In two recent decisions by the United States Supreme Court, the constitutionality of inter partes review was determined. Inter partes review (IPR) is a procedure within the United States Patent and Trademark Office (USPTO) which authorizes a board (namely, the Patent Trial and Appeals board) to reconsider and cancel an already-issued patent claim. Any person who is not the patent owner may petition for such review.
The first case, Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, involved a patent owned by Oil States and relating to technology for protecting wellhead equipment used in hydraulic fracturing. Oil States sued Greene’s Energy for infringement and in respons, Greene’s challenged the patent’s validity in parallel proceedings before the District Court and the USPTO in the form of an IPR. The case eventually made its way up to the Supreme Court which was tasked with determining whether IPR violates Article III or the Seventh Amendment of the Constitution.
The Court found that patents are public rights and therefore a decision to grant a patent is a matter involving public rights. Granting patents is a constitutional function that may be performed by the executive or legislative branches without judicial determination. Since IPR is simply a reconsideration of that original patent grant, such procedure may properly occur outside an Article III court. Moreover, the Court held that while the Seventh Amendment preserves the right of trial by jury in suits at common law, Congress particularly assigned this review of patent grants to the Patent Trial and Appeals Board, a non-Article III tribunal, so the action can be adjudicated by a nonjury fact finder.
The Court also considered the IPR procedure in the other case, SAS Institute v. IANCU. In that case, petitioner sought review of a software patent by alleging that all of the sixteen patent claims were unpatentable. The Patent Trial and Appeal Board’s final decision only addressed some of the claims and denied review of those remaining. Basing its decision on the plain text of the statute, 35 U.S.C. §318(a), the Supreme Court found this to be in error. Indeed, the Court held that when the USPTO institutes an IPR, it must decide the patentability of no less than all of the claims that have been challenged.