Oil States Briefing: The Chancery-at-Law

Recurring Patently-O contributor Ned Heller has filed his brief in support of petitioners in the Oil States case. Heller represented MCM v. HP in its parallel bid for consideration of the Article III issues.  [16-712 tsac Brief][Filed on behalf of Alliacence where Heller is Counsel]

The basic argument is historic — Inventors had a right to a trial by jury prior to 1791; those rights were guaranteed by the Seventh Amendment of the US Constitution; and Congress cannot now eliminate those established rights.

Heller reflects upon the remedy of scire facias that was at times commenced in the Chancery court.  As the law historians brief reflects, in this particular, the Chancery action operated as a common law court (rather than a court of equity) — “the Chancellor at all times was acting with his ordinary, common law powers, not his extraordinary, equitable powers.”  Thus, a scire facias action is also subject to the right of Jury Trial.

Because Inter Partes Review is effectively scire facias, it is improper without a jury trial.

[IPR] provides the same remedy, revocation, and the same grounds, invalidity as do scire facias, albeit, limited only to the claims challenged. Both are contested proceedings. Both begin with a petition by an interested party to the government. The common law proceeding was pursued in the name of the King, but the real party in interest was the petitioner who had to post a very large bond to pay the attorney’s fees of the patent owner.

Because IPR does not provide a jury trial, the statute authorizing IPR is unconstitutional.

Heller’s brief delves into the “public rights” debate and argues that argument is a red herring.  Regardless of the statutory basis of patent rights, a contested revocation proceeding has a right to a jury trial because it had such a right at common law in England in 1791.

Heller does offers an upper-cut to the Government’s argument at the petition stage:

Because they were filed in Chancery, the government has argued that the actions were equitable (apparently not even knowing that Chancery had a law side) thereby providing no basis for a Seventh Amendment right.

The law historians brief along with Heller’s brief here begin to nail down this historical point. “[E]quity could not and did not revoke patents for invalidity since an adequate remedy at law was available.”

Regarding the privy council’s ability to cancel patents without jury trial. Heller argues that longstanding political battle between the king and courts effectively ended in the 1750’s – in favor of a common law courts. However, in 1779, the Privy Council did cancel one last patent – this one on National Security grounds. (England needed the patented canons to conduct war against the American colonies).

More amicus briefs in this important case are expected this week.

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A key point in the briefs so far is that IPR is substantially parallel to litigation.  However, in the very recent Cuozzo decision, the Supreme Court held that in “significant respects, inter partes review is less like a judicial proceeding and more like a specialized agency proceeding.”  An upcoming amicus would do well to address this point.