If you can’t change your fate change your (IPR) attitude

In Oil States Energy Services LLC v. Green’s Energy Group LLC, 584 U.S. ___ (2018) [hereinafter ‘Oil States’ and ‘Green’s Energy’], the United States Supreme Court [hereinafter ‘the Court’] upheld the inter partes review provisions of the America Invents Act [hereinafter IPR] after a challenge based upon the United States Constitution. Briefly stated, to commence an IPR any person may petition the Patent Board of Trials & Appeals [hereinafter ‘the Board’]to review an issued patent for invalidity. The Board may then commence the IPR, but its decision to either do so or to decline the petition is not appealable. However, a party to an IPR which does proceed, and who is dissatisfied with the outcome, may appeal the Board’s decision to the United States Court of Appeals for the Federal Circuit [hereinafter ‘the Federal Circuit’].

In this case Oil States challenged the constitutionality of IPR based upon Article III (independent judiciary) and the Seventh Amendment (right to a jury trial). Green’s Energy originally attacked Oil State’s Energy patent in federal district court, and it also petitioned the Board to commence IPR to cancel this same patent. The Board concluded that Oil States’ claims were unpatentable and the Federal Circuit affirmed the Board’s decision. Furthermore, because that Federal Circuit held in a previous decision that IPR did not offend Article III or the Seventh Amendment, it summarily affirmed on that basis as well.

Before the Court, Oil States contended in relevant part that patents are private property to be litigated at common law, but that IPR improperly adjudicates private rights without an Article III judge. Oil States also contended that IPR impermissibly expands the public rights doctrine, because this doctrine requires that the government to enforce agency rules, but IPR resolves disputes between private parties.   Oil States further contended the IPR violates the Seventh Amendment which requires juries for common law disputes. Green’s Energy position was that patents are public rights, because they exclusively originate from a federal statute and regulatory scheme. Green’s Energy also contended that IPR differs from litigation because there is no resolution of ownership, damages or liability.  Therefore, IPR does not offend the Seventh Amendment, because there is no right to a jury in cases involving pubic rights or administrative proceedings.

The Court held that IPR was not unconstitutional, because Congress may properly delegate adjudication of public rights to non-Article III entities. According to the Court, patents clearly qualify as public rights because they remain subject to patent office authority for cancellation through agency procedures such as IPR.  There is also no violation of the Seventh Amendment where Congress properly assigns adjudication to a non-article III agency such as the patent office. However, the Court also stated that its decision was based exclusively upon challenges under Article III and the Seventh Amendment. As a result, this decision did not address or resolve whether patents are personal property for proceedings under the Due Process Clause or Takings Clause of the Constitution.

©2018 Adrienne B. Naumann, Esq. all rights reserved. Ms. Naumann dos not sponsor or endorse the advertisements posted at adriennebnaumann.wordpress.com


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