IPR: all eyes on the US Supreme Court

The saying “First it giveth, then it taketh away” is historically a misquotation of a biblical reference (Job 1:21) but has come to be understood to mean “the thing that gives can also take away.” This question of whether the entity that gives can also be the entity that takes away will be addressed by the US Supreme Court in the upcoming October 2017 term in connection with the Oil States Energy Services v Greene’s Energy Group case.

Specifically, the Supreme Court will decide whether it is constitutional for the Patent Trial and Appeal Board (PTAB), an administrative law body of the US Patent and Trademark Office (USPTO) to cancel patent claims through inter partes review (IPR). In effect, the Supreme Court will decide whether the USPTO, the entity that issues patents, can also be the entity to cancel their claims.

Procedural history of Oil States

The patent owner in Oil States challenged the constitutionality of an IPR proceeding at the Federal Circuit after the PTAB cancelled claims of its patent, US Patent No. 6,179,053. Generally, the patent owner argued that the PTAB had no authority to issue a decision that cancels patent claims because the Constitution requires patent invalidation to be determined by a jury in an Article III court.

The Federal Circuit, however, did not address the patent owner’s IPR constitutionality argument because of a decision addressing the same that was issued in MCM Portfolio v Hewlett-Packard before the close of briefing. The patent owner ultimately petitioned the Supreme Court for a writ of certiorari, requesting Supreme Court review of the IPR constitutionality issue. The Supreme Court granted certiorari on this issue on June 12, 2017.

Summary of argument presented in Oil States’ petition

In its petition, the patent owner argued that IPR violates the Constitution because attempts to invalidate patents must be tried before a jury in an Article III forum and not in an agency proceeding. In support of its position, the patent owner argued that patents are private rights (as opposed to public rights) and the adjudication of private rights must occur in an Article III tribunal. Additionally, the patent owner set forth a stare decisis argument that Supreme Court precedent compels a decision that IPR is unconstitutional.

Potential impact of Oil States on patentees and technology users

The Supreme Court’s upcoming decision in Oil States is being watched by patentees as well as technology users because of its potential to change the current landscape of patent proceedings in the US. According to The PTO Litigation Center, more than 6,500 petitions for IPR have been filed since the enactment of the America Invents Act (AIA) in 2011. IPR provides technology users with a “more efficient and streamlined patent system” that “improves patent quality and limits unnecessary and counterproductive litigation costs.”