Northern District of Texas Blog

On April 24, 2018, the US Supreme Court issued its opinion in SAS Institute Inc. v. Iancu (available here).

The Court held that “[w]hen the Patent Office institutes an inter partes review, it must decide the patentability of all the claims the petitioner has challenged.” The Supreme Court reasoned that:

Section 314(a)’s requirement that the Director find “a reasonable likelihood” that the petitioner will prevail on “at least 1 of the claims challenged in the petition” suggests, if anything, a regime where a reasonable prospect of success on a single claim justifies review of them all. Again, if Congress had wanted to adopt the Director’s claim-by-claim approach, it knew how to do so. See §304. Nor does it follow that, because §314(a) invests the Director with discretion on the question whether to institute review, it also invests him with discretion regarding what claims that review will encompass. The rest of the statute confirms, too, that the petitioner’s petition, not the Director’s discretion, should guide the life of the litigation.

The Director made a policy argument that the power of partial institution is “efficient because it permits the Board to focus on the most promising challenges and avoid spending time and resources on others.” The Court rejected this as an argument for Congress to hear, not the Court, because the partial institution power is not mentioned anywhere in the statute.

Justices Ginsburg, Breyer, Sotomayor, and Kagan dissented from the majority opinion. In her dissent, Justice Ginsburg called the Court’s decision a “wooden reading of 35 U.S.C. §318(a)” and stated that there was “no cause to believe Congress wanted the Board to spend its time so uselessly.”

On April 24, 2018, the US Supreme Court issued its opinion in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC (available here). The Court held that inter partes review is constitutional and violates neither Article III nor the Seventh Amendment:

Inter partes review falls squarely within the public-rights doctrine. . . . [T]he decision to grant a patent is a matter involving public rights—specifically, the grant of a public franchise. Inter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration. Thus, the PTO can do so without violating Article III.

Because the determination to grant, and therefore reconsider that grant, is a matter involving public rights, it does not need to be adjudicated in an Article III court. The Court further stated that it has “recognized that within the scope established by the Constitution, Congress may set out conditions and tests for patentability. We conclude that inter partes review is one of those conditions.” The Court rejected the argument that inter partes review violates Article III because it shares “every salient characteristic associated with the exercise of judicial power”—the Court “has never adopted a ‘looks like’ test to determine if an adjudication has improperly occurred outside of an Article III court. The fact that an agency uses court-like procedures does not necessarily mean it is exercising the judicial power.”

The Court summarily dismissed petitioner’s Seventh Amendment argument: “Because inter partes review is a matter that Congress can properly assign to the PTO, a jury is not necessary in these proceedings.”