Gorsuch Casts Patent Office Trials as Blow to Judicial Independence

WASHINGTON (CN) – With only Justice Neil Gorsuch and the chief aligned in dissent, the Supreme Court found nothing unconstitutional Tuesday about letting the Patent and Trademark Office review patent claims without court involvement.

The challenger here, Oil States Energy, faced the process known as inter partes review after it accused Greene’s Energy Group in 2012 of infringing a patent that concerned a method of protecting wellhead equipment during hydraulic fracturing.

Though Oil States Energy claimed that inter partes review trampled its right to a jury trial, the Federal Circuit rejected its constitutional arguments, and the Patent and Trial Appeal Board of the Patent and Trademark Office found the fracking-equipment claims unpatentable.

Upholding the constitutionality of inter partes review on Tuesday, Justice Clarence Thomas found that there is no need to involve an Article III court in the determination to grant a patent.

The decision sparked a fiery dissent by Gorsuch that casts inter partes review as agency intrusion into judicial independence — an example of expediency triumphing over constitutionally prescribed procedures.

“Whether it is the guarantee of a warrant before a search, a jury trial before a conviction — or, yes, a judicial hearing before a property interest is stripped away — the Constitution’s constraints can slow things down,” Gorsuch wrote. “But economy supplies no license for ignoring these — often vitally inefficient —  protections. The Constitution ‘reflects a judgment by the American people that the benefits of its restrictions on the government outweigh the costs,’ and it is not our place to replace that judgment with our own.”

Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor joined the lead opinion in full but also emphasized in a concurring opinion the narrowness of their holding.

“The court’s opinion should not be read to say that matters involving private rights may never be adjudicated other than by Article III courts, say, sometimes by agencies,” Breyer wrote. “Our precedent is to the contrary.”

Supporters of inter partes review have emphasized that the Patent Office issues too many low-quality patents, and that bringing in clean-up from of a subdivision of that office solves the problem efficiently.

But Gorsuch said the defense of inter partes review today “signals a retreat from Article III’s guarantees.”

“Ceding to the political branches ground they wish to take in the name of efficient government may seem like an act of judicial restraint,” he wrote, joined by Chief Justice John Roberts. “But enforcing Article III isn’t about protecting judicial authority for its own sake. It’s about ensuring the people today and tomorrow enjoy no fewer rights against governmental intrusion than those who came before. And the loss of the right to an independent judge is never a small thing. It’s for that reason Hamilton warned the judiciary to take ‘all possible care … to defend itself against’ intrusions by the other branches. It’s for that reason I respectfully dissent.”

Among those watching the case was Brian Pandya, a partner with Wiley Rein LLP who represents technology and pharmaceutical companies in patent litigation.

In a statement on the ruling, Pandya called the Supreme Court’s reasoning “simple and crystal clear: if the PTO can grant a patent, it can take it away (under certain circumstances).”

Pandya also reflected on what he called today’s surprise 5-4 decision by the Supreme Court in the case SAS Institute Inc. v. Iancu.

Because this ruling says that the Patent Trial and Appeal Board must review all claims in a review petition, Pandya says petitioners could face the quandary of instituting inter partes review for one claim, only to have other claims confirmed later “as patentable on the backend, thus creating a bulletproof patent.”

Pandya said PTO Director Andrei Iancu has promised even more changes for the board, and noted the narrow holding reached today in Oil States.

Abbreviating the name of the board and inter partes review, Pandya said it “leav[es] open the possibility of narrower constitutional challenges to the PTAB, such as due process challenges in cases involving alleged ‘panel stacking’ or challenges to the application of inter partes review to patents granted before 2012 before the expectation of IPRs.”

%d bloggers like this: