Supreme Court to examine legality of patent reviews

Supreme Court to examine legality of patent reviews
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The Supreme Court on Monday agreed to take a case that could affect the process used for challenging patents in the United States.

The challenge focuses on inter partes reviews (IPR), a rule that was created in 2012 as part of the America Invents Act that allows companies and individuals to challenge patents at the U.S. Patent and Trademark Office (PTO). 

In the case, Oil States Energy Services (OSES) is challenging the constitutionality of inter partes reviews on the grounds that the PTO reviews deprive patent owners of the right to a jury trial to defend their patents.

Greene’s Energy Group LLC, the defendant in the case, says the PTO is within the bounds of the law in reviewing patent challenges.

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“In short, the Federal Circuit has repeatedly and correctly rejected the argument that the Constitution prohibits the PTO from correcting its own error in issuing a patent that fails the statutory requirements,” Greene’s wrote in January when it petitioned the Supreme Court to take up the case.

A portion of OSES’s analysis is predicated on the contention that intellectual property and patents are not public rights, but instead private or property rights, which should be adjudicated in a court of law, not by a government agency. 

“Most fundamentally, the government’s position rests entirely on a faulty premise — that ‘[p]atents are quintessential public rights,’ ” OSES wrote in May.

“To the contrary, this Court has held that a patent “confers upon the patentee an exclusive property in the patented invention,” OSES continued, citing Horne v. Department of Agriculture, a 2009 Supreme Court case. “This Court has also noted that ‘[p]rivate rights have traditionally included property rights,’ ” it wrote, citing a 2016 Supreme Court case, Spokeo Inc. v. Robins.   

The justices had previously declined to take up the case in October but had considered a similar case in 2016, Cuozzo Speed Tech v. Lee. That case revolved around whether the PTO’s inter partes review should be subject to a judicial review. The court ruled 6-2 in favor of Cuozzo and the PTO’s authority in reviewing patent challenges.

Legal experts say that the decision in the latest case will have far-reaching implications in the patent law space.

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

David O’Brien, a partner in Haynes and Boone’s Patent Office Trials Practice Group, said the decision could have a significant impact on technology companies. 

"It has traditionally been the electronic companies who are more frequently on the receiving end of patent infringement suits than the giving end," O'Brien said.

"[IPR] has given them a much more cost effective, frankly a much more predictable way of bringing their unpatentability cases for patents that should never been granted in the first place. I would expect the tech sector to be strongly unenthusiastic about removing [IPR] from their options."

This story was updated at 2:53 p.m.