Supreme Court in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, Holds that Inter Partes Review Is Constitutional
By: Charles R. Macedo, Jung Hahm and David P. Goldberg*
On April 24, 2018, the Supreme Court issued a 7-2 decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712, affirming the US Court of Appeals for the Federal Circuit’s judgment that inter partes review (“IPR”) does not violate Article III or the Seventh Amendment of the US Constitution. The majority opinion of the Court was written by Justice Thomas, joined by Justices Kennedy, Ginsburg, Breyer, Alito, Sotomayor and Kagan. Justice Gorsuch filed a dissenting opinion, in which Chief Justice Roberts joined.
Most importantly, the Court determined that “[i]nter partes review falls squarely within the public rights doctrine.” Slip op. at 6.
This Court has recognized, and the parties do not dispute, that the decision to grant a patent is a matter involving public rights--specifically, the grant of a public franchise. Inter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration. Thus, the PTO can do so without violating Article III.
Id. at 6-7 (emphasis in original). The Court disposed of contrary argument based on prior decisions citing the “private property of the patentee” by noting that those precedents were decided under the Patent Act of 1870, which did not provide for any post-issuance administrative review. Accordingly, “[t]hose precedents . . . are best read as a description of the statutory scheme that existed at that time.” Id. at 11.
The Court also rejected Appellant’s argument that IPR violates Article III based on the similarities between IPR and typical court procedures, since “this Court has never adopted a ‘looks like’ test to determine if an adjudication has improperly occurred outside of an Article III court. The fact that an agency uses court-like procedures does not necessarily mean it is exercising the judicial power.” Id. at 15 (citation omitted).
Finally, the Court held that IPR does not violate the Seventh Amendment because “when Congress properly assigns a matter to adjudication in a non-Article III tribunal, the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” Id. at 17 (citations omitted).
Emphasizing the narrowness of its holding, the Court pointed out that it did not consider “whether inter partes review would be constitutional without any sort of intervention by a court at any stage of the proceedings.” Id. at 16 (citation omitted). Further, “Oil States does not challenge the retroactive application of inter partes review, even though that procedure was not in place when its patent issued.” Id. at 17. The Court also warned against misconstruing its decision “as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.” Id. (citations omitted).
In short, in this much-awaited decision, the Court confirmed the constitutionality of IPRs but left open the possibility that it would consider other constitutional challenges that don’t turn on a public right vs. private right distinction.
* Charles R. Macedo is a Partner, Jung Hahm is Senior Counsel and David P. Goldberg is an Associate at Amster, Rothstein & Ebenstein LLP. Their practice focuses on all facets of the intellectual property law, including patent, trademark and copyright. They may be contacted at email@example.com, firstname.lastname@example.org and email@example.com. Mr. Goldberg is the Co-Chair of the Amicus Brief Committee of the New York Intellectual Property Law Association.