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12 June 2017Patents

SCOTUS to mull constitutionality of IPRs

The US Supreme Court has agreed to consider whether inter partes reviews (IPRs) violate the US Constitution.

Today, June 12, the Supreme Court justices granted a petition for a writ of certiorari filed by Oil States Energy Services, a provider of services to oil and gas companies, in November last year.

In its petition, Oil States argued that the IPR process at the US Patent and Trademark Office (USPTO) violates the right to a jury in an Article III court (a federal court established under Article III of the US Constitution).

“Historically, though, suits to invalidate patents would have been tried before a jury in a court of law. The Constitution thus provides patent owners with a right to a jury and an Article III forum. IPR violates these rights,” said Oil States.

According to its petition, patents are private property rights and actions to invalidate patents must be tried in an Article III forum, not in an agency proceeding.

“Disregarding this long line of precedent, IPR takes a patent infringement claim out of the jury’s hands and entrusts it to bureaucrats,” said the petition.

In April, the USPTO filed a reply brief, arguing that patents are “quintessential public rights”, and that Congress is authorised to designate public rights for adjudication in non-Article III tribunals.

Oil States filed its petition after the US Court of Appeals for the Federal Circuit affirmed a Patent Trial and Appeal Board (PTAB) decision to invalidate claims of US patent number 6,179,053.

Greene’s Energy Group, an oilfield services company, had petitioned for review of the patent, which covers a “lockdown mechanism for well tools requiring fixed-point packoff”.

The Federal Circuit didn’t explain its reasoning, but affirmed the PTAB’s decision.

David O’Brien, a partner in Haynes and Boone’s patent office trials practice group, said: “It is hard to understate the potential significance of the question on which certiorari was granted for post-grant proceedings under the 2011 America Invents Act (AIA).”

He added that well over 6,500 petitions for IPR or covered business method review have been filed and that, to date, over 1,400 AIA trials have resulted in a final written decision of the PTAB.

“Under the petitioner’s view, the 1,100-plus trials that have held claims unpatentable would have been unconstitutional for want of a jury,” said O’Brien.

Marshall Schmitt, an IP partner at Michael Best, added: “The Supreme Court's decision holds the potential to be one of the most significant patent decisions in decades.”

Schmitt explained that AIA trials have become the “focal point of many patent disputes”.

He said: “Finding that these trials are unconstitutional will raise a myriad of issues that will require either Congressional action or a monumental investment in judicial resources.”

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More on this story

Patents
25 October 2017   The US acting solicitor general has weighed in on a case being mulled over by the US Supreme Court over whether inter partes reviews (IPRs) are constitutional.
Patents
27 November 2017   With the US Supreme Court today hearing a constitutional argument that could reshape the patent system by eliminating inter partes review, WIPR explains how we got here and which way the court might rule.
Patents
24 April 2018   Inter partes reviews do not violate the US Constitution and the Patent Trial and Appeal Board has authority to invalidate patents.