Cooper takes another shot at the apple
Inventor Makes Another Push For High Court To Review IPRs
By Kelly Knaub
Law360, New York (October 19, 2016, 5:05 PM EDT) -- The inventor behind a credit card payment patent on Wednesday doubled down on his effort to persuade the U.S. Supreme Court to consider whether American Invents Act inter partes reviews are constitutional, a week after the high court rejected similar bids by him and a flash memory patent owner in two separate cases.
Before responding directly to arguments made by card payment company Square Inc. in its Oct. 11 reply brief, J. Carl Cooper told the justices that the case has “extreme constitutional importance,” saying the “broadest reasonable construction” standard used in IPRs can invalidate patents under agency review that would not have been invalidated in court.
Since accused infringers can request an IPR, Cooper said, litigation over patent validity based on prior art has been moved from the courts to a single executive agency. As a result, he said, patent owners don't get their day in court before having their private property rights administratively revoked.
“The constitutional injury has no parallel,” Cooper said in Wednesday's reply brief. “Had King George III done to inventors in 1776 what the federal government does today, Thomas Jefferson would have likely added a paragraph on the topic to the Declaration of Independence.”
Cooper filed the brief eight days after the high court declined to take up a separate petition filed by Cooper and eCharge Licensing LLC raising the same issue, along with MCM Portfolio LLC’s petition in another case. Cooper's attorney, Robert Greenspoon of Flachsbart & Greenspoon LLC, told Law360 last week that the denial in those two cases might be a "positive sign" that the court is anticipating his petition in the instant case.
In a somewhat rare move, the high court directed Square in September to file a reply brief after it attempted to waive its right to respond in August.
In his Wednesday reply brief, Cooper said Square’s contention that the high court should deny certiorari because of an alleged “vehicle” problem fails, arguing that no future petition on the question presented will ever be a better vehicle for high court review.
Specifically, Cooper took aim at Square's contention that his failure to make a constitutional objection in his patent owner's response at the Patent Trial and Appeal Board meant he waived his right to make that argument on appeal. That waiver only applied to arguments for patentability, he said.
Cooper noted that numerous amicus briefs were filed in both this case and the other two cases in support of reviewing the constitutionality of IPR proceedings.
In April, the Federal Circuit affirmed the PTAB’s IPR decisions invalidating many claims of three "universal credit card" patents that eCharge asserted against Square, just days after oral argument.
ECharge, a company that licensed the patents from Cooper, sued Square in the Northern District of Illinois in September 2013, alleging infringement of three patents.
The suit claims Square, which was created by Twitter co-founder Jack Dorsey, infringed by offering an app that converts a smartphone or other device "into a credit card apparatus as claimed" in the patent.
Square makes products that allow people and companies to accept credit card payments through smartphones and tablets. It challenged all three patents in AIA inter partes reviews, and the PTAB invalidated nearly all of the challenged claims.
One of the eCharge patents describes a "universal credit card" apparatus that allows access to numerous accounts with one card, "thereby eliminating the need to carry, store or retain numerous cards," according to the patent.
Before the PTAB issued its decision, Cooper sued the U.S. Patent and Trademark Office, contending that AIA reviews are unconstitutional. But the district court granted summary judgment to the agency, ruling Cooper should have raised the issue at the PTAB before seeking judicial review.
As a result of the Federal Circuit’s December ruling in the MCM case that AIA reviews are constitutional, Cooper asked the Federal Circuit to summarily affirm the lower court's decision against him and took the case to the Supreme Court, which denied certiorari last week.
MCM’s case dates back to 2012, when the company sued Hewlett-Packard Co. in the Eastern District of Texas over MCM's patent for a controller chip used in flash memory readers. The case has since been transferred to the Northern District of California, where it is pending.
An attorney for eCharge and Cooper declined to comment. An attorney for Square did not respond to a request for comment.
The patents-in-suit are U.S. Patent Numbers 8,490,875; 7,828,207; and 6,764,005.
Cooper is represented by Robert P. Greenspoon of Flachsbart & Greenspoon LLC.
Square is represented by Theodore John Angelis of K&L Gates LLP.
The case is Cooper v. Square Inc., case number 16-76, in the Supreme Court of the United States.
--Additional reporting by Kevin Penton, Ryan Davis, Matthew Bultman and Bonnie Eslinger. Editing by Mark Lebetkin.
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