By: Devin Salmon, Patent Analyst, IP.com
On April 24th 2018, the US Supreme Court issued its decision, 7-2, for Oil States Energy Services v. Greene’s Energy Group. The case has been closely watched by the patent world, as it had the potential to bring big changes to the current patent system. While the patent involved was directed toward a method for hydraulic fracking, at issue was whether Inter Partes Review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB), introduced as part of the 2001 Leahy-Smith America Invents Act (AIA), are constitutional. The question boiled down to if IPR proceedings require judicial review of an Article III forum or the right to a jury trial under the Seventh Amendment of the US Constitution. Boiled down further, the key was whether IPR proceedings are “extinguishing private property rights through a non-Article III forum without the jury.” *
The decision upheld the constitutionality of IPR proceedings, and Justice Clarence Thomas wrote, “Inter partes review falls squarely within the public rights doctrine”. The court found that the post-grant question of validity of a patent falls within the public-rights doctrine since the grant of a patent is carried out without “judicial determination” and it “involves a matter arising between the government and others”. Under the public rights doctrine, patent validity trials do not need to take place in an Article III court, and therefore do not violate the Seventh Amendment.
Matters governed by the public rights doctrine may be assigned to the Legislative, Executive, or Judicial branches. The change Congress made when allowing the USPTO to decide on these cases, as opposed to the courts, was not barred based on “historical precedence”, i.e. the fact that in the past courts have decided on patent cases does not mean that they must forever do so.
It was noted that this decision does not contradict the three decisions that previously recognized patent rights as private property rights. The court found that since the three previous decisions were decided under the Patent Act of 1870 and are read as describing the statutory scheme from that time, they do not foreclose the kind of review that Congress has authorized here.
So, what does this mean for patent holders? For most, it will be business as usual because the current system has not been modified or changed by this decision. The blow is to the pharmaceutical companies hoping to eliminate these kinds of challenges to their patents and those that are still looking for ways to change the large role that PTAB has been granted in the current patent system. It is likely that patent practitioners will now want to focus on their ability to amend claims during an IPR proceeding to preserve patent validity.
Justice Neil Gorsuch dissented and was joined by Chief Justice John Roberts. He did not agree with the reasoning that because the grant of a patent and post-grant questioning of validity involve the same matter, they should both be matters involving public rights. He went on to write, “just because you give a gift doesn’t mean you forever enjoy the right to reclaim it”.
Overall, this decision, which could have created major changes to the patent system and possibly even brought zombie patents back from the dead, has fizzled out to leave the status quo.