The Justiciability of Cancelled Patents

Abstract

The recent expansion of the Patent Office’s power to invalidate issued patents raises a coordination problem when there is also concurrent litigation, particularly where the federal courts have already upheld the patent’s validity. The Federal Circuit has concluded that Patent Office cancellation extinguishes litigation pending at any stage and requires vacating prior decisions in the case. This rule is widely criticized on doctrinal, policy, and separation of powers grounds. Yet, the Federal Circuit has reached (almost) the right outcome, except for the wrong reasons. Both the Federal Circuit and its critics overlook that the Federal Circuit’s rule reflects a straight-forward application of the justiciability limits on the power of the federal courts. Patent cancellation eliminates the exclusive rights that form the basis for the plaintiff’s suit, mooting the infringement case no matter how belated in the litigation. Courts typically vacate prior judgments and decisions when a pending case becomes moot, exactly as the Federal Circuit requires. Properly rooting the effects of Patent Office cancellation in mootness addresses critics’ doctrinal and policy concerns. It also demonstrates that critics’ separation of powers concerns are exactly backwards. The Federal Circuit’s rule is not a threat to the constitutional structure or the role of federal courts but rather a necessary result of Article III’s limits on federal judicial power. Courts and Congress each have potential ways to mitigate policy concerns from allowing Patent Office cancellation to trump litigation, while respecting mootness, but these ways introduce their own problems. Courts may have some discretion to decline to vacate prior judgments but doing so would have limited impact and could be an unwarranted departure from generally applicable procedural rules. Congress could limit the retroactive effect of patent cancellation, but this would be historically novel and raise its own policy concerns.

Keywords: patent, PTAB, intellectual property, IP, federal courts, mootness, justiciability, Article III, patent litigation