Inter Partes Review - Michigan 7 2024

Inter Partes Review Affirmative
Notes
Thanks to Ankit Bhasi, Rohan Chalamalasetti, Athena Chan, Ethan Huang, Alex Jayaratne, Cephas Liu, Clara Mengoli, Mihika Pandit, Neel Patel, Joseph Rozenblat, Res Seibels, and Varsha Sivasubramanian for their hard work on this aff and neg.
The judicial delegation advantage needs some more work before it’s ready to be read. The idea for this aff was to write an advantage based on legal precedent that did not require the aff to win that patents were good – and while we did put together an advantage that meets that criteria, it’s difficult to answer the distinguish CP given the impact we were able to write about federalism. We also considered a takings clause advantage to fill this purpose, but that was even more difficult to impact than judicial delegation proved to be. This aff and its neg are a good illustration of what we believe legal precedent advantages will look like this year and how the neg can respond by counterplanning out of those advantages while reading patents disads.
If desired, the invalidation advantage could be split into competitiveness/innovation like the existing PERA aff, and the plan could be altered to remove the reference to delegation – this would give the aff a 1AC about the patent system broadly but would not link to subject matter eligibility disads like the pathogen patents DA insofar as it would not alter subject matter eligibility.
1AC---2470 Words
1AC---Plan
The United States federal government should render determinations by the Patent Trial and Appeals Board advisory opinions subject to de novo review by Article III courts on the basis that binding adjudication of patents by administrative tribunals constitutes an improper delegation of judicial authority.
1AC---Invalidation
Advantage one is INVALIDATION:
PTAB is killing the patent economy now---Administrative Patent Judges have unrestricted access to cancel patents even after they have been judicially approved
PTAB---Patent Trial and Appeal Board
IPR---Inter partes review
AIA---America Invents Act
APJs---Administrative Patent Judges
Jasper L. Tran 2021 (Jasper L. Tran, June 29th 2021, an Intellectual Property Attorney in private practice in San Francisco, California. He was a Federal Clerk, https://www.gwlr.org/unconstitutional-appointment-of-patent-death-squad/, "Unconstitutional Appointment of Patent Death Squad")//rohan
Can legal scholarship change the law?1 Apparently so—a recent exemplar appears in United States v. Arthrex, one of the three intellectual property (IP) decisions handed down near the end of the 2020 term.2 In this deeply fractured Supreme Court decision—with different majorities for the merits and the remedy—five justices held that administrative patent judges (“APJs”) of the Patent Trial and Appeal Board (“PTAB”), who are appointed as inferior Officers under the Appointments Clause3 and have traditionally wielded “unreviewable authority” during inter partes review (“IPR”) to cancel patents, have unconstitutionally acted as principal Officers, and should therefore have been nominated by the President and confirmed by the Senate.4 To remedy such an Appointments Clause violation, seven justices voted to judicially convert these principal Officers to inferior Officers by allowing the U.S. Patent and Trademark Office (“USPTO”) Director to discretionarily review the PTAB’s IPR decisions.5
This case traces its humble beginnings to Professor John Duffy’s 2007 essay, titled Are Administrative Patent Judges Unconstitutional?, which contends that APJs are, at minimum, inferior Officers under the Appointments Clause because their ability to cancel patents is a “significant authority” that warrants the jurisdiction of the Appointments Clause.6 Scholars have dubbed the failure to follow the constitutional procedures outlined in article II, section 2, clause 2 for the proper appointment of an Officer as the “Duffy Defect” in that appointment—a “triple 2” violation.7 And decisions of defectively appointed Officers, such as PTAB judges in this case, are presumptively invalid and subject to collateral attack.8 Since 2007, Duffy’s essay has sparked a renewed interest in the Appointments Clause, ultimately leading to Arthrex’s ruling 14 years later.9
The Court found such a Duffy Defect in the appointment of PTAB judges pursuant to the Leahy-Smith America Invents Act (“AIA”), which Congress passed a decade ago. The AIA created the administrative regime of IPR, which allows anyone except the patent owner to challenge the validity of an issued patent before the PTAB in the USPTO—an agency within the Department of Commerce.10 The PTAB judges are appointed by the Secretary of Commerce and not confirmed by the Senate, which has a Duffy Defect in that appointment because they issue opinions on behalf of the government in cases involving patents potentially worth “[b]illions of dollars.”11 This power to speak for the government is reserved for principal “Officers of the United States,” such as Article III judges.12
The facts of this case are straightforward. In November 2015, Arthrex, Inc., a medical device company, sued Smith & Nephew, Inc. for patent infringement in the Eastern District of Texas.13 A year later, Smith & Nephew filed IPR to challenge the validity of Arthrex’s patent.14 In May 2018, the PTAB invalidated Arthrex’s patent.15 Arthrex appealed, arguing that PTAB judges were unconstitutionally appointed.16 The Federal Circuit agreed, ruling that the proper remedy was to remove PTAB judges’ tenure protections and remand for a new hearing at the PTAB,17 which “satisfied no one.”18 Arthrex, Smith & Nephew, and the government asked the Supreme Court to weigh in.19 Arthrex argued for the overturn of the PTAB’s invalidity decision. Both Smith & Nephew and the government argued that PTAB judges were constitutionally appointed but disagreed on the remedy if the court were to find a Duffy Defect.
Writing for the conservative majority, Chief Justice Roberts began with a discussion of Congressional intent to create “a workable patent system,” rather than a discussion of property rights.20 The majority noted that the parties do not dispute that PTAB judges are Officers.21 It then relied on Edmond v. United States to explain the distinctions among inferior-Officer, principal-Officer, and no-officer-at-all.22 In Edmond, the Court found Coast Guard Court of Criminal Appeals judges, appointed by the Secretary of Transportation, to be inferior Officers because they have “no power to render a final decision on behalf of the United States unless permitted to do so by other Executive officers.”23 In contrast, the power to issue decisions in the name of the government, insulated from any executive review, belongs to principal Officers.24
Here, five justices found that the PTAB judges’ unreviewable executive power to cancel patents conflicts with the Appointments Clause’s design to “preserve political accountability” to the public through a clear “chain of command” down from the President.25 To guarantee “accountability” for the appointees’ actions, the President wields the nomination power because, as Hamilton wrote in the Federalist, the “blame of a bad nomination would fall upon the president singly and absolutely,”26 whose “sole and undivided responsibility . . . will naturally beget a livelier sense of duty and a more exact regard to reputation.”27 The Senate is also accountable and shares the public blame “for both the making of a bad appointment and the rejection of a good one.”28 But the President can neither oversee the PTAB judges himself nor attribute their failings to those whom he can oversee, rendering the “chain of command” defective.29 In particular, although the USPTO Director “is the boss” of more than 250 PTAB judges in most ways, the Director lacks the critical ability to override the APJs’ significant power to cancel issued patents.30 The PTAB judges are, in short, appointed as inferior Officers but unconstitutionally acting like principal Officers.
To remedy this Duffy Defect, seven justices voted to rewrite the statute, 35 U.S.C. § 6(c), giving the Director discretionary power to unilaterally and directly review the PTAB’s IPR decisions and reach her own decision, while effectively leaving the existing PTAB system in place and not vacating existing IPR decisions.31 The Director’s review would follow the “almost-universal model of adjudication in the Executive Branch” and align the PTAB with the Trademark Trial and Appeal Board (“TTAB”).32 “Because the source of the constitutional violation is the restraint on the review authority of the Director, rather than the appointment of APJs by the Secretary” of Commerce, Arthrex and others similarly situated are not entitled to a hearing before a new panel of PTAB judges.33 Put succinctly, the clever fix is to simply and narrowly make the PTAB judges’ unreviewable authority reviewable by the Director.
The majority expressly limits its narrow holding to only IPR and declines to address the Director’s supervision over other types of PTAB adjudications, including the examination process for issuing patents.34 The majority also leaves unanswered the broader constitutional question of whether PTAB judges must be removable at will by the agency head—the Secretary of Commerce.35 While it is currently unclear how inserting the Director’s review into the existing IPR system will work in practice,36 what is clear is that PTAB’s “final written decision[s]” under 35 U.S.C. § 318(a) will not be truly final until the Director has had an opportunity to review and finalize them.37
Consequently, Arthrex has expanded the Director’s power to review the PTAB’s IPR cases and reach her own decisions. As Justice Gorsuch’s dissent suggested, the new power creates risk that the Director, as a political appointee, may be politically motivated—or perceived as politically motivated—to cancel patents that carry with them significant financial or social consequences.38 This puts more pressure on the currently unfilled Director post in the Biden Administration. It is not difficult to imagine lobbying campaigns aimed to influence the Director’s decision.39 Recent examples of patents at potential risk include those related to COVID vaccines.40 Not to put too fine a point on it, patents have become less free of political influence than they might have been in the past, as patents are certainly political.41 Arthrex sends a strong message that patent adjudication is not special in the administrative state and reaffirms the long-observed pattern of no patent exceptionalism in the justices’ eyes.42
More broadly, this case has provided a clear roadmap for Congress to rethink current regulatory regimes and design adjudicative regimes in the future: outside of patent law, Arthrex’s ruling may upend a handful of adjudicative agencies with internal administrative-law bodies that have final decision-making authority like the PTAB, such as the Department of Health and Human Services, the Department of Labor, and the Social Security Administration.43 Under Arthrex, those administrative law judges are, like APJs, appointed as inferior Officers, but unconstitutionally acting as principal Officers. These apparent Duffy Defects may lead to future constitutional challenges based on the Appointments Clause (as well as the Vesting Clause), including those unresolved by Arthrex.44 Ideas, after all, have consequences,45 and those originated in law reviews can indeed later change the law.
PTAB threw over 2000 profit making patents---Tech powerhouses blow out small patent owners
Greg Stohr and Susan Decker 2021 (Greg Stohr has been the Bloomberg News Supreme Court reporter since 1998. A former judicial clerk and Congressional and campaign press secretary, he graduated with honors from Harvard Law School in 1995, Susan Decker, After 35 years in journalism including 21 years as patents reporter, I'm retiring from Bloomberg, February 27th, 2021, https://www.bloomberg.com/news/articles/2021-02-27/-death-squad-that-tossed-2-000-patents-challenged-at-high-court, "‘Death Squad’ That Tossed 2,000 Patents Challenged at High Court")//rohan
The U.S. Supreme Court will consider whether to declare unconstitutional a system that technology companies, including Apple Inc. and Google Inc., have used to invalidate hundreds of patents and head off litigation.
In an argument at the intersection of intellectual property and the separation of powers, the justices on Monday will consider a challenge to a congressionally-created board that critics have dubbed a “death squad” because of its tendency to toss out patents.
The Patent Trial and Appeal Board has invalidated more than 2,000 patents since it began work in 2012. Apple says it alone has used the board to successfully attack almost 200 patents, many held by entities interested only in filing lawsuits and extracting royalties. Congress set up the board, known as PTAB, in 2011 as a faster and cheaper alternative to litigation.
But some smaller inventors see a chance to undercut the board, saying it’s become an anticompetitive tool for large companies.
The case “has the potential to shut down the PTAB, if only for a moment until Congress can do something to get it back on course,” said Jim Carmichael, a former PTAB judge and now managing director of Carmichael IP. “For many inventors and patent owners, that’s a very exciting prospect.”
At issue is whether more than 250 PTAB judges are serving in violation of the Constitution. The federal appeals court that handles most patent disputes said the judges have important enough powers that they need to be appointed directly by the president.
Read More: Patent Death Squad Judges Can Be Fired, U.S. Appeals Court Says
Should the Supreme Court agree, it could go as far as barring the board from continuing to review and invalidate patents. The justices could also issue a more limited ruling that would strip the judges of their job protections but leave the board’s powers intact. Either way, a decision against the board could mean that hundreds of cases would have to be reconsidered.
Constitutional Fight
The U.S. Court of Appeals for the Federal Circuit said the judges are “principal officers,” a constitutional category that requires presidential appointment and Senate confirmation. The court said it reached that conclusion in part because patent judges’ decisions, typically issued by three-person panels, aren’t subject to review by a presidentially appointed official at the agency.
The Justice Department is urging the Supreme Court to leave the system in place, saying patent judges are “inferior officers,” who the Constitution says don’t have be presidential appointees. In a brief filed before leaving office, President Donald Trump’s administration said the Patent & Trademark Office director and the Commerce secretary together have broad control over the work of the judges. Among other tools, the patent office director can decide which judges sit on a review panel.
The Supreme Court said in a 1997 case involving Coast Guard judges that inferior officers are people “whose work is directed and supervised at some level by others who were appointed by presidential nomination with the advice and consent of the Senate.”
The case before the justices involves an Arthrex Inc. surgical device patent invalidated by PTAB after a challenge by Smith & Nephew Plc. The court has deferred action in dozens of other cases likely to be affected by its ruling.
Technology Companies
Apple, the single biggest user of the review boards, filed a brief backing Arthrex. The iPhone maker said it relies “on Congress’s promise of a fair and efficient forum to challenge what often prove to be woefully weak patents that should not have issued in the first instance.”
Other companies backing PTAB include Intel Corp. and an alliance whose members include Alphabet Inc.’s Google, Cisco Systems Inc., Microsoft Corp., Oracle Corp. and Samsung Electronics Co.
A group describing itself as “39 aggrieved inventors” said intellectual property rights are “under attack by large corporations that are motivated to devalue patents and quell competition.”
“There is no place for overlooking constitutional violations and contrived, convoluted administrative shortcuts when the future of small businesses and their owners’ livelihoods hang in the balance,” the group said.
The drug industry is largely staying out of the fight, though a trade group for the generic-drug industry urged the court to preserve the PTAB.
So many patents have been invalidated that it’s been called a “death squad,” a term coined by Randall Rader, the former chief judge of the Federal Circuit, which oversees all patent disputes in the country. The patent office has since altered its rules, giving patent owners a better shot at surviving the challenges.
PTAB already survived one challenge at the Supreme Court. In 2018, justices found the panel wasn’t unconstitutionally wielding powers that belong to the courts.
The court is scheduled to rule by late June. The lead case is U.S. v. Arthrex, 19-1434.
Petitioners are able to abuse patent owners at tribunal---biases among the APJs render them incapable of providing a proper decision
Adam Mossoff and David Lund 2017 (Adam Mossoff is Professor of Law at Antonin Scalia Law School, George Mason University, Dr. David Lund is a John Witherspoon Legal Fellow at the Center for the Protection of Intellectual Property (CPIP) at George Mason, October 1st 2017, https://www.iam-media.com/article/the-problems-the-ptab, "The problems with the PTAB")//rohan
Structural flaws creates bias against patent owners
The death squad data raises a legitimate concern about bias, which is confirmed by the PTAB’s decisions to create systemic procedural biases that work to the disadvantage of the patent owners appearing before it. These procedural biases are important for two reasons. First, they explain the statistical data and thus indicate how to fix this problem before it does serious damage to the foundations of the US innovation economy. Second, in considering much-needed reforms to this administrative tribunal, the current situation is a warning bell. The PTAB exemplifies the unintended consequences that inevitably follow when an administrative agency is given virtually unbounded power to fulfil its mandate to eliminate property rights. It understandably becomes ‘captured’ by its own version of mission creep and becomes the subject of strategic abuse by petitioners due to its failure to create the checks and balances that rightly constrain governmental institutions.
Lack of standing requirement invites abuse by petitioners
A prime example of the PTAB’s structural problem and lack of constraint in fulfilling its mission to invalidate patents is that the America Invents Act grants anyone the right to file a petition at the PTAB. This is in stark contrast to other governmental institutions responsible for adjudicating disputes about legal rights, such as courts or even other administrative agencies such as the International Trade Commission. There, a plaintiff or a petitioner must establish standing – that is, the party asking for relief must have a basis for doing so that relates to its own legal status, such as being accused of infringement. However, at the PTAB there is no requirement to show standing: anyone can file a petition and prosecute their case against a patent. In fact, the only statutory limitation imposed on PTAB petitioners is that the petitioner cannot be the patent owner; again, confirming the structural bias against patent owners built into the PTAB by the America Invents Act.
The requirement of standing is so fundamental to the proper functioning of courts that lawyers rarely talk about the reasons for it. However, the lack of this requirement at the PTAB requires a review of this basic issue. First, standing ensures that a party’s motivation in filing a complaint or petition

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