[Ip-health] Supreme Court Rules Inter Partes Review is Constitutional

Andrew Goldman andrew.goldman at keionline.org
Tue Apr 24 09:25:22 PDT 2018


Supreme Court Rules Inter Partes Review is Constitutional

The Supreme Court today delivered its ruling in the case of Oil States
Energy Services, LLC v. Greene’s Energy Group, LLC, holding 7-2 that inter
partes review (IPR) is constitutional and does not violate Article III nor
the Seventh Amendment.

(See the KEI statement on the opinion below)

Justice Thomas delivered the majority opinion, succinctly finding that the
IPR “falls squarely in the public rights doctrine,” with patents as public
franchises that may constitutionally be granted by executive or legislative
departments without judicial determination. Because IPR “involves the same
basic matter as the grant of a patent” and is “a second look at an earlier
… grant,” IPR can rightly be reviewed outside of an Article III court. And
following on that, the determination of the Article III issue resolved the
argument regarding the Seventh Amendment right to a jury trial.

The opinion is clear in that it is to be viewed as a narrow holding, and
explicitly avoids the question of whether patents are or are not property
for the purposes of the Due Process Clause or the Takings Clause.

Justice Breyer, joined by Justices Ginsburg and Sotomayor, wrote a
concurring opinion joining the majority in full, but adding as a point of
clarification that, “the Court’s opinion should not be read to say that
matters involving private rights may never be adjudicated other than by
Article III courts, say, sometimes by agencies.”

Justice Gorsuch, joined by Chief Justice Roberts, wrote the lone dissent
that begins with this telling paragraph:

After much hard work and no little investment you devise something you
think truly novel. Then you endure the further cost and effort of applying
for a patent, devoting maybe $30,000 and two years to that process alone.
At the end of it all, the Patent Office agrees your invention is novel and
issues a patent. The patent affords you exclusive rights to the fruits of
your labor for two decades. But what happens if someone later emerges from
the woodwork, arguing that it was all a mistake and your patent should be
canceled? Can a political appointee and his administrative agents, instead
of an independent judge, resolve the dispute? The Court says yes.
Respectfully, I disagree.

Justice Gorsuch’s opinion delves into the history of courts and patents,
but fails to at all consider the high rates of mistakes made by USPTO, or
the burden that a finding of unconstitutionality might foist onto an
already overwhelmed court system. Instead, he analogizes patents to a gift
that cannot be reclaimed. (“Just because you give a gift doesn’t mean you
forever enjoy the right to reclaim it.”)

The retention of the inter partes review system is a major victory for the
ability to efficiently knock out bad patents without further exhausting the

KEI had submitted an amicus brief in this case, which can be read here:

KEI’s statement on the opinion:

“It was quite important that the inter parte review (IPR) was held to be
constitutional. The USPTO makes a lot of mistakes when it grants patents,
and the IPR makes it cheaper and faster to eliminate the errors that
encroach on the public domain. KEI’s brief in the case called attention to
the many non-patent instruments that can be used to protect investments and
induce innovation. The patent system can and should play an important role
in promoting innovation, but it has many obvious flaws and limitations. For
hundreds of years, the harm to society from overly broad patents or patents
that lack an actual inventive step have been discussed, and the IPR is one
mechanism that is needed to improve the patent system. Where patents are a
poor mechanism to protect investments or promote innovation, policy makers
have many alternatives that in the right context, will work better.”
James Love, Director, KEI

Andrew S. Goldman
Counsel, Policy and Legal Affairs
Knowledge Ecology International
andrew.goldman at keionline.org // www.twitter.com/ASG_KEI
tel.: +1.202.332.2670 <(202)%20332-2670>

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