Cascades Projection LLC v. Epson America, Inc.
864 F.3d 1309
| Fed. Cir. | 2017Background
- Cascades Projection LLC sought en banc review of a Federal Circuit panel decision upholding the Patent Trial and Appeal Board’s (PTAB) authority to cancel issued patents via inter partes review (IPR).
- The petition followed conflicting panel precedent and debate over whether patents are "public rights" (amenable to agency adjudication) or private property requiring Article III adjudication.
- The court invited responses; Epson and Sony defended IPR; Cascades argued IPR violates Article III and the Seventh Amendment and conflicts with Supreme Court precedent.
- The en banc petition was denied; multiple judges issued separate concurring and dissenting opinions addressing the constitutional question.
- Key legal tension: McCormick (1898) holds that issued patents cannot be annulled by the issuing department and implicates Article III, while Patlex (1985) and MCM (2015) upheld post-issuance administrative review as constitutionally permissible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IPR cancellation of issued patents violates Article III and the Seventh Amendment | Cascades: Patents are private property; McCormick requires Article III courts to invalidate issued patents; IPR thus unconstitutional | Epson/Sony: Patents are public rights created by federal statute; Congress may assign adjudication to PTO/PTAB; Patlex and MCM permit agency review | Petition for en banc hearing denied; panel precedent (MCM/Patlex) upholding IPR remains controlling; full-court review not granted |
| Whether patents are "public rights" (agency decides validity) or private rights (Article III required) | Cascades: Historical and Supreme Court authority treat patents as private property deserving Article III protections | Respondents: Patents stem from federal regulatory scheme and Congress can authorize agency adjudication; Stern and related doctrine permit agency resolution of public-rights disputes | Court declined en banc review; concurrences defend MCM/Patlex; dissents urge en banc to resolve the split |
| Whether McCormick controls or was superseded/distinguished by statute and later decisions | Cascades: McCormick is binding Supreme Court precedent and prohibits executive cancellation of issued patents | Respondents: McCormick turned on lack of statutory authority; subsequent statutes and decisions allow reexamination/IPR to correct governmental mistakes | Panel decisions (Patlex, MCM) treat McCormick as distinguishable; en banc review denied so conflict unresolved at full court level |
| Whether conflicting panel precedent warrants en banc rehearing to maintain uniformity | Cascades: Patlex and MCM provide irreconcilable rationales; full court should resolve uniformity and separation-of-powers issues | Respondents/Court: MCM correctly follows Patlex and Supreme Court guidance; no need for initial en banc hearing now | En banc petition denied; several judges concurred or dissented explaining readiness or reluctance to revisit the constitutional questions |
Key Cases Cited
- Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985) (upheld PTO reexamination statutes and distinguished McCormick)
- MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015) (held patent rights are public rights and IPR does not violate Article III)
- McCormick Harvesting Machine Co. v. Aultman, 169 U.S. 606 (1898) (held the Patent Office lacked authority to revoke issued patents; such power vested in the courts)
- Stern v. Marshall, 564 U.S. 462 (2011) (articulated limits of non-Article III adjudication and refined the public-rights exception)
- Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272 (1855) (early discussion of public rights exception to Article III)