Kelo v. City of New London stands as the apogee of Supreme Court cases regarding property rights, especially for conservatives. A narrow 5-4 decision recklessly expanded the scope of eminent domain, allowing private developers and the government to collude and forcibly take private property away from citizens for “public use” under the Takings Clause of the Fifth Amendment. Now the Court is faced with another landmark case on property rights that will once again be a defining moment for conservatives.
Oil States Energy Services, LLC v. Greene’s Energy Group, LLC (Oil States for short) asks the court to decide the scope and power of the Patent and Trademark Appeals Board (PTAB), and whether this unaccountable government agency can extra-constitutionally extinguish “… private property rights through a non-Article III forum without a jury.” The PTAB (which is part of the Patent and Trademark Office) was created to provide another venue for challenging the validity of patents. This extra-judicial system has allowed ideology driven decisions to invalidate pre-existing patents, as in the case of Oil States, in clear violation of the patent holder’s property rights.
Last month, dozens of conservative leaders issued a “Memo for the Movement” which called for an innovation and economic competitiveness agenda that included the need for stronger patent protections, including the need to reign in the out-of-control Patent Trail and Appeal Board “… an administrative tribunal created after previous congressional reform and has been labeled a “patent death squad” with the sole purpose of invalidating patents.”
Since its inception, the PTAB has become a rogue agency that has tramped on the rights of patent holders, invalidating a very high percentage of patents. Officials have even embraced the moniker of it being a “death squad for patents.” Virtually anyone can challenge a patent, multiple times and patent holders have fewer rights to protect them.
I joined with numerous conservatives in an amicus brief in this case, which wrote that the PTAB, may “cancel existing patents irrespective of when they issued, how many times they have been upheld in the courts, or even how many layers and rounds of review they have survived within the Patent Office itself.”
While an overzealous regulatory agency may be old news to many of us, the PTAB presents a clear constitutional problem in my view. This agency endangers the court’s role in reviewing patent property rights as it can essentially overrule court decisions, upholding patent rights. As we wrote in the Amicus, “Not only does this approach undermine the valuable property rights in patents, it destabilizes the delicate balance between the three branches of government. The administrative state cannot be allowed to extend this far, and the Court should, by reversing the decision below, take the opportunity to set firm limits on congressional attempts to expand the power of the political branches at the expense of the federal judiciary.”
The regulatory uncertainty caused by the ideological driven agendas of entities like PTAB has endangered American innovation and competitiveness. At one time, not long ago, America was the world leader in invention and risk taking, thanks to the very concept of patent rights as property rights being enshrined in our constitution. The idea of ownership of invention and innovation, coupled with the legal rights to that ownership, is unique in the world and gave us a competitive edge. But over time, that edge was eroded by bad policies and court decisions that have eroded our IP protections and have added uncertainty to the very concept of patent and property protections.
The US Chamber of Commerce’s Global Intellectual Property Center has been tracking this fade in our global standing. In their most recent International IP Index, the United States dropped from No. 1 globally to No. 10 when it comes to the protection of “patents, related rights and limitations.” For the first time ever, another nation would sit at the top of this ranking. Complacency and ideological agendas have undermined our patent rights, and in doing so, undermined the United States of America. While America’s innovation edge has declined, others – including China – has risen.
Once again, the Supreme Court is faced with a case that could vastly change the scope of our property rights as Americans. Just as Kelo granted private developers and local and state governments vast new powers with eminent domain, Oil States has the potential to enshrine the radical expansion of power of bureaucratic agencies to undermine patent protections and to undermine the very notion of patents as a fundamental property right. Continuing on this path may guarantee America’s decline as the global leader in innovation and property rights.