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For many decades the U.S. Supreme Court has grappled with the constitutional issues that arise when a federal institution other than an Article III court makes a decision based on the application of law to fact, where that institution’s conclusion will not be subject to de novo consideration in an Article III tribunal.8 The Court under Chief Justice Marshall discussed the status of the courts of the federal territories, which functioned much like state courts but many of which did not have life-tenured judges.9 The problem of adjudication outside the Article III courts continued to come before the Court.10 In 1982, in Northern Pipeline Co. v. Marathon Pipe Line Co., 11 the Court considered the constitutionality of the bankruptcy courts that Congress had established in the Bankruptcy Reform Act of 1978. The judges of those courts did not serve for life, and the courts were authorized to decide a wide range of issues subject to only limited review by Article III courts.12 Northern Pipeline involved a claim under state law, not a question of federal bankruptcy law. Northern Pipeline had filed for bankruptcy reorganization and, as allowed by the Bankruptcy Act, brought a proceeding in the bankruptcy court against Marathon Pipe Line, seeking damages for breach of contract, warranty, misrepresentation, coercion, and duress.13 The Court concluded that Article III barred that jurisdiction but produced no opinion for the majority.

Speaking for four of the Justices in the majority, Justice Brennan sought to find the pattern in the Court’s precedents. The United States, as amicus curiae in support of the Act’s constitutionality, had argued that under the Court’s cases, “pursuant to its enumerated Article I powers, Congress may establish legislative courts that have jurisdiction to decide cases to which the Article III judicial power of the United States extends.”14 According to the Solicitor General, that power included specialized areas such as bankruptcy law.15 Justice Brennan responded that “when properly understood, these precedents [relied on by the Solicitor General] represent no broad departure from the constitutional command that the judicial power of the United States must be vested in Art. III courts.”16 Instead, “they reduce to three narrow situations not subject to that command, each recognizing a circumstance in which the grant of power to the Legislative and Executive Branches was historically and constitutionally so exceptional that the [assertion of congressional power] was consistent with, rather than threatening to, the constitutional mandate of separation of powers.”17 Two of those narrow, exceptional situations involved territorial courts and courts-martial.18 The third, and the subject of current controversy and this Article, were cases “in which [the] Court has upheld the constitutionality of legislative courts and administrative agencies created by Congress to adjudicate cases involving ‘public rights.’”19.

The case hinged on whether patents are considered 'public rights' or 'private rights.' This distinction is important because, generally, 'Congress [has] significant latitude to assign adjudication of public right to entities other than Article III courts.' Public rights cover matters '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.' In this case, Justice Thomas, on behalf of a seven-justice majority, wrote that, notwithstanding a lack of clarity over the distinction between public and private rights jurisprudence, 'Inter partes review falls squarely within the public rights doctrine.' Citing hundred-year-old authority, the Court first concluded that 'the grant of a patent is a matter involving public rights' because it is a public franchise that is given to the patentee by the government on behalf of the public. The Court then determined that 'Inter partes review involves the same basic matter as the grant of a patent. So it, too, falls on the public-rights side of the line.' The fact that an IPR takes place after the patent has been granted is a 'distinction that does not make a difference here.' That is because 'Patent claims are granted subject to the qualification that the PTO has the authority to examine—and perhaps cancel—a patent claim in an inter partes review.' The Court distinguished three cases relied on by the patent owner suggesting that patents are private property. Responding to a case suggesting that patent rights are 'private property of the patentee,' the Court held that patent property is a public franchise, which is entitled to all of the rights and statutory conditions of the grant of a public franchise. The Court also concluded that the fact that the PTAB uses terms of the judiciary, such as 'trial,' 'judges,' and 'judgment' is not dispositive of whether the agency is exercising judicial power. The Court also held that IPRs do not violate the Seventh Amendment right to trial by jury. Rather, 'when Congress properly assigns a matter to adjudication in a non-Article III tribunal, the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.' Importantly, the Court emphasized that its holding was 'narrow,' and that it was not resolving many issues concerning the constitutionality of IPRs. For example, it was not addressing 'the retroactive application of inter partes review' where 'that procedure was not in place when [the] patent issued.' It also stated that it was not addressing due process concerns. These two caveats to the Court's decision are assuredly going to receive attention in future litigation, particularly given the Court's reliance on the fact that patents are now granted subject to the IPR process. Justices Breyer, Ginsburg, and Sotomayor issued a one-paragraph concurrence, emphasizing that even private rights may be subject to agency disposition. Justice Gorsuch dissented, in an opinion joined by Chief Justice Roberts. Opinion can be found here[1] SAS Institute Inc. v. Iancu, et al., Appeal No. 16-969 (U.S. 2018) In this parallel case, argued the same day as Oil States Energy, the Supreme Court held that the final written decision in any inter partes review must address all claims challenged by the petitioner in the Petition. This case undoubtedly will require an adjustment to Patent Office procedures for future IPRs. Petitioner SAS challenged a number of claims in a petition for an IPR. The PTAB instituted review on some, but not all of the claims. The Board ultimately found that all of the instituted claims, except for one, were unpatentable over the prior art. SAS appealed the decision not to institute an IPR on other claims challenged in the Petition. The Federal Circuit affirmed on that issue. SAS then appealed to the Supreme Court. In an opinion written by Justice Gorsuch, the Supreme Court reversed, holding that, if the Patent Office institutes review at all, it must institute review on all claims, and must issue a final written decision with respect to all claims challenged in the Petition. Justice Gorsuch pointed to 35 U.S.C. 318(a), which states that the Patent Office 'shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner' (emphases added). Applying canons of statutory construction, the Court found this to mean that 'the Board must address every claim the petitioner has challenged' in its Final Written Decision (emphasis in original). The Court further found that the statute authorizing inter partes review is unambiguous on this point. Notably, the Court did not address whether PTAB must institute review on all asserted grounds, but instead focused on the necessary review of all challenged claims. That could be a significant issue as the PTAB has routinely instituted IPRs based on some grounds and denied other grounds at the institution stage as redundant or not raising a significant enough question of patentability. It remains for future courts to determine whether the Supreme Court's decision in SAS will be extended to require the PTAB to address all challenged grounds in final decisions, as well as all challenged claims. In reaching its conclusion, the Court undertook a review of the statutory provisions enabling inter partes reviews, and concluded that Congress envisioned an adversarial process bounded by the Petition, not by PTO's or the Director's discretion. The Court also held that any policy arguments favoring partial review were properly directed to Congress, and not to the Court. The Court also found that its decision was not precluded by 35 U.S.C. 314(d)'s admonition that decisions whether to institute are 'final and nonappealable,' as Congress did not signal a clear intent to foreclose review of whether the PTO had exceeded its statutory bounds. In one of two dissents, Justices Ginsberg, Breyer, Sotomayor and Kagan issued a one-paragraph opinion that the law does not appear to preclude PTO from outright rejecting Petitions containing weak challenges, and then instituting review on a subsequently-narrowed Petition. They characterized partial institution as a 'more rational way to weed out insubstantial challenges,' and argued that the majority would thus needlessly require PTO to either iteratively winnow petitions, or preside over wasteful litigation, in service to a 'wooden reading' of 318(a). Justices Breyer, Ginsburg and Sotomayor issued a more detailed dissent, which Justice Kagan joined in most parts. Applying a comprehensive review of the enabling statute, this dissent disagreed that 318(a)'s reference to 'any patent claim challenged by the petitioner' necessarily means 'challenged in the original petition,' and could just as easily refer to claims remaining challenged in the IPR itself, such as after Patent Owner cancellation or settlement. Given this ambiguity, Justice Breyer concluded that the 'partial institution' power was entitled to deference under Chevron. Opinion can be found here[2] [ 1]: https://communications.schwabe.com/email_handler.aspx?sid=df2583df-9d09- 4f0c-ae43-559e78ff5f82...irect=https%3a%2f%2fwww.supremecourt.gov%2fopinions%2f17pdf%2f16-712_87ad.pdf [ 2]: https://communications.schwabe.com/email_handler.aspx?sid=df2583df-9d09-4f0c-ae43- 559e78ff5f82...irect=https%3a%2f%2fwww.supremecourt.gov%2fopinions%2f17pdf%2f16-969_f2qg.pdf

Comments submitted by the open-source community highlight the need for accessible PTAB review in order to promote new, accessible software innovation:

“...Open source projects and their maintainers are uniquely vulnerable to attack by hostile parties such as patent trolls (sometimes called “non-practicing entities”) and companies rent-seeking over so-called standard-essential patents. The projects and their non-profit fiduciary hosts are not of a scale to be able to manage the usual defenses of large corporations, while the individuals themselves may seem worthwhile targets for avaricious litigators. When a project faces a patent attack, it is thus frequently defended by others as a matter of civic duty.

The USPTO and Congress have both expressed a desire to make changes that serve the best interests of SMEs, small inventors, and under-resourced entities. As the public comments make clear, any new standing requirements that restrict access to the PTAB would have the opposite effect. 

The following comments emphasize the threat that standing requirements pose to SMEs: 

The PTO has many tools at its disposal in granting patents and providing oversight to our patent system—a system intended to reward genuinely new inventions. However, today’s patent system has become less an engine for real invention than a tool for companies, investors, and their lawyers to exploit using sophisticated legal and marketing tricks under the guise of that most nebulous of terms: “innovation.” The quest for ever-longer monopolies too often comes at the cost of people’s lives—the stakes are too high to keep tolerating it.

Restoring the patent system to one that prioritizes genuinely new inventions will require unlearning belief systems and policies from the past 40 years that have led us to this precipice. In the short term, however, there is clear evidence to support immediate changes that could greatly improve the quality of patents.

PTAB has also been increasingly cautious about whether to institute trials in the first place. Since the beginning of IPR, the rate at which the PTO institutes trials in response to petitions is significantly lower than it was under IPX and it has been declining: In 2016, it was at 67 percent, down from 87 percent in the first year of IPR and roughly 90 percent under the IPX regime.

Standing

The U.S. patent system gives inventors a 20-year exclusive right to their inventions to incentivize the creation of new technologies.

But what if you have a great idea for a new technology, but never actually create it, test it, or determine that it works? Is that patentable? Conversely, should the U.S. Patent and Trademark Office (PTO) grant patents covering imaginary, fraudulent and otherwise non-existent inventions? Probably not, but it happens with alarming frequency, and it is causing serious problems.

In Loper Bright Enterprises v. Raimondo, the Supreme Court expressly overruled Chevron USA Inc. v. Natural Resources Defense Council, Inc. This landmark 6-3 ruling ends nearly 40-years of Chevron deference, the doctrine of deferring to an agency's interpretation of allegedly ambiguous statutory language. Instead, courts will now exercise independent judgment over statutory interpretation traditionally under the purview of agencies. This ruling will increase the opportunities for regulated companies to challenge agency rules, including in proceedings before the Patent Trial and Appeal Board (PTAB) and the International Trade Commission (ITC). The ruling also calls into question the powers courts will have to make judgments in the fields of science and tech (including A.I.).

In a landmark decision issued on Friday, June 28, 2024, the Supreme Court in Loper Bright Enterprises v. Raimondo overruled a prior cornerstone holding of agency law—called Chevron deference—that a court must defer to agency action with respect to an ambiguous statute.

This decision will have ramifications in virtually all areas of administrative law, not the least of which includes regulations promulgated by the United States Patent and Trademark Office. As explained below, the end of Chevron deference gives rise to many new potential challenges against existing rules governing post grant proceedings (inter partes reviews and post grant reviews) before the Patent Trial and Appeal Board.

The Idea That People Challenging Patents Are Abusing The System Is Absurd

The rules create an upside-down world in which people who work to challenge patents are treated as the abusers of the system, rather than the patent trolls they’re up against. For instance, the rules would punish groups that file “serial petitions” or “parallel petitions” by simply denying them access to the PTAB. It also creates new rules denying petitions “to ensure that certain for-profit entities do not use the [] processes in ways that do not advance the mission and vision of the Office to promote innovation.”

In 1991, the introduction of the World Wide Web transformed the internet from a network of interconnected computers to an information system utilizing that network. In the intervening three decades, a handful of digital platform companies built upon that foundation to dominate internet services and soar to the top of the list of the world’s most valuable companies. Apple, Microsoft, Alphabet (Google), and Amazon are the four most valuable American companies and four of the top five most valuable companies in the world (Meta Platforms, the renamed Facebook, is number 10).

In a short period of time, these companies—collectively known as Big Tech—have leapt from an innovator’s idea to marketplace dominance and great wealth.

Earlier this month, Democratic Senator Elizabeth Warren solidified her party’s growing disenchantment with Big Tech by proposing to break up companies like Amazon, Google and Facebook. “Today’s big tech companies have too much power — too much power over our economy, our society and our democracy,” the 2020 presidential candidate wrote in a March 8th blog post. “They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.”

Clouding the issue of breaking up Big Tech is that these firms arguably make consumers’ lives better by offering such things as free Google searches, social media connections on Facebook and low prices with fast, free shipping through Amazon. But Warren argues that they are impeding competition by buying up or squashing smaller rivals — and ultimately harming consumers. She cited the antitrust lawsuit against Microsoft in the 1990s that tamed its ways and made room for an upstart — Google — to rise. “Aren’t we glad that now we have the option of using Google instead of being stuck with Bing?”

ARLINGTON, Virginia — China controls the market for most processed rare earth minerals, which are critical in manufacturing and developing key military and commercial technologies and systems, but the United States will not be able to end reliance on China through domestic production, experts and former officials said.

Out of the 50 critical raw minerals listed by the U.S. Geological Survey, 17 are considered “rare earths.” While there are abundant quantities of many of the elements, the process to extract just a few pounds of these minerals requires mining a large quantity of raw material, said Misha Glenny, rector of the Institute for Human Sciences in Vienna, during the Aspen Security Forum on July 20.

The recent article on the efficacies and impacts of national pandemic management strategies posed that there are various approaches to controlling the spread of the virulent virus.[1] Combinations of proven health protocol measures were identified. This author agrees to their findings but also gives additional insights on possible ways of human flourishing and ways to respond to challenges related to public health toward positive well-being.

Studies show that expressions of spirituality have contributed to great human flourishing in the midst of the COVID-19 pandemic.[2] Hart and Koenig described how religion made a difference during the challenging times of the pandemic as people and religious communities responded to stay healthy and alive. The role of religious involvement enhanced immune function and resilience against the coronavirus. It allowed individuals to stay mentally, socially, spiritually, and physically healthy during the COVID-19 pandemic.[3] In some regions, people utilized religion as a coping resource to find meaning and overcome the ordeals brought about by the pandemic.

The end of humanity is far more likely to be brought about by multiple factors, Kemp says—a pileup of disasters. Although apocalyptic movies often turn to viruses, bacteria and fungi to wipe out huge swathes of the population, a pandemic alone probably won't drive humanity to extinction simply because the immune system is a broad and effective defense, says Amesh Adalja, an infectious disease physician and senior scholar at the Johns Hopkins Center for Health Security. A pandemic could be devastating and lead to severe upheaval—the Black Death killed 30 to 50 percent of Europe's population—but it's unlikely that a pathogen would kill all of humanity, Adalja says. "Yes, an infectious disease could kill a lot of people," he says, "but then you're going to have a group [of people] that are resilient to it and survive."

Humans also have tools to fight back against a pathogen, from medical treatments to vaccines to the social-distancing measures that became familiar worldwide during the COVID pandemic, Adalja says. There is one example of a mammalian species that may have been entirely eliminated by an infectious disease, he says: the Christmas Island rat (Rattus macleari), also called Maclear's rat, an endemic island species that may have gone extinct because of the introduction of a parasite.

Pharmaceutical, Health Tech, and Other Health Care Organizations Spoke out in Opposition

A number of organizations in the pharmaceutical and health industries submitted comments in opposition to the substance of the ANPRM proposals, including Mylan Pharmaceuticals, Fresenius Kabi, Association for Accessible Medicines, Edwards Lifesciences, I-MAK, and Generation Patient.

Throughout the debate on the cost of prescription drugs, there has been much focus on how much we pay or reimburse for these treatments. Less public attention, however, has been devoted to addressing drugmakers’ gaming of drug patents, which directly impacts drug affordability.

That’s not to say that patent gaming hasn’t been the subject of policy discourse. The author of this post testified before the House Committee on Oversight and Reform in May of last year on the patent abuses AbbVie has used to build patent walls for Humira and Imbruvica, two of the best-selling drugs in the world. The Food and Drug Administration (FDA) sent a letter to the Patent and Trademark Office (PTO) on drug patents while, separately, members of the House and Senate Judiciary Committees sent a bipartisan, bicameral letter to the PTO on similar issues.

The potential reliance cost concern with the PTAB depends on two premises: that the patent owner made investments in reliance on patent protection and that those investments were diminished or rendered worthless by patent invalidation. As to the second premise, the patent owner’s investments may remain protected, even after patent invalidation, by the consequences of the first mover advantage conferred by the now invalidated patent, such as developed expertise, brand recognition, established distribution networks, customer loyalty, etc.116 Moreover, at least some of the costs incurred in reliance on patent protection (e.g., building manufacturing facilities or establishing distribution networks) may be transferable to other product lines or business pursuits.

As to the first premise, a fairly large number of patents invalidated in the PTAB are owned by non-practicing entities who only license and do not commercialize in a way that would generate significant reliance interests.117 More generally, the extent of costs incurred in reliance on patent protection will vary with the circumstances and industry.118 For example, inventions in computer-related fields tend to be commercialized before patent protection, and are often obsolete around the time that the patent issues,119 suggesting limited reliance interests. By contrast, patent protection is seen as a necessary prerequisite for pharmaceutical and biotech companies to undertake the clinical trials and other commercialization efforts necessary in these industries,120 suggesting significant reliance interests.

What is “Inter Partes Review” (IPR)? Congress established today’s Inter Partes Review (IPR) process within the U.S. Patent and Trade Office (PTO) as part of the America Invents Act signed into law in 2011. Under IPR, the Patent Trial and Appeal Board (PTAB) at the PTO takes a “second look” at its earlier decision to grant a patent but this time allows third parties to bring evidence about the appropriateness of that decision.1 The goal of these processes was “to ensure that the poor-quality patents can be weeded out through administrative review rather than costly litigation” and “to improve patent quality and limit unnecessary and counterproductive litigation costs.”2

The IPR process as we know it today has existed at the PTO in one form or another for nearly 40 years.3 Throughout this time, the PTO’s ability to reconsider and cancel patents that never should have issued has been an important part of the patent system.

The American patent system has, since our nation’s founding, served as a cornerstone of innovation. But the pharmaceutical industry’s willingness to undermine this system is having real consequences for American patients.

The skyrocketing cost of health care has been fueled by rapidly rising prescription drug prices, which are  for Americans than patients in other wealthy countries. While some argue that this is just the cost of being a global innovator, it is more complicated than that, and a key source of the problem is the abuse of the patent system.