The US Supreme Court has ruled that inter partes review (IPR) is constitutional. In a 7-2 majority opinion issued on April 24 in Oil States Energy Services v. Greene’s Energy Group (2016-0712), the Court established that patents are public franchises, the adjudication of which Congress may assign to an entity other than an Article III court. The majority also ruled that IPR falls under the Patent Office’s existing authority to grant patents, since it essentially involves the Patent Trial and Appeal Board (PTAB) revisiting an existing patent grant and follows the same standards for patentability. The fact that the courts have historically decided patent validity challenges does not mean they must always do so, and procedural similarities between IPR and the courts do not amount to a violation of Article III. As a result, the Court held that IPR also does not violate the Seventh Amendment, since the proper assignment of a claim to a non-Article III tribunal necessarily allows for adjudication by a “non-jury factfinder”. On the same day as its ruling in Oil States, the Court also issued an opinion in SAS Institute v. Iancu, rejecting the PTAB’s prior practice of issuing partial institution decisions in IPRs.
The Supreme Court held oral arguments for Oil States v. Greene’s Energy Services on November 27, exploring the constitutionality of inter partes review (IPR) under Article III of the US Constitution. During their questioning of counsel for the two parties and the US Government, the justices pushed for a clear-cut articulation for how, if at all, IPR might be invalidated without affecting the USPTO’s far less controversial ex parte and inter partes reexamination systems along with myriad other agency review proceedings. The justices also pressed the parties on the core issue of whether patents are private or public rights, a distinction that received particular attention from Justice Neil Gorsuch, and thus whether their invalidation can be addressed only in an Article III court. Chief Justice John Roberts emphasized the issues of due process and the applicability of the Takings Clause, while the Court’s liberal and moderate justices seemed to favor the view that, in key respects, IPR is closer to a reexamination than a trial.
The US Supreme Court has agreed to assess the constitutionality of inter partes review (IPR). On June 12, the Court granted certiorari in Oil States Energy Services v. Greene’s Energy Group (2016-0712), with the petitioner asserting in part that IPRs violate the right to a jury trial under the Seventh Amendment and that the validity of patents, as private property rights, may be challenged only in an Article III court.