Supreme Court Issues 2 IPR-Related Decisions
Written April 24, 2018
On April 24, 2018, the US Supreme Court released two decisions related to Inter Partes Review (IPR) proceedings before the Patent Trial and Appeal Board (PTAB).
Inter Partes Review (IPR) does not violate Article III of the Constitution because Congress has the freedom to assign adjudication of “public rights” to non-Article III courts and the decision to grant a patent “is a matter involving public rights,” the Supreme Court held. However, prior Supreme Court decisions that recognize patent rights as the private property of the patentee do not contradict this conclusion. Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, U.S., No. 16-712, 4/24/2018.
The United States Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board (PTAB) must address every claim raised by a petitioner during IPRs, doing away with the current regime to only address the claim challenges that the PTAB determines have a “reasonable likelihood of success.” SAS Institute Inc. v. Iancu, U.S., No. 16-969, 4/24/18.
In 2001, Oil States obtained a patent for an apparatus and method for protecting well-head equipment used in hydraulic fracturing. In 2012, Oil States sued Greene’s Energy in Federal District Court for infringing that patent.
Greene’s Energy responded by challenging the patent’s validity, and by petitioning the PTAB to institute inter partes review, arguing that two of the patent’s claims were unpatentable because they were anticipated by prior art not mentioned in Oil States’ original patent application.
Though the District Court issued a June 2014 order that foreclosed Greene’s Energy’s arguments about the prior art, a few months later the Board issued a final written decision concluding that the claims were unpatentable.
Oil States sought review in the Federal Circuit, where in addition to other arguments about patentability, they challenged the constitutionality of inter partes review. The Federal Circuit affirmed the Board’s decision, and this decision was taken for review by the Supreme Court.
The Supreme Court concluded that the grant of a patent falls within the public-rights doctrine, because it involves a matter “arising between the government and others.” Specifically, patents are “public franchises” that the government grants to an inventor. Therefore, IPRs involve the same basic matter as the original grant of the patent; essentially, it is simply a reconsideration of that grant. However, a public franchise” remains a specific form of property right, therefore, patents remain private property for the purposes of the Due Process Clause or Takings Clause. The Court also held that their Article III holding compels the conclusion that IPRs do not violate the Seventh Amendment.
Justice Breyer wrote a concurring opinion, joined by Justice Ginsburg and Justice Sotomayor. Justice Gorsuch wrote a dissenting opinion, joined by Chief Justice Roberts, arguing that patents should not be construed as public rights, but as personal rights.
The decision in this case is consistent with AIPLA’s amicus brief.
Read the opinions in this case.
SAS petitioned for inter partes review of ComplementSoft’s software patent, alleging that all 16 of the patent claims were unpatentable. The USPTO only instituted review of claims 1 and 3 – 10 and denied review of the rest. SAS sought review by the Federal Circuit, arguing that the PTAB had erred by not addressing every claim challenged in its petition. In a split opinion, the Federal Circuit rejected SAS’s argument.
Justice Gorsuch, writing the opinion for the Court, explained that the plain meaning of § 318(a) requires the PTAB to decide the patentability of every claim SAS challenged in its opinion. The Court rejected the current paradigm whereupon the USPTO Director retains “partial institution” power to decide which claims make it into an IPR and which don’t. The Court also rejected several policy arguments, finding them “properly addressed to Congress, and not this Court.”
Justice Ginsburg filed a dissenting opinion joined by Justices Breyer, Sotomayor, and Kagan. Justice Breyer filed a dissenting opinion joined by Justices Ginsburg and Sotomayor and by Justice Kagan in part.
Read the opinions in this case.
Inter Partes Review (IPR) does not violate Article III of the Constitution because Congress has the freedom to assign adjudication of “public rights” to non-Article III courts and the decision to grant a patent “is a matter involving public rights,” the Supreme Court held. However, prior Supreme Court decisions that recognize patent rights as the private property of the patentee do not contradict this conclusion. Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, U.S., No. 16-712, 4/24/2018.
The United States Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board (PTAB) must address every claim raised by a petitioner during IPRs, doing away with the current regime to only address the claim challenges that the PTAB determines have a “reasonable likelihood of success.” SAS Institute Inc. v. Iancu, U.S., No. 16-969, 4/24/18.
Oil States Energy Services, LLC v. Greene’s Energy Group, LLC
Background
In 2001, Oil States obtained a patent for an apparatus and method for protecting well-head equipment used in hydraulic fracturing. In 2012, Oil States sued Greene’s Energy in Federal District Court for infringing that patent.
Greene’s Energy responded by challenging the patent’s validity, and by petitioning the PTAB to institute inter partes review, arguing that two of the patent’s claims were unpatentable because they were anticipated by prior art not mentioned in Oil States’ original patent application.
Though the District Court issued a June 2014 order that foreclosed Greene’s Energy’s arguments about the prior art, a few months later the Board issued a final written decision concluding that the claims were unpatentable.
Oil States sought review in the Federal Circuit, where in addition to other arguments about patentability, they challenged the constitutionality of inter partes review. The Federal Circuit affirmed the Board’s decision, and this decision was taken for review by the Supreme Court.
Constitutionality of IPRs Upheld
The Supreme Court concluded that the grant of a patent falls within the public-rights doctrine, because it involves a matter “arising between the government and others.” Specifically, patents are “public franchises” that the government grants to an inventor. Therefore, IPRs involve the same basic matter as the original grant of the patent; essentially, it is simply a reconsideration of that grant. However, a public franchise” remains a specific form of property right, therefore, patents remain private property for the purposes of the Due Process Clause or Takings Clause. The Court also held that their Article III holding compels the conclusion that IPRs do not violate the Seventh Amendment.
Concurring and Dissenting Opinion
Justice Breyer wrote a concurring opinion, joined by Justice Ginsburg and Justice Sotomayor. Justice Gorsuch wrote a dissenting opinion, joined by Chief Justice Roberts, arguing that patents should not be construed as public rights, but as personal rights.
The decision in this case is consistent with AIPLA’s amicus brief.
Read the opinions in this case.
SAS Institute Inc. v. Iancu
Background
SAS petitioned for inter partes review of ComplementSoft’s software patent, alleging that all 16 of the patent claims were unpatentable. The USPTO only instituted review of claims 1 and 3 – 10 and denied review of the rest. SAS sought review by the Federal Circuit, arguing that the PTAB had erred by not addressing every claim challenged in its petition. In a split opinion, the Federal Circuit rejected SAS’s argument.
USPTO Must Address Patentability of Every Claim Challenged in IPR Petition
Justice Gorsuch, writing the opinion for the Court, explained that the plain meaning of § 318(a) requires the PTAB to decide the patentability of every claim SAS challenged in its opinion. The Court rejected the current paradigm whereupon the USPTO Director retains “partial institution” power to decide which claims make it into an IPR and which don’t. The Court also rejected several policy arguments, finding them “properly addressed to Congress, and not this Court.”
Dissenting Opinion
Justice Ginsburg filed a dissenting opinion joined by Justices Breyer, Sotomayor, and Kagan. Justice Breyer filed a dissenting opinion joined by Justices Ginsburg and Sotomayor and by Justice Kagan in part.
Read the opinions in this case.