Inter Partes Review Lives – Supreme Court Upholds Constitutionality under Article III and Seventh Amendment

The 2011 America Invents Act brought seemingly potent alternatives to the extraordinary expense and uncertainty of patent litigation in the United States District Court system. Now in their fifth year, Inter Partes Reviews and, to a lesser extent, Post-Grant Reviews and Covered Business Method Reviews, allow parties to bring challenges regarding the validity of a United States patent directly before the Patent Trial and Appeal Board of the United States Patent and Trademark Office, an administrative body comprised of administrative law judges, rather than before Article III judges. In practice, about 85% of all Inter Partes Reviews arise from an already existing patent lawsuit, while an Inter Partes Review is sought in less than 20% of all patent lawsuits.

On April 24, 2018, the United States Supreme Court rejected a challenge to Inter Partes Reviews brought before it based upon the alleged violation of Article III and the Seventh Amendment of the United States Constitution. In Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 (April 24, 2018), Justice Thomas, writing for the 7-2 majority, reasoned that the grant of a patent involves a matter “arising between the government and others.” As a result, a patent is a “public right” that may be properly reviewed, and invalidated if necessary, by an Article II Executive Branch tribunal. Having passed Article III muster, the Court also held that Inter Partes Reviews did not violate the right to a jury trial on the issue of invalidity under the Seventh Amendment.

In preserving Inter Partes Reviews in the face of Oil States’ challenge, Justice Thomas concluded by stressing that the holding in the case was narrow. For example, Oil States did not challenge the retroactive application of Inter Partes Reviews to patents granted before the AIA was enacted. Nor did Oil States present a due process challenge. Indeed, Justice Thomas expressly noted that the decision “should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.” Coupled with the vigorous dissent presented by Justice Gorsuch and joined by Chief Justice Roberts, future challenges to Inter Partes Reviews are almost certain.

This post was authored by Steven Underwood, a partner of Price Heneveld LLP.  Learn more about Steve’s practice and contact him here.