OIL STATES ENERGY SERVICES, LLC, Petitioner, v. GREENE'S ENERGY GROUP, LLC, ET AL., Respondents
Interviewer(s): Anthony M. Kennedy, Samuel A. Alito, Jr., Stephen G. Breyer, Elena Kagan, John G. Roberts, Jr., Ruth Bader Ginsburg, Neil Gorsuch, Sonia Sotomayor
Interviewee(s): Christopher M. Kise, Allyson N. Ho

John G. Roberts, Jr.: We'll hear argument first this morning in Case Number 16-712, Oil States Energy Services versus Greene's Energy Group. Ms. Ho.

Allyson N. Ho: Mr. Chief Justice, and may it please the Court: For 400 years, courts have adjudicated disputes between private parties about the validity of patents.

Six years ago, Congress transferred this judicial power to an executive branch tribunal that is unusual because of five features. First, it exercises the judicial power; second, in disputes between private parties; third, over private rights; fourth, without both Article III supervision and consent; and, fifth, about questions adjudicated in courts for 400 years.

Ruth Bader Ginsburg: Ms. Ho, you outlined your position, but there must be some means by which the Patent Office can correct the errors that it's made, like missing prior art that would be preclusive. So, do you recognize any error correction mechanism as within Article III?

Allyson N. Ho: Yes, certainly, Justice Ginsburg.

And -- and our position -- our position is not that the PTO is precluded from error correction.

It simply can't do it through this adjudication. So, for example, we believe ex parte reexams, which are fundamentally examinational and not adjudicational in nature, are perfectly consistent with Article III.

Ruth Bader Ginsburg: But your brief wasn't clear on that.

You -- you recognize a difference between reexamination, but you didn't take a position on -- on whether that would be permissible, but now you are? The reexamination procedure would be all right?

Allyson N. Ho: Yes, ex -- ex parte reexaminational -- reexamination --

Elena Kagan: What about inter partes reexamination?

Allyson N. Ho: I think inter partes reexamination presents a closer case, but it is still fundamentally examinational.

I think in the government brief that we cite on page 13 of our reply, where the government itself draws a line between both ex parte and inter partes reexamination and says these are fundamentally examinational.

John G. Roberts, Jr.: Could you --

Allyson N. Ho: And that distinguishes us --

John G. Roberts, Jr.: Could you review for me what you mean by examinational?

Allyson N. Ho: Certainly.

When we -- when I -- I think what the government means by examinational and what we mean by examinational is that that is fundamentally a proceeding between the Patent and Trade Office, between the government and the Patent Owner, between the private -- the private party.

John G. Roberts, Jr.: But it's one, I suppose, in which anybody can participate? In other words, including the person alleging infringement or the person challenging the grant of the patent?

Allyson N. Ho: Not with respect to -- with -- with respect to -- I think that's a fundamental difference.

With respect to ex parte reexam, the only role for the third party is to request, and then at that point, the third party drops out. Even with respect to inter partes reexam, where Congress gave the third party more -- more participatory rights, the third party bears no burden of production or persuasion.

It is still fundamentally a matter between the PTO and the Patent --

Elena Kagan: But I thought --

Sonia Sotomayor: I'm sorry, there is always inherent a burden of -- of -- of production.

You can't write the PTO and say: I think this patent's invalid, period.

You have to supply them with a reason for doing what they're doing. So, why is that reason any different than actively participating and pointing the PTO in the right direction? What is so fundamentally Article III that changes this process into an Article III violation?

Allyson N. Ho: Certainly, Justice --

Sonia Sotomayor: Both of them are just informing the PTO of the nature of its error and giving it an opportunity to correct its error.

Allyson N. Ho: I think the fundamental difference -- which is that I think the -- why the -- the government itself has referred to inter partes reexam as -- as adjudicational, is it is -- it is initiated by the third party and the third party actually prosecutes that proceeding. It is deciding a cause between the patent owner --

Sonia Sotomayor: Well, not quite, because under the rules, if the third party settles with the patent owner, the PTO can still continue the action, can still decide the question, can still participate on appeal. So it is a public issue that is being litigated or discussed or adjudicated, so isn't that quite different than a normal adjudication?

Allyson N. Ho: I -- I don't believe so, Your Honor.

And -- and -- and let me -- let me push back a little bit on -- on when you say that -- that the -- the PTO may -- may continue to conduct the proceedings. Both the statute and the regulations provide that the PTAB may dismiss the case, which its public guidance says is -- is its preference, or it may proceed to final written decision. And we've located only four instances where the PTAB, even after settlement, has proceeded to final written decision.

And in every case, it has informed the parties that it has already decided the case.

So --

Ruth Bader Ginsburg: But in -- in your -- in your brief, you said if the parties settle, the PTO can't go on.

That was -- that was an error, wasn't it, in --

Allyson N. Ho: Well, I believe what we did was we -- we -- we quoted the statute, which says it -- it can -- its preference is to settle, or it may proceed -- it may proceed to final written -- written decision. And we've -- again, we've located only four times when the PTO has -- PTAB has done that.

And, again, it's already reached its decision.

Sonia Sotomayor: If this is a private right, as you claim, what does it matter in terms of whether the process is adjudicatory or not? If I own something, which is what your basic position, I understand, is, that this is a personal right, how can a government agency take that right away without due process of law at all? Isn't that the whole idea of Article III, that only a court can adjudicate that issue?

Allyson N. Ho: I think I would say, Justice Sotomayor, your -- it -- in terms of -- of matters that have been adjudicated traditionally in courts, over -- between private parties over -- over private rights, I think this Court's cases have established a baseline where those matters -- Article III vests those matters in Article III courts. At the same time, this Court's cases have recognized narrow exceptions, where public rights, as distinct from private rights, are at issue, where Article III does not require that those rights be vested, the decisions of those rights --

Anthony M. Kennedy: Just to examine public rights, could Congress say -- let's hypothesize going forward -- that we will grant you a patent on the condition that you agree to this procedure; otherwise, we don't give you the patent.

Could Congress do that?

Allyson N. Ho: No, for -- for two reasons. First, we believe that would be an unconstitutional condition, so that Congress cannot condition the exercise of a right or a property or benefit of -- of any sort, to the extent that doing so would -- would conflict with another article of the -- of the Constitution.

Anthony M. Kennedy: What --

Allyson N. Ho: So, for example -- yes, Your Honor.

Anthony M. Kennedy: What's your closest case for that? Not Crowell versus Benson, that doesn't quite work.

Allyson N. Ho: I think -- I think, perhaps -- I think, perhaps our -- our closest case to that might be Northern Pipeline or maybe one of the bankruptcy cases --

Anthony M. Kennedy: I --

Allyson N. Ho: -- where even -- even -- even the fact that Congress had recognized -- had said that it's permissible for -- for these rights to be adjudicated in an Article III court.

This Court still, in Stern, held that Article III prevented the -- those adjudications may not --

Anthony M. Kennedy: But -- but Congress didn't create the right in Stern, so that's quite distinguished. Let me ask you this, it's a basic question -- patent lawyers would probably know the answer.

Could Congress say that we are reducing the life of all patents by 10 years?

Allyson N. Ho: Yes, I think that would -- that -- that goes to the limited times requirement in Congress that this Court doesn't --

Anthony M. Kennedy: Well, then that -- doesn't that show that the patent owner has limited expectations as to the scope and the validity of the property right that he holds?

Allyson N. Ho: No, Your Honor, I don't -- I don't think the limited times requirement, which is the Article I, Section 8 requirement, I don't think that goes to whether Congress could, by statute, withdraw the adjudication of disputes that have been adjudicated in courts for centuries, could withdraw those cases and put them in a non-Article III tribunal. Again --

John G. Roberts, Jr.: What is -- what is the relationship between your position and the takings clause? The government can certainly diminish the value of your property rights quite extensively when it comes up with new -- new regulation. You have a lot that you think you could have built a mansion on, and then the government passes a law and you can only build a shed on it and -- and yet we often say -- or give the government a lot of leeway in saying that -- that they don't have to pay compensation. So, if the government can restrict your property right in real property to that extent, why can't it do so with respect to patent rights?

Allyson N. Ho: And I think the fundamental difference there, Mr. Chief Justice, in terms of -- of -- of takings and due process, which we haven't advanced arguments about, and Article III, which is really focused on the exercise of the judicial power, and it has really two components. It has the component that is directed toward the individual rights guarantee, so the guarantee of litigants to impartial decision-makers and at the same time at the structural protections, the checks and balances protections that protect the -- the judicial integrity. So I think the difference here is that when Congress -- and certainly individual rights are at stake when the government takes property that belongs to one person for a public use and doesn't pay just compensation. But I think, in the Article III context, where Congress is taking a category of cases that have been adjudicated in courts for centuries and removes those cases -- withdraws those cases to a non-Article III tribunal, that impacts not only the individual rights guarantees that Article III does --

Ruth Bader Ginsburg: But for a very limited purpose, for the purpose of determining whether -- it's not a duplication of an infringement action.

It's -- it's a narrow kind of reexamination that the -- it's only for the prior art, right? And there are other restrictions. So it's -- it's not -- it is geared to be an error correction mechanism and not a substitute for litigation.

Allyson N. Ho: Several points to that, that -- Justice Ginsburg, you're absolutely correct that the grounds are under sections 102 and 103 novelty and non-obviousness with respect to prior art. Even if that were narrow, I think this Court has said that it's no more permissible for Congress to -- to kind of nibble around the edges, as opposed to a wholesale transfer, but even so, here, setting aside that those two areas of novelty and obviousness make up about 60 percent of the patent validity challenges in the district courts, the estoppel provisions provide that, in the 80 percent of cases, in 80 percent of inter partes reviews, those proceedings are taking place with concurrent district court litigation. So, if in those cases, if in the IPR the patent holder wins, then the -- the claims of the patent are canceled and the patent -- the challenger goes into the district court and says the action is moot -- the infringement action is moot.

Elena Kagan: So -- I'm sorry.

Neil Gorsuch: Ms. -- Ms. Ho, we have a number of cases that have arguably addressed this issue already, like McCormick, for example, in which this Court said the 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.

We have cases -- and American Bell is another one.

We have that wonderful quote from Justice Story indicating that any correction to a patent has to go to a court. The United States takes the position, as I understand it, that some of those decisions are purely statutory interpretation. What's your reading of those cases?

Allyson N. Ho: So our reading of those cases, particularly McCormick, is they are constitutional.

We don't need this Court to go that far for us -- us to prevail.

It's enough in this case for the Court to hold --

Neil Gorsuch: Why is your reading that they're constitutional, if you could help me with that?

Allyson N. Ho: Certainly.

We believe -- we believe they're constitutional in McCormick because this Court wasn't -- didn't reach that decision sort of in the absence of statutory authority, but in the face of it. There was, at that time, statutory authority in a different procedure, albeit, for the --

Sonia Sotomayor: Ms. Ho, I'm sorry, I thought in McCormick, that -- why did the Court even bother looking at the statute? What it did, I understood, was look at the statute and say the statute basically defines the issue of a new patent being issued as one -- before the old patent expires. And so they were really doing a statutory analysis of whether or not, by that process, the old patent was expired, and they were saying, no, if you want it to expire now, you have to go to court, because there's no statutory authority for doing it currently. So I'm not quite sure how -- how you get to the constitutional holding.

Allyson N. Ho: I -- I think how we -- how we get to the constitutional holding, Your Honor, is that there was, at that time, there -- there -- there was another statute in play that would have -- would have permitted the -- the -- the -- the cancellation.

So it wasn't -- it's not that the Court -- there wasn't any statutory authority.

It wasn't simply a statutory holding. It's certainly true that the Court didn't refer to Article -- Article III.

It didn't -- didn't refer to that.

Sonia Sotomayor: It's certainly true that it didn't refer to that other statute either.

Allyson N. Ho: I --

Elena Kagan: Ms. Ho --

Allyson N. Ho: Yes, Your Honor.

Elena Kagan: -- can I -- can I take you back to this question of where you would draw the line --

Allyson N. Ho: Yes.

Elena Kagan: -- between ex parte and inter partes reexamination on the one hand and this? Because, as I understand what you would permit, those proceedings too can be initiated by a third party -- you know, can be at the request of a third party, and -- and those -- in those proceedings too, the third party can participate in some way, can file a reply to the patentee's statement, can make known its views. So what's the line? Where would you -- what are the procedures that are here that you think make this essentially adjudicatory that are not in those other proceedings?

Allyson N. Ho: Certainly.

I think how we -- we would define an adjudication as it's where a tribunal is hearing and deciding a cause between two private -- two private parties. So in -- in -- in both IP reexam and ex parte reexam, as Your -- as Your Honor said, the third party essentially falls out after making the request, is able to comment.

The Patent Office is not --

Elena Kagan: Well, I didn't say they fall out.

There are opportunities for it to make known its views as to what --

Allyson N. Ho: Certainly.

Elena Kagan: So what is it? Is it discovery? Is it -- is it participation in the hearing? I mean, I just want to ground this in something.

Allyson N. Ho: Yes.

I think -- I think certainly the existence of -- of discovery, of a hearing, all of these things show that what you have here is -- is trial -- is trial-like.

Elena Kagan: But what -- what's the most that the government could do, do you think?

Allyson N. Ho: The --

Elena Kagan: You know, what's the -- what are the -- how many of these things do you have to take away before you have a constitutional system?

Allyson N. Ho: I think -- I think, fundamentally, an adjudication, an exercise of the judicial power -- and one reason we know it in this case is because it simply has taken a category of cases out and put it into the tribunal, but I think hearing and deciding a cause between two private parties that results -- that results in a -- in a final binding judgment.

Stephen G. Breyer: It would be like if the airlines loses your umbrella, for example, and the CAB used to say, you go to the CAB, you complain, they lost my umbrella.

The airline says, no, we didn't.

Oh, that was unconstitutional?

Allyson N. Ho: No, Your Honor, the --

Stephen G. Breyer: By the way, there was judicial review.

Allyson N. Ho: I -- JUSTICE BREYER.

As there is here. And, by the way, it didn't say that your rights, when you fly on an airplane or truck or some other thing regulated, it didn't say as it does here, subject to the provisions of this title, the matter, your umbrella, or in this case patents, shall be private property. Uh-huh.

So you have a statute that says you only get the private property if, in fact, you survive the provisions of the title, of which this is one. And, in addition to that, I thought it's the most common thing in the world that agencies decide all kinds of matters through adjudicatory-type procedures often involving private parties.

So what's special about this one --

Allyson N. Ho: To --

Stephen G. Breyer: -- or do you want to say it isn't special and all the agency proceedings are unlawful?

Allyson N. Ho: It --

Stephen G. Breyer: Because a lot of them would fit the definition, I think, that you propose.

Allyson N. Ho: Let me -- let me -- let me begin with -- with your last -- your last question, Justice Breyer. I don't think that invalidating IPR would affect these, for the fundamental reason that in virtually -- virtually all truly administrative adjudications, those are between the government as -- as -- as the enforcer.

Stephen G. Breyer: You could have -- is an airline the government? Is a trucking company the government? Is a utility, electricity company or a natural gas company, the government?

Allyson N. Ho: In the vast -- in the vast majority of administrative adjudications, it is -- it is the government, or those proceedings are acting as a permissible adjunct to the district court.

Elena Kagan: Well, one understanding of this, Ms. Ho, is that this is the government in a real sense.

It's the government trying to figure out whether it made a mistake by granting the patent, which the government sometimes does and knows it sometimes does, but the government wants to put in place a set of procedures that will actually increase the government's accuracy in figuring out whether it made a mistake. And that involves listening to a third party that has some interest in the proceeding. So it seems a little bit odd to say, sure, the government can reexamine this, the government can allow a third party to request it, can allow the third party to do some things, but there's some line that falls short of what the government thinks are the procedures that enable the greatest accuracy. So why -- why would we do that?

Allyson N. Ho: Certainly, Your Honor.

And I think to be clear, we're not -- we're certainly not contesting the proposition that adversarial testing can't be a very beneficial proceeding for arriving at the truth. But it -- it's useful and it's helpful when Article III protections -- if it's an adjudication between private parties over private rights, adversarial testing also requires Article III protections, a neutral decision-maker, not subject to -- to the -- to the -- to having to curry favor with the executive, which is the situation that -- that we have here.

Samuel A. Alito, Jr.: Well, to ask you --

Neil Gorsuch: Why not -- why not, though, Ms. Ho, just simply say the question is whether there's a private right involved? In answering Justice Kagan's questions and Justice Breyer's questions, you struggled with how much of an adjudication does an inquisitorial process have to have before it becomes an adjudication.

Why does that matter at all? If -- if you really want to stake your ground and think McCormick's right, why not just say anytime a private right is taken by anyone, it has to be through an Article III forum?

Allyson N. Ho: In large measure, Justice Gorsuch, because of several -- in several of this Court's cases, in Schor, for example, in Providence --

Neil Gorsuch: Schor is about the line between public and private rights.

You can stake your ground and simply say this is a private right.

Allyson N. Ho: We certainly do stake our ground on that it's a private right.

We think this Court held -- has held as much already in Horne.

Neil Gorsuch: But then you -- but then you --

Samuel A. Alito, Jr.: Well, suppose -- suppose that Congress had included inter partes review in the Patent Act of 1790.

Would you make -- would you make the same argument? Would you still say it's a private right?

Allyson N. Ho: Yes, we would, because even in -- even in -- in 1790, Your Honor, there would still be a 200-year history of these rights being adjudicated in -- in courts -- in courts at all.

Samuel A. Alito, Jr.: But you think Congress was under an obligation to create the patent system, a constitutional obligation to do it?

Allyson N. Ho: No, we don't.

Samuel A. Alito, Jr.: So could it do it subject to the -- grant these monopolies, subject to this limitation?

Allyson N. Ho: I think there are any number of ways that Congress could certainly permissibly condition a grant on -- of a patent.

What it can't do is exert an unconstitutional condition on it, either under takings or due process or Article III.

Sonia Sotomayor: So is your -- is your position that somehow at the founding in 1789, given the replete English history of the Crown and the Privy Council sidestepping -- sidestepping any judicial adjudication of validity, that in 1789 the founders intended to change that system as radically as to say, no, we're not going to permit either the legislature -- the legislature to change the terms of a patent grant?

Allyson N. Ho: The way I would respond, Your Honor, I think with respect to the history, I think the history here is very strong that at -- certainly, at the time of the founding and for centuries before, that English courts at law, this was precisely -- this wasn't just the stuff that was decided in the -- in the courts at Westminster in 1789 were those proceedings.

Sonia Sotomayor: Your amici -- your strongest amici says that it had waned, the Privy Council's adjudications had waned over time and that they could only find 10 times over a 20-year period preceding 1789 in which the Privy Council had acted.

But the fact that it waned didn't mean it was eliminated, and it didn't mean that the Privy Council or the Crown thought that it no longer had those rights.

Allyson N. Ho: Respectfully, Your Honor, I believe that it did.

The -- the Privy Council revoked its last patent in -- in any -- any case, ordinary or otherwise, in -- in 1779. And that was only after -- it was a national security case in which -- which the Privy Council had told the patent holder that the proper thing to do was to go to a court at law. And the patent holder refused to do it.

And it actually involved cannons.

And so, with the -- with the American Revolutionary War in the offing, that was the very last time that the Privy Council revoked a patent.

And, in fact --

Ruth Bader Ginsburg: Who -- who grant -- who granted the patent in -- way back in 1787 -- 1789? Who granted the patent?

Allyson N. Ho: Who granted? It would have -- in England, it would have come -- it would have come from -- from the Crown, according to --

Anthony M. Kennedy: And was it subject to findings about novelty, non-obviousness?

Allyson N. Ho: Yes, it absolutely was, and in -- in disputes between --

Anthony M. Kennedy: Was that statutory, or was that just the custom?

Allyson N. Ho: Well, the statute of monopolies in 1624 referred to that the validity of patents should be decided as at common law.

And at common law, issues of novelty, precisely the issue here, was a question of fact and disputed facts were resolved by -- by juries.

Ruth Bader Ginsburg: And the king couldn't say I made a mistake?

Allyson N. Ho: Well, the statute of monopolies in 1624 said the validity of a patent should be decided at common law.

We don't disagree that the Privy Council revoked patents after it, but it did so pursuant to -- to -- to -- to proceedings and not simply as a -- as a matter of grace. And if I may reserve time for rebuttal.

John G. Roberts, Jr.: Thank you, counsel.

Allyson N. Ho: Thank you.

John G. Roberts, Jr.: Mr. Kise.

Christopher M. Kise: Mr. Chief Justice, and may it please the Court: IPR, inter partes review, comports with both Article III and the Seventh Amendment for at least the following three reasons: First, inter partes review simply reexamines the propriety of the original grant of a patent, engaging in the same type of patentability analysis entrusted by Congress to the executive since 1790. The process itself is not inherently judicial, and it does not involve the exercise of the judicial power. Next, inter partes review does not extinguish, in the language of the question presented, private property rights.

To the extent standards of patentability were not met initially, the patent simply should not have issued. And, finally, although we don't believe, respectfully, the Court need reach this question, inter partes review satisfies any test under any of the courts' public law cases.

Stephen G. Breyer: You at some point -- I mean, what I've wondered as I've read this is -- suppose that just what you say happens, with that all we're doing is reexamining the patent and the statute provides it, but suppose that the patent has been in existence without anybody reexamining it for 10 years and, moreover, the company's invested $40 billion in developing it.

And then suddenly somebody comes in and says: Oh, oh, we -- we want it reexamined, not in court but by the Patent Office. Now, that seems perhaps that it would be a problem or not?

Christopher M. Kise: I -- I don't think so, respectfully, Justice Breyer, and here's why.

Stephen G. Breyer: Fifteen years?

Christopher M. Kise: I don't know that the timeline --

Stephen G. Breyer: Thirty? Everybody -- I don't know how long they last, but, you know, they --

Christopher M. Kise: Well --

Stephen G. Breyer: -- some lasted a long time.

Christopher M. Kise: Respectfully, I don't think that it -- it matters, certainly not constitutionally, but -- but -- but even in the structure of the -- of the patent statute -- the patent scheme that's been created by Congress. Congress established certain patentability criteria that need be met, and all patents are taken --

Stephen G. Breyer: Everybody's dead, by the way, who actually knows about the original article written in Danish, that -- (Laughter.)

Stephen G. Breyer: -- nobody found except this one guy who happens to be sued for infringement.

Christopher M. Kise: All patents are taken subject to these patentability standards.

Stephen G. Breyer: Yes, but I'm just saying can it be anything? Can it be anything at all where you're going to re -- do people gain a kind of vested interest or right after enough time goes by and they rely on it sufficiently so that it now becomes what?

Christopher M. Kise: I -- I --

Stephen G. Breyer: Is there something in the Constitution that protects a person after a long period of time and much reliance from a reexamination at a time where much of the evidence will have disappeared?

Christopher M. Kise: Respectfully, Your Honor, I -- I would say no, because --

Elena Kagan: Well, here is --

John G. Roberts, Jr.: I understood --

Elena Kagan: -- how about -- how about if there were no judicial review at all?

Christopher M. Kise: Well, I think, if there were no judicial review at all, that presents a different question.

Elena Kagan: Yes.

Then you would have to say yes, right?

Christopher M. Kise: Well, I -- I don't know that I would have to say yes because we're still talking about a patentability determination that's being made by the executive branch.

This is an executive adjudication.

And adjudications are not themselves inherently judicial.

John G. Roberts, Jr.: So your -- your position, it strikes me, is simply that you've got to take the bitter with the sweet. If you want the sweet of having a patent, you've got to take the bitter that the government might reevaluate it at some subsequent point.

Christopher M. Kise: Yes -- yes, Mr. Chief Justice.

John G. Roberts, Jr.: Well, haven't our cases rejected that -- that proposition? I'm thinking of the public employment cases, the welfare benefits cases.

We've said you -- you cannot put someone in that position.

You cannot say, if you take public employment, we can terminate you in a way that's inconsistent with due process.

Christopher M. Kise: I -- I don't think, respectfully, Mr. Chief Justice, this is inconsistent with due process.

I also think that the scheme itself is set up so that these rights are taken subject to the power of Congress to determine patentability. I mean --

John G. Roberts, Jr.: What about -- in terms of due process anyway, what about this business -- and maybe it's in the Petitioner's brief, that the commissioner can change the -- the panels if she doesn't agree with the direction they're going, that she can add new judges to the panel so that they'll -- in other words, it's a -- the panel itself -- and I think constitutionally this may be fine, is -- is a tool of the executive activity, rather than something involving some -- anything resembling a determination of rights?

Christopher M. Kise: Well, Mr. Chief Justice, the -- the panel packing, if you will, mentioned by Petitioner in the briefs, I don't believe -- and -- and I'll leave it to the government to -- to have the exact statistics -- precise statistics, but I don't believe that that's taken place more than one or two times, and I don't believe it's taken place with respect --

Anthony M. Kennedy: Well, suppose it were rampant.

Christopher M. Kise: Well, if it were rampant, then I think what this Court said in Cuozzo, that -- that was written, that the -- the shenanigans point, if you will, that the Administrative Procedures Act and other provisions of the Constitution would deal with infirmities in a particular case on an as-applied basis, but I don't think that the -- the potential for there to be mischief afoot --

Sonia Sotomayor: That -- that was what troubled me deeply about you telling Justice Kagan that, without judicial review, that this would be adequate.

I mean, for me, this -- what saves this, even a patent invalidity finding, can be appealed to a court. There's deference with respect to factual matters, but there is de novo review as to legal matters.

So how can you argue that the -- the Crown, the executive, the PTO, here has unfettered discretion to take away that which it's granted?

Christopher M. Kise: Justice Sotomayor, I did not mean to imply that -- that there is unfettered discretion.

What -- what I --

Sonia Sotomayor: Well, that's what you're saying because, without judicial review, how -- what else is it?

Christopher M. Kise: No, I think with respect to this process there is judicial review.

Neil Gorsuch: Well, now, counsel, there's only judicial review if somebody appeals.

This isn't like an adjunct to the district court, like a magistrate judge or -- or a bankruptcy judge, and I didn't -- I didn't see any argument in your brief under Crowell or something like that that this is really an Article III adjunct. I -- I -- I saw an argument that this stands alone, fine, in the executive branch and that there's, in fact, a self-executing judgment issued by the director that, if not appealed, has all the force of law of an Article III court.

Christopher M. Kise: Well --

Neil Gorsuch: Did I miss something?

Christopher M. Kise: No, Your Honor.

It -- it -- it is subject to the Article III review. It's subject to review in the federal circuit --

Neil Gorsuch: If somebody takes review, but if not, it -- it's binding, right?

Christopher M. Kise: Well, I think that would be true with respect to any -- even in the original examination process.

I mean --

Neil Gorsuch: Well, it's not true with respect to magistrate judges or anything like that.

You have an absolute, you know, opportunity -- the district judge has to put its imprimatur on it before it has -- as an adjunct of the district court.

Christopher M. Kise: No, Your Honor, because I -- this is a different structure.

This is -- this is --

Neil Gorsuch: It is a different structure, yes.

Christopher M. Kise: It is because it's the same patentability determination that's made during the original examination process.

Neil Gorsuch: Do you think it would work if -- if we had land patents subject to the same circumstances, that they could be reexamined at any time over hundreds of years, even after the farmer had sold the land to the developer who built the houses and that the land patent could be revoked by the government, by bureaucracy, I suppose, in the Department of Interior?

Christopher M. Kise: I think that there is --

Neil Gorsuch: But, that it is subject to packing by a director who's unhappy with the results?

Christopher M. Kise: There's a fundamental distinction between -- respectfully, between land patents which -- which grant fee-simple title to the holder and an invention patent.

Neil Gorsuch: A monopoly in the use of land.

What's -- what's the difference between -- operative difference, other than obviously one isn't land?

Christopher M. Kise: Well, one is -- one is -- one is -- is a core fundamental right, to borrow the -- the expressions of the court, it's more of a Lockean interest, it's a fundamental right.

It's a property interest.

Neil Gorsuch: Isn't that question begging about what's a private right? Isn't that the very question this Court has to decide?

Christopher M. Kise: Respectfully, as I began, I don't believe that the Court does need to decide it because this is an executive adjudication, but to the extent the Court looks to those factors, I think under -- under almost any test the Court has established, we -- we have a right that derives solely from and depends solely on a federal statute. There are no common law antecedents. The Petitioner has not disputed that.

There -- it -- the cases in this Court establish that patent law in the United States is statutory. The adjudication implicates a paramount public purpose.

The grant of a patent is -- is the grant of a monopoly, but it's a grant -- it's granted for the purposes of the sovereign.

It is not granted for the purposes of the inventor.

It benefits the inventor, certainly, but the paramount public purpose that is embedded in every patent is the advancement of the progress of science --

Neil Gorsuch: Fair -- fair enough, when it's -- when it's granted, but once it's granted, there's an abundance of law going back 400 years.

Justice Story says it.

I mean, you know, this is not new idea, that once it's granted, it's a private right belonging to the inventor. Justice Story said it is a property that has -- an inventions of a property which is often of very great value, in which the law intended to give him, the inventor, absolute enjoyment.

Anthony M. Kennedy: That -- and that's the -- that's the constitutional provision.

Neil Gorsuch: Yeah.

Anthony M. Kennedy: Securing for limited times authors and inventors the exclusive right, securing to them, not securing to the public --

Christopher M. Kise: But -- but those cases were decided, first of all, as -- as -- as the discussion earlier revealed, they were decided on a statutory basis.

There was no undertaking by the Court to determine that, constitutionally, Congress could not establish the structure that they have in an inter partes review.

Ruth Bader Ginsburg: I think Ms. Ho conceded that there can be an examination -- reexamination.

Some of the questions raised in the last few minutes suggest they accord no -- no reexamination, it's a private right, it can't be taken away. But Ms. Ho, I think, wisely, recognized that the reexamination procedure between the government is okay.

But -- but the problem here is it looks too much like a court proceeding.

Christopher M. Kise: May I respond, Mr. Chief Justice? Justice Ginsburg, what you're hearing from the Petitioner is a process versus power argument.

The quarrel is with the process. The Petitioner has conceded that the power exists, the power of revocation, even though there are -- there are citations in the brief that -- that make that argument seem -- their argument inconsistent, this is a process versus power argument. And in this Court, a unanimous Court in Cuozzo determined -- they looked at these same factors and determined that this is not an adjudication, that this is an executive branch action and, therefore -- because the purpose of it is to reexamine the patent.

John G. Roberts, Jr.: Thank you, counsel.

Christopher M. Kise: Thank you, Mr. Chief Justice.

John G. Roberts, Jr.: Mr. Stewart.

Neil Gorsuch: Mr. -- Mr. Stewart, could you address the Chief Justice's question, which I'm also stuck on, the bitter and the sweet, to the -- to what extent could the executive condition patents on, say, you have no takings rights later or you -- you take it subject to whatever conditions in terms of its withdrawal that we wish to impose.

Neil Gorsuch: Including -- including maybe -- and, arguably, I understand -- the condition that we will stack the deck with judges whom we like -- administrative judges we like?

Neil Gorsuch: So the answer to Justice Breyer's question then, if there are all these reliance interests and $40 million or billion dollars spent, that would just be you're out of luck --

Neil Gorsuch: -- take the bitter with the sweet?

Neil Gorsuch: Can you answer that -- answer that question?

Neil Gorsuch: So is the answer yes?

Neil Gorsuch: So -- so --

John G. Roberts, Jr.: So --

Neil Gorsuch: -- I take it the answer is yes?

John G. Roberts, Jr.: Well, how can -- how does that work since this patent was issued before there was inter partes review, before the America Invents Act?

John G. Roberts, Jr.: Well, but there was -- I mean, inter partes review changed those things.

It is something different.

John G. Roberts, Jr.: Including particularly with respect to the procedures.

John G. Roberts, Jr.: Well, sure. That's just defining what the sweet is.

But I -- it sounds to me like your position is if the government says you're hired for this job and if we terminate you, you know, we'll flip a coin and decide whether or not you get to stay or not.

John G. Roberts, Jr.: Does it comport to due process to change the composition of the adjudicatory body halfway through the proceeding?

John G. Roberts, Jr.: So I'll rephrase the question.

Was it illegal under those three occasions?

John G. Roberts, Jr.: The chief judge?

John G. Roberts, Jr.: You're talking about the executive employee?

John G. Roberts, Jr.: When we say "judge," we usually mean something else.

Ruth Bader Ginsburg: You mean an ALJ?

Elena Kagan: No, no, no.

There are administrative law judges all over this country, aren't there?

John G. Roberts, Jr.: How did that case come out?

Neil Gorsuch: Mr. Stewart, let's say we had a land patent.

Let's say the land patent said it becomes invalid if anybody in -- uses the land in an improper way, in violation of an environmental law, labor law, you choose. Let's say the land then gets developed and turns into a housing development outside of, I don't know, Philadelphia.

And it turns out, though, that a great-grandfather who owned the land originally back when it was a farm, indeed violated a labor or environmental law, rendering the land patent invalid on its terms. Could -- couldn't the Bureau of Land Management, for example, or some other department, Interior, official just pull back the patent?

Neil Gorsuch: Under your theory?

Neil Gorsuch: Well, you dispute that they're constitutional holdings in your brief.

Neil Gorsuch: So, presumably, there's nothing to prohibit the scheme I've just described in the government's position, correct?

Neil Gorsuch: It's a yes-or-no answer I'm looking for.

Neil Gorsuch: Exactly.

Neil Gorsuch: Exactly.

Stephen G. Breyer: Okay.

Is -- is it possible? You started out and you said this boils down to two different theories, and you -- I didn't get the second.

In my mind -- and I'd like you to say whatever you want on any of them -- but as to the first, there is -- and the Chief did raise this kind of thing, is there a kind of what Brandeis said in Crowell was a due process problem? Is there a problem of: it's unfair to hold these people to the new statute because they got their patent before the statute was enacted? That's one. That's a practical thing, and much of the questioning has been around that, different variations on that theme, what's unfair. The second is formal.

That's the public versus private right theory.

And the best, or at least most recent, articulation of that is in the Chief Justice's opinion in Stern. And the third is a vested right theory, which had great popularity in the 19th century and might have moved Justice Story but in fact has happily sunk from sight.

Now, is that -- have I missed some basic theory, and is there anything you want to say about those?

Sonia Sotomayor: Sorry, that only existed as of 1981, correct?

Neil Gorsuch: Those were four -- four cases, I believe, right? And involve foreign -- foreign patent applicants, right?

Neil Gorsuch: No, not the reissuance.

The invalidity.

Neil Gorsuch: Yeah.

Neil Gorsuch: But the invalidity, it's just those four cases you have, right?

Neil Gorsuch: The foreign -- that period of time when there was a brief statute permitting executive rejection of patents by foreigners?

Neil Gorsuch: All right.

Fair enough.

John G. Roberts, Jr.: I'd like to just touch on more directly the Schor test for whether something is or is not a public right. And as I understand it, it says five different factors that you consider.

Stephen G. Breyer: Now, that's what I meant.

John G. Roberts, Jr.: Consent, this, this, this, and other things.

And I'm wondering if that is a sufficiently stable and predictive test when you're talking about something like a property right? In other words, as Justice Breyer mentioned, people invest in their patents to the tunes of billions of dollars in building the plant that's going to make the product that's -- and all that, and yet when you're deciding -- when they're deciding is this a right that I can securely rely on, they've got to go through these five factors, you know, any one of which can be determinative in a particular case.

Stephen G. Breyer: So -- so is that -- look, the answer -- what I'm thinking, quite seriously, is saying should we leave open, assuming I basically agree with you, but leave open the question of what happens if there has been huge investment? That, I think, is what was dividing -- what was worrying Brandeis in Crowell.

I -- I think that -- that we don't face it here in this case, and it seems to me it would be properly raised more likely under either a takings clause or the due process clause probably.

Stephen G. Breyer: What do you think?

Ruth Bader Ginsburg: Is -- is there no --

Elena Kagan: Well, Mr. Stewart --

Ruth Bader Ginsburg: -- is there no limit on the time you can institute an inter partes review? Is -- is it any -- any time at all, or is there a limit on it?

Ruth Bader Ginsburg: And what -- what happens if an infringement action is started first in court and the alleged infringer then says, I want to go over to the -- to the Patent Office and institute an IPR proceeding?

Elena Kagan: How important, Mr. Stewart, is judicial review here? I mean, would you concede that there's a constitutional problem, either if there's no judicial review at all or if the judicial review were deferential as to matters of law?

Sonia Sotomayor: So, in your judgment, could Congress permit the PTO to adjudicate infringement actions?

Sonia Sotomayor: Well, there's no historical tradition here, except the interference actions, up until 1981, of the PTO canceling issued patents.

Neil Gorsuch: But, Mr. Stewart, if I understand your answer, an infringement action could be adjudicated by the director so long as money damages were not sought, and that would be fine.

Neil Gorsuch: So a declaration of non-infringement could be issued by the director, for example, right?

Neil Gorsuch: So traditional being more than 40 years but less than 400? Or what --

Neil Gorsuch: -- what's the -- what's the cutoff?

John G. Roberts, Jr.: Thank you, counsel.

John G. Roberts, Jr.: Ms. Ho, four minutes.

Allyson N. Ho: Thank you, Your Honor. Three quick points.

First, the government has conceded that at least some constitutional rights, I believe due process, cannot be suspended as conditions or subject to, and in our view, Article III is no different. Second, with respect to the colloquy about panel stacking, Article III entitles litigants not to have to worry about precisely that sort of executive influence.

That is exactly what this Court -- as this Court put it in Stern, as not to have decision-makers in positions of having to curry favor with the -- with the executive.

Ruth Bader Ginsburg: Wouldn't that be an obvious due process flaw?

Allyson N. Ho: I -- I would have thought in a case where it happens, it would have been an obvious due process flaw.

I think even in cases like ours where it doesn't happen, every -- every administrative judge of the 200 knows that this is something that can happen, that the director, and the director has said, and I quote, that she justifies it, she justified it to exercise -- to make sure her policies, her preferred policies are enforced.

Ruth Bader Ginsburg: But I think the government has conceded that due process has to be a check on administrative agency adjudications as well as court adjudications.

Allyson N. Ho: And we certainly -- we certainly don't disagree with that, Justice Ginsburg.

Our point is that the existence of it, the existence of the panel stacking shows precisely the danger of judges, of decision-makers, who are subject to executive political influence. And, third, in terms of conditions or subject to --

Ruth Bader Ginsburg: They're the same people that -- that grant the patent in the first place.

They're executive officials. Courts don't grant patents.

Allyson N. Ho: No.

And certainly there is actually -- it is the -- the patent examiners who -- who make the decision to issue.

PTAB judges are not -- are not examiners.

They are the -- they are the -- the patent -- the patent judges. And with respect to -- to waiver, we know what is required to waive Article III protections, as this Court made clear in Wellness. It is knowing and voluntary consent by both parties, which is absent here.

It is Article III supervision, which this Court said in Stern and Atlas Roofing is not satisfied by what this Court called ordinary appeal, which is all that the statute provides litigants in our situation. And I guess finally I would say, in response to the government's argument, you know, this doesn't just -- IPR doesn't just look like a trial.

It is a trial.

It hears and determines a cause between two private parties that results in a final enforceable judgment. Our objection is not to the use of third parties in any number of government proceedings, any more than we would object to a concerned citizen who calls the police to report a crime. Our objection is to the exercise of the judicial power by an executive branch tribunal in violation of Article III. If there are no further questions.

Stephen G. Breyer: I guess the Federal Communications Commission, at least as they used to have it, where a citizen could come in and say I want you to take away the franchise of KPIX, sounds to me as if you've described it perfectly.

I guess that would be unconstitutional, too?

Allyson N. Ho: No, Your Honor.

And, in fact, again, in any number -- in the NLRB, in the -- the FTC, the SEC, the CFPB, in all of these agencies what ends up happening is that the government makes the decision to prosecute the action, to prosecute the complaint. It is the government.

That is -- that is pure executive action.

And under -- under our -- our argument against IPR, none of that would be affected whatsoever by invalidating IPR. Thank you, Your Honor.

Elena Kagan: Well, if I could just --

Allyson N. Ho: Oh, yes.

Elena Kagan: -- I mean, because there are formal adjudications all over the place in agencies.

I mean, for example, the NLRB runs by formal adjudications and, indeed, when they try to make rules, Congress slaps them down and says we want adjudications. So how is that different?

Allyson N. Ho: Certainly, Your Honor.

May I --

John G. Roberts, Jr.: Go ahead.

Allyson N. Ho: I think the big difference there is at the NLRB, it is the general counsel, it is the general counsel of the NLRB, it is the government, that is bringing that action and that is prosecuting that action. So you're -- you're right there. There -- I think there is some confusion in terms of adjudication for rule-making purposes, which is the government prosecuting the action and choosing that, in opposed to rule-making, which we're not challenging. Our challenge is to an adjudication in the Article III sense between two private parties, where the government isn't -- isn't engaging in the classic executive action of bringing the action or prosecuting action but is adjudicating, is the decider of the action.

John G. Roberts, Jr.: Thank you, counsel.

Allyson N. Ho: Thank you.

John G. Roberts, Jr.: The case is submitted.