April 26, 2018
As previously reported, on April 24 the U.S. Supreme Court issued its highly anticipated decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC. In a 7–2 split, the Supreme Court upheld the constitutionality of inter partes review (IPR) proceedings. An IPR is a trial-like proceeding in which the validity of a patent is challenged by a third-party petitioner and reviewed by a panel of judges of the Patent Trial and Appeal Board. After one of Oil States’s patents was invalidated in an IPR, it challenged the constitutionality of the process, arguing IPR proceedings violate both Article III and the Seventh Amendment. Specifically, Oil States argued that patents are private property, and therefore challenges to a patent’s validity must be tried by an Article III court before a jury. The Court disagreed.
Writing for the majority, Justice Thomas found that inter partes review falls within the public- rights doctrine, which applies to matters “arising between the government and others, which from their nature do not require judicial determination and yet are susceptible of it.” In particular, the Court characterized patents as a “public franchise,” and found that the IPR process is merely “a second look” at the grant of a patent—a decision the USPTO retains the authority to make. The Court found under Article III that Congress could properly delegate this power to a non-Article III tribunal, such as the USPTO. Accordingly, the Court also rejected the Seventh Amendment challenge.
Notably, Justice Thomas took care to emphasize the narrowness of the holding as applying only to the specific constitutional arguments raised by Oil States. The Court pointed out that Oil States did not challenge the “retroactive application of inter partes review” to patents issued before the passage of the America Invents Act, nor did it raise a due process challenge, leaving such questions for another day.
For more information on this decision, please contact Fitch Even partner Paul B. Henkelmann, author of this alert.
Fitch Even law clerk Evan Kline-Wedeen contributed to this alert.
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