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

Supreme Court, U.S.

FILED

AUG 31 2017

No. 16-712

OFFICE OF THE CLERK

a = = = —

Bn the

Supreme Court of the Anited States

Or. STATES ENERGY SERVICES, LLC,

Petitioner,

Vv.

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 27 LAW PROFESSORS AS AMICI

CURIAEIN SUPPORT OF PETITIONER

ADAM MOSSOFF SEAN D. JORDAN

Antonin Scalia Law School Counsel of Record

GEORGE MASON ADAM W. ASTON

UNIVERSITY JACKSON WALKER L.L.P.

3301 Fairfax Drive 100 Congress Avenue,

Arlington, VA 22201 Suite 1100

Austin, TX 78701

sjordan@jw.com

(512) 236-2281

ne

1

QUESTION PRESENTED

Whether inter partes review—an adversarial

process used by the Patent and Trademark Office

(PTO) to analyze the validity of existing patents-—

violates the Constitution by extinguishing private

property rights through a non-Article [J forum

without a jury.

i

TABLE OF CONTENTS

te ccuietnecwaudébvescoressons 1

a cacdisnenbetebeiecersses il

I I ccs ncunpsiocecssuwesscauesesncessoees J

I cenvawvervscoeseusdckosncosesses ee

|. Since the Early American Republic, ‘This

Court and Lower Federal Courts Have

Defined Patents as Private Property

li. This Court Has Provided Constitutional

Protection to Patents as Private Property

Rights for Two Hundred Yeurs....................... 10

Ill. This Court Recently Reaffirmed That

Patents are Private [Property Rights

Secured Under the Constitution .................... 17

eG es cepasauuscacueusonnes 19

il

TABLE OF AUTHORITIES

Cases

Allen v. New York,

1 F. Cas. 506 (C.C.S.D.N.Y. 1879)...........

Atlas Rooting Co. v. Occupational Safety

& Health Review Comm'n,

SIU, BO FAD aco ccnecsscsesccesens ilaelaestl

Ayling v. Hull,

2 F. Cas. 271 (C.C.1). Mass. 18685)...........

Ball v. Withington,

2 F. Cas. 556 (C.C.S.D. Ohio 1874) .........

Batten v. Silliman,

2 F. Cas. 1028 (C.C.E.D. Pa. 18655)..........

Brooks v. Byam,

4 F. Cas. 261 (C.C_D. Mass. 1843)...........

Buck v. Cobb,

4 F. Cas. 546 (C.C_N.D.N.Y. 1847)..........

Burleigh Rock-Drill Co. v. Lobdell,

4 F. Cas. 750 (C.C.D. Mass. 1875)...........

Butner v. United States,

Me I once iin ches ace nbs caobeaducdeuddee ss

Page(s)

shbgseounetent 9

w

iv

Cammeyer v. Newton,

ee ee et 12. 13, 36, 38

Carew v. Boston Elastic Fabrie Co.,

SP. Ce, OG ee Si cg ee fs)

Carr v. Rice,

Sr. Ce, BO Oe, Fs ei 7

Cascades Projection LLC v. Epson Am., Inc.,

EG FAS TOGO Wee. Cir, BOUFD a vncsisecrecsececvescdesess’ 12

Crowell v. Benson,

ie IRE: eae et Aarne = 8 oe 8 5

Davoll v. Brown,

7, Cos, 007 G.I Memon, 1OOO ei 10

Dobson v. Campbell,

7 ¥. Gos. FO0 CCD. We. 1608) ceed 6, 7

Earle v. Sawyer,

8 F. Cas. 254 (C.C.D. Mass. 1826)........................ 8

Eastman v. Bodfish,

SF. Com. Se oe eee. 16D) oe 7

eBay Inc. v. MercExchanye, L.L.C.,

RO: Ce, Dr i hcsesentecs tack ecinnes 19

kx parte Wood,

SS UTD. Bh Wt) OO Chika ove vos veecectenne 6

Vv

Festo Corp. v. Shoketsu Kinzoku Kogyo

Kabushiki Co.,

I i PU NO ia ieics writin is niceetareien 19

Fla. Prepaid Postsecondary Educ.

Expense Bad. v. Coll. Sav. Bank,

Oe arcs sacs neieteiscdobions 3,19

Gay v. Cornell,

50 F Cas. 190 0.0 B.D. Y... TOI vecciiccsccsncesses 10

Gayler v. Wilder,

A UI CEO Paarae) SAF CRI asi csc cnacscescvvevscsonsces 8

Goodyear Dental Vulcanite Co. v. Van Antwerp,

Os FA GE TET TID ia caenscncescncseccsvessons 7

Grant & Townsend v. Raymond,

10 F. Cas. 985 (C.C.S.D.N.Y. 1829)..........:ccec00- 218

Gray v. James,

SW Pine. FOGG C.D. Dik. UBT FD ccacsndesccccensscsseeees 9

Hayden v. Suffolk Mfg. Co.,

11 F. Cas. 900 (C.C.D. Mass. 1862)...................-- 10

Horne v. Dep't of Agric.,

4 Bee | one eerennen 2,17, 18

Hovey v. Henry,

12 ¥. Cas. 603 (C.C.D. Mass. 1846)..........-.......22-+. 7

James v. Campbell,

OG ane 3,5, 18

vi

Lightner v. Kimball,

15 F. Cas. 518 (C.C.D. Mass. 1868)..................... 10

Livingston v. Jones,

15 F. Cas. 669 (C.C.W.D. Pa. 1861)

(rev'd hy Jones v. Morehead,

I re I a race cara casceccesiassaceesusicunscavaceeatens 7

McClurg v. Kingsland,

43 US. (i Flow.) BOS (CIDER) .......ccc<csc0c0000s: 10-12, 16

McCormick Harvesting Mach. Co. v. C.

Aultman & Co.,

Sarr a 12, 18

McKeever v. United States,

ct: Re & 1). Reema cnenenen ee 13-16

MCM Porttolio LLC v. Hewlett-Packard Co.,

812 F.3d 1284 (Fed. Cir. 2015).............. 2, 4, 12, 16

Moore v. Marsh,

oT a SO TES GS iat alee y

Pennock v. Dialogue,

Bee A ee NEO CRI eesisisedes tee sinexeicsorsonnsenincnn 7,8

Potter v. Holland,

10 F. Com: 1166 6C.C. Comte. ERD BD acccecccscasseceovscves: y

Russell v. United States,

ee rs WN ee cece cuvecan hore eeonseds 13

Vii

Soe’y for the Propagation of the Gospel

in Foreign Parts v. New Haven,

21 U.S. (8 Wheat.) 464 (1823).....0.000000.....

Stern v. Marshall,

Se er i iincesicrsenacuinaconies

Suydam v. Day,

$3 F. Cas. 678 C.CB.D.N.Y.. UBGG)...20.0::cccsesersses00

Tull v. United States,

IT TE ST osewcesscsavescinecesessssowveniss

United States v. Butfalo Pitts Co.,

UF Se Ce oi ibs sen icctcsepastects snes

United States v. Burns,

ee CUD. sespeuwcasaibansetinas

Vanhorne's Lessee v. Dorrance,

2 US. (2 Dall.) 304 (1795) .............ccscoveee-

Winans v. Denmead,

56 U.S. (15 How.) 330 (1853)................5

Constitutional Provision & Statute

ee ae ee ee

OR OO OG see ccsvaeascovuniecinecsidoraseis

Vill

Other Authorities

Adam Mossoff, Patents as Constitutional

Private Property. The Historical

Protection of Patents Under the Takings

Clause, 87 B.U. L. Rev. 689 (2007)............ccceecceeees 3

Adam Mossoff, #xc/usion and Exclusive Use

in Patent Law, 22 Harv. J. L. & Tech. 321

The Federalist No. 48, at 271-72 (James

Madison) (Clinton Rossiter ed., 1961)................06. A

Gregory Dolin & Irina D. Manta,

Taking Patents, 73 Wash. & Lee L.

Rg ee RR a ate Not a8 2 ey eae ea 17

Theodore D. Woolsey et _ al.,

The First Century of the American

BN I ntti d score icadracduvcanvecks 15

INTEREST OF AAt/c/ CURIAE

The amici curzae are 27 law professors who teach

and write on patent law, property law, and

constitutional Jaw. They have an interest in both

promoting continuity in the evolution of these

interrelated doctrines and ensuring that the patent

system continues to secure innovation to its creators

and owners. They have no stake in the parties or in

the outcome of the case. Although amici may differ

amongst themselves on other aspects of patent law

and constitutional law, they are united in their

professional opinion that this Court should reverse

the Court of Appeals for the Federa! Circuit’s decision

in this case because it fails to protect the

constitutionally secured private property rights of

patent owners. This failure undermines the

constitutional function of the patent system in

promoting innovation. The names and affiliations of

the amici members are set forth in Appendix A.

SUMMARY OF ARGUMENT

The decision by the Court of Appeals for the

Federal Circuit directly contradicts this Court's

longstanding case law th: secures constitutional

protections for private property rights in patents. The

Petitioner fully addresses the specific legal and

|. All parties have consented to the filine of tuis brief. No counsel]

for any party authored this brief in whole or in part, and no

person or entity, other than ame: or their counsel, made a

monetary contribution intended to fund the preparation or

submission of this bricf.

2

constitutional issues concerning these _ private

property rights protected under the Seventh

Amendment. Amgucz offer additional support by

identifying the substantial case law from this Court

and lower federal courts reaching back to the early

American Republic that patents are private property

rights secured under the Constitution. Thus, the

Federal Circuit ts mistaken in concluding that patents

are “public rights” that exist solely at the

administrative prerogative of the sovereign, a key

legal premise in this case and in many others since

the Federal Circuit's decision in \4CM Portfoho LLC

v. Llewlett-Packard Co., 812 F.3d 1284, 1293 (Fed. Cir.

2015). This mistake has infected many of the Federal

Circurt’s decisions affirming actions by the Patent

Trial & Appeal Board (PTAB) at the United States

Patent & Trademark Office. This is a predicate issue

underlying whether the Seventh Amendment or any

other constitutional provision or doctrine applics to

the private property rights in patents, and thus it

must be resolved in this case.

This Court has long recognized and secured the

constitutional protection of patents as private

property rights reaching back to the early American

Republic. Just two terms ago, this Court confirmed

the continuing vitality and relevance of the revered

legal proposition that patents are private property

rights in Horne v. Department of Agriculture, 135 S.

Ct. 2419, 2427 (2015) (Roberts, C.J.), in which the

Court approvingly quoted one of its own nineteenth:

century decisions that “[a patent] confers upon the

3

patentee an exclusive property in the patented

invention which cannot be appropriated or used by the

government itself, without just compensation, any

more than it can appropriate or use without

compensation land which has been patented to a

private purchaser” (quoting James v. Campbell, 104

U.S. 356, 358 (1882)). This Court also held seventcen

years ago that patents are property rights secured

under the Due Process Clause of the Fourteenth

Amendment. See Fla. Prepaid Postsecondary Educ.

Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627 (1999).

To establish the extensive and binding historical

case law that supports this Court’s recent decisions-—

affirming the private property rights in patents under

the Constitution, amici detail these nineteenth-

century cases. These decisions are overwhelming

evidence for the public meaning in early American

courts that patents are private property rights

protected by the Takings Clause and Wue Process

Clause. See Adam Mossoff, Patents as Constitutional

Private Property: The Historical Protcetion of Patents

Under the Takings Clause, 87 B.U. L. Rev. 689, 700—

11 (2007) (discussing this case law). Congress

explicitly endorsed this case law in the 1952 Patent

Act in codifying the Segal definition of patents as

“property” in 35 U.S.C. § 261. See Adam Mossuilf,

Exclusion and Exclusive Use in Patent Law, 22 Harv.

J. L. & Tech. 321, 343—45 (2009) (discussing the text

and legislative history of § 261 as “codifyling! the case

law reaching back to the carly American Republic that

patents are property rights”).

4

Respondent and its supporting amc? will likely

argue that the public (or its delegated agents in the

government) has an interest in the validity of a patent

given that it is a property right granted and secured

under federal law, and that this interest is sufficient

to classify it as a “public right” on par with other

modern regulatory entitlements. See MCM Portfolio,

812 F.3d at 1292-93 (citing only modern

administrative law cases). But this assertion proves

too much; it is a truism about all private rights. As

James Madison recognized in The Federalist No. 43,

“the copyright of authors had been solemnly adjudged,

in Great Britain, to be a right of common law,” and

that the “right to useful inventions seems with equal

reasun to belong to the inventors.” The Federa/ist No.

43, at 271-72 (James Madison) (Clinton Rossiter ed.,

1961). As with all private rights, such as the rights to

liberty, property, and contract, Madison concluded

that “the public good fully coincides in both |patents

and copyrights}! with the claims of individuals.” Jad at

272.

Any appeal to a highly generalized “innovation

policy” goal in the patent system is not a coherent

ground in policy or law for defining an entire class of

private property rights as “public rights.” First, it

directly contradicts the weight of this Court’s

longstanding decisions to the contrary, holding that

patents are private property rights. Second, it

contradicts this Court’s recent discussion in Stern vy.

Marshali, 131 8S. Ct. 2594, 2612 (2011), that the

“public rights exception” does not apply to matters of

5

“private right, that is, of the liability of one individual

to another under the law as defined” (quoting Crowe//

v. Benson, 285 U.S. 22, 50 (1932)). In their alienation

in the marketplace (via license or assignment) and in

their enforcement, patents are quintessential

property rights in which rights and liabilities cxist

solely between individuals “under the law as defined.”

Id. The fuct that patents are uniquely federal property

rights, whereas most other “property interests are

created and defined by state law,” Butner v. United

States, 440 U.S. 48, 55 (1979), is a distinction without

a difference under this Court’s binding case law

reaching back to the early American Republic.

The Federal Circuit’s decision in this case directly

conflicts with both modern and long-established

decisions on the constitutional protection of patents as

private property rights. The result of this

contradiction with this Court’s jurisprudence on

patents has a far-reaching, negative impact for the

protection of all “exclusive property” under the

Constitution. James, 104 U.S. at 358. The Court

should reaffirm expressly its extensive case law that

patents are private property rights, which are secured

as such under the Constitution, and reverse the

Federal Circuit’s contrary decision.

6

ARGUMENT

I. SINCE THE EARLY AMERICAN REPUBLIC, THIS

COURT AND LOWER FEDERAL CouRTS HAVE

DEFINED PATENTS AS PRIVATE PROPERTY RIGHTS.

This court unequivocally defined patents as

property rights in the early American Republic. In

1824, for instance, Justice Joseph Story wrote for a

unanimous Supreme Court that the patent securcs to

an “Inventor... 4a 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.” Ex parte Wood, 22 U.S. (9

Wheat.) 603, 608 (1824). In deciding patent cases

while riding circuit, Justice Story explicitly relied on

real property case law as binding precedent in his

opinions.” Justice Story was not an outlier, as many

Justices and judges repeatedly used common-law

property concepts in patent cases, such as defining a

2. See, e.x., Brooks v. Byam, 4 F. Cas. 261, 268-70 (C.C_D. Mass.

1843) (No. 1,948) (Story, Circuit Justice) (anulogizing a patent

license to “a right of way granted to a man for him and his

domestic servants to pass over the grantor’s land,” citing a litany

of real property cases and commentators at common law, such as

Lord Coke's Institutes, Coke's Littleton, Viner’s Abridgment, and

Bacon's Abridgement); Dobson v. Camphbcil, 7 F. Cas. 783, 785

(C.C.D. Me. 1833) (No. 3,945) (Story, Circuit Justice) (relying on

real property equity cases in which “feoftment is stated without

any averment of livery of seisin” in assessiiig validity of patent

license).

7

patent as a “title” in an invention,* identifying patent

infringement as a “trespass,”* and referring to

infringement of a patent as “piracy.”®

3. See, e.g., Carr v. Rice, 5 F. Cas. 140, 146 (C.C.S.D.N.¥. 1856)

(No. 2,440) (noting that “assignees [of a patent] become the

owners of the discovery, with a perfect title,” and thus “(patent

interests are not distinguishable, in this respect, from other

kinds of property”); Hovey v. Henry, |2 F. Cas. 603, 604 (C.C_D.

Mass. 1846) (No. 6,742) (Woodberry, Circuit Justice) (instructing

jury that “laln inventor holds a property in his invention by as

good a title as the farmer holds his farm and flock”).

4, See, eg., Goodyear Dental Vulcanite Co. v. Van Antwerp, 10

F. Oas. 749, 750 (C.C.D.NJ. 1876) (No. 5,600) (stating that

patent infringement is equivalent to a “trespass” of horse

stables); Burleh Rock-Drill Co. v. Lobdell, 4 F. Cas. 750, 751

(C.C.D. Mass. 1875) (No. 2,166) (noting that the defendants

“honestly believled] that they were not trespassing upon any

rights of che complainant”); Livingston v. Jones, 15 F. Cas. 669,

674 (C.C.W.D. Pa. 1861) (No. 8,414) (rev'd by Jones v. Morchead,

68 U.S. 155 (1863)) (accusing defendants of having “made large

gains by trespassing on the rights of the complainants”);

Eastman v. Bodfish, 8 F. Cas. 269, 270 (C.C.D. Me. 1841) (No.

4,255) (Story, Circuit Justice) (comparing evidentiary rules in a

patent infringement case to evidentiary rules in a trespass

action).

5. See, e.g., Pennock v. Dialogue, 27 U.S. (2 Pet.) 1, 12 (1829)

(Story, J.) (recognizing that “if the invention should be pirated,

(this} use or knowledge, obtained by piracy” would not prevent

the inventor from obtaining a patent); Batten v. Silliman, 2 F.

Cas. 1028, 1029 (C.C.1E.D. Pa. 1855) (No. 1,106) Gecrying

defendant's “pirating an invention”); Buck v. Cobb, 4 F. Cas. 546,

547 (C.C.N.1).N.Y. 1847) (No. 2, 079) (recognizing goal of patent

laws in “securlingl to inventors the rewards of their genius

against the incursions of pirates”); Dobson, 7 F. Cas. at 785

8

This Court explained in its unanimous decision in

Pennock v. Dialogue, 27 U.S. (2 Pet.) 1, 18 (1829), that

a patent is a “title” and thus an act of invention before

an application for a patent is “like an inchoate right to

land, or an inceptive right to land, wel] known in some

of the states, and every where accompanied with the

condition, that to be made available, it must be

prosecuted with due diligence, to the consummation

or completion of the title.” Similarly, in Cayler v.

Wilder, 51 U.S. (10 How.) 477, 493 (1850), this Court

recognized “the discoverer of a new and useful

improvement is vested by law with an inchoate right

to its exclusive use, which he may perfect and make

absolute by proceeding in the manner which the law

requires. [The inventor! possessed this inchoate right

at the time of the assignment [to Enos Wilder].”

The Gayler Court’s use of the common law

property concept of an “assignment” is significant, /d.,

because it further confirms the extent to which this

Court and lower courts in the early American

Republic defined patents as private property rights.

This Court and lower courts expressly incorporated

real property concepts from the common law in

creating conveyance doctrines in patent law. For

ee

(concluding that patent-assignee has been injured by “the piracy

of the defendant”); Grant & Townsend v. Raymond, 10 F. Cas.

485, 985 (C.C.S.D.N.Y. 1829) (No. 5,701) (noting that the

patented machine had “been pirated” often); Earle v. Sawyer, 8

F. Cas. 254, 258 (C.C_D. Mass. 1825) (No. 4,247) (Story, Circuit

Justice) (instructing jury that an injunction is justified by

defendant's “piracy by making and using the machine”).

9

instance, in (otter v. IJvlland, 19 ¥. Cas. 1154 (C.C.

Conn, 1858), Justice Story, riding circuit, surveyed in

extensive detail how the common law real property

doctrines of “assignment” and “license” had been

applied in U.S. patent law in defining the nature of

the legal interest that a patent owner conveys to a

third party. See id. at 1156-57 (stating that “lan

ussignment, as understood by the common law, is a

parting with the whole property,” and that a license is

a “less or different interest than ... the interest in the

whole patent”). See also Moore v. Marsh, 74 U.S. (7

Wall.) 515, 520 (1868) (“An assignee is one who holds,

by a valid assignment in writing, the whole interest of

a patent, or any undivided part of such whole interest,

throughout the United States.”); Suydam v. Day, 23 F.

Cas. 473, 474 (C.C.S.]).N.Y. 1845) (distinguishing

between “an assignee of a patent [who] must be

regarded as acquiring his title to it, with a right of

action in his own name,” and “an interest in only a

part of each patent, to wit, a license to use”).

Federal courts from the early American Republic

to the late nineteenth century consistently alfirmed

that “the [patent] right is a species of property,” A//en

v. New York, 1 F. Cas. 506, 508 (C.C.S.D.N.Y. 1879)

(No. 232), and thus infringement is “an unlawful

invasion of property,” Gray v. /ames, 10 F. Cas. 1019,

1021 (C.C.D. Pa. 1817) (No. 5,719).§ As Cireuit Justice

ee

6. See also Bal/ v. Withington, 2 F. Cas. 556, 557 (C.C.S.D, Ohio

1874) (No. 815) (noting that patents are a “species of property”):

Carew v. Boston Elastie Fabric Co., 5 ¥. Cas. 56, 57 (C.C.D. Mass.

1871) (No. 2,398) (explaining that “ihe rights conferred by the

10

Levi Woodbury explained in 1845: “we _ protect

intellectual property, the labors of the mind, ... as

much a man’s own, and as much the fruit of his honest

industry, as the wheat he cultivates, or the flocks he

rears.” Davoll v. Brown, 7 F. Cas. 197, 199 (C.C.D.

Mass. 1845) (No. 3,662).

Il. Tris Court HAS PROVIDED CONSTITUTIONAL

PROTECTION TO PATENTS AS PRIVATE PROPERTY

RIGHTS FOR TWO HUNDRED YEARS.

The substantial early nineteenth-century case law

that patents are private property rights is directly

relevant to this case, because it underscores the

uncontroversial, unanimous decision by this Court in

McClurg v. Kingsland, 42 U.S. (1 How.) 202, 206

(1843), that the Constitution pruhibits Congress from

retroactively abrogating vested property rights in

patents. In that case, the question was whether a

patent that had issued under a subsequently repealed

provision of the patent statute was still valid. The

patent law, being property, have the incidents of property”);

Lightner v. Kimball, 15 ¥. Cas. 518, 519 (C.C.D. Mass. 1868) (No.

8,345) (noting that “every person who intermeddles with a

patentee's property . . . is liable to an action at law for damages”);

Ayling v. Hull, 2 F. Cas. 271, 273 (C.C.D. Mass. 1865) (No. 686)

(discussing the “right to enjoy the property of the invention”);

Hayden v. Suffolk Mfg. Co., 11 F. Cas. 900, 901 (C.C.D. Mass.

1862) (No. 6,261) (instructing jury that a “patent right,

gentlemen, is a nght given to a man by law where he has a valid

patent, and, as a legal right, is just as sacred as any right of

property”); Gay v. Cornel/, 10 F. Cas. 110, 112 (C.C.S.D.NLY.

1849) (No. 5,280) (recognizing that “an invention is, within the

contemplation of the patent laws, a species of property”).

1]

unanimous opinion states bluntly that “a repeal [of a

patent statute] can have no effect to impair the right

of property then existing in a patentee, or his

assignee, according to the well-established principles

of this court.” Jd. In sum, a patent issued to an

inventor creates vested property rights, and “the

patent must therefore stand” regardless of Congress's

subsequent repeal of the particular statute under

which the patent originally issued. /d. The McClurg

Court emphasized that its decision was based on the

“well-established principles of this court” that

constitutional security is provided to vested property

rights in patents. /d.

Further confirming the legal status of patents as

private property rights, the McClurg Court continued

the practice of citing rea/ property cases as precedent

for defining and securing property rights in patents.

See id. (citing Society for the Propagation of the

Gospel in Foreign Parts v. New Haven, 21 US. @

Wheat.) 164 (1823), which addressed the status of

property rights in land under the treaty that

concluded the Revolutionary War). In relying on such

“well established principles” set forth in Society, the

McClurg Court. removed any doubt that might have

existed in 1843 that patents are on par with private

property rights in land as a matter of constitutional

doctrine.

The 174-year-old legal rule in McClurg that

patents are private property rights secured under the

Constitution has never been reversed or limited. This

12

is confirmed by the holding (and substantial

supporting citations) in McCormick Harvesting Mach.

Co. vy. C. Aultman & Co., 169 U.S. 606 (1898), that

once a patent is issued to an inventor “lilt has become

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

the same legal protection as other property.” /d. at

609. The Federal Circuit's decision in this case, and in

prior cases in which it has explicitly asserted that

patents are only “public rights,” cannot be reconciled

with this long-established rule. See, eg, MCM

Portfolio LLC, 812 F.3d at 1293; Cascades Projection

LLC v. Epson America, Inc., 864 ¥.3d 1309 (Fed. Cir.

2017) (Reyna, J., dissenting from denial of rehearing

en banc) (critiquing the Federal Circuit’s view from

MCM Portfolio and in many follow-on decisions that

patents are “public rights”).

Like McClurg, the McCormick Court’s decision in

1898 was not an outlier. In the late nineteenth

century, this Court and lower federal courts built

upon the precedents in McClurg and many other

similar decisions in consistently holding that patents

are private property rights secured under the

Constitution. See, e.g., United States v. Burns, 79

U.S. 246, 252 (1870) (stating that “the government

cannot, after the patent is issued, make use of the

improvement any more than a private individual,

without license of the inventor or making

compensation to him”); Cammeyer v. Newton, 94 U.S.

225, 234 (1876) (holding that a patent owner can seek

compensation for the unauthorized use of his patented

invention by federal officials because “(plrivate

13

property, the Constitution provides, shall not be taken

for public use without just compensation”); McKeever

v. United States, 14 Ct. Cl. 396 (1878) (rejecting the

argument that a patent is a “grant” of special

privilege, because the text and structure of the

Constitution, as well as court decisions, clearly

establish that patents are private property rights).

In Cammeyer, for example, this Court expressly

rejected an argument by federal officials that a patent

was merely a public grant by the sovereign and thus

they could use it without authorization. Citing the

Takings Clause, the Cammeyer Court stated that

“lalgents of the public have no more right to take such

private property than other individuals.” /d. at 234-

35 (emphasis added). "hus, the Cammeyer Court held

that the Constitution protects patent owners against

an “invasion of the private rights of individuals” by

federal officials. Jd. at 235 (emphasis added).

This Court again expressly affirmed that patents

are private property rights in its summary affirmance

of McKeever v. United States, 14 Ct. Cl. 396 (1878), in

which the Court of Claims held that patents are

secured under the Takings Clause as “private

property” against unauthorized uses by government

officials. See Russell] v. United States, 182 U.S. 516,

531 (1901) (stating that McKeever was “affirmed on

appeal by this court”); United States v. Buffalo Pitts

Co., 234 U.S. 228, 233 (1914) (citing McKeever and

stating “affirmed by this court”). The McKeever

court’s wide-ranging, historical analysis of why U.S.

14

patents are “private property,” as opposed to the

English definition of a patent as a “grant” that issues

by “royal favor,” McKeever, 14 Ct. Cl. at 417-19,

makes even more clear the profound contradiction in

the Federa] Circuit’s contrary conclusion that patents

are “public rights.”

Contrary to the English view of patents as solely

legal tools of governmental economic policy, the U.S.

clearly and definitively recognized that American

patents secured the “property in the mind-work of the

inventor,” za., as specifically authorized under the

Patent and Copyright Clause in the Constitution. U.S.

Const. art. I, § 8, cl. 8 (authorizing Congress in

“securing” the “exclusive Right” to “Inventors”.

The McKeever court’s opinion reflects now-classic

textualist and uriginal public meaning analysis. First,

it analyzed the text of the Patent and Copyright

Clause as evidence of this fundamental difference

between the English Crown’s persona/ privilege and

the American private property right. The court

explained that the language in this constitutional

provision—the use of the terms “right” and

“exclusive, the absence of the English legal term

“patent,” and the absence of any express reservation

in favor of the government—established that the

private property rights in an American patent were

not on the same lIegal footing as the personal

privileges in a patent granted by the English Crown.

McKeever, 14 Ct. Cl. at 421. The Court further

observed that this conclusion was buttressed by the

15

fact that the Framers empowered Congress, not the

Executive, to secure an inventor's rights—placing this

constitutional provision in Article I, not in Article II—

which suggested they viewed patents as important

private property rights secured by the people's

representatives, not as a special grant issued by the

prerogative of the Executive. /@ Although the

Framers did not state their reasons for securing

patents in the Constitution, the McKeever court

concluded that they “had a clear apprehension of the

English law, on the one hand, and a just conception,

on the other, of what one of the commentators on the

Constitution has termed ‘a natural right to the fruits

of mental labor.” /d. at 420.°

Second, the McKeever court canvassed the federal

government's interpretation of the Patent and

Copyright Clause in the 100 years since the Founding

Era, finding again that patents protected private

7. The phrase “a natural right to the fruits of mental labor”

invokes the classic formulation of the natural nghts justification

for property. See, ¢.g., Vanhorne’s Lessee v. Dorrance, 2 U.S. (2

Dall.) 304, 310 (1795) (Patterson, J.) (“(The right of acquiring

and possessing property, and having it protected, is one of the

natural, inherent, and unalienable rights of man. ... No man

would become a member of a community, in which he could not

enjoy the fruits of his honest labour and industry.”), ‘lhe

MeKeever court did not cite a source for this quote, but it may

have been paraphrasing from a recently published treatise. See

Theodore D. Woolsey et al., The First Century of the American

Hepublic 443 (1876) (discussing how inventors are given “some

control over the reproductions of the fruits of mental labor . . . in

addition to the natural right te property”).

16

property rights, not special grants of privilege that

served only governmental policy goals. Accordingly,

Congress’s enactment of the patent statutes, the

Executive’s use of patented articles via “express

contracts,” and the Judiciary’s interpretation and

enforcement of these statutes and contracts all “forbid

the assumption that this government has ever sought

to appropriate the property of the inventor.” /d.

Throughout its opinion, McKeever repeatedly cited

this Court’s decisions in Cammeyer, Burns and

McClurg—Supreme Court cases holding that the

Takings Clause protects a patent as “private

property.”

Underlying the Federal Circuit’s decision in this

cuse and in many other cases denying patent owners’

claims that the PTAB violated their rights of due

process and constitutional doctrines like the

separation of powers is the Federal Circuit’s wrong

assertion that “patent rights are public rights,” 4CM

Portfolio LLC, 812 F.3d at 1293.5 In saying this, the

8. To reach this mistaken conclusion, the MCM Portfolto court

relied solely on two nun-patent law, administrative agency cases.

812 F.3d at 1292-93. These two modern cases address solely

creatures of modern administrative statutes—procedural

entitlements solely created in and adjudicated by modern

regulatory regimes. See, e.g., AUas Roofing Co. v. Occupational

Safety & Health Review Comm'n, 430 U.S. 442, 442-443 (1977)

(addressing procedural rights within the administrative regime

created by the Occupational Safety and Health Act of 1970); 7ud/

v. United States, 481 U.S. 412, 425-427 (1986) (addressing

procedural rights within the administrative regime created by

the Clean Water Act of 1972). Modern decisions by this Court

17

Federal Circuit directly contradicts the longstanding

jurisprudence of this Court. This Court should reverse

the Federal Circuit given its ahistorical argument

based entirely in modern administrative law that

patents are “public rights.” The Federal Circuit is

wrong; its decision in this case and prior cases conflict

with the decisions handed down by this Court in the

early American Republic and repeatedly sustained for

over two-hundred years that patents are private

property rights. See Gregory Dolin & Irina D. Manta,

Taking Patents, 73 Wash. & Lee L. Rev. 719 (2016)

(relying on this historical case !aw in applying modern

takings jurisprudence to conclude that the PTAB

effects a constitutional taking of a patent owner's

private property).

Ill. THis CourRT RECENTLY REAFFIRMED THAT

PATENTS ARE PRIVATE PROPERTY RIGIITS

SECURED UNDER THE CONSTITUTION.

This Court’s modern decisions are in accord with

the long-standing legal principle that patents are

private property rights that are secured under the

Constitution. Two years ago in Horne v. Department

of Agriculture, 135 S. Ct. 2419, 2427 (2015) (Roberts,

C.J.), this Court approvingly quoted one of its

decisions in 1882 that “la patent] confers upon the

patentee am exclusive property in the patented

addressing regulatory entitlements arising in the administrative

slate are distinct from the constitutionally protected private

property rights in patents long recognized by this Court and by

Circuit Courts for over two hundred years.

18

invention which cannot be appropriated or used by the

government itself, without just compensation, any

more than it can appropriate or use without

compensation land which has been patented to a

private purchaser” (quoting James v. Campbell, 104

U.S. 356, 358 (1882)). Notably, sixteen years after the

James decision, the McCormick Court cited it in 1898

along with numerous other decisions by this Court as

precedent for the same proposition:

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 office .... It hes become the

property of the patentee, and as such is

entitled to the same legal protection as other

property.

McCormick, 169 U.S. at 608-09 (citing ames and

other cases, including Cammeyer). The legal rule

reaffirmed two years ago in Horne—patents are

private property mghts secured under the

Constitution—is settled doctrine with a provenance in

an unbroken line of decisions by this Court reaching

back to the early American Republic.

The Horne Court’s reaffirmation of this legal rule

was similarly confirmed nineteen years ago by this

Court when it held that patents are private property

rights secured under the Due Process Clause of the

Fourteenth Amendment. See Fila. Prepaid

19

Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank,

527 U.S. 627 (1999) (holding that patents are private

property rights secured under the Due Process Clause

of the Fourteenth Amendment).

To reverse the Federal Circuit in this case would

not be the first time this Court has stopped the

Federal Circuit in ignoring settled legal doctrine. In

2002, this Court warned the Federal Circuit in Festo

Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535

U.S. 722 (2002), that it must respect “the legitimate

expectations of inventors in their property” and thus

it cannot abrogate legal doctrines that have existed

since the early nineteenth century. /d. at 739. In

Festo, this Court brought an end to a decade-long

attempt by the Federal Circuit to abrogate the

longstanding infringement doctrine known as the

doctrine of equivalents. /d. ‘The doctrine of equivalents

is based in this Court's case law reaching back to the

Antebellum Era, see, c.g, Winans v. Denmead, 56

U.S. (5 How.) 330 (1853), just like the settled

constitutional doctrine that patents are private

property rights. As Chief Justice John Roberts stated

in eBay Inc. v. MercExchange. L.L.C., 1268. Ct. 1837

(2006), nineteenth-century patent law should be

accorded significant weight by modern courts in

securing the property rights in patents. /d. at 1841-

A2 (Roberts, C.J., concurring).

CONCLUSION

lor the foregoing reasons, amici urge this Court to

reverse the Federal Circuit and affirm the

20

longstanding rule in patent law and constitutional

law that patents are private property rights secured

under the Constitution.

Respectfully submitted,

Adam Mossoff SEAN D. JORDAN

Antonin Scalia Law School Counsel of Record

GEORGE MASON ADAM W. ASTON

UNIVERSITY JACKSON WALKER L.L.P.

3301 Fairfax Drive 100 Congress Avenue

Arlington, VA 22201 Suite 1100

Austin, TX 78701

sjordan@j w.com

(512) 236-2281

August 31, 2017

APPENDIX A — FULL LIST OF AMICl CURIAE*

Daniel R. Cahoy

Professor of Business Law

Smeal College of Business

Penn State University

David L. Callies

Benjamin A. Kudo Professor of Law

William S. Richardson Schoo] of law

University of Hawaii at Manoa

Kric R. Claeys

Professor of Luw

Antonin Scalia Law School

George Mason University

Gregory Dolin

Associate Professor of Law

University of Baltimore School of Law

James W. Ely, Jr

Milton R. Underwood Professor of Law, Emeritus

Vanderbilt University Law School

* Institutions of all signatories are for identification purposes

only. The undersigned do not purport to speak for their

institutions, and the views of amici should not be attributed to

these institutions

A°2

Richard A. Epstein

Laurence A. Tisch Professor of Law,

New York University School of |.aw

James Parker Hall Distinguished Service Professor

of Law Emeritus,

University of Chicago Law School

Eric M. Freedman

Siggi B. Wilzig Distinguished Professor of

Constitutional Rights

Maurice A. Deane Schoo! of law

Hofstra University

Matthew P. Harrington

Professeur titulaire

Faculté de droit

Université de Montréal

Hugh Hansen

Professor of law

Fordham University Schoo! of Law

Chris Holman

Professor of Law

UMKC School of Law

Joseph G. Hylton

Professor of Law

Marquette University Law School

A-3

Justin (Gus) Hurwitz

Assistant Professor of Law

University of Nebraska College of Law

Keith N. Hylton

William Fairfield Warren Distinguished Professor

Boston University School of Law

Layne Keele

Associate Professor of Law

Thomas Goode Jones School of Law

Faulkner University

Gary S. Lawson

Philip S. Beck Professor of Law

Boston University School of Law

Enka Lietzan

Associate Professor of Law

University of Missouri School of Law

Adam MacLeod

Associate Professor of Law

Thomas Goode Junes School of Law

Faulkner University

Irina D. Manta

Professor of Law

Maurice A. Deane School of Law

Hofstra University

A-4

Adam Mossoff

Professor of Law

Antonin Scalia Law Schoo!

George Mason University

Lateef Mtima

Professor of Law

Howard University School of Law

Sean M. O’Connor

Professor of Law

University of Washington School of Law

David Orozco

Associate Professor of Lega! Studies

College of Business

Florida State University

Kristen Osenga

Professor of Law

University of Richmond School of Law

Michael Risch

Professor of Law

Charles Widger School of Law

Villanova University

Mark Schultz

Professor of Law

Southern I]linois University School of Law

A-5

David O. Taylor

Associate Professor of Law

SMU Dedman Schoo! of Law

Saurabh Vishnubhakat

Associate Professor of Law

Texas A&M University School of Law