Source: https://bannerwitcoff.com/ip-alert-supreme-court-considers-constitutionality-of-inter-partes-review-in-oil-states/
Timestamp: 2019-04-24 20:36:48+00:00

Document:
On November 27, 2017, the Supreme Court heard argument in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, to answer whether inter partes review (IPR) violates the Constitution by “extinguishing private property rights through a non-Article III forum without a jury.” The case stems from an IPR proceeding in front of the Patent Trial and Appeal Board (PTAB). Greene’s Energy Group filed the IPR petition to invalidate certain claims of U.S. Patent No. 6,179,053, which is owned by Oil States. In the IPR proceeding, the PTAB found that all of the claims at issue were unpatentable.
Oil States appealed to the Court of Appeals for the Federal Circuit, which affirmed the decision of the PTAB in a Rule 36 decision providing no written opinion. The Supreme Court then granted certiorari, limited to the question above. As discussed below, the oral argument shows a split among the Court on the issue.
Congress created IPR proceedings, with the passage of the America Invents Act (AIA), to allow third parties to challenge the validity of issued patents at the U.S. Patent and Trademark Office (USPTO) based on prior art patents and printed publications. IPR proceedings are generally considered “a quicker and cheaper substitute for litigation.” Frequently, district courts grant accused infringers’ motions to stay litigation pending IPR proceedings. Over the past few years, the PTAB has invalidated a large percentage of claims that have been reviewed, and in turn, IPR has become a very popular avenue for accused infringers. Prior to the creation of IPR, the USPTO examined the validity of issued patents for more than 30 years through ex parte reexamination, and more recently through inter partes reexamination.
Are Patents a Public Right or a Private Right?
As noted by the Federal Circuit in MCM, one central question is whether patent rights are a public right or a private right. Under Article III of the Constitution, Congress cannot “withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty.” In practice what this means is that only an Article III court can decide cases that were traditionally subject to common law at courts in England in 1789. One exception to this rule that the Supreme Court has recognized is that cases concerned with so-called “public rights” can be assigned to administrative agencies for resolution.
Parties in patent disputes have some options in light of the upcoming decision, which is expected in the next few months. If the Supreme Court were to find that IPR is an unconstitutional delegation of power, it is not clear what would happen to patents that were already declared invalid by the PTAB. Patentees who have patents invalidated by the PTAB should try to avoid final judgments by district courts, so that they might still have the opportunity to assert their patents if the Supreme Court reverses in Oil States. Efforts to accomplish this have had, thus far, little success.
Some patentees have also attempted to avoid IPR by transferring their patents to Native American tribes, which might not be subject to IPR under sovereign immunity. Although it is not yet clear whether this scheme will effectively render the patents immune to IPR, this issue has slowed down the IPR proceedings, and may ensure that these proceedings or appeals from these proceedings are still live when Oil States is decided.
Some had hoped that oral argument would provide a good indicator of how the Court will rule in this case, but the justices seemed split and the outcome is far from clear. Joseph Matal, director of the USPTO, had predicted that the Court would issue “a 9-0 decision in the agency’s favor,” which following arguments seems unlikely. The opinion in Oil States will provide a final answer as to whether Congress can authorize the USPTO to review the validity of issued patents, a question that was first brought to the Federal Circuit in 1985.
Click here to read a transcript of the arguments in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC.
 Oil States Energy Servs., LLC, No. 16-712 (U.S. argued November 27, 2017).
 Petition for a Writ of Certiorari at 2, Oil States Energy Servs., LLC, No. 15-446 (U.S. Feb. 22, 2016).
 Brief for the Petitioner at 17, Cuozzo Speed Techs., LLC, No. 15-446 (U.S. Feb. 22, 2016).
 MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015).
 Id. at 1291 and 1293.
 Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 284 (1855).
 Stern v. Marshall, 564 U.S. 462, 484 (2011).
 Brief for Respondent at 30, Oil States Energy Servs., LLC, No. 15-446 (U.S. Oct. 23, 2017).
 Brief of Petitioner, Oil States Energy Servs., LLC, No. 15-446 (U.S. Aug. 24, 2017).
 Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833, 851 (1986).
 See Order Dismissing Case, SurfCast, Inc. v. Microsoft Corp., ECF No. 315 (D. Me. August 21, 2017) (No. 2:12-cv-00333-JDL).
 Order at 1, LEAK Surveys, Inc. v. FLIR Systems, Inc., ECF No. 141 (N.D. Tex. November 13, 2017) (No. 3:13-cv-02897).
 See, e.g., Mylan Pharmaceuticals Inc., et al. v. Saint Regis Mohawk Tribe, IPR 2016-01127.
 Ryan Davis, USPTO Chief Predicts Supreme Court will Uphold AIA Reviews (June 29, 2017), https://www.law360.com/articles/934552/uspto-chief-predicts-supreme-court-will-uphold-aia-reviews.
 Patlex Corp. v. Mossinghoff, 758 F.2d 594, 604 (Fed. Cir. 1985).

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.