I’d Say 2 For 2

The editors of the Wall Street Journal like one of the recent Supreme Court decisions but not the other:

The Court ruled in Jesner v. Arab Bank that foreign corporations cannot be sued under the 1789 Alien Tort Statute, which was originally intended to punish piracy and injuries to ambassadors under the common “law of nations.” But plaintiff attorneys have been using the law to haul foreign defendants into U.S. courts for human-rights violations that occur overseas.

In Jesner, foreign plaintiffs charged that the Jordanian Arab Bank should be liable for injuries perpetrated by terrorists in Israel since it had cleared automatic wire transfers via the U.S.-based CHIPS system for groups later placed on Treasury’s list of terrorist organizations. Writing for a 5-4 conservative majority, Justice Anthony Kennedy affirmed the Court’s Kiobel (2013) decision that liability under the 1789 law does not extend to suits against foreign corporations when “all the relevant conduct took place outside the United States.”

In sterling concurrences, Justices Samuel Alito and Neil Gorsuch explained that allowing foreign corporations to be sued under the 1789 law would violate the separation of powers. “Creating new causes of action and navigating foreign policy disputes belongs to the political branches,” Justice Gorsuch noted. That was the good decision.

Article III of the Constitution grants independent judges the limited power to adjudicate disputes of common law between private parties. Yet the Court on Tuesday erred by relinquishing some of its authority to the executive branch in Oil States Energy v. Greene’s Energy decision, which upheld inter partes review for patents.

Inter partes review allows anyone to challenge a patent at any time before a special tribunal composed of administrative law judges selected by the Patent Office director who are vested by Congress with authority to nullify patents and even override contrary jury verdicts. The process was intended to discourage frivolous patent litigation but is susceptible to political bias. Apple joined a brief last fall supporting inter partes review, but then it complained in January that a plaintiff in a case that it had filed with the tribunal was lobbying administrative judges behind the scenes.

A 7-2 majority led by Justice Clarence Thomas circumvented the knotty separation-of-powers questions by holding that patents are public rather than private rights. This ruling overturns 200 years of judicial precedent and means that the federal government can revoke patents as it can a public monopoly.

But the purpose of patents, which is to encourage innovation and reward investment, will be undermined if they can be nullified without due process and hearing before an Article III judge. As Justice Gorsuch noted in his dissent joined by Chief Justice John Roberts, “Ceding to the political branches ground they wish to take in the name of efficient government may seem like an act of judicial restraint,” but the decision “signals a retreat from Article III’s guarantees” and leaves people vulnerable to governmental intrusion.

U. S. intellectual property law has become excessively expansive over the last 20 years. That hasn’t led to more innovation but less as big companies use the power of the law to crowd out upstarts. The decision is a start but it’s just a start.