Inter partes review is unconstitutional, claims NPE
A non-practising entity has filed a lawsuit claiming that inter partes review proceedings are unconstitutional.
US-based eCharge claimed the reviews, which are conducted by the Patent Trial and Appeal Board (PTAB), violate the seventh amendment’s guarantee of a jury trial.
It has demanded a permanent injunction prohibiting the PTAB from conducting any more such proceedings.
Implemented in 2012, inter partes reviews allow third parties to challenge the validity of a patent either nine months after it is granted or after a post-grant review has been terminated, whichever is earlier.
In this case, eCharge had sued a company called Square Inc in 2013 for allegedly infringing three patents.
The patents are owned by an inventor named Carl Cooper, for whom eCharge licenses them.
In response, Square Inc requested an inter partes review to challenge certain claims of the patents.
This plea led the US District Court for the Northern District of Illinois, where the case is being heard, to stay the case pending the PTAB’s decision. In May 2014, the PTAB agreed to launch an inter partes review.
In a suit filed on June 5 at the US District Court for the Eastern District of Virginia, eCharge said it has “unconstitutionally been denied its right to have the issue of patent validity in the pending litigation determined by a jury”.
“Likewise, it added, “Mr Cooper’s property rights have become subject to nullification without a trial by a jury.”
According to eCharge, which also complained about Michelle Lee, deputy director of the USPTO, inter partes reviews embody the executive’s assertion of judicial power.
Therefore, it said, the reviews violate “fundamental constitutional principles of separation of powers by adjudicating purely private disputes between patent owners and alleged infringers ... usurping the judicial branch’s exclusive jurisdiction”.
But eCharge’s case is likely to face a “significant uphill battle” on two counts, said Victor Johnson, member of Dykema Gossett PLLC’s IP group in Dallas.
“First, challenges like this one are based on the misconception that a patent is a vested right, which once granted may not be taken away by the agency that granted it ... Upon the inter partes review, the USPTO may confirm any patentable claim or cancel any unpatentable claim.
“Second, unlike many rights, the granting of a patent is a public right as opposed to a private right; the right to exclude a patent is a right that can be conferred only by the government. Thus, its extent, duration and validity must be determined by the legislative branch,” he said.
He added: “The inter partes review provides a constitutional process and opportunity for the USPTO to review and correct its own work based on more complete information.”
