Solicitor General Tells SCOTUS that Patents are Public Rights in Oil States Brief

On November 27th, the U.S. Supreme Courtwill hear oral arguments in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC. The case, which stems from an appeal of an inter partes review (IPR) trial at the Patent Trial and Appeal Board (PTAB), asks the highest court in the U.S. to decide if the PTAB operates in violation of the U.S. Constitution by extinguishing property rights in a non-Article III federal judicial forum without a jury trial.

On October 23rd, U.S. Solicitor General Noel Francisco filed a brief for the federal respondent in the case. A brief for the federal respondent filed in April by Principal Deputy Solicitor General Jeffrey Wall filed a brief with SCOTUS in opposition of their granting a writ of certiorari to hear Oil States. The October brief filed with the Supreme Court argues that IPR proceedings at the PTAB comport with both Article III of the U.S. Constitution as well as the Seventh Amendment, which guarantees both the right to a jury trial as well as no reexamination of a fact found by a jury by another U.S. court.

The U.S. federal government pushed back against petitioner Oil States’ argument that Article III precludes Congress from authorizing the same agency that issues patents to reconsider the validity of the patents which it has issued. “That argument is unsupported by precedent, logic, or history,” the brief reads. The federal government equated the cancellation of patents through IPR proceedings as serving the “same public purpose” of an examiner concluding that an invention doesn’t satisfy statutory prerequisites to patentability.

The government’s brief argues that IPR proceedings at the PTAB are consistent with Article III because, in its view, patents are public rights and not private ones and the right for an inventor to seek a patent is a public right. In the government’s eyes, it is constitutionally permissible for the U.S. Patent and Trademark Office to reassess previously issued patents for revoking in order to “correct its own errors.” If the PTAB errs, then patent owners have legal recourse in appealing those cases to the Court of Appeals for the Federal Circuit, the government argues.

“Petitioner does not contend that initial patent-issuance decisions must instead be made by Article III courts,” the federal government argues. Thus, because executive branch employees, and not federal judges, are given Congressional approval to grant patents under terms of the U.S. Patent Act, Citing to Supreme Court decisions in Gayler v. Wilder (1850) and Graham v. John Deere Co. (1966), the government argued that patent rights did not exist at common law and historically have not reflected the natural right of inventors. Second, because patent examiners determine if a patent owner has rights “as against the world” and Article III courts adjudicate disputes between opposing litigants, the determination of whether an invention qualifies for patent protection “is appropriate for Executive but not Judicial Branch resolution.”

“Inter partes review serves the same important public purposes as the initial examination, namely the protection of the public from private monopolies that exceed the bounds authorized by Congress,” the government contends. Citing to Cuozzo Speed Technologies, LLC v. Lee (2016), the Solicitor General argues that the reexamination process enabled by IPR proceedings serves the purpose of the Framers of the Constitution by preserving balance between “the goal of encouraging innovation against the dangers and economic loss of monopoly.” Having a review process available through the Executive Branch is appropriate in the government’s eyes because of the presumption of validity which patents have in Article III district courts. The Solicitor General also argues against Oil States’ contention that Executive Branch employees may not revoke a private property right as the petitioner “confuses the distinct concepts of private property and “private rights”—those rights that are not integrally related to federal government action.” The government’s brief tries to take Oil States’ petition, which notes that ex parte reexamination is constitutionally valid, as reason why IPRs should remain in force. “At the end of both proceedings, however, the agency makes the same decision: whether a patent (or particular patent claims) should be cancelled,” the government argues.

“Contrary to petitioner’s contention, the AIA provisions that created inter partes review did not ‘withdraw’ questions of patent validity from Article III courts,” the Solicitor General’s brief states. Because the America Invents Act (AIA) of 2011, the law enacting the PTAB, did not expressly preclude the right of Article III courts from adjudicating questions of patent validity, the government argued that Article III courts have not been diminished. This is true even in cases where a judge or jury rejects an infringer’s defense of patent invalidity in district court, the federal government’s brief maintains.

source:http://www.ipwatchdog.com/2017/11/26/solicitor-general-tells-scotus-patents-public-rights-oil-states/id=90361/