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3 December 2015Patents

IPR process is constitutional, says Federal Circuit

The inter partes review (IPR) process, administered by the Patent Trial and Appeal Board (PTAB), does not violate the Seventh Amendment, the US Court of Appeals for the Federal Circuit has ruled.

MCM Portfolio had challenged the legality of the IPR process following the PTAB’s decision to invalidate its patent covering the connection of a computer to a flash memory storage system.

Technology company HP challenged the patent, US number 7,162,549, in 2013 and last year the PTAB invalidated the patent on the grounds that it was obvious.

In 2012, MCM had sued another company called Pandigital at the US District Court for the Eastern District of Texas.

MCM alleged that the ‘549 patent had been infringed by digital picture frames manufactured by the defendant.

Because HP had sold the allegedly infringing digital picture frames, MCM claimed the IPR petition, filed in 2013, should be barred from proceeding under section 35 of the US Code.

Section 35 prohibits the PTAB from instituting an IPR if a challenge is filed more than one year after a “real party in interest” or a “privy of the petitioner” is hit with a complaint at a district court concerning the disputed patent.

Furthermore, MCM claimed that the process of the PTAB deciding whether to institute an IPR violated the Seventh Amendment, a party’s right to be tried by a jury.

After an IPR petition is filed at the PTAB, a three-judge panel decides whether the challenging party has a reasonable chance of success in revoking the patent. Once the IPR petition is approved, the same three judges rule on the validity of the disputed patent following a trial.

Yesterday, December 2, the federal circuit ruled unanimously that the IPR process does not violate the Seventh Amendment.

“Patent rights are public rights, and their validity susceptible to review by an administrative agency; the Seventh Amendment poses no barrier to agency adjudication without a jury,” Judge Timothy Dyk, writing the opinion, said.

Dyk also concluded that the patent was obvious.

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