The Supreme Court held oral hearings on Monday in Oil States v. Greene’s Energy, giving the public its first glimmer into how the high court’s justices view the constitutionality of inter partes review proceedings that were introduced by the America Invents Act. Click here for a transcript of the hearing.
As expected, the subject of whether patents are private property that cannot be taken away by an Executive Branch tribunal such as the Patent Trial and Appeal Board (PTAB) or are public property drew many questions from the justices. Justice Gorsuch appeared to embrace that idea that patents do indeed constitute private property, stating, for example, that “this is not a new idea, that once [a patent] is granted, it’s a private right belonging to the inventor.” Justice Roberts similarly noted that Supreme Court precedent has rejected the proposition that the government can reevaluate a patent that is already issued, likening it to public employment cases where “[y]ou cannot say, if you take public employment, we can terminate you in a way that’s inconsistent with due process.”
Interestingly, the justices also questioned what makes the pre-existing re-examination proceedings conducted by the USPTO constitutional but inter-partes reviews unconstitutional. Oil States argued that re-examinations are “fundamentally examinational” while inter partes reviews are “adjudicational in nature.” However, the justices seemed unconvinced, noting that both the pre-existing re-examinations and the AIA inter partes reviews provide an avenue for the USPTO to review the patents that it issues. This lead the justices to ask which specific features of inter partes review make it unconstitutional. In other words, “[h]ow many of these things do you have to take away before you have a constitutional system?” How the justices consider this issue could play a large factor in the Court’s decision.
While it may not sway the Court’s decision in this case, it is worth noting that the justices seemed wary of the impartiality of PTAB proceedings in view of the USPTO’s admission in a recent unrelated case that agency officials have convened expanded panels to rehear cases after a PTAB panel had already reached a decision on several occasions. These new expanded panels reached different results more consistent with policy of the USPTO director. Chief Justice Roberts remarked that it appeared the PTAB “is a tool of the executive activity, rather than anything resembling a determination of rights.”