Sunday, July 31, 2011

Supreme Court Patent Decisions Reviewed by Panel Session at BIO International Convention: Federal Circuit Mistakes Judicial Role for Legislative Duty

Kevin E. Noonan at Patent Docs has an extensive review of Supreme Court patent decisions as reviewed by panel session at the BIO International Convention. Significant for us in terms of patent developments is this paragraph from Noonan at Docs at BIO: Panel Session on Recent Supreme Court Patent Decisions:
"[Paul Clement, former Solicitor General now at Bancroft PLLC] ... reminded the audience that in the seven patent cases decided in the past five years (including eBay Inc. v. MercExchange, L.L.C., KSR Int'l Co. v. Teleflex Inc., MedImmune, Inc. v. Genentech, Inc., Microsoft Corp. v. AT&T Corp., and Quanta Computer, Inc. v. LG Electronics, Inc., excluding Bilski v. Kappos) the Court ruled 59-2 (with 2 recusals) against the Federal Circuit. Thus, this term is the anomaly he said, particularly when it is remembered that the Court reverses generally about 70% of the time." [emphasis added by LawPundit]
In spite of that above-noted severe reversal record of the Federal Circuit, former Federal Circuit Chief Judge Paul Michel showed signs in the panel session that he still has not successfully resolved the role of patent law vis-a-vis U.S. constitutional law. Noonan writes:
"Judge Michel then asked the panel whether the Supreme Court utilized what he called its "constitutional law mode" of decision-making when deciding patent cases, invoking multifactor weighing tests that result in there being no answer to any question until the Court has opined. He noted that in his view the consequences of this way of addressing patent cases ignore the reality that most of what happens in patenting does not happen in court, but in the real world where clients need guidance with predictability if not certainty about what they can do and what they cannot do."
To repeat in short form, Michel thus derogatorily categorizes U.S. Supreme Court decisionmaking as utilizing "constitutional law mode ... to ignore the reality of what happens in patenting ... in the real world where clients need guidance with predictability if not certainty ...."

One might point out to Judge Michel that "constitutional law mode" is the job of the U.S. Supreme Court, and no other. The Supremes are paid to interpret the Constitution and are the final word on that score. They are not handmaidens to inventors, nor guarantors of patent certainty.

The idea that the Federal Circuit should provide patent certainty to inventors is a novel view of patent law and to this observer is surely one reason why the Federal Circuit has been reversed time and time again in the past, seeing as how that paternalistic view of the role of the Federal Circuit is much more a legislative one rather than a judicial one.

The Federal Circuit was not called into life to provide patent certainty "to patent clients", but rather to determine whether the alleged patents of those "clients" are valid and whether they rightfully deserve the monopoly protection of the patent laws. Apparently that has not been done.

The only thing that should be certain is that a real invention will be protected by the law and everything else NOT.

In confusing the Federal Circuit's JUDICIAL role with norm-making legislative duties, the Federal Circuit Court has gone astray, and continues to do so in the Court era since Michel, apparently seeing itself as a legislative-type body, rather than as a judicial case-deciding one.

Correctly seen, the Federal Circuit should properly understand that it does not "make" patent law, rather, it "applies" patent law.

That is a significant difference in duty.

US Tax Revenus as a Percentage of GDP (Gross Domestic Product) Lag Far Behind the EU European Union Member Nations and OECD Countries

We love America as the country of our youth, but why does one get the impression when one now visits the USA that so little has been done there in the last 40 years?

Indeed, has the United States in some respects sunk economically to the level of a 3rd-world banana republic? Read Ray B. Williams in Wired for Success at Psychology Today online for some hair-raising stats about Why America Is In Decline.

The graphic below shows an integral part of the American problem, which stems from antiquated, unrealistic, nostalgic misconceptions about the nature of modern government, its means of financing and its tax system. Constitutional originalists may yearn for the good old days, but economically seen, that kind of nostalgic sentiment is a formula for future disaster.

Take a look at the graphic below from the Wikimedia Commons
showing Tax Revenues as a Percentage of GDP (Gross Domestic Product)



It is hard for a realist to comprehend how America hopes to police the globe militarily (recent wars have cost about as much as the federal deficit) and keep up with the rest of the world economically, when its own federal government has -- relatively speaking -- much less tax revenue money available than the rest of the civilized, industrial nations on our planet. America is trying to do twice as much on half the money. It is not going to work long-term.

Indeed, realistic analysis leads to the conclusion that it is impossible for America to maintain its world standing under its current system of under-taxation and the correlated under-financing of its federal government.

In fact, America is losing and has been losing its position of world power since about 1970, when the need to import oil began. America became energy-dependent on others, and that has been expensive for an energy culture living in bygone days when oil and gas were locally abundant and cheap. No more.

See Oil & Gas Cartels and American Inertia on Energy Issues : Major Culprits for the Current Economic Situation in the World?

See Europe vs. the USA : A European Economic Model? — Crooked Timber on Manzi : BloggingHeads : Henry Farrell & Daniel Drezner discuss Cohen & DeLong

Well-meaning but totally misguided Republicans in the present U.S. Congress think they have some kind of magic solution for accomplishing more with less, but they are kidding both themselves and the American citizens.

When you have less money you have less money, and sooner or later, the shoe is going to squeeze your foot, as is happening in the current debt crisis. Jobs and revenues are scarce and political entities must react to the realities.

One aspect of America's problems is that they are listening to the wrong people. Take a look at the skewed Europe Is Warning Us at TownHall.com by a writer who got his Ph.D. in Classics, hardly an expertise in law, government, economics, foreign policy or political science. America is full of opinionated poorly informed commentators who are short on facts.

As Bernd Debusmann writes at Reuters in The Great Debate: Who wins in U.S. vs Europe contest?:
"In these days of renewed gloom about the future of Europe, a quick test is in order. Who has the world’s biggest economy? A) The United States B) China/Asia C) Europe? Who has the most Fortune 500 companies? A) The United States B) China C) Europe. Who attracts most U.S. investment? A) Europe B) China C) Asia.

The correct answer in each case is Europe, short for the 27-member European Union (EU), a region with 500 million citizens. They produce an economy almost as large as the United States and China combined.... " [emphasis added by LawPundit]
The LawPundit lives in Europe and most of what is written about Europe in that TownHall.com posting above is just nonsense. The American economy is floundering, while the average European lives at a much higher standard of living, culturally and economically, than your average American, in spite of much higher taxes -- and indeed, in part because of higher taxes and because of much greater income equality. See USA National Debt: WHO Are the Investors? What Role Tax Cuts in the Federal Deficit? The Bane of Income Inequality in the USA.

As a visitor of ours to Germany recently asked: "where do the poor live?", not having seen any. We answered: "there are none, at least, none in the sense you seek". We take care of our own. That is a difference in worlds, folks.

Indeed, America's position in the hierarchy of the nations of the world has changed dramatically in past decades. America maintains its position of world power only because of military superiority and because of a superb educational system at the top institutions of learning. In many other aspects of life, economics and culture, the USA is lagging further and further behind. As written in How Europe Sees America about a survey of world opinions about the USA and its cultural influence:
"In total, more respondents (39%) said America's cultural influence in the world was negative than those who said it was positive (22%). Among European respondents, 32% said U.S. cultural influence was negative, compared to 26% who gave a positive response."
We wrote about this cultural decline previously at America: A Disordered Culture and Country: Peggy Noonan at the WSJ asks What the World Sees in America: Also the Good: Agriculture, Defense, Computers, Airlines.

Articles like those at TownHall.com are the blind leading the blind. For example, we were in the USA recently and were appalled at the shoddy mechanical condition of the commercial airplanes at major US airlines, as compared to European carriers. We know commercial jet pilots here in Europe who state unabashedly that visiting America can hardly be distinguished any more from visiting 3rd world countries.

Wake up, America. Wake up,
and,
above all,
Grow up, America. Grow up.
The world has changed.
Take notice if you want to survive and prosper.
Things will not improve by living in a dream world.

Madmen in Congress Playing a Risky Game With US Treasury: Under Unitary Executive Theory, US President Could Declare National Emergency and Pay Bills

In case you were not aware of it, the American system is broken, more or less, as Congress is increasingly manned by idiots.

The government has run out of money (actually, it has run out of it credit), yet the Republicans -- who, under the Bush Administration -- created massive deficits in the first place, continue to advocate massive tax and spending cuts in a disturbed economy which is not creating enough jobs to generate necessary taxable income and thus also not enough government revenue to cover fixed government expenses. A lack of money is the consequence.

The Debt Ceiling for the U.S. Federal Government is found in Public Law 111 - 139 - Joint resolution increasing the statutory limit on the public debt, and is currently set at $14,294,000,000,000. The government of course can borrow more, this is no problem at all, as such, but it needs Congressional authorization to do so.

In order for the Treasury Department to write next month's checks, the above debt limit must be raised, or one would exceed the present limit.

This situation has led to a political battle in Congress in Washington D.C., where Republicans, apparently basking in the ever-increasing wealth of the upper income groups, refuse to raise the debt limit, but instead are using the current money situation to extort Congress to instead cut government programs -- immediately, which is quite irresponsible, politically and financially. No sound major financial institution in the world supports that crazy Republican position.

As written at Bloomberg by Julianna Goldman and Vincent Del Giudice in Treasury Will Detail Bill-Paying Plan If Deal on Debt Limit Isn't Reached:
"Bankers such as Goldman Sachs Group Inc. Chairman and Chief Executive Officer Lloyd Blankfein and JPMorgan Chase & Co. CEO Jamie Dimon called on President Barack Obama and Congress to raise the debt limit.
“The consequences of inaction -- for our economy, the already struggling job market, the financial circumstances of American businesses and families, and for America’s global economic leadership -- would be very grave,” the executives wrote in the letter sent today by the Financial Services Forum, a Washington-based trade group representing the largest banks."
However, if no agreement is reached in Congress, the U.S. Treasury will go into default and be unable to pay its bills viz. write its checks (Social Security, Medicare, interest on government debt, treasury certificates, etc.).

Obviously, if it comes to that, the first people who should not get their checks are the Republicans in Congress, whose totally irresponsible behavior has led to the present situation.

In Consensus in Washington That City Is Mad, Elisabeth Bumiller writes inter alia that:
"Tourists who have come from around the world to see messy American democracy in action are watching far more mess than they ever expected. “You guys are nuts,” said Joseph Eastwood, 44, a Toronto accountant who was waiting in the Capitol Visitor Center for a tour last week. “Instead of building the country, you’re destroying it.”
People in Congress should consider that the President of the United States

-- rather than permitting a national default with all of the negative world consequences affiliated with that default --

could -- very theoretically -- declare a national emergency and by executive order instruct the Treasury to pay all outstanding national obligations, referring in the course of an executive order to "subsequent" necessary "power of the purse" Congressional legislative implementation of applicable laws and regulations down the road, i.e. at a time when all Congresspersons have come to their senses.

There is, by the way, precedent from the Republican eras of the Reagan and Bush presidential administrations, supporting such a presidential move.

In legal terms, one speaks of unitary executive theory, first proposed during the Reagan administration, where the President of the United States is "supreme" over the executive branch.

We note here from the Wikipedia that:
"The Department of the Treasury is an executive department and the treasury of the United States federal government. It was established by an Act of Congress in 1789 to manage government revenue. The Department is administered by the Secretary of the Treasury, who is a member of the Cabinet."
If the President deemed it necessary as part of a national emergency that the Department of Treasury should make required payments, regardless of the debt ceiling, The Treasury would have to do so, since it stands under his command. Whether that would be "strictly legal", is another matter.

The U.S. President can in any case issue executive orders that nullify or amend existing laws if required by a national emergency, and he would stand on very good legal footing in the case of a challenge to the U.S. Supreme Court.

Congress could challenge an executive order instructing the U.S. Treasury to pay its bills as required, as having no legislative basis, but, in case of a judicial win, that would be a very messy political business, getting all of those Medicare and Social Security checks back from their recipients. That is not an alternative the Republicans want, you can be sure. No better way to alienate voters than that.

The ultimate issue of financing the payment of federal government bills by taxes or debt is of course with Congress, who holds the power of the purse, but that technicality can be postponed to a later date. Why not, if a national emergency default can be averted?

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