On May 11, 2017, the Federal Circuit denied a request for an initial hearing en banc in Cascades Projection LLC v. Epson Am., Inc., Nos. 2017-1517, 2017-1518 (Fed. Cir. May 11, 2017). Although the denial was not surprising, the level of interest from the Court was. With multiple amicus briefs, two dissenting opinions, and a lukewarm concurrence by Judge Newman, the en banc denial will likely not be the last we hear about the issues presented in the petition. 

Briefly, Cascades Projection (“Cascades”) took the unusual step of petitioning the Federal Circuit for an initial hearing en banc to address whether a patent right is a private right such that a non-Article III body can constitutionally review issued patents in IPR proceedings. The Court, in a per curiam decision, denied the petition.

Judge Reyna dissented in a thorough twenty-four page opinion. Specifically, Judge Reyna stated that the Supreme Court’s McCormick Harvesting Mach. Co. v. Aultman, 169 U.S. 606 (1898) decision dictates that only an Article III court may annul an issued patent. This reasoning conflicts with the Federal Circuit’s own precedent in MCM Portfolio, LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015) cert. denied 137 S. Ct. 292 (2016), and Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985), both of which purport to distinguish McCormick. Moreover, Judge Reyna stated that Patlex and MCM are in conflict with each other as to whether McCormick was decided on statutory or constitutional grounds. Finally, Judge Reyna stated that the petition raises larger separation of powers issues implicated by the increased use of administrative law judges, a practice he found “in need of a clear limiting principle.”

Judge O’Malley likewise dissented from the denial, noting she was “far from certain that MCM’s underlying premise—that patent rights are public rights—is correct.”

Judge Newman concurred in the denial of the petition, on the grounds that “the matter should be resolved after full opportunity for panel consideration.”

Finally, Judge Dyk issued an opinion (joined by Chief Judge Prost and Judge Hughes) “solely to address three points raised by today’s dissents.” That is, Judge Dyk stated that MCM and Patlex were not in conflict, and further, that both decisions distinguished McCormick on statutory grounds. Finally, Judge Dyk stated that “the Supreme Court has repeatedly recognized that patent rights are public rights flowing from congressional legislation.”

Cascades likely found solace in the unusual interest its petition was able to garner, and therefore is likely to continue to advocate for this position through panel briefing and beyond. As Judge Newman noted, Cascades may re-raise the need for en banc review following the panel’s review. Finally, Cascades may decide to take its fight up with the Supreme Court. Indeed, while MCM appears consistent with Federal Circuit precedent, the Supreme Court’s recent decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC demonstrates that the Supreme Court is not adverse to questioning what otherwise appears to be well-settled Federal Circuit principles, particularly when there is a potential conflict between a prior Supreme Court decision and the Federal Circuit’s more recent pronouncements.