Analysing ‘Takings Clause’ challenges to PTAB reviews
The US Supreme Court denied writ of certiorari in Christy v US (2021), declining to consider a constitutional challenge under the Fifth Amendment’s “Takings Clause” to Patent Trial and Appeal Board (PTAB) post-grant review proceedings.
This leaves in place decisions by the Court of Appeals for the Federal Circuit as controlling law. Consequently, this article reviews Takings Clause-based constitutional challenges to America Invents Act (AIA) post-grant proceedings.
Setting the stage
The AIA established three new post-grant review proceedings: inter partes reviews (IPRs), covered business method reviews (CBMRs), and post-grant reviews (PGRs).
These proceedings allow the PTAB to review the patentability of one or more issued patent claims challenged by a petitioner. IPR proceedings have proved to be a popular tool for petitioners, often used in response to a patent infringement litigation. More than 12,000 IPR petitions have been filed since IPRs first became available.
In Oil States Energy Services v Greene’s Energy Group (2018) the US Supreme Court held that IPR “falls squarely within the public-rights doctrine,” that patents are “public franchises,” and that IPR proceedings do not violate Article III or the Seventh Amendment. The court, however, “emphasi[s]e[d] the narrowness of [its] holding” and cautioned that its “decision should not be misconstrued as suggesting that patents are not property for purposes of the due process clause or the Takings Clause”.
The Takings Clause of the Fifth Amendment provides that “private property [shall not] be taken for public use, without just compensation.” Since Oil States, some patent owners who lost patent rights in an AIA post-grant review proceeding, eg, an IPR, have challenged the constitutionality of the scheme under the Takings Clause.
“Taking” property
The first type of challenge focuses on the “takings” portion of the Takings Clause that private property shall not be taken for public use. Such challenges question whether pre-AIA patents may be challenged and held unpatentable in an IPR (an AIA construct), thereby taking away the property of the patent owner and placing it into the public domain.
In Celgene Corp v Peter (2019), the patent owner argued “that the retroactive application of IPRs to their pre-AIA patents without just compensation is an unconstitutional taking under the Fifth Amendment” because “subjecting its pre-AIA patents to IPR, a procedure that did not exist at the time its patents issued, unfairly interferes with its reasonable investment-backed expectations without just compensation.” The Federal Circuit disagreed.
