Inter Partes Review deemed constitutional by the United States Supreme Court

A patent is a set of exclusive rights granted by a government to an inventor, for a limited period of time, in exchange for detailed explanation of how an invention works. The purpose of a patent is encourage the sharing of knowledge by rewarding inventors with a monopoly on their invention for a period of time, if the inventor teaches the public how to use the invention. In the United States the authority to grant patents is granted to congress by the United States Constitution. The United States Patent and Trademark Office is an agency in the United States Department of Commerce to which Congress has delegated the authority to issue patents in the United States.

Modern United States patent law was passed in 1951. Patent law remained relatively unchanged for the rest of the century, but as technology progressed and the world complicated issues began to develop with the 1951 Patent Law. The America Invents Act was passed in 2011. The America Invents Act was law intended to update United States patent law and bring the patent system in line with the modern world. The America Invents Act introduced a number of new innovations to United States Patent law, the most notable innovation being the inter partes review.

Inter partes review is intended to fight bad patents. Bad patents are patents which should not have been granted because the patent application was defective. Stated differently, inter partes review are a way to ask the United States Patent and Trademark Office to rescind a patent which was granted in error. Before inter partes review a patent which had been granted could only be challenged in federal court, a long and expensive process. Inter partes review created a parallel track to challenge the validity of a patent which was much faster and less expensive than litigation in a federal court.

In the United States new laws are frequently challenged in the courts. The inter partes review section of the America Invents Act was challenged on the grounds that the process is unconstitutional in OIL STATES ENERGY SERVICES, LLC v. GREENE’S ENERGY GROUP, LLC. 584 U. S. ____ (2018). The United States Supreme Court held that the Inter Partes Review process is constitutional.

The details of the case are as follows: The plaintiff, Oil States, sued Greene’s Energy Group for patent infringement in federal District Court. Greene’s Energy responded to the lawsuit and at the same time petitioned the United States Patent and Trademark Office’s Patent Trial and Appeal Board for an inter partes review of the patent. The basis for the inter partes review was that the Oil States’s patent was invalid because of prior art. The District Court case proceeded in a way that Greene’s Energy could not assert that the patent was invalid because of prior art. The Patent Trial and Appeal Board found that the patent was invalid because of prior art. So Greene’s Energy lost in Federal District Court but won in the United States Patent and Trademark Office’s administrative court.

Oil States appealed on the basis that patents are a property right, and property rights can only be taken away by courts created by Article III of the United States Constitution. The United States Patent and Trademark Office’s Patent Trial and Appeal Board is not an Article III court.

The United States Supreme Court found for Greene’s Energy. The court held that a patent is a public franchise, Congress is allowed to delegate the patent grant process to an agency like the United States Patent and Trademark Office, and that revoking a public franchise can be done outside of Article III courts.

The United States Supreme Court did narrowly tailor its decision to apply only to the revocation of patents by the United States Patent and Trademark Office. Patents still may be considered private property in other situations.

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