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USPTO INTER PARTES REVIEW

IN REVIEW BY THE U.S. SUPREME COURT

 

 

The America Invents Act was signed into law in 2011 and established inter partes review among other items.   Inter partes review were proposed as an efficient proceeding outside traditional patent litigation to challenge patents and invalidate them where needed. IPR proceedings are conducted by the Patent Trial and Appeal Board, an administrative arm of the U.S. Patent and Trademark Office, rather than by a court or judicial body.

 

In the case of Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, the U.S. Supreme Court heard arguments on December 6, 2017 as to whether the Patent Trial and Appeal Board (PTAB) can constitutionally invalidate patents through inter partes review. In 2012, Oil States sued Greene’s Energy for patent infringement in the Eastern District of Texas. The patent claims an apparatus and method for protecting wellheads used in hydraulic fracturing. In turn, Greene’s Energy petitioned the PTAB to institute inter partes review. The PTAB determined that the claims were anticipated, and thus unpatentable.  The Supreme Court is now considering whether IPR proceedings satisfy constitutional requirements, or whether the adjudication of patent validity must take place in an Article III federal court.

 

Competing briefs focused on whether patent rights are a public right or private property. If a public right, then the executive branch, including the PTAB, may limit or revoke that right. Patents might be a public right because patent protection would not exist but for federal statutes. Congress tasked the U.S. Patent and Trademark Office (USPTO) with granting patents for inventions meeting statutory criteria. Inter partes review is a mechanism to quality control those patent grants. If patents are private property, on the other hand, then the patentee is entitled to a proceeding with Article III supervision. Otherwise, the tribunal needs the patentee’s consent to adjudicate its patent’s validity. Oil States also argued that the Seventh Amendment guarantees patent holders a jury trial for common law issues, which historically included patent validity disputes.

 

The Acting PTO Director Joe Matal, who followed the resignation of Michelle Lee, has been on record in various forums predicting a 9-0 ruling by the Supreme Court in favor of the constitutionality of inter partes review proceedings.  However, Supreme Court Chief Justice Roberts appeared to have concerns at the oral arguments with respect to IPR proceedings.  In particular, the Court questioned whether inter partes review is truly an adversarial proceeding between two private parties.  Chief Justice Roberts stated that Due Process prohibits the government from both bestowing “the sweet of having a patent” while imposing the “bitter that the government might reevaluate it at some subsequent point.”  The Supreme Court is expected to rule on the constitutionality of the inter partes review procedure in 2018.   The Supreme Court session ends June 30, 2018 so a ruling is likely before that date.

 

Dated: March 29, 2018

 

By: Michael Slavin

Intellectual Property Attorney

 

 

 

 

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