Patent Owner Launches Takings Class Action in Wake of SCOTUS Ruling
Heninger Garrison Davis serves up a challenge to AIA proceedings that Justice Clarence Thomas refused to rule out.
May 11, 2018 at 05:26 PM
4 minute read
An Alabama law firm has launched a class action on behalf of patent owners who've lost claims during America Invents Act proceedings.
Birmingham-based Heninger Garrison Davis argues in Christy v. United States. that the U.S. Patent and Trademark Office is taking property without just compensation every time it cancels claims in a post-grant proceeding. The U.S. Supreme Court seemed to sketch out such a theory in its Oil States Energy Services v. Greene's Energy decision last month that turned away a broader constitutional challenge to inter partes review.
IPR is the system set up by the America Invents Act for the Patent Office to take a second look at previously issued patents. Thousands of patents have been partly or fully invalidated under the system since it was launched in 2012.
Thursday's complaint, signed by Heninger managing partner Timothy Davis, contends the PTO conceded liability by taking the position during Oil States that it uses IPRs to withdraw patents that never should have been issued in the first place.
“If this is the case, then the USPTO should never have collected (or be allowed to keep) any issuance fees or maintenance fees for any of the patents,” Davis writes. The PTO also must reimburse patent owners for attorney fees spent defending before the PTAB, plus any money plaintiffs invested in the patented invention, the complaint states.
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Justice Clarence Thomas' 7-2 opinion in Oil States emphasized the narrowness of the decision. He said the court was not expressing an opinion on whether the PTO could reach back and cancel patents issued before the America Invents Act. And, he wrote, “Our decision should not be misconstrued as suggesting that patents are not property for purposes of the due process clause or the takings clause.”
The patent owned by name plaintiff Christy Inc. issued in 2006 and describes an “ambient air backflushed filter vacuum.” Black & Decker brought two IPRs that invalidated many of the patent claims based on obviousness and anticipation.
Along with takings in violation of the Fifth Amendment, Christy alleges breach of contract, breach of duty of good faith and fair dealing, unjust enrichment, and improper exaction of fees.
Ropes & Gray counsel Matthew Rizzolo, who predicted a takings suit in an article last week, says ordinary IPRs probably present the weakest taking claims, because the PTO has been re-examining patents for anticipation and obviousness since the 1980s. Covered business method reviews (CBMs), a procedure similar to IPR but where patents can be canceled for Section 101 eligibility or Section 112 indefiniteness, “have the most potential viability, because they represented a departure in substance from prior PTO proceedings,” Rizzolo says.
Rizzolo and University of Missouri School of Law professor Dennis Crouch, who blogged about the case Thursday, both describe the wide-ranging case as a long shot. The best chance of recovery, they suggest, is for issuance and maintenance fees.
Rizzolo sees one other potential flaw in the Christy patent as the vehicle: “It appears that the patent at issue had only 18 of its 20 claims ruled invalid in the IPRs,” he said. “So there is still some portion of the property right intact and to which the issue and maintenance fees apply.”
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