August 22, 2018

August 21, 2018

Subscribe to Latest Legal News and Analysis

August 20, 2018

Subscribe to Latest Legal News and Analysis

Supreme Court Upholds the Constitutionality of Inter Partes Reviews

On April 24, 2018, the Supreme Court issued its opinion in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712, affirming the constitutionality of the U.S. Patent and Trademark Office’s (PTO) inter partes review proceedings (IPR). The Court had granted certiorari on the following two issues: (1) whether IPRs violated Article III by having the PTO, an Article I entity, adjudicate the validity of issued patents; and (2) whether IPRs violate the Seventh Amendment right to a jury trial

Majority Opinion

In a 7-2 decision, with Judge Thomas writing for the majority, the Court held that IPR “violates neither” part of the Constitution. Slip Op. at 1. The Court began by explaining that “administrative processes that authorize the PTO to reconsider and cancel patent claims that were wrongly issued,” such as ex parte and inter partes reexamination, existed before the America Invents Act (AIA). Id. at 2. The Court further explained that the AIA merely “replaced inter partes reexamination with inter partes review.” Id.

With respect to the issue of whether IPRs violate Article III of the Constitution, the Court began by comparing IPRs to the granting of patent rights. The Court stated that “the decision to grant a patent is a matter involving public rights—specifically, the grant of a public franchise.” Id. at 7. Upon this basis, the Court found that IPRs “fall[] squarely within the public-rights doctrine” and the PTO can permissibly reconsider the grant of a patent without violating Article III. Id. at 7. The Court explained that “the grant of a patent is a matter between the public, who are the grantors, and the patentee” and that patent rights are a “creature of statute law.” Id. (citations omitted). Thus, according to the Court, “the determination to grant a patent is a matter involving public rights” and “[i]t need not be adjudicated in Article III court.” Id. 8.

The Court then explained that because “[i]nter partes review involves the same basic matter as the grant of a patent, . . . it, too, falls on the public-rights side of the line.” Id. at 8. In doing so, the Court found that an IPR is merely “a second look at an earlier administrative grant of a patent” and the fact that IPRs involve issued patents “does not make a difference here” as “[p]atent claims are granted subject to the qualification that the PTO has the authority to reexamine—and perhaps cancel—a patent claim” in an IPR. Id. at 9 (citations omitted). The Court stressed that IPR “protects the public’s paramount interest in seeing that patent monopolies are kept within their legitimate scope.” Id. The Court further stressed that patents “convey only a specific form of property right—a public franchise.” Id. at 10.

Meanwhile, with respect to the issue of whether IPRs violate the Seventh Amendment, the Court held that because IPRs are properly assigned to a non-Article III tribunal, the Seventh Amendment does not pose an independent constitutionality question. Id. at 17.

The Court did emphasize that its holding is narrow. The Court made clear that it was “address[ing] the constitutionality of inter partes review only.” Id. at 16. For example, the Court stated that its decision should not be construed as suggesting that patents are not property for the purposes of the Due Process Clause or Takings Clauses. Id. at 17.

Concurrence and Dissent

Justices Breyer wrote a short concurring opinion, which Justice Ginsburg and Sotomayor joined. The concurring opinion agreed with the majority but explained that “the Court’s opinion should not be read to say that matters involving private rights may never be adjudicated other than by Article III courts, say, sometimes by agencies.” Concurring Op. at 1.

Justice Gorsuch wrote the dissenting opinion, which Chief Justice Roberts joined. The dissent argued that the IPR process puts too much power in the hands of the executive branch and historically patent rights have been adjudicated by courts and not executive agencies.

Conclusion

The opinion removes any doubt that the PTO has constitutional authority to conduct IPRs. The holding presumably applies to other types of post-grant proceedings as well, such as Post Grant Reviews and Covered Business Method patent reviews.

© 2018 Foley & Lardner LLP

TRENDING LEGAL ANALYSIS


About this Author

Pavan K. Agarwal, Foley Lardner, Patent Licensing Lawyer, Automotive technology Attorney
Partner

Pavan K. Agarwal is a partner and intellectual property lawyer with Foley & Lardner LLP. He practices in various patent law areas, including patent litigation and licensing, as well as opinions and prosecution. Mr. Agarwal represents numerous high-tech clients, with a focus on electronics and automotive technology companies. He has extensive experience representing manufacturing clients in several patent-heavy U.S. Federal Districts and the International Trade Commission. Mr. Agarwal has been involved in several portfolio level licensing negotiations and also manages...

202.945.6162
aGeorge Quillen, Patent interference litigator, appeals, prosecution, Foley and Lardner
Partner

George E. Quillin is a partner and intellectual property lawyer with Foley & Lardner LLP. Mr. Quillin litigates patent interferences and patent appeals, and counsels clients in patent prosecution. He is a member of the firm’s IP Litigation, Mechanical & Electromechanical Technologies and Appellate Practices.

202-672-5413
Bradley Roush, Foley, Electromechanical Patent Litigation Attorney, Intellectual property Lawyer,
Associate

Bradley Roush is an associate and intellectual property lawyer with Foley & Lardner LLP where he focuses on electromechanical patent litigation. His experience includes various stages of U.S. district court litigations and International Trade Commission (ITC) Section 337 investigations. Technologies Mr. Roush has litigated include video display, computer software, narcotics and explosives detection, semiconductor materials, mobile phones, and hybrid automobiles. He is a member of the firm’s IP Litigation Practice.

Prior to joining Foley, Mr...

202.295.4166