CPIP Fifth Annual Fall Conference – Day Two Recap: AIA & Constitutionalism

Center for the Protection of Intellectual Property

“A patent, once issued, is a vested property right that can only be revoked by a judicial body, rather than an executive one.”

 

Patrick Anderson Image  by: Patrick Anderson | October 13, 2017

The Center for the Protection of Intellectual Property (“CPIP”) Fifth Annual Fall Conference continued today, Friday the 13th of October with a morning panel on administrative issues that affect IP. The most profound comments of the morning panel belonged to Professor Gary Lawson (Boston University), whose forthcoming paper refers to the America Invents Act (AIA) as appallingly illegal. Taking a largely academic approach, disregarding 19th and 20th Century case law, Professor Lawson instead focuses strictly on the text of the US Constitution, on the one hand, and the AIA, on the other. The problem, according to Lawson, is not that the AIA provides a mechanism to cancel patents, but rather on who is doing the cancellation.

A patent, once issued, is a vested property right that can only be revoked by a judicial body, rather than an executive one. Lawson compared patents to titles to land. Some titles are objectively invalid, but they remain treated as property rights until properly undone by a judicial body. The reason, according to Lawson, is fairly straightforward: due process.  The constitutionalist understanding of due process is substantive, rather than merely procedural.

Therefore, an executive agency mimicking trial procedure—albeit poorly—fails to transform an executive action into judicial due process.

Lawson noted a second problem, assuming for the sake of argument, that the PTO may properly revoke patent rights. Patent Trial and Appeal Board (“PTAB”) judges are inferior agents based on the way they are appointed. However, once a PTAB panel issues a decision, no higher executive authority may review or overturn it. Instead, only the PTAB itself, via a rehearing, or the Court of Appeals for the Federal Circuit (“CAFC”) may overturn a prior decision of the PTAB. Thus, the AIA treats PTAB judges as principal officers, which would require their appointment to be approved by the Senate.

Professor Arti Rai (Duke University) offered a contrary position, suggesting that the PTO’s power to cherry-pick rehearing panel members remedies Lawson’s defect. If the PTO director can personally perform the PTAB function, then the use of inferior officers is permitted since the director is appointed and confirmed by the Senate. Thus, Rai argues that the panel stacking practice serves as the director imposing his or her will. Professor Lawson argues that picking the panel is not the power to decide. Philosophically, Lawson is absolutely correct. However, practically speaking the main objection to panel stacking is very specifically that the director was using her influence to determine outcomes. Ultimately, the answer to this question will likely drive everyone’s individual opinion on whether or not PTAB judges have been appointed legally.

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