Double Jeopardy: Patents of Invention as Contracts, Invention Disclosure as Consideration, and Where Oil States Went Wrong

Patents in England were once favors granted by the King with the requirement that the subject matter be practiced, or worked, for the benefit of the public. However, by the late eighteenth century patents were viewed as contracts with the government. Concomitant with this shift, the requirement to practice an invention was replaced by submission of a written specification disclosing to the public how to work the subject matter of the patent. In essence, advancement of the public good by grant of an exclusionary right to practice an invention at royal discretion was substituted with public disclosure as consideration for grant of that right by contract. The contractual nature of patents that evolved in England was adopted in the United States shortly after its founding. Disclosure of an invention can be offered as consideration by an inventor because, unlike most substance of sovereign dispensation, it is not otherwise available. Also unlike favor, disclosure of an invention cannot be withdrawn once it has been made. The Supreme Court in Oil States v. Greene’s Energy Group failed to acknowledge these distinctions by improperly construing nineteenth century dicta to conclude that patents “take from the public rights of immense value” and by asserting more recent dicta that inter partes review is nothing but “a second look” at an earlier administrative decision. Dismissing the genesis and irretrievable nature of invention disclosure by implying that patent rights are taken from the public by virtue of patent grant obliterates the distinction made over two hundred years ago that patents are not privileges subject to sovereign volition. The Supreme Court’s new understanding of patents causes an overlap of Article I “legislative courts” under the purview of the executive branch, with “constitutional courts” controlled by Article III of the Constitution. The result is double jeopardy for patentees and reduced certainty in the business community, both of which are anathema to the intent behind creation of ex parte reexamination, introduced under the Bayh–Dole Act of 1980, and extending to the several proceedings inaugurated with the America Invents Act, such as inter partes review