In arguing that inter partes review (IPR) violates the U.S. Constitution, the petitioner in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC advances two theories. The first is that patents are private rights, not public rights, and therefore suits to invalidate patents must be tried before a jury under the Seventh Amendment. Second, even if the Seventh Amendment is not violated by IPRs, suits for invalidity must be tried in an Article III forum, not in an agency proceeding. The petitioner also takes issue with claim interpretation and claim amendment limitations during IPR, which are beyond the scope of this post.
The constitutional argument begins by focusing on the fact that patent “infringement cases today must be tried to a jury, as their predecessors were more than two centuries ago”, citing Markman v. Westview Instruments, Inc., 517 U.S. 370, 377 (1996) (emphasis added). At a minimum, the Constitution requires that an Article III judge adjudicate all cases in law and in equity arising under federal law. According to the petitioner, IPRs provide neither the jury nor the Article III forum guaranteed by the Constitution.
The petitioner’s brief argues that because patent infringement must be tried by a jury, invalidity defenses also must be tried by a jury. This seems unconvincing, as IPRs are not infringement suits and may be filed without any infringement allegation being levied at all. To say, as the petitioner does, that IPRs take “a patent infringement claim out of the jury’s hands and entrusts it to bureaucrats” seems odd, since infringement is not an issue in IPRs.
In any case, the petitioner then argues that patents are private rights, not public rights. The petitioner argues that even the PTO has recognized that patents are a property right, complete with the most important characteristic of private ownership – the right of exclusion. The petitioner convincingly observes that a private right exists wholly apart from the government once granted, as the Supreme Court itself observed in United States v. Am. Bell Tel. Co., 128 U.S. 315, 370 (1888) (“[The subject of the patent] has been taken from the people, from the public, and made the private property of the patentee”). That is why “[o]nce a patent is issued, the patentee must enforce the patent without aid of the USPTO.” The implication is that if patents are indeed private rights once issued, they cannot be “taken” without a jury trial under the Seventh Amendment.
The petitioner next argues that even if the IPR determination of invalidity does not violate the Seventh Amendment, it nonetheless violates Article III and Supreme Court precedent, because the Court has “long recognized that, in general, Congress may not ‘withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty’”, Stern v. Marshall, 564 U.S. 462, 484 (2011) (quoting Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272, 284 (1855)). According to the petitioner, because patent infringement cases are traditional actions at common law tried by the courts, an Article III judicial proceeding must be held to test validity because the Court itself has held that once a patent is granted, it “is not subject to be revoked or canceled by the president, or any other officer of the Government” because “[i]t has become the property of the patentee, and as such is entitled to the same legal protection as other property”, citing McCormick Harvesting Mach. Co. v. C. Aultman & Co., 169 U.S. 606 (1898).
The petitioner then presents arguments relating to land patents, in which the Court held in the 19th century that the only authority to set such patents aside is the courts, not the department that issued the patent. This, of course, conflates land patents with invention patents and moreover relies on law that appears to have been, at the very least, softened by contemporary Court deference to the administrative state.
The petitioner concludes by admitting that although there is a category of cases involving “public rights” that Congress could constitutionally assign to “legislative” courts for resolution, patents do not fall into that category, having been recognized for centuries as a private property right. Consequently, IPRs are a “prototypical exercise of judicial power” because a final, binding judgment is being entered on a cause of action – patent invalidation – that stems from the common law and does not depend on any agency regulatory regime as it predates the agency by centuries. For this reason, patent infringement cases – complete with invalidity defenses – are traditional actions at common law and therefore the responsibility for deciding them rests, if not with juries, then at a minimum with Article III judges in Article III courts.
CLICK HERE to READ a summary of the Constitutional arguments made by the Respondent.