In June, the U.S. Supreme Court agreed to rule on whether inter partes review, an often-used administrative process for determining patent validity, is unconstitutional. Months later, in-house counsel have begun lending their names to amicus briefs in what's sure to be a closely watched case, as it stands to significantly impact the patent system.
The case, Oil States Energy Services v. Greene's Energy Group, likely to be argued in the high court's next term, questions whether the IPR process violates the Constitution by eliminating a private property right without the option of a jury trial. Texas-based Oil States Energy Services has argued that "[s]uits to invalidate patents must be tried before a jury in an Article III forum, not in an agency proceeding."
Meanwhile, Greene's Energy Group has called IPR "the sort of mechanism that Congress may permissibly create to administer a public-right scheme."
Thus far, only briefs in support of Oil States' position or in support of neither party have been filed. Amicus briefs backing Greene's Energy are due near the end of October.
The "constitutionally flawed" IPR process "seriously prejudices" certain companies that depend on property rights in patents, argued Houston-based LiquidPower Specialty Products Inc. (LSPI) in its amicus brief, which was signed jointly by the company's general counsel, Patricia Rice, and Thomas Goldstein of Washington's Goldstein & Russell.
Because of the low-risk, low-cost nature of IPR proceedings, there's little to lose for alleged patent infringers, LSPI argued, and defendants can rely on "lenient" IPR rules to "engage in gamesmanship" to circumvent established protections for patent owners.
LSPI "critically depends on the patent system," according to the Aug. 31 brief, but the company's experience has shown the "destabilizing effect of IPR on smaller, innovation-driven businesses seeking to enforce the previously-earned substantive property rights that the patent system was designed to protect."
Long regarded by U.S. law as private property rights, patents should only be revoked by an Article III court, according to the Pharmaceutical Research and Manufacturers of America (PhRMA), a trade group representing leading biopharmaceutical research companies including Bayer Corp., Bristol-Myers Squibb Co. and GlaxoSmithKline. With members that invested over half a trillion dollars in researching and developing new medicines from 2000 to 2017 and that are reliant on a patent system to protect patent rights, PhRMA has a "profound interest" in the issues before the Supreme Court, according to the brief, which includes the association's executive vice president, general counsel and corporate secretary, James Stansel, as a signatory.
"It may be that questions over whether to issue a patent in the first place are questions of public rights," the Aug. 31 brief noted. "But once the patent has issued, the rights it conveys are private property rights—no less than the right to land granted by a government-issued land patent or the right to a chattel conveyed by a government sale."
The right to a trial by jury before a patent is revoked can be traced back more than two centuries, argued Edward Heller, chief patent counsel of intellectual property development and licensing company Alliacense Ltd., in a brief in support of Oil States.
Before 1791, when the Seventh Amendment right to a jury trial was ratified, "inventors had a right to a trial by jury in an English court of law before their patents could be revoked for invalidity" by way of a remedy known as scire facias, said Heller, who unsuccessfully petitioned the Supreme Court to consider the constitutionality of inter partes review last year.
Because IPR and scire facias actions are comparable in a number of ways—both are contested proceedings, provide the same remedy and begin with a petition by an interested party to the government—Heller argued that the statute authorizing IPR, which does not provide a jury trial, is unconstitutional.
If the Supreme Court were to hold the IPR process unconstitutional, the "patent system would not be cast into turmoil," according to a brief in support of neither party from 3M Co., Bristol-Myers Squibb, Johnson & Johnson, Procter & Gamble and other companies.
The America Invents Act's provisions relating to Patent Trial and Appeal Board adjudications are "readily severable from the rest of the AIA," according to the brief. "Moreover, modified IPR could be implemented with 'fixes' that are readily available to Congress," the brief said. "Such modified reviews could still allow the agency to apply its administrative expertise to questions of patentability, while preserving the historical role of courts and juries in adjudicating patent validity."
When all is said and done, a number of voices will likely be heard in support of both parties in the case, because, as Heller pointed out in a June interview with Corporate Counsel, "the patent bar as a whole is greatly concerned [about this case], one way or the other."