The Supreme Court Upholds the Constitutionality of IPRs and Strikes Down Partial Institutions

Recently, the Supreme Court ruled that inter partes review (IPR) proceedings conducted before the Patent Trial and Appeal Board (PTAB) do not violate the U.S. Constitution.  IPRs are a popular mechanism for challenging the patentability of issued patents.  Since their enactment in 2012, over 7,500 IPR petitions have been filed.  In Oil States Energy Services v. Greene’s Energy Group, LLC, the Supreme Court held that IPRs do not violate Article III of the U.S. Constitution or the Seventh Amendment.  A key issue was whether patent rights are public rights subject to reconsideration by the USPTO or private rights insulated from agency review.  The Court determined that IPRs fall “squarely within the public-rights doctrine” and the Constitution “does not prohibit the Board from resolving [patentability matters] outside of an Article III court.”  The Supreme Court distinguished early decisions characterizing patents as “private property of the patentee,” noting that such cases were decided under the Patent Act of 1870 and “are best read as describing the statutory scheme that existed at that time.”

In a separate decision issued on the same day as Oil States, the Supreme Court struck down the USPTO’s standard practice of granting “partial institutions” in IPRs.  In an IPR, the PTAB assesses whether or not to institute trial on a claim-by-claim basis.  Under the USPTO’s current rules, patent claims that are not instituted drop out of the IPR proceeding and are not addressed in the final written decision.  In SAS Institute Inc. v. Iancu, the Supreme Court determined in a 5 to 4 decision that when the USPTO institutes an IPR, it must decide the patentability of all of the claims the petitioner has chal­lenged.  The Court stated that the plain language of the statute dictated this outcome, noting that “§ 318(a) means that the Board must address every claim the petitioner has challenged.”  In response to the parties’ public policy arguments, the Court strictly adhered to the statute, noting that “[p]olicy arguments are properly addressed to Congress, not this Court.”  The Court stated that the statute “makes the peti­tion the centerpiece of the proceeding both before and after institution” and “requires the Board’s final written deci­sion to address every claim the petitioner presents for review.”  SAS Institute impacts the scope of appealability of final written decisions and estoppel arising from such decisions.

1 Comment

  1. Thanks for a great summary of the recent decisions, Roger. Interesting how interpretation can change over time, with respect to the public vs. private nature of patents.

    Reply

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