Oil States Energy Services, LLC v. Greene's Energy Group, LLC

JUSTICE GORSUCH, with whom THE CHIEF JUSTICE joins, dissenting.¶verify

After much hard work and no little investment you devise something you think truly novel. Then you endure the further cost and effort of applying for a patent, devoting maybe $30,000 and two years to that process alone. At the end of it all, the Patent Office agrees your invention is novel and issues a patent. The patent affords you exclusive rights to the fruits of your labor for two decades. But what happens if someone later emerges from the woodwork, arguing that it was all a mistake and your patent should be canceled? Can a political appointee and his administrative agents, instead of an independent judge, resolve the dispute? The Court says yes. Respectfully, I disagree.¶verify

We sometimes take it for granted today that independent judges will hear our cases and controversies. But it wasn’t always so. Before the Revolution, colonial judges depended on the crown for their tenure and salary and often enough their decisions followed their interests. The problem was so serious that the founders cited it in their Declaration of Independence (see ¶11). Once free, the framers went to great lengths to guarantee a degree of judicial independence for future generations that they themselves had not experienced. Under the Constitution, judges “hold their Offices during good Behaviour” and their “Compensation . . . shall not be diminished during the[ir] Continuance in Office.” Art. III, §1. The framers knew that “a fixed provision” for judges’ financial support would help secure “the independence of the judges,” because “a power over a man’s subsistence amounts to a power over his will.” The Federalist No. 79, p. 472 (C. Rossiter ed. 1961) (A. Hamilton) (emphasis deleted). They were convinced, too, that “[p]eriodical appointments, however regulated, or by whomsoever made, would, in some way or other, be fatal to [the courts’] necessary independence.” The Federalist No. 78, at 471 (A. Hamilton).¶verify

Today, the government invites us to retreat from the promise of judicial independence. Until recently, most everyone considered an issued patent a personal right—no less than a home or farm—that the federal government could revoke only with the concurrence of independent judges. But in the statute before us Congress has tapped an executive agency, the Patent Trial and Appeal Board, for the job. Supporters say this is a good thing because the Patent Office issues too many low quality patents; allowing a subdivision of that office to clean up problems after the fact, they assure us, promises an efficient solution. And, no doubt, dispensing with constitutionally prescribed procedures is often expedient. Whether it is the guarantee of a warrant before a search, a jury trial before a conviction—or, yes, a judicial hearing before a property interest is stripped away—the Constitution’s constraints can slow things down. But economy supplies no license for ignoring these—often vitally inefficientprotections. The Constitution “reflects a judgment by the American people that the benefits of its restrictions on the Government outweigh the costs,” and it is not our place to replace that judgment with our own. United States v. Stevens , 559 U. S. 460, 470 (2010).¶verify

Consider just how efficient the statute before us is. The¶verify

Director of the Patent Office is a political appointee who serves at the pleasure of the President. 35 U. S. C. §§3(a)(1), (a)(4). He supervises and pays the Board members responsible for deciding patent disputes. §§1(a), 3(b)(6), 6(a). The Director is allowed to select which of these members, and how many of them, will hear any particular patent challenge. See §6(c). If they (somehow) reach a result he does not like, the Director can add more members to the panel—including himself—and order the case reheard. See §§6(a), (c); In re Alappat , 33 F. 3d 1526, 1535 (CA Fed. 1994) (en banc); Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co. Ltd ., 868 F. 3d 1013, 1020 (CA Fed. 2013) (Dyk, J., concurring), cert. pending, No. 17–751. Nor has the Director proven bashful about asserting these statutory powers to secure the “ ‘policy judgments’ ” he seeks. Brief for Petitioner 46 (quoting Patent Office Solicitor); see also Brief for Shire Pharmaceuticals LLC as Amicus Curiae 22–30.¶verify

No doubt this efficient scheme is well intended. But can there be any doubt that it also represents a retreat from the promise of judicial independence? Or that when an independent Judiciary gives ground to bureaucrats in the adjudication of cases, the losers will often prove the unpopular and vulnerable? Powerful interests are capable of amassing armies of lobbyists and lawyers to influence (and even capture) politically accountable bureaucracies. But what about everyone else?¶verify

Of course, all this invites the question: how do we know which cases independent judges must hear? The Constitution’s original public meaning supplies the key, for the Constitution cannot secure the people’s liberty any less today than it did the day it was ratified. The relevant constitutional provision, Article III, explains that the federal “judicial Power” is vested in independent judges. As originally understood, the judicial power extended to “suit[s] at the common law, or in equity, or admiralty.”¶verify

Murray’s Lessee v. Hoboken Land & Improvement Co. , 18 How. 272, 284 (1856). From this and as we’ve recently explained, it follows that, “[w]hen a suit is made of the stuff of the traditional actions at common law tried by the courts at Westminster in 1789 . . . and is brought within the bounds of federal jurisdiction, the responsibility for deciding that suit rests with” Article III judges endowed with the protections for their independence the framers thought so important. Stern v. Marshall , 564 U. S. 462, 484 (2011) (internal quotation marks omitted). The Court does not quarrel with this test. See ante , at 12–14. We part ways only on its application. 1¶verify

As I read the historical record presented to us, only courts could hear patent challenges in England at the time of the founding. If facts were in dispute, the matter first had to proceed in the law courts. See, e.g. , Newsham v. Gray , 2 Atk. 286, 26 Eng. Rep. 575 (Ch. 1742). If successful there, a challenger then had to obtain a writ of scire facias in the law side of the Court of Chancery. See, e.g. , Pfander, Jurisdiction-Stripping and the Supreme Court’s Power To Supervise Inferior Tribunals, 78 Texas L. Rev. 1433, 1446, n. 53 (2000); Lemley, Why Do Juries Decide If Patents Are Valid? 99 Va. L. Rev. 1673, 1686–1687 (2013) (Lemley, Juries). The last time an executive body (the King’s Privy Council) invalidated an invention patent on an ordinary application was in 1746, in Darby v. Betton , PC2/99, pp. 358–359; and the last time the Privy Council¶verify

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1 Some of our concurring colleagues see it differently. See ante , at 1 (BREYER, J., concurring). They point to language in Commodity Futures Trading Comm’n v. Schor , 478 U. S. 833 (1986), promoting the notion that the political branches may “depart from the requirements of Article III” when the benefits outweigh the costs. Id., at 851. Color me skeptical. The very point of our written Constitution was to prevent the government from “depart[ing]” from its protections for the people and their liberty just because someone later happens to think the costs outweigh the benefits. See United States v. Stevens , 559 U. S. 460, 470 (2010).¶verify

even considered doing so was in 1753, in Baker v. James , PC2/103, pp. 320–321. After Baker v. James , the Privy Council “divest[ed] itself of its functions” in ordinary patent disputes, Hulme, Privy Council Law and Practice of Letters Patent for Invention from the Restoration to 1794 (Pt. II), 33 L. Q. Rev. 180, 194 (1917), which “thereafter [were] adjudicated solely by the law courts, as opposed to the [crown’s] prerogative courts,” Mossoff, Rethinking the Development of Patents: An Intellectual History, 15501800, 52 Hastings L. J. 1255, 1286–1287 (2001) (Mossoff, Rethinking Patents). 2¶verify

This shift to courts paralleled a shift in thinking. Patents began as little more than feudal favors. Id., at 1261. The crown both issued and revoked them. Lemley, Juries 1680–1681. And they often permitted the lucky recipient the exclusive right to do very ordinary things, like operate a toll bridge or run a tavern. Ibid. But by the 18th century, inventors were busy in Britain and invention patents came to be seen in a different light. They came to be viewed not as endowing accidental and anticompetitive monopolies on the fortunate few but as a procompetitive means to secure to individuals the fruits of their labor and ingenuity; encourage others to emulate them; and promote¶verify

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2 See also Brief for H. Tomás Gómez-Arostegui et al. as Amici Curiae 6–37; Brief for Alliacense Limited LLC as Amicus Curiae 10–11; Gómez-Arostegui & Bottomley, Privy Council and Scire Facias 1700–1883, p. 2 (Nov. 6, 2017) (Addendum), https://ssrn.com/ abstract=3054989 (all Internet materials as last visited Apr. 20, 2018); Observations on the Utility of Patents, and on the Sentiments of Lord Kenyon Respecting That Subject 23 (2d ed. 1791) (“If persons of the same trade find themselves aggrieved by Patents taken for any thing already in use, their remedy is at hand. It is by a writ of Scire Facias ”); Mancius v. Lawton , 10 Johns. 23, 24 (NY Sup. Ct. 1813) (Kent, C. J.) (noting the “settled English course” that “[l]etters-patent . . . can only be avoided in chancery, by a writ of scire facias sued out on the part of the government, or by some individual prosecuting in its name” (emphasis deleted)).¶verify

public access to new technologies that would not otherwise exist. Mossoff, Rethinking Patents 1288–1289. The Constitution itself reflects this new thinking, authorizing the issuance of patents precisely because of their contribution to the “Progress of Science and useful Arts.” Art. I, §8, cl. 8. “In essence, there was a change in perception—from viewing a patent as a contract between the crown and the patentee to viewing it as a ‘social contract’ between the patentee and society.” Waltersheid, The Early Evolution of the United States Patent Law: Antecedents (Part 3), 77 J. Pat. & T. Off. Soc. 771, 793 (1995). And as invention patents came to be seen so differently, it is no surprise courts came to treat them more solicitously. 3¶verify

Unable to dispute that judges alone resolved virtually all patent challenges by the time of the founding, the Court points to three English cases that represent the Privy Council’s dying gasp in this area: Board of Ordnance v. Wilkinson , PC2/123 (1779); Grill [Grice] v. Waters , PC2/127 (1782); and Board of Ordnance v. Parr , PC1/3919 (1810). 4 Filed in 1779, 1782, and 1810, each involved an¶verify

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3 See also, e.g., Mossoff, Who Cares What Thomas Jefferson Thought About Patents? Reevaluating the Patent “Privilege” in Historical Context, 92 Cornell L. Rev. 953, 967–968 (2007) (Mossoff, Reevaluating the Patent Privilege) (“[A]n American patent in the late eighteenth century was radically different from the royal monopoly privilege dispensed by Queen Elizabeth or King James in the early seventeenth century. Patents no longer created, and sheltered from competition, manufacturing monopolies—they secured the exclusive control of an inventor over his novel and useful scientific or mechanical invention” (footnote omitted)); Mossoff, Rethinking Patents 1286–1287; H. Fox, Monopolies and Patents: A Study of the History and Future of the Patent Monopoly 4 (1947).¶verify

4 The 1794 petition the Court invokes, ante, at 13, involved a Scottish patent. Simpson v. Cunningham , PC2/141, p. 88 (1794). The English and Scottish patents systems, however, were distinct and enforced by different regimes. Gómez-Arostegui, Patent and Copyright Exhaustion in England Circa 1800, pp. 10–16, 37, 49–50 (Feb. 9, 2017), https://ssrn.com/abstract=2905847. Besides, even in that case the¶verify

effort to override a patent on munitions during wartime, no doubt in an effort to increase their supply. But even then appealing to the Privy Council was seen as a last resort. The 1779 petition (the last Privy Council revocation ever) came only after the patentee twice refused instructions to litigate the patent’s validity in a court of law. Gómez-Arostegui & Bottomley, Privy Council and Scire Facias 1700–1883, p. 6 (Nov. 6, 2017) https://ssrn.com/abstract=3054989 (citing Board of Ordnance v. Wilkinson , PC2/123 (1779), and PC1/11/150 (1779)). The Council did not act on the 1782 petition but instead referred it to the Attorney General where it appears to have been abandoned. Gómez-Arostegui & Bottomley, Privy Council and Scire Facias, supra , at 17–18. Meanwhile, in response to the 1810 petition the Attorney General admitted that scire facias was the “usual manner” of revoking a patent and so directed the petitioner to proceed at law even as he suggested the Privy Council might be available in the event of a “very pressing and imminent” danger to the public. Id., at 20 (citing PC1/3919 (1810)).¶verify

In the end, these cases do very little to support the Court’s holding. At most, they suggest that the Privy Council might have possessed some residual power to revoke patents to address wartime necessities. Equally, they might serve only as more unfortunate evidence of the maxim that in time of war, the laws fall silent. 5 But¶verify

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Scottish Lord Advocate “ ‘was of opinion, that the question should be tried in a court of law.’ ” Gómez-Arostegui & Bottomley, Addendum, supra , at 23 (citing Petition of William Cunningham, p. 5, Cunningham v. Simpson , Signet Library Edinburgh, Session Papers 207:3 (Ct. Sess. Feb. 23, 1796)).¶verify

5 After all, the English statute of monopolies appeared to require the “force and validitie” of all patents to be determined only by “the Comon Lawes of this Realme & not otherwise.” 21 Jac. 1, c. 3, §2 (1624). So the Privy Council cases on which the Court relies may not reflect the best understanding of the British constitution.¶verify

whatever they do, these cases do not come close to proving that patent disputes were routinely permitted to proceed outside a court of law.¶verify

Any lingering doubt about English law is resolved for me by looking to our own. While the Court is correct that the Constitution’s Patent Clause “ ‘was written against the backdrop’ ” of English practice, ante, at 14 (quoting Graham v. John Deere Co. of Kansas City , 383 U. S. 1, 5 (1966)), it’s also true that the Clause sought to reject some of early English practice. Reflecting the growing sentiment that patents shouldn’t be used for anticompetitive monopolies over “goods or businesses which had long before been enjoyed by the public,” the framers wrote the Clause to protect only procompetitive invention patents that are the product of hard work and insight and “add to the sum of useful knowledge.” Id ., at 5–6. In light of the Patent Clause’s restrictions on this score, courts took the view that when the federal government “grants a patent the grantee is entitled to it as a matter of right , and does not receive it, as was originally supposed to be the case in England, as a matter of grace and favor.” James v. Campbell , 104 U. S. 356, 358 (1882) (emphasis added). As Chief Justice Marshall explained, courts treated American invention patents as recognizing an “inchoate property” that exists “from the moment of invention.” Evans v. Jordan , 8 F. Cas. 872, 873 (No. 4,564) (CC Va. 1813). American patent holders thus were thought to “hol[d] a property in [their] invention[s] by as good a title as the farmer holds his farm and flock.” Hovey v. Henry , 12 F. Cas. 603, 604 (No. 6,742) (CC Mass. 1846) (Woodbury, J.). And just as with farm and flock, it was widely accepted that the government could divest patent owners of their rights only through proceedings before independent judges.¶verify

This view held firm for most of our history. In fact, from the time it established the American patent system in 1790 until about 1980, Congress left the job of invalidating patents at the federal level to courts alone. The only apparent exception to this rule cited to us was a 4 year period when foreign patentees had to “work” or commercialize their patents or risk having them revoked. Hovenkamp, The Emergence of Classical American Patent Law, 58 Ariz. L. Rev. 263, 283–284 (2016). And the fact that for almost 200 years “earlier Congresses avoided use of [a] highly attractive”—and surely more efficientmeans for extinguishing patents should serve as good “reason to believe that the power was thought not to exist” at the time of the founding. Printz v. United States , 521 U. S. 898, 905 (1997).¶verify

One more episode still underscores the point. When the Executive sought to claim the right to cancel a patent in the 1800s, this Court firmly rebuffed the effort. The Court explained:¶verify

“It has been settled by repeated decisions of this court that when a patent has [been issued by] the Patent Office, it has passed beyond the control and jurisdiction of that office, and is not subject to be revoked or cancelled by the President, or any other officer of the Government. It has become the property of the patentee, and as such is entitled to the same legal protection as other property.” McCormick Harvesting Machine Co. v. Aultman , 169 U. S. 606, 608–609 (1898) (citations omitted).¶verify

As a result, the Court held, “[t]he only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent.” Id. , at 609.¶verify

The Court today replies that McCormick sought only to interpret certain statutes then in force, not the Constitution. Ante , at 11, and n. 3. But this much is hard to see. Allowing the Executive to withdraw a patent, McCormick said, “would be to deprive the applicant of his property without due process of law, and would be in fact an invasion of the judicial branch of the government by the executive.” 169 U. S., at 612. McCormick also pointed to “repeated decisions” in similar cases that themselves do not seem to rest merely on statutory grounds. See id. , at 608609 (citing United States v. Schurz , 102 U. S. 378 (1880), and United States v. American Bell Telephone Co. , 128 U. S. 315 (1888)). And McCormick equated invention patents with land patents. 169 U. S., at 609 . That is significant because, while the Executive has always dispensed public lands to homesteaders and other private persons, it has never been constitutionally empowered to withdraw land patents from their recipients (or their successors-in-interest) except through a “judgment of a court.” United States v. Stone , 2 Wall. 525, 535 (1865); Wellness Int’l Network, Ltd. v. Sharif , 575 U. S. ___, ___ (2015) (THOMAS, J., dissenting) (slip op., at 11) (“Although Congress could authorize executive agencies to dispose of public rights in lands—often by means of adjudicating a claimant’s qualifications for a land grant under a statute—the United States had to go to the courts if it wished to revoke a patent” (emphasis deleted)).¶verify

With so much in the relevant history and precedent against it, the Court invites us to look elsewhere. Instead of focusing on the revocation of patents, it asks us to abstract the level of our inquiry and focus on their issuance. Because the job of issuing invention patents traditionally belonged to the Executive, the Court proceeds to argue, the job of revoking them can be left there too. Ante, at 610. But that doesn’t follow. Just because you give a gift doesn’t mean you forever enjoy the right to reclaim it. And, as we’ve seen, just because the Executive could issue an invention (or land) patent did not mean the Executive could revoke it. To reward those who had proven the social utility of their work (and to induce others to follow suit), the law long afforded patent holders more protection than that against the threat of governmental intrusion and dispossession. The law requires us to honor those historical rights, not diminish them.¶verify

Still, the Court asks us to look away in yet another direction. At the founding, the Court notes, the Executive could sometimes both dispense and revoke public franchises. And because, it says, invention patents are a species of public franchises, the Court argues the Executive should be allowed to dispense and revoke them too. Ante , at 9–10. But labels aside, by the time of the founding the law treated patents protected by the Patent Clause quite differently from ordinary public franchises. Many public franchises amounted to little more than favors resembling the original royal patents the framers expressly refused to protect in the Patent Clause. The Court points to a good example: the state-granted exclusive right to operate a toll bridge. Ante, at 9. By the founding, courts in this country (as in England) had come to view anticompetitive monopolies like that with disfavor, narrowly construing the rights they conferred. See Proprietors of Charles River Bridge v. Proprietors of Warren Bridge , 11 Pet. 420, 544 (1837). By contrast, courts routinely applied to invention patents protected by the Patent Clause the “liberal common sense construction” that applies to other instruments creating private property rights, like land deeds. Davis v. Palmer , 7 F. Cas. 154, 158 (No. 3,645) (CC Va. 1827) (Marshall, C. J.); see also Mossoff, Reevaluating the Patent Privilege 990 (listing more differences in treatment). As Justice Story explained, invention patents protected by the Patent Clause were “not to be treated as mere monopolies odious in the eyes of the law, and therefore not to be favored.” Ames v. Howard , 1 F. Cas. 755, 756 (No. 326) (CC Mass. 1833). For precisely these reasons and as we’ve seen, the law traditionally treated patents issued under the Patent Clause very differently than monopoly franchises when it came to governmental invasions. Patents alone required independent judges. Nor can simply invoking a mismatched label obscure that fact. The people’s historic rights to have independent judges decide their disputes with the government should not be a “constitutional Maginot Line, easily circumvented” by such “simpl[e] maneuver[s].” Bank Markazi v. Peterson , 578 U. S. ___, ___ (2016) (ROBERTS, C. J., dissenting) (slip op., at 12).¶verify

Today’s decision may not represent a rout but it at least signals a retreat from Article III’s guarantees. Ceding to the political branches ground they wish to take in the name of efficient government may seem like an act of judicial restraint. But enforcing Article III isn’t about protecting judicial authority for its own sake. It’s about ensuring the people today and tomorrow enjoy no fewer rights against governmental intrusion than those who came before. And the loss of the right to an independent judge is never a small thing. It’s for that reason Hamilton warned the judiciary to take “all possible care . . . to defend itself against” intrusions by the other branches. The Federalist No. 78, at 466. It’s for that reason I respectfully dissent.¶verify