USPTO Cancels My Patent

The USPTO’s trial arm, the Patent Trial and Appeal Board (‘PTAB’), cancels patent claims so frequently that the PTAB is usually the copyist’s first stop in defending against patent infringement.  Before the PTAB cancels the claims, the patent owner has a valuable (and expensive) asset, namely the patent.  When the PTAB cancels the patent claims, the patent owner’s right to enforce the patent claims, and hence the patent, vanishes.  The patent owner’s rights are here one moment and gone the next, taken away by the USPTO. The invention is no longer protected by those claims and the invention is effectively dedicated to the public.

But the 5th Amendment to the U.S. Constitution says: “…nor shall private property be taken for public use, without just compensation.”  Doesn’t this guarantee that the government can’t take your patent without paying you for it?

That’s certainly the position taken by Christy, Inc. in Christy v United States.  Christy, Inc’s founder, invented and patented a portable shop vacuum that used two or more filters and alternately knocked dust loose from the filters using air pulses.  Christy paid all the fees to have the patent issued and to keep the patent in effect.  

When Christy tried to enforce the patent against Black and Decker, B&D went to the USPTO to challenge the patent using the ‘inter partes’ review procedure.  B&D was successful and the USPTO cancelled Christy’s patent claims.  Christy then sued the Federal government in the Court of Federal Claims, which is where you go when the Federal government owes you money. 

Christy presented two arguments of interest.  The first was that the USPTO took Christy’s property without just compensation under the 5th Amendment by cancelling the patent claims.  The second was for ‘illegal extraction’, namely that the USPTO improperly extracted fee payments from Christy to issue the worthless patent and to keep its (invalid) claims in effect.  Christy presented its claims as a class action, meaning that everyone else whose patent claims have been cancelled by the USPTO or who the USPTO induced to pay fees for worthless patents would be able to collect their damages, too.

It should come as no surprise that Christy did not win.  On appeal, the Federal Circuit concluded that the USPTO’s inter partes review could not result in a 5th Amendment taking under the prior Golden and Celgene decisions, which conclude that inter partes review was a way for the USPTO to correct its mistakes, not take property.  

Christy’s illegal extraction argument was basically a negligence argument – the USPTO was negligent in mistakenly issuing the patent in the first place, and should be responsible for the financial consequences of its errors. The Federal Circuit rejected the argument because there is no specific provision of the Constitution, statutes or regulations that imposes such liability on the Federal government. The Federal Circuit suggested that Christy’s argument is better directed to Congress, not the courts.

Our conclusion? The USPTO can declare claims invalid through its review procedures without paying money to the patent owner.  

— Robert Yarbrough, Esq.