In Two Life Sciences Cases, the Supreme Court Declines to Address the Constitutionality of IPRs of Pre-AIA Patents

Kramer Levin Naftalis & Frankel LLP

Kramer Levin Naftalis & Frankel LLP

Last week, the U.S. Supreme Court declined to review the constitutionality of inter partes review proceedings (IPRs) challenging patents issued before the Leahy-Smith America Invents Act (AIA). The AIA, enacted in September 2011, introduced IPRs and other post-grant review proceedings enabling third parties to challenge the validity of issued patents before the Patent Office under a lower standard of proof than in district court. Since then, thousands of pre-AIA patents have been the subject of these proceedings. The Court’s two recent denials of petitions for certiorari in Celgene Corp. v. Peter and Enzo Life Sciences, Inc. v. Becton, Dickinson & Co. both involved IPRs of pre-AIA patents in the life sciences and a challenge to the constitutionality of such IPRs.

Specifically, in Celgene Corp. v. Peter, the Federal Circuit addressed whether invalidation of a pre-AIA patent in an IPR is an unconstitutional taking under the Fifth Amendment. The patents at issue, issued pre-AIA, were directed to methods for providing teratogenic agents to patients and were challenged by the Coalition for Affordable Drugs VI LLC in IPRs. The Federal Circuit rejected the constitutional argument, explaining, in relevant part, that “IPRs do not differ sufficiently from the [Patent and Trademark Office (PTO)] reconsideration avenues available when the patents [] were issued to constitute a Fifth Amendment taking,” thus viewing IPRs as an extension of the review procedures of issued patents that were already in place pre-AIA such as reexaminations. As the Federal Circuit further noted, Celgene’s pre-AIA patents had been “granted subject to existing judicial and administrative avenues for reconsidering their validity,” and at the time of their issuance, as now, the PTO had the authority to reexamine and reassess the validity of the issued patents. In effect, the Federal Circuit concluded that if a patent is challenged and its validity overturned, the patent owner ultimately never had a property right to be taken because the patent was issued in error. Last week, the Court denied the petition to review the issue further.

In Enzo Life Sciences, Inc. v. Becton, Dickinson & Co., the Federal Circuit relied upon its explanation in Celgene in rejecting one of Enzo’s arguments on appeal that challenged the constitutionality of IPRs of pre-AIA patents. The patent at issue, granted in 2006 before the AIA, related to nucleic acid detection techniques involving non-porous solid support. While the Federal Circuit briefly concluded that “the retroactive application of IPR proceedings to the [asserted] patent, which issued before the enactment of the AIA, is not an unconstitutional taking under the Fifth Amendment,” it did not address an additional due process constitutional challenge that Enzo had raised. Enzo subsequently filed a request for rehearing before the Federal Circuit, arguing that “the right to a clear and convincing burden of proof in adversarial proceedings against the . . . patent is a substantive right that vested when the . . . patent issued . . . [and thus] it is a property interest protected under due process.” The Federal Circuit denied the request, followed by the Court’s denial of Enzo’s petition for certiorari.

While the Court denied these petitions for certiorari, in the last few years, the Court has considered the potential limits surrounding post-grant review proceedings under the AIA, with a particular focus on IPRs. Of particular note is the Court’s decision in which it upheld the constitutionality of IPRs under Article III and the Seventh Amendment but noted that it “addresse[d] only the constitutionality of inter partes review and the precise constitutional challenges that Oil States raised . . . . The decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.”

While the Court declined the opportunity now to review the constitutionality of IPRs pertaining to pre-AIA patents with respect to the Due Process Clause and the Takings Clause, the opportunity to do so may arise again. Until then, patent owners of pre-AIA patents remain subject to potential IPR challenges, and petitioners will continue to challenge such patents in IPR proceedings.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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