Oil States Energy Services, LLC v. Greene's Energy Group, LLC

Supreme Court of the United States · 2018 · Administrative Law

Administrative LawFederal CourtsArticle IIISeventh AmendmentPatentsInter Partes ReviewPublic Rights Doctrineinter partes review

Facts

The America Invents Act authorizes the PTO to conduct inter partes review, a process in which the Patent Trial and Appeal Board may reconsider and cancel issued patent claims on certain prior-art grounds. Oil States owned a patent relating to protecting wellhead equipment used in hydraulic fracturing and sued Greene's Energy for infringement in federal district court. Greene's Energy both challenged validity in court and petitioned for inter partes review, and the Board instituted review after finding a reasonable likelihood that Greene's Energy would prevail. Although the district court issued a claim-construction order favoring Oil States, the Board later concluded the challenged claims were unpatentable, prompting Oil States' constitutional challenge.

Issue

Does inter partes review, which allows the PTO to reconsider and cancel already-issued patent claims, violate Article III by assigning the revocation of patent rights to a non-Article III tribunal? If not, does the procedure nonetheless violate the Seventh Amendment by denying a jury trial?

Rule

Inter partes review does not violate Article III when Congress assigns to the PTO the reconsideration of an issued patent because the grant of a patent is a matter involving public rights and inter partes review is simply a reconsideration of that grant. When Congress properly assigns such a matter to a non-Article III tribunal, the Seventh Amendment poses no independent bar to adjudication without a jury.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Congress creates a new review procedure within the United States Patent and Trademark Office allowing a panel of administrative patent judges in Alexandria, Virginia, to reconsider issued patent claims for novelty and nonobviousness based only on prior patents and printed publications. Nora Feldman, a patent owner in Denver, argues that once her patent issued, only an Article III court may cancel it.

How should a court rule on Nora's Article III challenge?

Explanation. The majority held that the grant of a patent is a matter involving public rights because a patent is a public franchise created by statute. It further held that inter partes review is simply a second look at that earlier administrative grant. Because the PTO's later cancellation proceeding is a reconsideration of the same public-franchise grant, Congress may assign that matter to a non-Article III tribunal without violating Article III. (Derived from Oil States Energy Services, LLC v. Greene's Energy Group, LLC (2018).)