https://archive.org/details/LegalGeekEp107
While our past two segments have focused on significant patent law decisions of the Supreme Court in the 2016 term, we're always looking ahead at Legal Geek to the next huge case. The Supreme Court did not disappoint in this regard, as it decided to grant cert for the 2017 term to a huge case called Oil States Energy Services v. Greene's Energy Group.
The issue presented in Oil States is this: whether it is constitutional for executive branch tribunals such as the Patent Office's Patent Trial and Appeal Board to invalidate patents in review proceedings, or is that invalidation process only allowable by federal courts? Let's explain first why that is such a significant question.
When enforcing a patent, one defense that can be raised is that no infringement of the claims is present, while another defense is that the patent is invalid and should never have been granted by the Patent Office. Currently, defendants can pursue invalidity claims in federal court lawsuits, but also in several review proceedings available at the Patent Office.
One type of post grant review is a reexamination by examiners, which has been around since 1980, and another type called Inter Parties Review or IPR was created by the America Invents Act in 2012. IPR is kind of a mini litigation of the validity of a patent, but done in front of the Patent Trial and Appeal Board, which hypothetically should have more patent and tech savvy judges than your average federal district court.
IPR's have been wildly popular since their creation, thanks to lower costs compared to fighting over validity in federal courts. Over 7000 IPR petitions have been filed, of which 1500 have come to final decision and 1300 of those have invalidated some or all of the patent claims reviewed. Obviously a high success rate for defendants or patent challengers.
So this question is important because it could undo 5 years of strong invalidity or opposition procedures as well as impact the reexamination process that has been in force since 1980. Countless so-called "bad patents" could come back into play if the work of the Patent Trial and Appeal Board is deemed unconstitutional. Plus, challenging patents would immediately become much more expensive and difficult.
So what will this decision turn on? In all likelihood, the argument will be won based on whether a granted patent is considered a private property right, which typically can only be revoked by courts, or a public right created by government regulation that could be revoked by governmental agencies. There are relatively compelling arguments for both positions, but the lower court at the Federal Circuit deemed patents as public rights. If the Supreme Court reverses the Federal Circuit, as they often do, this will mark a massive change in patent enforcement in the U.S. But such a decision would also be favorable to patent owners, which is typically not how the Supreme Court has come out in recent years' decisions.
The Bottom Line is, whenever a massive change in procedures and rules comes around in law, like what happened in patent law with the AIA, it's only a matter of time before these large constitutionality challenges threaten the new regime. It will be fascinating to see if the post grant review procedures from Congress survive like Obamacare did when facing similar challenges at the Supreme Court, and this shapes up to be the story of the year for next term in IP law.
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Thanks for reading. Please provide feedback and legal-themed questions as segment suggestions to me on Twitter @BuckeyeFitzy
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