By: Aaron Goukhman | Features  | 

Law Review: Are Patents Public or Private Property?

Legend has it that Charles Holland Duell, the former Commissioner of the United States Patent and Trademark Office, once said that “Everything that can be invented has been invented.” His proclamation proved to be absurdly short-sighted as far as modern inventions and discoveries are concerned. After all, antibiotics and planes had yet to be conceived of in his time, let alone high-speed internet or virtual reality technology. Humanity’s innovative capacity is still in its infancy, though in contemporary times we now invent at a rate never seen before. However, the laws protecting the patents and copyrights of these inventions have not advanced nearly as rapidly as the rate of the inventions themselves. In cases of disputes, we look to rudimentary yet precedential eighteenth-century laws for guidance. This came to play recently in the Supreme Court case of Oil States v. Greene’s Energy, where the crux of the case lay on the fine line separating patent private rights from public rights.

In order to understand the importance of this case, it is necessary to understand the difference between a public and private patent. If a patent lies in the public domain, it can be revoked at any time, while a privately held patent cannot. This difference between what is considered public or private property stems from the origin of patent law itself. Laws stemming from statutes and regulations are public, such as revocable business licenses. In contrast, laws stemming from common law, the same laws that give individuals personal freedom, are immutable private rights. The difference between the two was decided by the King’s bench and circle of advisors when issuing and nullifying patents.

The case of Oil States v. Greene’s Energy is of interest because both sides went to court holding very different views on the domain of the fracking patent — that is, whether it fell in the public or private domain. In this case, Oil States held a patent on new fracking technology, which it claimed that Greene’s Energy had infringed upon. When Oil States sent Greene’s Energy a Cease and Desist letter, Greene’s Energy retaliated by filing a petition with the Patent Trial and Appeal Board (PTAB) in an ultimately successful effort to invalidate the patent. Oil States then sued Greene’s Energy in a case that made it all the way to the Supreme Court. See Supreme Court. OIL STATES ENERGY SERVICES, LLC v. GREENE’S ENERGY GROUP, LLC, ET AL. No. 16–712., Oct. 2017.

Oil States sued Greene’s Energy with the claim that its patent was a private right, or personal property, while Greene’s Energy petitioned based on the assumption that the patent was a publicly held right that could be revoked by the PTAB. IP Watchdog, an organization that evaluates patent policies, suggests that a ruling in Greene’s Energy’s favor, could become a contentious precedent that creates opportunities for abuse of power by the executive branch of government. The PTAB has the power to revoke publicly held patents, a power which is solely under the jurisdiction of the executive branch of the government’s Department of Commerce. The Department of Commerce is led by a political appointee of the president of the United States, giving the president a direct line to revoking patents at will, claiming that rather than being a creation, and therefore personal property, they are more similar to state-granted licenses. Granted, this is an extreme hypothetical case.

However, with the case of Oil States v. Greene’s Energy, the Supreme Court ruled in favor of Greene’s Energy, stating that patents are indeed public rights. The court did so based on the precedent set by an old English law, in which the king’s advisors had the power to revoke patents at will. This law implied that patents are more of a government-issued license than a personal right. In the words of Justice Thomas, “It was well understood at the founding that a patent system could include a practice of granting patents subject to potential cancellation,” thus giving the PTAB the ability to revoke patents. See d. at 1374 (quoting Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct 2131, 2137 (2016)). Oil States’ patent was granted some ten years before Congress established IPR, but, as the majority emphasized, “Oil States [did] not challenge the retroactive application of inter partes review.” Id. at 1379.

The Oil States v. Greene’s Energy ruling has the potential to affect many industries in both positive and negative ways, including but not limited to pharmaceutical, medical, and software industries. For example, this ruling has the power to deter the practice of patent trolling, in which individuals file patents for various vague ideas in the hopes that they can sue the inevitable inventor of the idea and settle for a large sum. Patent trolls have long been disrupting the entire patent system, as evidenced by the fact that according to The New York Times, out of 4007 patents filed in 2012, 3000 were filed by patent trolls. By giving the PTAB the ability to revoke patents, the Supreme Court effectively deprives patent trolls of their leverage.

On the opposite side of the outcome spectrum, some worry that the newfound power afforded to the PTAB will devastate the innovative spirit of many industries as we know it. By removing the power of any one individual or entity to monetize an idea, we run the risk of removing one of the most powerful incentives to keep inventors inventing. As put in the Article Three of the American Constitution, the purpose of a patent is “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” By removing this security from a creator, we run the risk of killing the innovative spirit that has guided our progress as a society thus far.


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