Supreme Court Upholds the Constitutionality of Inter Partes Review

The Supreme Court in Oil States Energy Services v. Greene’s Energy Group upheld the constitutionality of inter partes reviews, holding that inter partes review does not violate Article III or the Seventh Amendment of the Constitution. The Supreme Court held that inter partes review involves public rights and is simply a reconsideration of the grant of a public franchise. Therefore, allowing the Patent and Trademark Office (PTO) to reconsider the grant of a public right does not violate Article III. The Supreme Court concluded that the grant of a patent has long been recognized as a public right, and the Seventh Amendment is not violated because a jury is not necessary since the PTO can properly conduct inter partes review.

The Supreme Court qualified that its holding was narrow. The Supreme Court’s constitutionality determination applied to inter partes review only. The Court did not rule on the retroactive application of inter partes review to a patent granted before AIA post-grant proceedings were in place, nor to any due process challenges.

Oil States Energy Services and Greene’s Energy are oilfield services company. After Oil States sued Greene’s Energy for infringing a patent related to hydraulic fracturing, Greene’s Energy challenged the patent’s validity in an inter partes review. The inter partes review and litigation progressed in parallel. A few months after the district court’s claim construction opinion, the Patent Trial and Appeal Board (PTAB) issued a final written decision concluding that the claims were unpatentable. The PTAB decision relied on a claim construction that differed from the district court’s construction, and, under the district court’s construction, the invalidity determination reached by the PTAB was foreclosed. Oil States appealed the PTAB’s decision. Oil States argued that executive branch tribunals, like the PTAB, do not have the authority to invalidate patents, which involve private property rights.

Gibbons P.C. will continue to monitor developments in the review of IPR proceedings.