Patent Day at the Supreme Court

by Dorsey & Whitney LLP
Contact

Today the Supreme Court re-affirmed the validity of the Inter Partes Review (IPR) process in Oil States Energy LLC v. Greene’s Energy Group, LLC, but also made IPRs a somewhat more stringent process in its decision today in SAS Institute Inc. v. Iancu, which held that all claims challenged by a party bringing an IPR must decide the patentability of all challenged claims (no more partial institutions), making an IPR a more high-risk strategy for a party challenging a patent.  Oil States Decision

In Oil States, the Supreme Court held that a patent is a public right, i.e., a “public franchise.”  A patent is granted by the government, via the PTO, and can be taken away in a proper proceeding by the government, in this instance through an IPR.  Justice Thomas’ opinion was particularly straightforward on this issue, writing that, by issuing patents, the PTO takes away from the public rights of immense value (and something Congress could do on its own), and thus the legislative branch can decide whether to take away such public rights, as it has done by creating IPRs.  While the Supreme Court admitted that there were some times in American history where patents were considered “private rights” and that patent validity has traditionally been adjudicated in the courts within the confines of the 7th Amendment, that does not mean that the government cannot take legislative steps, as here, to also allow a panel of Administrative Law Judges (Article II) to narrowly determine a patent’s validity.  The citations to guarantees of a trial by jury were typically for disputes between private parties, the IPR is really between the government and the patent owner.  Just because an IPR “looks” like a trial does not mean it is a “trial”, rather it is an agency procedure like many others under Article II.  Justice Thomas used the analogy of a toll bridge, whose authority can be revoked by Congress.  (I guess Peter Detkin was on to something when he coined the term “patent troll”).

Justice Thomas delivered the opinion, in which 5 Justices joined.  Justice Breyer filed a short concurrence (joined by Justice Ginsburg and Justice Sotomayor), and Justice Gorsuch and Justice Roberts dissented, calling into question the entire IPR scheme because the patent grant is a fundamental American right so serious that the founders cited it in the Declaration of Independence and 19th century American courts rejected any effort to have anyone besides judges decide patent disputes.  Many commentators were expecting a 9-0 opinion, so this is a little bit of a surprise, especially given the oral argument where none of the Justices appeared particularly excited about dismantling the IPR system that had existed for the past 7 years and was a creative of the legislative branch.

In a companion case, SAS, the Supreme Court curtailed the viability of IPRs, which patent owners are hailing as a win despite IPRs expectedly being re-affirmed in Oil States.  The Court found that no support for the partial institutions that that PTO had created in 37 CFR Section 42.108(a), and abolished that practice.  The Court found the 35 U.S.C. Section 318(a) required that Patent Trial and Appeal Board (PTAB) “shall” conclusively determine the patentability of all challenged claims.  The Court denied that there was a discrepancy between the PTO’s decision whether to institute review based on claims found “in the petition” rather than requiring a resolution of the claims challenged “by the petitioner.”  The Court found that the different language was allowed merely to allow a patentee to cancel any challenged patent claim, not to allow the PTAB to decide something less than all challenged claims.  Justice Gorsuch found that there is a “clear answer” in Section 318(a), because the final written decision with respect to the patentability of “any” patent claim means, in this context, “every” claim.  Justice Gorsuch found support in distinguished IPRs from ex parte reexaminations, where the PTO has a different charter, whereas in an IPR, the petitioner has identified exactly which claims it challenges, so all such claims must be resolved in such a proceeding.  Justice Gorsuch rejected the PTO Director’s argument that there was discretion as to which claims to evaluate, finding that the legislative intent was to give the petitioner that power through their petition, not the Director.  If the PTO Director seeks that power, it should be decided by Congress.  SAS Decision

Interestingly, the Oil States opinion by Justice Thomas seems somewhat at odds with the SAS opinion by Justice Gorsuch in that Justice Thomas treats patent as public rights that can be administratively granted and revoked, where Justice Gorsuch (who dissented in Oil States), refers to IPRs as litigation, and appears to have ruled that the petition is governed by “litigation” rules.  Nowhere does the Supreme Court accord these distinctions, and possibly it was intentional.  The result is a balancing through today’s decisions, while the IPR regime stands, it is now an all or nothing proposition for a petitioner.  The estoppel rules for an IPR, finding that a party challenging an IPR is now estopped from challenging validity in a later court proceeding, take on much more importance because losing an IPR challenge is likely to vitiate most validity challenges in any later litigation.

Justice Gorsuch delivered the opinion, in which 4 Justices joined.  Justice Ginsburg delivered a short dissent asking why a partial institution is not feasible, and Justice Breyer delivered a dissent as to which Justice Ginsburg, Justice Sotomayor, and Justice Kagan all joined (except as to one part).  The dissent questioned whether the PTAB needed to decide all claims “in the petitioner’s original petition”, because that’s not what the statute says expressly.  They agreed with the PTO Director that the lack of that language allows the PTO discretion whether to finally resolve all claims or only some.

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.

© Dorsey & Whitney LLP | Attorney Advertising

Written by:

Dorsey & Whitney LLP
Contact
more
less

Dorsey & Whitney LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.