U.S. Supreme Court Rules Inter Partes Reviews (IPRs) Constitutional

Wednesday, April 25, 2018

As part of the America Invents Act, Congress established inter partes review (“IPR”), which went into effect in 2012.   IPR allows a challenge to the validity of one or more claims of a patent on the grounds that the claims do not meet the novelty or nonobviousness standards for patentability in view of prior art patents or printed publications.  In Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC, No. 16-712, 584 U.S. ___ (Apr. 24, 2018), the U.S. Supreme Court, in a highly anticipated decision, rejected a challenge to the constitutionality of IPR, in particular finding that IPR does not violate Articles III or VII of the Constitution.  The Court found that the grant of a patent by the U.S. Patent & Trademark Office (“PTO”) falls within the public-rights doctrine.  IPR is simply a reconsideration of that grant, and Congress permissibly reserved the PTO’s authority to conduct that reconsideration through IPR without violating Articles III or VIII of the Constitution.  In reaching its conclusion, the Court equated patents to “public franchises,” which Congress can grant while reserving its authority to revoke or amend through legislation or an administrative proceeding.  The Court also found historical precedent for IPR in 18th-century England, which provided a procedure for vacating of a patent through petition to a Privy Council composed of the Crown’s advisers.  The Court emphasized that its holding was narrow and confined to the grounds raised by the petitioner Oil States, thus leaving open possible future challenges to the retroactive nature of IPR or the constitutionality of IPR under the Due Process Clause or Takings Clause.