Are Patents Public or Private Rights?

March 17, 2018

The Leahy–Smith America Invents Act (AIA), passed by Congress September, 16, 2011, introduced noteworthy amendments to the existing United States patent system, including transitioning from first-to-invent to first-to-file priority; assignee filing; prohibiting patents for human organisms; creating a new definition of prior art under § 102; and introducing and changing several post-grant review proceedings.

While the Act has been met with cheers by those who tout its passage—it makes prosecuting patents more efficient, purportedly reduces patent litigation and keeps the United States technologically competitive—it has also been met by others with concern, particularly post-grant review, in which the Patent Trial and Appeal Board (PTAB) may potentially invalidate issued patents.

Concern has reached the United States Supreme Court. In Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, the Court heard oral arguments November 27, 2017, as to whether PTAB can constitutionally invalidate patents through its inter partes review proceeding. Oil States sued Greene’s Energy in 2012 for patent infringement; Greene’s Energy initiated an inter partes review with PTAB, which determined that the claims in Oil States’s U.S. Patent No. 6,179,053 were anticipated and, therefore, unpatentable. Oil States appealed the PTAB decision to the U.S. Court of Appeals for the Federal Circuit, which affirmed the decision. Oil States appealed to the Supreme Court, which agreed to hear the case.

The question at hand is whether the PTAB, an administrative governance, may revoke patent rights in an inter partes proceeding or is the patent owner, in this case, Oil States, entitled to a jury trial in an Article III (federal) court? Further, are patent rights a public right or private property? Oil States argues that inter partes review is unconstitutional because patents are private property rights historically reviewed by courts, and argues patent rights can only be eliminated in federal court with a right-to-trial jury. Conversely, Greene’s Energy contends patents are public rights and Congress may assign an administrative body without a jury—in this instance, PTAB—to decide patent disputes.

“A strong patent system encourages investment in American innovation,” said San Diego IP Law Group patent attorney, Trevor Coddington.

The Supreme Court is expected to rule on Oil States Energy Services, LLC v. Greene’s Energy Group, LLC  in 2018. Its decision is likely to be as impactful on U.S. patent prosecution as the 2011 America Invents Act: it may reinforce or curtail the administrative power of PTAB to adjudicate patent validity.