Are Patents Free for the Taking; or Does the Law Require Just Compensation? – Patently-O

by Dennis Crouch

Christy, Inc. v. US (Supreme Court 2021)

This is a super interesting patent-as-property case. In 2018, Christy filed a class-action lawsuit asserting that the cancellation of its patent via Inter Partes Review was taking subject to the due process requirements of the Constitution as well as the Fifth Amendment requirement of Just Compensation.

nor shall private property be taken for public use, without just compensation.

Christy also argued that the payment of USPTO maintenance fees, without refund, constitutes an illegal exaction. The Court of Federal Claims rejected Christys argument as did the Court of Appeals for the Federal Circuit.

Now, Christy has the case up to the Supreme Court with the following two questions:

Petitioner Christy, Inc. obtained a patent after following all the steps and rules and paying all of the fees demanded of it. Upon trying to assert its property rights embodied in the patent against an accused infringer, the Government invalidated the patent during Inter Partes Review (IPR) initiated by the accused infringer because it had allegedly been mistakenly issued. Christy, Inc. received no compensation for its property nor return of the fees it paid. In that context, the Questions Presented are:

1) When a duly-issued patent is invalidated through a post-grant review process (such as an IPR), must compensation be paid under the Takings Clause?

2) When a duly-issued patent is invalidated through a post-grant review process (such as an IPR), should the issuance and maintenance fees that were demanded by the government by mistake be returned?

[Christy-v-USPTO_Petition4Cert].

The Federal Circuit offered a very low quality opinion on the issues here. In particular, the Federal Circuit simply stated that it was bound by a prior decision holding that cancellation of patent claims in [an] inter partes review cannot be a taking under the Fifth Amendment. The prior decision is Golden v. U.S., 955 F.3d 981 (Fed. Cir. 2020) where Larry Golden represented himself pro se. In that decision, the court also did not explain its decision but rather simply cited to another prior case,Celgene Corp. v. Peter, 931 F.3d 1342 (Fed. Cir. 2019). In Celgene, the court likewise did not examine the issue of takings, but rather cited to its older decision of Joy Technologies, Inc. v. Manbeck, 959 F.2d 226 (Fed. Cir. 1992) andPatlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985). However, neither of these cases addressed the takings clause they focused instead on alleged violation of due process. So, as is often the case, the trail Federal Circuit self-citation leads nowhere.

I dont expect the patentee to prevail in this case, but that will only be based upon the Supreme Courts rejection of its own prior statements.

A patent for an invention is as much property as a patent for land. The right rests on the same foundation and is surrounded and protected by the same sanctions. Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92, 96 (1877).

Briefing in the case will continue through the spring.

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U.S. Patent No. 7,082,640

The rest is here:
Are Patents Free for the Taking; or Does the Law Require Just Compensation? - Patently-O