Supreme Court May Let IPRs Continue

Posted by Elizabeth Hudson on Dec 8, 2017

Last week, the Supreme Court heard oral arguments in Oil States Energy Services v. Greene’s Energy Group—a case that addresses whether inter partes review unconstitutionally usurps the federal courts’ authority to adjudicate the validity of patents. An examination of the Justices’ questions provides hints of how they are thinking and suggests that IPRs may survive constitutional review.

Justices Ginsburg, Sotomayor, and Kagan all appeared to agree the PTO had the authority to review its decision to issue a patent, but focused on whether IPR was a permissible way to do so. Generally speaking, they focused on the similar purpose of IPRs and reexamination (i.e., review patents the PTO previously issued) and not on the differences in procedure.

Several Justices were interested in discussing ways the patent right is distinct from other property rights. For example, Justices Breyer and Kennedy both noted that by statute, the patent owner takes the patent “subject to the conditions and requirements of [the Patent Act]”—which includes IPR. Chief Justice Roberts seemed less convinced the issuance of a patent was conditioned on accepting IPR, but he noted that Congress can reduce the value of property, including patents. The implication may be that IPR could be defended as just impairing the value of patents.

Another focus of questioning centered on the history of patent review by the executive branch, reaching as far back as the Privy Council in 18th century England. Justice Ginsburg asked whether the king, who granted patents, could ever rectify a mistake, and Justice Sotomayor noted the Privy Council and crown had never indicated they no longer believed they had the right to review patents. If the Privy Council had the authority to cancel patents at the time of the U.S. founding, it could follow that the executive (i.e., the PTO) has the authority now.

A number of questions focused on due process concerns surrounding IPRs. Chief Justice Roberts drew parallels to the Supreme Court’s public employment cases where the Court held the government cannot terminate an employee in a way that is inconsistent with due process. Justice Sotomayor noted that the possibility for judicial review of the Board’s decision saved IPR from failing due process requirements. Chief Justice Roberts also took exception to the practice of the PTAB selecting judges for an expanded panel to ensure a particular outcome.

Justice Gorsuch was perhaps the most outspoken in opposition to IPRs. Among the many issues raised, he focused on whether an administrative procedure akin to IPR would be unconstitutional if it took land (as opposed to a patent) back from someone who acquired it from the government. While the PTO noted patents are different than land in that patent owners have always known their patents could be invalidated, it seems unlikely Justice Gorsuch will find the distinction meaningful.

Although nothing is certain, the Court appeared likely to find a majority to uphold the constitutionality of IPRs. Among the most likely to be in that majority are Justices Ginsburg, Breyer, Sotomayor, and Kagan. Either Justice Kennedy or Chief Justice Roberts could be the decisive fifth vote. Whether Justices Thomas and Alito will join that majority was not clear from the arguments.

The Supreme Court’s decision is due sometime early next year.

 

This blog post was co-authored by Stuart Duncan Smith, Associate at Wolf Greenfield.

Topics: Petitioners, Patent Owners

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This blog is intended to promote thought and debate on developing areas of the law. The opinions, commentary and characterizations of cases provided on this blog are not legal advice and do not represent the opinions of Wolf Greenfield or its clients.