Opinion ID: 692072
Heading Depth: 2
Heading Rank: 1

Heading: Patents Involve Public Rights

Text: 68 In Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989), the Supreme Court stated: The Seventh Amendment protects a litigant's right to a jury trial only if a cause of action is legal in nature and it involves a matter of 'private right.'  Id. at 42 n. 4, 109 S.Ct. at 2790 n. 4. Originally, the concept of public rights, in contrast to private rights, was limited to litigation where the government was a party. Northern Pipeline Constr. v. Marathon Pipe Line, 458 U.S. 50, 69, 102 S.Ct. 2858, 2870, 73 L.Ed.2d 598 (1982). The concept was expanded to litigation where the government was not a party in Thomas v. Union Carbide Agric. Prod., 473 U.S. 568, 586, 105 S.Ct. 3325, 3335-36, 87 L.Ed.2d 409 (1985), and in Granfinanciera, 492 U.S. at 54, 109 S.Ct. at 2796-97. 69 This court has held that the issue of validity of a patent involves public rights, not merely private rights. As stated in Patlex Corp. v. Mossinghoff, 758 F.2d 594, 604 (Fed.Cir.1985), [T]he grant of a valid patent is primarily a public concern. See also Joy Technologies, Inc. v. Manbeck, 959 F.2d 226, 228 (Fed.Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 90, 121 L.Ed.2d 52 (1992). In Patlex, the patentee had brought an infringement suit in which he asked for a jury trial. The defendant pleaded invalidity. A week before the scheduled trial, and with the consent of the trial judge, the defendant successfully petitioned the Patent and Trademark Office (PTO) to undertake reexamination of the patent. The district court stayed the suit awaiting reexamination. The patentee sought to enjoin the Commissioner from proceeding with reexamination, challenging the constitutionality of the reexamination procedure, which was added to the patent statute in 1980. 35 U.S.C. Secs. 301-307. The patentee asserted, inter alia, that the reexamination procedure deprived him of a Seventh Amendment right to have a jury determine the validity of his issued patent. As correctly noted, the administrative reexamination would allow the PTO to hold the patent invalid and cancel it without affording him a jury trial. 35 U.S.C. Sec. 307(a). While review of such administrative action may be obtained in this court directly or via a district court before such appeal, no jury trial is afforded in any part of these proceedings. 35 U.S.C. Sec. 306. 70 The Patlex panel noted that although validity is normally raised in litigation between two parties, the threshold question usually is whether the PTO, under the authority assigned to it by Congress, properly granted the patent. At issue is a right that can only be conferred by the government. Patlex, 758 F.2d at 604. The panel further reasoned: 71 The reexamination statute's purpose is to correct errors made by the government, to remedy defective governmental (not private) action, and if need be to remove patents that should never have been granted.... A defectively examined and therefore erroneously granted patent must yield to the reasonable Congressional purpose of facilitating the correction of governmental mistakes. This Congressional purpose is presumptively correct, and we find that it carries no insult to the Seventh Amendment and Article III. 72 Id. (emphasis added). 73 Underlying the concept of public rights is the power of Congress to define a public grant which need not include a jury right to determination of its efficacy. 74 [C]ongress can [not] withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law.... At the same time there are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determination, but which congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper. 75 Murray's Lessee v. Hoboken Land and Improvement Co., 59 U.S. (18 How.) 272, 284, 15 L.Ed. 372 (1856); Granfinanciera, 492 U.S. at 52, 109 S.Ct. at 2795-96; Northern Pipeline, 458 U.S. at 67, 69 n. 23, 102 S.Ct. at 2869, 2870 n. 23; Atlas Roofing Co. v. Occupational Safety and Health Review Comm'n, 430 U.S. 442, 451 n. 8, 97 S.Ct. 1261, 1267 n. 8, 51 L.Ed.2d 464 (1977); see also Thomas, 473 U.S. at 587, 105 S.Ct. at 3336. As stated in Northern Pipeline: 76 [W]hen Congress creates a statutory right, it clearly has the discretion, in defining that right, to create presumptions, or assign burdens of proof, or prescribe remedies; it may also provide that persons seeking to vindicate that right must do so before particularized tribunals created to perform the specialized adjudicative tasks related to that right. Such provisions do, in a sense, affect the exercise of judicial power, but they are also incidental to Congress' power to define the right that it has created. 77 Northern Pipeline, 458 U.S. at 83, 102 S.Ct. at 2878 (footnote omitted). 78 A patent grant is of this nature. The patent grant and accompanying rights are purely statutory, albeit based on Article I, section 8 of the Constitution which is both a grant of power and a limitation. Graham v. John Deere Co., 383 U.S. 1, 5, 86 S.Ct. 684, 687, 15 L.Ed.2d 545 (1966). 79 Moreover, Congress has placed patent validity determinations within the cognizance of both Article III and Article I trial tribunals. Reexamination by the PTO with review by the Board of Patent Appeals and Interferences of the PTO is only the most recent empowerment outside Article III. By specific amendment of the Tariff Act of 1930, the International Trade Commission also must pass on the validity of patents in connection with unfair trade practices in the importation of goods. Trade Act of 1974, P.L. 93-618, tit. III, ch. 4, Sec. 341, 88 Stat. 1978, 2053 (codified at 19 U.S.C. Sec. 1337(c) (1988)). 80 These legislative provisions are in accord with the concept of public rights. 4 They are not in accord with a constitutional right to a jury trial on the issue of validity. A litigant cannot have a constitutional right and not have a constitutional right on the same issue. See Fleming James, Jr., and Geoffrey C. Hazard, Civil Procedure (3rd Ed.1985) Sec. 8.11 at 450. The panel misreads the holding of Chauffeurs, Teamsters & Helpers Local No. 391 v. Terry, 494 U.S. 558, 110 S.Ct. 1339, 108 L.Ed.2d 519 (1990) (Teamsters ) in stating that the public rights limitation has no effect on a jury trial analysis because this case is in an Article III court. The panel states that public rights only apply when Congress has assigned adjudication of the legal claim concerning such public right exclusively to an administrative agency. Majority op. at p. 972 n. 5 (emphasis added). 5 The panel's reasoning would eliminate any problem respecting the public rights issue once a claim can be brought in an Article III court. That rationale cannot explain the Patlex case which denied the patentee litigant a right to a jury to determine validity. Patlex must be overruled under the panel's reasoning. 81 I believe that Patlex is correct and that Granfinanciera controls. A constitutional jury right to determine validity of a patent does not attach to this public grant. Congress could place the issue of validity entirely in the hands of an Article I trial court with particular expertise if it chose to do so. The panel wipes out this option by constitutionalizing jury rights on the issue of validity. 82 Since Supreme Court precedent holds that the Seventh Amendment does not apply to public rights determinations, and the patent grant involves a public right, the panel's order is in conflict with both the Supreme Court and our precedent.