Current Constitutional Challenge of Inter Partes Review Before the Supreme Court
Inter Partes Review (IPR) has become a vital procedure in the patent system since the adoption of the America Invents Act (AIA). As of March 31, 2017, there have been 4,563 IPR petitions initiated.1 In the final quarter of 2016, thirty-six percent of defendants in patent infringement litigations filed IPR petitions before the U.S. Patent and Trademark Office (USPTO).2 However, there is a current challenge to the constitutionality of this process before the Supreme Court in the case Oil States Energy Services, LLC v. Greene’s Energy Group, LLC.3
For patent owners, issuance is just the first step to obtaining a stable patent right. To enforce that right, patent owners also need to survive invalidation contentions initiated by infringers. To replace Inter Partes Re-examination (IPX)—the examination-like procedure defendants used to invalidate disputed patents in the pre-AIA era—the AIA provided a new trial-like procedure, Inter Partes Review.4 The objective of both IPR and IPX is “to correct the agency’s own errors in issuing patents in the first place.”5
On June 12, 2017, the Supreme Court granted certiorari in Oil States to address whether IPR is constitutional. In its brief, the petitioner raised two challenges: (1) the Constitution requires that questions about patent validity be adjudicated by Article III courts rather than the USPTO, an administrative agency, and (2) IPR violates the Seventh Amendment by depriving patent litigants of their right to a jury.6
For the first issue about separation of powers, the plaintiff argued in its brief that a patent right is a private right7because patent invalidation claims were historically adjudicated in Article III courts.8 They were not brought against or by the government.9 What’s more, these claims do not involve “new statutory obligations,” nor is their adjudication “essential to a limited regulatory objective.” 10 After this, the petitioner argues that the administrative forum cannot be deemed an “adjunct” of Article III courts because IPR is conducted without effective supervision by Article III courts.11Therefore, a patent right is not a public right and should only be adjudicated by an Article III court.
Contrarily, the respondent argued in its brief opposing certiorari that a patent is a public right because “the claim at issue derives from a federal regulatory scheme,” and “resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within the agency’s authority.”12 “Patents accordingly confer rights that ‘exist only by virtue of statute,’” the respondent says.13 Relying on Gayler v. Wilder, the respondent rebuts the petitioner’s argument that patent cases were cases at common law.14 Furthermore, even if infringement cases were in courts of law, the invalidation claims were adjudicated in courts of equity.15 Therefore, it is constitutional to let the USPTO adjudicate invalidation contentions, which is the same conclusion the Federal Circuit reached in MCM Portfolio.16
Regarding the second challenge, the petitioner argued that the Seventh Amendment preserves the right to a jury in patent validity cases because at the time of ratification in 1791, a patent invalidity contention was a question of law and usually adjudicated in courts of law.17 The respondent argued that the Seventh Amendment right to a jury is mandatory only in Article III courts.18
Because IPR has become such an important procedure, abolishing it completely may lead to chaos in the U.S. patent system. For example, one of the largest problems is how the USPTO should treat those patents that have been invalidated under IPR. Furthermore, if the Supreme Court decides to do away with IPR, then U.S. International Trade Commission patent litigation will also be in danger. Therefore, it is more likely that the Supreme Court will uphold IPR’s constitutionality, or request that the USPTO modify its IPR rule to be more compliant with the Constitution. This case has drawn substantial attention, and more than thirty amicus briefs have been submitted to the court since Oil States filed its opening arguments.19
Oral arguments have not been scheduled at the time of publication.
GLTR Staff Member; Georgetown Law, J.D. expected 2019; Nanjing University, B.S. 2016. ©2018, Xincheng Ma.