they may

assume to settle legal] rights.

fd. at 446-47."

An action seeking to enforce a legal right would be

heard by the law courts with a jury, as opposed to equity

22. In l/nited Siutes v. Wonson, 28 F. Cas. 744, 750 (C.C.1).

Mass. 1812) Judge Story observed, “treating the Seventh Amendment

common law ‘Suits’ as a dynamic category extending to all new types

of cases provided only that they determine ‘legal rights.” See also

Butler, supra n.18, at n.172.

23. Emphasis in original.

30

and admiralty that sat without a jury. See Parsons,

supra. This Court held, “if the action must be tried

under the auspices of an Article III court, then the

Seventh Amendment affords the parties a right to a jury

trial whenever the cause of action is legal] in nature.”

Granfinanciera, S.A. v. Norberg, 492 U.S. 33, 53 (1989).

This Court explained, “The Seventh Amendment thus

applies not only to common-law causes of action but also

to statutory causes of action ‘analogous to common-law

causes of action ordinarily decided in English law courts

in the late 18th century, as opposed to those customarily

heard by courts of equity or admiralty.” City of Monterey

v. Del Monte Dunes at Monterey, Lid., 526 U.S. 687, T08-

09 (1999) (citations omitted).”

For example, in England, before 1791, actions by

owners seeking to vindicate their ownership of property

were tried to a jury. Magna Carta §§39 and 52 guaranteed

the right to a jury when the King took property:

No free man shall be taken or imprisoned or

disseized or exiled or in any way destroyed, nor

will we go upon him nor send upon him, except

by the lawful judgment of his peers or by the law

of the land ***. If anyone has been dispossessed

or removed by us, without the legal judgment

of his peers, from his lands, castles, franchises,

or from his right, we will immediately restore

24. See generally Roger W. Kirst, Jury Trial and the Federal

Tort Claims Act: Time to Recognize the Seventh Amendment

Right, Texas Law Rev. 58 Tex.L.Rev. 549 (1980), and Erie Grant,

A Revolutionary View of the Seventh Amendment and the Just

Compensation Clause, 91 N.W.U.L.Rev. 144 (1996).

31

them to him; and if a dispute arise over this,

then let it be decided by the five-and-twenty

barons of whom mention is made below in the

clause for securing the peace.

Magna Carta”

In De Keyser’s Royal Hotel Ltd. v. the King, ch. 2,

p. 222 (1919), Swinfen Eady M.R. described English law

between 1708 and 1798:

It appears then to be fully recognized |that by

1708} the Jand of a subject could not be taken

against his will, except under the provisions

of an Act of Parliament. Accordingly, in 1708,

was passed the first of a series of Acts to enable

particular lands to be taken compulsorily

*** provision is made for the appointment

of Commissioners to survey the lands to be

purchased, and in default of agreement with

the owners, the true value is to be ascertained

by a jury.?®

The English equivalent to an inverse condemnation

action is a common law action called a “petition of right”

for which there is the right to trial by jury. See Baron de

Bode’s Case, 8 Q.B. Rep. 208 (1845).*?

25. James K. Wheaton, The History of the Magna Curta (2012).

26. Citing Statute 7 Anne c. 26 (emphasis added).

27. See also Levy, supra p. 24, at 211, providing,

Under an ordinance of 1164 known as the Constitutions

of Clarendon, the sheriff, acting at the instigation of

32

C. Patents are constitutionally-protected private

property that cannot be extinguished by a non-

Article [III tribunal.

The Patent Clause of the Constitution empowers

Cungress “|tjo promote the Progress of Science and

useful Arts, by securing for limited Times to Authors and

Inventors the exclusive Right to their respective Writings

and Discoveries.” U.S. Const. art. 1 §8 cl. 8. At the time

of the founding, patents were recognized as “civil rights

in property afforded expansive and liberal protections

under the law.” Adam Mossolf, Who Cares What Thomas

Jefferson Thought About Patents? Reevaluating the

Patent “Privilege” in Historical Context, 92 Corn.L.Rev.

953, 990 (2007).

The Supreme Court has long recognized that patents

are private property entitled to constitutional protection.

See, ¢.9., Hx parte Wood, 22 U.S. (9 Wheat.) 603, 608

(1824) (“The inventor has, during this period [of patent

monopoly], a property in his inventions; a property which

is often of very great value, and of which the law intended

to give him the absolute enjoyment and possession.”).

As private property, patents are protected by the Fifth

Amendment Takings Clause in the same manner as

personal property or other property. “The Government

the bishop, could swear twelve men of the countryside

to give a verdict — that is, to speak the truth on issues

involving property rights ***. Nu one could be evicted

or disposed of his land without the prior approval of

a jury verdict. A verdict in his favor restored him to

possession of the land. Thus trial by jury emerged

as the legal remedy for a person who had faced

dispossession.

33

has a categorical duty to pay just compensation when it

takes your car, just as when it takes your home.” Horne,

135 $.Ct. at 2426. See also Fla. Prepaid Postsecondary

Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627, 642

(1999). And the nature of patents as property rights has

long been analogized to that of patents for land, which

could not be revoked except in the courts. See, e.g., Consol.

Fruit Jur Co. v. Wright, 94 U.S. 92, 96 (1876).

One hundred and nineteen years ago, this Court

resolved the specific question raised in this ease — whether

a patent could be invalidated by some authority other than

an Article III court. Then, as now, the answer is “no.”

In McCormick, a patent owner applied to have his

patent reissued and sought to include several new claims.

169 U.S. 606, 607 (1898). While examining the reissue

application, the patent examiner determined that some of

the original claims lacked patentable novelty. The owner

rescinded his application and obtained the original patent

baek from the Patent Office. This Court granted certiorari

to decide whether the patent examiner’s review of the

new application allowed the examiner to invalidate the

original patent,

In no uneertain terms, this Court held that the

examiner Jacked authority to invalidate the previously

issued claims:

It has been settled by repeated decisions of

this court that when a patent has received

the signature of the secretary of the interior,

countersigned by the commissioner of patents,

and has had affixed to it the seal of the patent

34

office, it has passed beyond the contro! and

jurisdiction of that office, and is not subject to

be revoked or canceled by the president, or any

other officer of the government. It has become

the property of the patentee, and as such is

entitled to the sarne legal protection as other

property.

McCormick,

169 U.S. at 608-09.

The Court recognized that post-grant caneclJation of

patents by a non-Article IT] authority would effect a taking

of property without due process of law, and constitute

an “invasion of the judicial branch” by the Executive.

McCormick, 169 U.S. at 612. Thus, “{t|he only authority

competent to set a patent aside, or to annul it, or to correct

it for any reason whatever, is vested in the courts of the

United States, and not in the department which issued

the patent.” /d. at 609.

The America Invents Act allows the Board to conduct

an adversarial adjudication between a patent owner and

a third party and allows the Board to extinguish the

patent-owns” rights. See 35 U.S.C. $§ 311(a) and 318(a).

Under the enter partes review proceeding an Exccutive

Branch tribunal adjudicated Oil States’ property interest

in a previously vested patent and issued a decision

extinguishing Oil States’ ownership of the patent. Oil

States was not afforded access to an Article III court or

trial by jury. This statutory scheme violates the Seventh

Amendment and separation of powers.

35

CONCLUSION

There is great risk in the glacial creep of the ever-

expanding administrative state — virtually unnoticeable

on a smaller seale, but no less devastating to what lies

in its path. And we move ever more perilously toward a

point of no return,”

The Framers entrusted the “judicial Power” to this

Court. This power must be “jealously guarded” against

such insidious encroachment. Northern Pipeline, 458 U.S.

at 50 (1982). Without question, it “profits the Court nothing

to give its soul for the whole world.” Wellness int'l, 1385

S.Ct. at 1960 (Roberts, C.J., dissenting).

Here the Court is asked to allow Congress to assign

this Court's “judicial Power” to a non-Article III tribunal,

so that Congress may determine the ownership of patents

already held by private owners. ‘his violates separation

of powers and the Seventh Amendment.

28. “But the fact is *** executive bureaucracies *** swallow

huge amounts of core judicial and legislative power and concentrate:

federa! power in a way that seems more than a little difficult to square

with the Constitution of the framers’ design. Mayhe the time has

come to face the behemoth.” Gutierrez-Brizuela, 834 F.3d at 1149

(Gorsuch, J., concurring).

36

Respectfully submitted,

Brian T. LlopGces Marx F. (Tror) Hearne, il

Pactric J.8GaL FounDarion Counsel of Record

10940 NE 38rd Place, STEPHEN S. Davis

Suite 210 Mecuan 8S. LARGENT

Bellevue, Washington 98004 Luinpsay S.C. BRINTON

(425) 576-0484 ABraM J. Par rorD

bth@pacificlegal.org Arent Fox, LLP

1717 K Strect, NW

Counsel for Amicus Curiae Washington, DC 20006

Pacific Legal Foundation (202) 857-6000

thor@arentfox.com

JOHANNA TAicorr

Pactric LEGAL FouNDATION Counsel for Amici Curiae

930 G Street

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