Supreme Court Grants Certiorari in Oil States to Review Constitutionality of IPRs

On June 12, the Supreme Court granted certiorari in Oil States vs. Greene’s Energy Group, et al., a case dealing with the constitutionality of the post-grant challenge procedures established by the America Invents Act (AIA). The Federal Circuit, below, had upheld the constitutionality of these procedures.

The petition for writ of certiorari submitted by Oil States presented three questions:

  1. Whether inter partes review – an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents – violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.
  2. Whether the amendment process implemented by the PTO in inter partes review conflicts with Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S.Ct. 2131 (2016), and congressional direction.
  3. Whether the “broadest reasonable interpretation” of patent claims – upheld in Cuozzo for use in inter partes review – requires the application of traditional claim construction principles, including disclaimer by disparagement of prior art and reading claims in light of the patent’s specification.

The Supreme Court granted certiorari only as to the first question.

The petitioner, Oil States, has based much of their argument on an 1898 decision from the Supreme Court, McCormick Harvesting Mach. Co. v. Aultman & Co., 169 U.S. 606 (1898). This decision held that “the Patent Office had no power to revoke, cancel, or annul” an issued patent, because once the patent has issued, “[i]t has become the property of the patentee, and as such is entitled to the same legal protection as other property.” Oil States charges that the USPTO has acted contrary to McCormick and has unconstitutionally revoked patents through the post-grant challenges made available under the AIA, such as inter partes review.

It is unclear how the Supreme Court will rule on this case. Several commentators have noted that the Supreme Court has, in the recent past, typically granted certiorari to Federal Circuit patent cases in order to overrule them; as the Federal Circuit upheld the constitutionality of these procedures, the Supreme Court may intend to strike them down. It is also noted that a majority of the Justices of the Supreme Court have adopted “private property” interpretations of patents in other cases, and as such they may find McCormick to be persuasive.

However, the constitutionality of post-grant procedures has been challenged in a number of cases, and the Supreme Court may have wished to take this case just to settle the issue. It is also noted that the facts of McCormick could be limited to the narrow facts of the case. When McCormick was decided, the USPTO did not have a revocation power expressly granted to them by Congress, and the USPTO now has such a power. The Supreme Court may decide that Congress can grant the USPTO jurisdiction over an issued patent and has properly done so.

Category: Firm News, General