In Thryv, Inc. v. Click-To-Call Technologies, LP (Supreme Court, April 20, 2020), the Supreme Court held that the Patent Office decision to hear an inter partes review (“IPR”) challenge is not subject to judicial review on time-bar grounds. The majority found that ruling otherwise would “unwind the agency’s merits decision” and “operate to save bad patent claims.”
While this case deals largely with an issue of IPR appellate procedure, it should be interesting to a wider audience because it illustrates the Justices' disparate views on a key question: are issued patents property?
In a strongly worded dissent, Justice Gorsuch argued that the Constitution does not permit a “politically guided agency” (here the Patent Office) to revoke a property right (like an issued patent) without judicial review. He analogized issued patents to the land patents that the government once granted to “homesteaders who moved west.” He expressed his view that since the Court would not “allow a bureaucracy in Washington to ‘cancel’ a citizen’s right to his farm…” the Court should not allow the Patent Office to cancel an issued patent (especially without judicial review).
Justice Gorsuch’s dissent argued against the core principles established in the Supreme Court’s Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 584 U. S. ___ (2018) decision—where he also dissented. In Oil States, the Supreme Court held that patents are not “property rights” in the traditional sense, but rather are “public franchises” granted (and subject to revocation) by the government. Oil States left, for another day, the question of whether compensation is required, and in what circumstances, when the government acts to revoke a previously granted patent.
In response to Justice Gorsuch’s dissent, the majority asserted that:
The dissent acknowledges that “Congress authorized inter partes review to encourage further scrutiny of already issued patents.” . . . The second look Congress put in place is assigned to the very same bureaucracy that granted the patent in the first place. Why should that bureaucracy be trusted to give an honest count on first view, but a jaundiced one on second look?
The majority reached its conclusion – the Patent Office’s decision to hear an IPR challenge is not reviewable on time-bar grounds – in harmony with the expressed purpose of IPR reviews: making it easier to eliminate “bad patents” and to prevent the “wast[e] of resources spent resolving patentability.” Essentially, majority concluded that if the patent owner was able to challenge the PTO’s decision to cancel a patent on the merits – as opposed to on the procedure – she would do so (and such merits based challenges are subject to judicial review).
Please join our expert, Daniel L. Geyser, in a discussion of the oral argument. Dan represented Click-to-Call Technologies, LP, in the Supreme Court.
Mr. Daniel L. Geyser, Chair, Supreme Court and Appellate Practice, Geyser, P.C.
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Greg Walsh: Welcome to The Federalist Society Teleforum Conference Call. This afternoon’s topic is titled, “Courthouse Steps Decision Teleforum Thryv, Inc. v. Click-to-Call Technologies, LP.” My name is Greg Walsh, and I’m Assistant Director of Practice Groups at The Federalist Society.
As always, please note that all the expressions of opinion are those of the experts on today’s call.
Today we are fortunate to have with us Mr. Daniel L. Geyser, chair of the Supreme Court and Appellate Practice at Geyser, PC. After our speaker gives his opening remarks, we will go to audience Q&A. Thank you for sharing with us today.
Mr. Geyser, the floor is yours.
Daniel L. Geyser: Thanks so much, Greg. And thanks to The Federalist Society for having me. As you may know, I argued this case in the Supreme Court. And it’s always great to have a public opportunity to relive one of the most irritating and disappointing decisions of my entire career. But, that said, this is an important case, and I’m very happy for the chance to discuss it. I also promise to keep any flushing toilets in the background to a minimum.
Thryv v. Click-to-Call Technologies is a patent case. But it’s really about administrative law and judicial power. The question presented was whether Congress barred all judicial review ever over the Patent Office’s interpretation of a key provision of federal law. Even though that provision was designed specifically to restrict the agencies on authority.
We argued before the Court that cutting off Article III authority was squarely at odds with the strong presumption favoring judicial review and bedrock norms in the APA. But the court ultimately rejected our position. And the end result of the majority’s reasoning is that Congress delegated the judicial function to the administrative agency. Gave that agency unfettered discretion to say what the law is, and then instructed that no Article III court ever at any time at any level may review the agency’s interpretation of the statutory limits on its own power.
Now, I’m not sure there ever was a time when one would expect that kind of ruling from the Supreme Court. But I certainly didn’t expect it from the Roberts Court, which has been highly protective of Article III authority. But that’s what happened, and there could be unspoken motivations behind the majority’s departure from the recent trend of the Court’s heavy skepticism of any reading that leaves agencies in charge of saying what the law is.
So with that high-level review out of the way, here’s a quick summary of the background on a more granular level. As for the basic statutory setup, in 2011, Congress passed the America Invents Act. Part of that act set up a new procedure called inter partes review, and inter partes review created an adjudicative process to take a second look at issued patents. It set up the provisions for inter partes review in Chapter 31 of Title 35. And it goes before a board of Article I judges to review the arguments by a petitioner seeking to strike down the patent, and the patent owner seeking to defend its issued patent.
There a few key statutory provisions that are relevant to this case. So I’ll give you the language so it makes a little more sense as we go through the discussion. And fair warning that this gets a little dense.
The first key provision is in Section 314(a), and this is the provision that outlines certain powers that the director has to institute review. And certain limitations on those powers, but not the only limitations on those powers. And what Section 314(a) says is the director may not authorize an inter partes review to be instituted unless the director determines that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition.
So that sets out the discretionary authority for the director to look at the merits of the petition and decide whether to institute review. It’s up to the director. Then if you skip down the subsections to Subsection 314(d), it says the determination by the director whether to institute inter partes review under this section shall be final and non-appealable.
Now that’s the key provision at issue here that debatably cuts off judicial review. But as we pointed out to the Court, the provision is textually limited to the director’s determination under this section. And as a side note, Congress separately used the phrase “instituting inter partes review under this chapter,” referring to all of Title 31, that chapter, throughout the rest of Title 31.
So one question is, what else is in that chapter. And one thing that you’ll find in other parts of the chapter outside Section 314 are limits on the agency’s authority to act. It’s a strict limit on agency power. These are prerequisites that must be satisfied in order for the agency to exercise review. And, indeed, even for the director to consider whether to exercise review in the first place.
So one of those provisions, and the one that was issued in this case, was a limitation provision. And it restricted the Patent Office’s power to institute review in this way. This is under Section 315(b). It says an inter partes review may not be instituted if the petition requesting the proceeding is filed more than one year after the date on which the petitioner is served with a complaint alleging inference of the patent.
So that imposes an absolute textual limit on the agency’s power. It was one of the fundamental protections that Congress included in the America Invents Act to protect patent owners from abuse. And it did that by making sure that accused infringers couldn’t test the waters in district court, receive unfavorable rulings and then turn to the agency for a second bite at the apple.
That kind of activity is not only profoundly unfair to patent owners but it’s also wasteful of judicial and party time and resources. So the Supreme Court has confronted the meaning of Section 314(d), that’s the provision that cuts off some form of judicial review in two prior cases, and those cases debatably reached conflicting results. The first case was the Cuozzo case. And the question in Cuozzo was whether the Section 314(d) appeal bar—again, the same provision that was at issue here—blocked off judicial review of a requirement that a party seeking review state with particularity the grounds for challenging the patent.
And the majority opinion in that case was written by Justice Breyer. Justices Alito and Sotomayor dissented, and the majority held that Section 314(d) did cut off review of that question, whether the petition stated with particularity the grounds for review. It ultimately held that the interpretation and application of any provision, and this is in the Court’s words, “closely tied to institution or involving statutes closely related to Section 314 are barred by judicial review.”
And at the same time, it noted that interpretive questions that extend and again in the Court’s words “well beyond those issues still are subjected to judicial review.” Now I’m a huge fan of Justice Breyer’s, but I frankly don’t have any idea what those restrictions could possibly mean. The idea of something being closely related or closely tied to institution or extending well beyond the institution question, those words are found nowhere in Section 314’s plain text or anywhere else in Title 31.
It’s not clear to me how one would reliably measure whether a legal issue is closely tied to Section 314(a). How close is close? The majority didn’t really say. When does an issue reach not just beyond but well beyond the director’s discretionary institution decision? Again, I’m not sure. The Court never really said. And so, one argument that we made in our brief—and again this is, in fairness I am the losing party here—that when it comes to jurisdictional statutes, the Court typically adopts clear and bright line rules that favor administrability and predictability over vague and obscure boundaries.
So in our view, Cuozzo left what you would think of as vague and obscure boundaries, and it would create confusion in future cases. And, indeed, it was no surprise that the Court revisited the Cuozzo test only a term or two later in SAS Institute. In SAS Institute, the Court took up a related question under Section 314(d), and in doing so, it seemed to textually narrow Cuozzo. And in that case, the majority, in an opinion written by Justice Gorsuch, rejected the government’s argument that Section 314(d) forecloses judicial review of any legal question bearing on the institution decision.
So the government tried to argue effectively what they succeeded in arguing in this case. That Section 314(b) forecloses judicial review of legal questions bearing on institution. But that position, again, was rejected in SAS Institute, and rejecting it before the Court signed a strong presumption favoring judicial review. And it said that Section 314(d), and I quote, “precludes judicial review only of the director’s initial determination under Section 314(a).” That there is a reasonable likelihood that the claims are unpatentable.
So what the Court effectively said in SAS Institute is not withstanding the broader language in other parts of the Cuozzo decision. That Section 314(d) bars off what effectively is the preliminary look that the director takes when they look at a petition and the patent, which makes sense and it comports with traditional APA principles. Because those initial decisions are exactly the kind that are usually washed out once the director finally issues a final decision on patentability.
It’s sort of like trying to get review of a preliminary injunction after the final decision that adjudicated all the claims, not just guessing about likelihood of success but actual success or failure is teed up for appellate review.
So the Court stressed too in SAS Institute that the America Invent Act and that 314(d) appellate bar didn’t let agencies act outside their statutory limits and that the judiciary retained its usual authority to set aside agency action that exceeds its jurisdiction. So that’s sort of the very long windup for our case.
And so here are the very quick facts of how we got here. And it was a long and drawn out procedural history. I won’t bore anyone with the details, which I hope I haven’t already done. But the bottom line was that Thryv, who was the petitioner before the Patent Office had been sued earlier and over a decade earlier by a patent owner before Thryv sought the current inter partes review. And now when Thryv filed that petition, the PTAB said—the PTAB is the patent board that adjudicates these proceedings—said that Thryv’s petition was timely because the earlier lawsuit, even though filed over a decade ago, had been dismissed without prejudice. And so, if you remember back to the 314(b) language, that talked about when someone was served with a complaint. It didn’t say anything about what happened after being served. But the Patent Office read that provision to effectively reset where there’s a dismissal without prejudice. Then the earlier service of the complaint is wiped out.
Now after multiple trips to the Federal Circuit and a trip up to the Supreme Court, where there was a GVR for the earlier decisions, put the call one in the Federal Circuit. And the panel made two callings that are relevant here. The first is it said that whether the agency had correctly construed 315(b)’s time bar was an issue that is subject to judicial review, and it held that, citing an intervening en banc decision in a case called Wi-Fi One. And that was a 7-4 decision by the Federal Circuit.
Then the panel in our case held en banc that the agency had misread Section 315(b)’s plain text. As I just said, the panel’s logic was pretty straight forward. It was a plain text reading. It said that 315(b) asks when a complainant was served, not what happened after the complainant was served, and that there was no textual hook for reviving the limitation period whenever a case is dismissed without prejudice.
Thryv, at that point, sought Supreme Court review. In its response to that petition, the government conceded for the first time that the agency’s initial reading of Section 315(b) was wrong, which means that the agency should not have instituted review and did not have the power to strike down provisions of Click-to-Call’s patent. But the government also said that the agency’s interpretation of the 315(b), which is a freestanding provision of the United States code, was not subject to any Article III review.
And that meant, according to the government, that the agency proceeding was instituted in error. The agency had no authority to conduct the proceeding. The agency thus had no authority to strike down the issued patent, and yet no court ever at any time could interpret the meaning of this federal statute or cabin the agency to its lawful authority. And yet, the Supreme Court still granted review.
So now we advance forward, and I’ll skip the oral argument for now to get to the opinion. One might think that with the Roberts Court, which again is typically very protective of Article III authority, that they would question whether Congress really vested in the agency with the unreviewable authority to say what the law is for a federal statute, especially one that constrains agency authority.
Yet the Court affirmed 7-2 in an opinion by -- I’m sorry the Court reversed. This is wishful thinking on my part. With Ginsberg -- Justice Ginsburg wrote the opinion, and Justice Gorsuch joined only by Justice Sotomayor dissented. Justice Ginsburg’s opinion was quick and tidy work. She’s a tremendous writer. She did not go into her characteristic usual painstaking and studious detail on all of the arguments in the case. It was a very short discussion. It had scant reference to the strong presumption favoring judicial review. It didn’t really grapple with the difficult textual arguments pointing the other way that I’d like to think that we pointed out effectively in our brief and argument, and that Justice Gorsuch certainly pointed out effectively in his dissent.
The majority instead focused on a few short points. It first said that Cuozzo, the first case looking at this provision, already read the statute the way that Thryv and the government were reading it in this case. And so the majority then proceeded to ask whether the Section 315(b) time bar fell within Cuozzo’s test for how broad the scope of the prohibition on judicial review is. The majority didn’t really ask, at least in any detail, whether the provision fell within the actual text of Section 314(d), which cuts off review.
So we weren’t too happy with that because we’d like to think that typically the answer is, or the answer turns on what the statute says, not what the Court might say in formulating a general test designed to resolve a specific issue arising in a past case. But that’s how the analysis proceeded in this case.
And in looking at that analysis, Justice Ginsberg’s opinion suggested that Section 314(a) governs institution, Section 315(b) is a limitation on institution, and, therefore, must be closely related, again looking to Cuozzo’s test with the institution decision. Now, that didn’t really answer the textual points on the other side. One thing that we pointed out and that Justice Gorsuch points out is that Section 314(a) is discretionary. It’s looking at that preliminary merits determination, whether it’s reasonably likely to think that a claim is invalid.
Taking that first cut at the question, not the final cut. And under 315(b), the director doesn’t even have authority to ask that question unless a petition is timely. And if you look at the language of 315(b), it’s not directed to the director. It doesn’t ask him to decide certain things. It simply says that no institute inter partes review may be instituted. It’s an express statutory cutoff of the agency’s power, which again strikes us as a pretty different question than the reasonable likelihood determination that it actually captured in Section 314.
We didn’t see a really convincing answer to the text of 314. Justice Ginsberg doesn’t really say why Congress said that the review, the judicial bar, or the bar on judicial review is limited to decisions of a director under this section, where 315(b) falls outside this section. The judiciary review bar is in 314. 315 is not 314. It’s in that section. It’s under this chapter, which we pointed out is language that Congress used repeatedly in other parts of Title 31. And we also didn’t see really any textual answer for what the words under the section could possibly mean.
And, in fact, you can read the language, the provision exactly the same way, whether you include under this section clause or not. And typically, under bedrock rules of construction, construction or interpretation isn’t favored if it renders certain language superfluous. And so the majority also didn’t address whether the provision was really ambiguous.
Some points that were before the Court was at the very first time the scope of 314(d) was litigated by the government. It was in a district court case, and the U.S. Attorney’s Office read the provision to say that judiciary review was in fact available upon -- once there was a final written decision in a case. That you couldn’t look at that initial determination on the merits, but that you couldn’t litigate the other provisions arising elsewhere in the chapter.
You have the Federal Circuit en banc saying judicial review is available, reading this same section. You have the fact that the dissenting justices earlier in Cuozzo read the statute not to cut off judicial review. You have the majority in SAS Institute reading the statute not to cut off judicial review. So aside from the textual [inaudible 00:20:01], you have an awful lot of both the government litigating positions and actual members of the Article III judiciary reading this text and thinking it doesn’t cut off review, and, in fact, it’s not even the best reading of the text to say that it does, which typically is enough under the presumption favoring judiciary review to preserve Article III authority.
Because, again, as long as something is reasonably susceptible to construction, that gives Article III courts their usual power to, as Marbury v. Madison said a long time ago, to say what the law is. That’s the right way to read that provision. So instead of grappling with those points, Justice Ginsberg’s majority opinion instead turned to the purpose and design of the statute and effectively held that Congress crafted this new procedure, this inter partes review procedure, to element bad patents, that there was something unseemly about letting the agency go through the entire process, hold that a patent is invalid and then permit the patentee to erase that opinion on appeal, based on a technicality.
So there was something that the majority felt was at odds with Congress’ ultimate determination that these bad patents shouldn’t be on the books. Now, of course, Congress often tasks agencies with the work. And when agencies make procedural errors in conducting that work, sometimes they have to start over. If there’s a notice-and-comment requirement, and the agency spends lots of time crafting very careful regulation but they never provide notice and they don’t ask for any comments, they’re likely to be sent back down by courts to review that work.
And I don’t think to me that there’s anything unseemly about that. It’s just the way that the process is supposed to work. And I think that’s consistent too with the statutory purpose. One thing the majority really didn’t say is how their view of eliminating bad patents squares with Congress’ kind of conflicting but tempering purpose to eliminate the agency’s authority and protect patent owners.
The statutory time bar is one of the protections that Congress crafted to make sure that patentees weren’t facing duplicative challenges by accused infringers. And the Supreme Court has said countless times that no statute proceeds its purposes at all costs. And when Congress has an express balance in the statutory text that on the one hand does try to weed out bad patents, but on the other hand tries to protect patentees from untimely challenges, it seems to advance the statutory purpose to enforce the statute itself. But, again, these arguments didn’t carry the day.
Now, everything I said was said far better and far more coherently by Justice Gorsuch in his dissent. And Justice Sotomayor joined the dissent in large part. She was the only justice that joined that dissent. I was a little surprised that Justice Alito didn’t join since he, Justice Gorsuch was taking the exact position that Justice Alito had taken earlier in Cuozzo and in SAS Institute.
But Justice Gorsuch did keep Justice Sotomayor. Again, it’s a tour de force. He broke down the America Invents Act’s text, structure, context, purpose. He emphasized the importance of judicial review in checking unauthorized agency action. He stressed the importance of protecting private property rights from arbitrary and unlawful determinations. And he reminded the reader that back in the Oil States case, it wasn’t even clear whether an Article I agency has the authority to adjudicate the validity of an issued patent right.
You have a private property, which is what a patent grant is, being adjudicated exclusively by Article I judges. And while the Court said that that didn’t offend other parts of the Constitution, Justice Gorsuch, I think, had a pretty fair point—again, I’m very biased—in saying that it’s extraordinary to let that Article I process adjudicate these rights and let the Article I agency construe the meaning of a provision of the United States code that constrains its own authority, and then not let any judicial body at any time, anybody actually vested with Article III power, to review the meaning of that federal law.
So I say the dissent is worth reading in full, and so is the majority opinion in fairness. I mean these are tough, tricky issues, and Justice Ginsberg did a good job with it. I just wish she’d addressed some of the other points to see how the majority would really answer some of the better arguments on the other side. So now, that’s a quick summary of the opinion.
Now to just to go quickly into the, sort of the implications and the oddities from the decision. Now I didn’t talk about the oral argument, but one thing I will say about it is that our case was paired that day with an immigration case Guerrero-Lasprilla v. Barr. The immigration case went first. And it also involved a provision that arguably cut off judicial review of an agency determination.
And in that hour of argument, I believe that every justice who asked a question emphasized the absolute importance of Article III review. The dangers of vesting Article I agencies with total authority to say what the law is, how this isn’t just a statutory presumption. This strikes at the very core of our constitutional system of governance and the separation of powers and how important all these principles are.
And as we were sitting there, we were thinking this sounds pretty good for our case. But as it turns out, it was sort of a tale of two arguments. We stand up, and immediately it’s a “what’s the big deal? The agency can generally get these things right.” The Chief asked a funny question about, this isn’t really what we were battling about at Yorktown, which is fair. But at the same time, it’s really not fair because the constitutional structure is indeed part of what we were battling about at Yorktown.
And whether Article III courts get to construe the meaning of federal law or whether agencies get to construe the meaning of federal law, is a pretty big constitutional issue even if it arises in the backdrop of a patent, that, although in our view, actually has substantive merit, the Patent Office thought it was issued incorrectly. So now what were the sort of undecided questions leftover from the decision? One is that I think it’s a pretty safe bet that this will not be Section 314(b)’s last trip to the Court. The majority embraced Cuozzo’s test, which is pretty imprecise, which leaves open a lot of questions about what else is cut off from review or isn’t cut off from review.
There’re provisions about who can join ongoing proceedings. Can a party join one of its earlier proceedings to raise new issues that otherwise would be time barred? There’re provisions that restrict what a real party in interest can do. If they’re associated with a petitioner whose time barred. There’re lots of different components of Chapter 31 that are pretty tricky, that raise pure questions of statutory construction that might bear on the agency’s authority to institute review. And it’s really not clear under the majority’s test where those provisions will shake out.
Another undecided issue, are there alternative paths to getting these questions before the Court? The majority hinted at mandamus relief. And so what if you have a situation where the agency says Section 315’s time bar is wholly optional? Or what if it embraces extensive tolling on the time bar and novel tolling, a form of equitable tolling no one’s ever seen? The Federal Circuit has looked at this in the past and cast doubt on the availability of mandamus review, but it may now be an open question.
What do you do about possible freestanding suits under the APA? If the agency docks officially an unlawful construction in a way that affects a party in a pending case, can that construction be challenged in district court under the APA? And the DOJ originally said that you couldn’t raise that kind of suit, but they did that at the time when they read the appeal bar more narrowly and more modestly and said that patent owners could get review of these questions once a final decision was issued and the case -- and the agency was done with the case.
So a few other quick points that I’ll make before turning it over for questions. I would note that I think this is inconsistent with the Court’s pretty strong recent efforts to curb the actions of executive agencies. You look at cases like Kisor v. Wilkie, and Auer deference. You have the Court questioning whether the agency can construe ambiguities in its own regulations. You have members of the Court flagging questions about Chevron deference and whether it’s even legitimate to say that courts will defer to an agency’s reasonable construction of a federal statute.
I mean you think about cases like PDR Network and the terrific opinions in that case, including the ones that would have taken the decision a little further. And yet in this case, we’re not just talking about deferring to ambiguities in the law and giving the Court some role. This is giving agencies sole discretion to construe federal law. It’s cutting off the judiciary’s role in the process entirely. So it’s a little unclear how this decision squares with the Roberts Court’s recent trends in those areas. But we’ll see. Now if I had to guess, and guessing is always a risky endeavor, I would guess this probably has something to do with patents and the Federal Circuit. The Court in recent terms has shown that it’s no friend to the patents that it thinks are bad patents.
Now, again, in this case, I think we actually had a very good patent. But this is still a systemic question about what happens if the Patent Office strikes down some claims in an issued patent, and if everyone else thinks this claim should be struck down, will we permit that patent to survive a little longer? And both the government and petitioner in this case pretty effectively pushed those buttons to remind the Court of the policy implications of what could be at stake. We had a great amici on our side who wrote terrific briefs, trying to stress the importance of inventiveness in American society and protecting patentees from abusive and repetitive challenges before the Patent Office. But the trends in the Court’s recent decisions on patent sort of cut the other way.
The Court has also made a habit of reversing the Federal Circuit in recent terms. So it’s always possible that the strong presumption favoring judicial review simply gave way to the even stronger presumption that the Federal Circuit is always wrong and should always be reversed. So maybe that had something to do with it. It’s possible that this case trended on the recent questions about stare decisis.
We have the difficulty of what happens when you have language in one earlier opinion, here Cuozzo, that was sort of chipped away at by later opinions, SAS Institute. And I’m sure everyone is aware that the Court has had some pretty heated battles in other opinions that were issued around this time about stare decisis and exactly when the Court can sort of cabin or set aside its earlier decisions. It’s possible that maybe this had some affect on the Court’s decisions.
And the last point I’ll make for now is that for those who are watching carefully the jurisprudence of Justice Thomas. Justice Thomas, who typically refuses to let agencies supplant the judicial role in saying what the law is, hinted in a concurrence in the immigration case that was argued the same day as our case. And by the way, that case came out trumpeting the strong presumption favoring judicial review and saying that Article III courts do indeed retain their authority to say what the law is. But Justice Thomas wrote a very interesting concurrence that questioned whether there really is a presumption of favor of judicial review, whether it’s a matter of statutory construction, such a presumption makes sense, or whether it’s illegitimate.
So it will be interesting to see how his views evolve on those questions, especially given the sort of the push and pull of, on the one hand being careful to ensure Article III authority over agencies, but on the other hand possibly thinking that there isn’t a thumb on the scale of preserving Article III authority when you’re construing federal law.
And so with that, I’d say it’s probably a good time for questions.
Greg Walsh: It doesn’t look like we have a caller in the queue, so can I exercise my host’s prerogative and ask one myself?
Daniel L. Geyser: Of course, you can.
Greg Walsh: Thank you. Could the rejection of judicial review impact innovation and product development negatively, or is there any way to project that kind of repercussion?
Daniel L. Geyser: I mean I think it could in the sense that companies invest tremendous amounts of resources to get an issued patent. And it takes a lot of work. And once they get that patent and then they start investing in manufacturing lines to implement it and all sorts of other things related to their private endeavors, to have the patent thrown back for a second look before the agency can cast doubt on the reliability of the initial investment. And when you have situations where someone is debatably infringing upon a patent, they’re sued in district court and sometimes even invalidity decisions are litigated in court. And then where the party can, after spending up to a year, and in this case, waiting over a decade after original lawsuit, try to go back to the agency to relitigate those patent ability questions, that certainly could have a chilling effect on a company’s willingness to put in the funds necessary to come up with the really innovative medical breakthroughs, technological breakthroughs, and everything else.
But whether is it possible to quantify exactly how that plays out? I don’t know. But my sense is that Congress included the provisions like 315(b), protecting patent owners, for a reason. The bill faced a lot. The America Invents Act was heavily scrutinized by all stakeholders on both sides of these questions, and Congress tried to balance their interests.
So I think a ruling that says that the Patent Office, which is obviously doing its very best to get these questions right, but sometimes, as they’ve now admitted here, they got these questions wrong, were applying the wrong construction for a long time. That chips away at the protections that Congress inserted in the statute to protect patentees.
Greg Walsh: Dan, considering the Patent Office, that the agency is far from infallible, is the only recourse for patent owners in the future to try to get more legislation passed or more protections? Is the ball clearly in [inaudible 0:36:29] check the Court’s court, I guess?
Daniel L. Geyser: Yes, I think it may or may not be. I mean as I suggested, it’s theoretically possible that patentees could pursue mandamus relief in the Federal Circuit. They could try to bring freestanding APA suits. Those’ve faced problems in the past. Both of those options have been shot down in the past. And for some questions, they can still litigate and say that for whatever reason, whatever the particular protection at issue is, it falls outside Cuozzo’s textual and version of 314(b).
So I do think there still are options for patentees, but the safest option would be legislation, either reaffirming that Article III courts do indeed have the authority to say what the law is or at least to clarify exactly what is barred by 314(d) and what isn’t. And as usual, Congress obviously tries its best and these are complex and difficult questions to write. But the inter partes review scheme isn’t perfectly written. There actually is no provision anywhere that affirmatively grants the Patent Office authority to institute review. It simply sets out things that when review can’t be instituted. It places certain conditions on when a review can be instituted, but there’s actually no provision that says the Patent Office has the authority to institute inter partes review. So this is far from a perfectly written statute. And I think if Congress went back and clarified the usual Article III role and the separation of powers, it would make more meaningful the protections that they textually included in the America Invents Act.
Greg Walsh: Dan, was there anything about the opinion that threw you off in particular?
Daniel L. Geyser: These are hard questions. And I think a lot of people, now that we’re through it I think I can safely say, predicted this would be a tough case for us to win. I was hopeful that we could pull it out just looking at the Roberts Court and how they usually are very protective of Article III authority. I do think it’s fairly extraordinary to say that the agency gets to construe the meaning of a provision of the U.S. Code designed to constrain agency power. That’s kind of letting -- it’s kind of letting the agency define sort of the limits on its own review. And I thought that there were different ways that we could count to five and get a majority to say that. I was a little surprised that the opinion didn’t go into a little more detail trying to refute what at least what we thought were pretty good arguments on the other side and points in Justice Gorsuch’s dissent. But, of course, the Court is busy, and it certainly wrote a very capable opinion that adequately decides the questions.
I do think because they relied on an earlier test that is imprecise and sort of wiped out SAS Institute’s attempt to sort of clarify and narrow that test so it provides more of a bright administrable line that we’re going to see future cases trying to figure out what happens next. And so I was a little surprised to see a resolution where one of the main reasons for taking up this case, in theory, to reconcile Cuozzo and SAS Institute and to do so in a way that won’t invite the fourth battle over this provision. But I’m guessing that unless the Court decides it’s had enough, unless Congress fixes it, that we will see a fourth case in the near future.
Greg Walsh: Well, I hope you get signed up to be able to handle it then.
Daniel L. Geyser: Well, it would be great to get another crack at it.
Greg Walsh: On behalf of The Federalist Society, I want to thank our speaker for the benefit of his valuable time and expertise today. We welcome listener feedback by email at info.fedsoc.org. Thank you all for joining us. We are adjourned.
Dean Reuter: Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.