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IPRs Found to be Constitutional – For Now

On April 24, 2018, the US Supreme Court handed down its decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 138 S. Ct. 1365 (2018). The issue in the case was whether the PTO’s inter partesreview (“IPR”) procedure is constitutional. Oil States Energy asserted IPRs were not constitutional because they violated Article III of the Constitution by giving judiciary powers to the PTO, which are reserved solely for district courts. Oil States further argued IPRs violated a patent owner’s Seventh Amendment right to a jury trial.

In a 7-2 decision, the US Supreme Court rejected Oil States Energy’s arguments by holding the IPR system is constitutional. The court invoked the “public rights doctrine,” which states Congress has significant latitude to assign the adjudication of “public rights” to decision makers other than federal courts. Id. at 1372 – 1376.The decision was a blow to patent owners, while a significant victory to those every accused of infringement.

While the Supreme Court found IPRs constitutional for now, the Court did note there may be other issues relating to whether an IPR is constitutional, such as retroactive license issues, due process issues, and takings issues. Id. at 1379 – 1380. These issues were not raised so they were not addressed in the Opinion.

There was also a powerful dissent given by Justices Gorsuch and Roberts. The dissent explained the executive branch is often controlled by “armies of lobbyists and lawyers,” while Article III creates the judiciary to protect against these forces. The dissent writes that IPRs are a “retreat from Article III’s guarantees.” Id. at 1379.

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