IPR’s a vital test case to clarify Article III delegation

This Case Is an Ideal Vehicle for Clarifying Article III Jurisprudence, and for Fixing the Constitutional Damage to the Patent System

This case presents an ideal vehicle for clarifying the Court’s Article III Separation of Powers jurisprudence. It would also be the first time in 30 years (since Schor) for this Court to address directly the constitutional limits on the growth of the administrative state. In the process, the Court may restore needed certainty over the validity of valuable patent rights that companies at all levels of the economy need to compete on an even playing field.

Further, though the district court here ruled on administrative exhaustion grounds, this case may reach the constitutional questions directly. The district court necessarily reached (and rejected) the unconstitutionality argument, recognizing that a showing of clear unconstitutionality simultaneously triggers relief requiring a constitutional remedy, and negates any administrative exhaustion defense (App. 18a-21a). Thus, this Court’s review would directly address the district court’s rationale for entering judgment, and would also directly address the constitutional violation.

The issue has also percolated as much as it ever will. Since this appeal arises from the Federal Circuit, no other circuit court will likely weigh in on the constitutionality of IPRs. Even here, the Fourth Circuit transferred the underlying appeal to the Federal Circuit, on the grounds that the constitutional challenge lies within its exclusive jurisdiction. Virtually no chance exists that the Federal Circuit will pick up the issue again and change its mind, since a panel of that court has already spoken. At the Federal Circuit, once a panel rules on a contested issue surrounding AIA administration, future panels have a practice of issuing affirmances without opinion under that court’s Federal Circuit Rule 36 in subsequent challenges seeking to change the original holding.

The constitutional violations shown here are also capable of repetition. It is happening essentially every day. Patent claim invalidation through IPRs has now reached the rate of approximately 1.27 fullyor partially-invalidating determinations per day. Infringers are using the IPR procedure with greater frequency all the time, and thus unconstitutional invalidations are on the rise from even these high numbers.

Finally, Petitioners recognize the possibility that MCM itself might come before this Court with its own petition. Nonetheless, this case would be the better vehicle. This is so if for no other reason than the patent system urgently needs this Court’s prompt attention. Attackers are threatening vested property rights with rising frequency, such that the Patent Office expects to receive 1,667 requests for review by the end of FY2015, taking unconstitutional actions according to its procedures.