Intellectual Property

The Supreme Court Upholds Inter Partes Review at the USPTO

4/25/2018 | Article

Authors:

Scott Chambers, Ph.D.

Richard Oparil

Matthew Zapadka

On Tuesday, April 24, 2018, the Supreme Court issued its decision in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, upholding the U.S. Patent and Trademark Office's (USPTO) inter partes review (IPR)proceedings. Oil States argued that the USPTO's use of IPRs to invalidate issued patents violated Article III and the Seventh Amendment of the Constitution because they are not conducted before federally-appointed judges, but instead, in front of a panel of administrative patent judges appointed by the Director of the USPTO. The decision is available here.

IPRs are often considered to be mini litigations because IPR "includes some of the features of adversarial litigation." Despite this, the Court held that patents issued by the USPTO because the agency was statutorily granted that right and that patents are subject to the public-rights doctrine, meaning that reconsideration of the grant of a patent falls under the Government's decision to grant patents, which are a public franchise and not personal property. Although these rights, at times, are susceptible to judicial intervention, they do not require it. In other words, litigants may continue to challenge patent claims at the USPTO or the district court, which often becomes a strategic decision based on the kinds of claims asserted against the alleged infringer. The Court also emphasized the narrowness of its holding, and stated that the decision did not address whether infringement actions could be heard by non-Article III judges and did not change patents' status as property for the purposes of the Due Process Clause or the Takings Clause.

Although this decision keeps IPRs in play at the USPTO, the Supreme Court issued its decision SAS Institute, which ordered that the USPTO must issue a final decision related to all claims challenged by a petitioner. The recently-appointed USPTO Director, Andrei Iancu, has indicated the possibility of narrowing the scope of claim interpretation of IPRs. As a result, some new procedures could be forthcoming, which could have the effect of a reduced number of patents being found invalid during these proceedings, while also changing the litigant's calculus of attempting to invalidate claims in IPRs.