The Patent Troll Lobby Never Learns From SCOTUS
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Here’s a simple question for you: If, every time you faced a particular court, it found against you either unanimously or close to it, would you not do anything possible to avoid that court?

To most people, the answer to this question would seem to be “yes.” However, for the extortion rackets known as patent trolls, apparently the answer is “no, because this time it’ll totally work, we swear.” Although to be fair to them, it may be harder to avoid the court in question when it happens to be the U.S. Supreme Court.

I’m not exaggerating this situation for effect. The Supreme Court has ruled against the interests of the patent troll lobby unanimously not once, not twice, not thrice, but eight times in the past 11 years. Here are just a sample of the greatest hits of this scathing record:

In 2007, the court ruled that obvious ideas like connecting a car’s control panel to electricity were not patentable, invalidating a troll’s joke patent, in KSR International v. Teleflex Inc. Then, in 2011, the court found that a law of nature (like, say, the law of gravity) could not simply be patented because someone had filed a patent with the words “apply it” involved in Mayo Collaborative Services v. Prometheus Laboratories. Then, in 2014, the court ruled that vague software patents were invalid in the case Alice Corp. v. CLS Bank International, invalidating one of the favorite weapons of patent trolls to hamstring innovators. And finally, this year, in TC Heartland v. Kraft, the court put serious limits on the venues in which patent lawsuits could be brought, effectively emasculating the patent trolls’ favorite tactic of bringing suits in the notoriously plaintiff-friendly East Texas District Court.

Again, all of these decisions were unanimous. However, as already stated, patent trolls once more think they have a winner. This time, their target is the Inter Partes Review process, a common-sense process by which the Patent Trial and Appeal Board (PTAB), an offshoot of the U.S. Patent and Trademark Office (USPTO) can invalidate patents that, for whatever reason, were granted erroneously. The trolls claim this process is unconstitutional, the USPTO obviously disagrees, and while it has previously declined to weigh in, this time the Supreme Court has decided to (literally) lay down the law, in the upcoming case Oil States Energy Services LLC v. Greene Energy Group.

As is commonly the case in such disputes, both sides of the case argue from seemingly ironclad constitutional precedent. Ryan Davis of Law 360 has explained their respective interpretations of the law ably, but to summarize briefly, the central point that seems the most likely to decide the case is whether the Inter Partes Review process strips legitimate private property rights from patent owners in an unconstitutional fashion, or whether it merely acts as a continuing use of the USPTO’s well-established power to decide whether the supposed rights in question are enforceable at all. Further, there is some question as to whether the over-a-century-old case of McCormick Harvesting Machine Co v. Aultman & Co., which the trolls rely on to make their case, amounted to a rebuke of the patent office’s authority to reexamine patents on constitutional grounds, or merely on the grounds that such authority did not exist in the Patent Act at the time the case was decided, but has since been added.

Obviously, fully anticipating the actions of the Supreme Court is above this author’s pay grade. However, it seems worth noting that so far, every time the question has come up before Federal Appeals Courts in the past two years, the trolls have either lost, or had their case ignored. Further, the Supreme Court already handled a similar question in Cuozzo Speed Technologies, LLC v. Lee, and came down on the side of the USPTO by a vote of 6-2. The patent bar’s one hope, as Davis notes in his article, is the fact that two judges on the Federal Circuit Court of Appeals dissented against the trend this year in the case Cascades Projection LLC v. Epson America, Inc. Granted, the Supreme Court has reversed a string of federal appellate decisions before, but given its record of handing unanimous defeats to the patent lobby, it’s far from clear that we should expect that kind of result here. Certainly, the USPTO doesn’t seem worried, as interim USPTO Director Joseph Matal has already predicted a 9-0 victory in favor of the Inter Partes Review process.

Hopefully, he’s right, because an invalidation of the Inter Partes Review process would throw the entire patent system into chaos. For example, previously invalidated garbage patents might become active again, and require massive court battles to once again be struck. The already negligent patent examiners at USPTO would face a much weaker check on their increasingly desperate and reckless attempts to cut through the much-discussed patent backlog by requiring lower standards of patent quality. Trolls would have a field day snatching up vague patents for their portfolios with much less fear of invalidation, and pharmaceutical companies would lose one of the few things that (very, very mildly) curbs their practice of trying to keep their patents alive at any cost. Although, to be fair, Pharma found a way around even this by assigning Indian tribes their patents as a way to skirt U.S. law. Charming.

In short, whatever the legal merits of Oil States, and there is plenty of reason to believe they are lacking, at a policy level, a finding for the trolls would be disastrous. One only hopes that the Justices keep up their continuing streak of recognizing such disasters and snuffing them out before they arrive. Then maybe, just maybe, the fifth time will be the charm for the patent bar’s increasingly desperate attempts to defend its own overreach.

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