By Terence M. Durkin

A question in front of the Supreme Court this term is whether inter partes review by the Patent and Trademark Office (PTO) violates the constitution by revoking private property rights through non-Article III courts.  The case is Oil States Energy Services v. Greene’s Energy Group, and the Supreme Court’s decision will likely have a significant impact on the future development of intellectual property.

Oil States may be one of the most important cases since Kelo v. City of New London (2005) to decide on a key property right.  While the court in Kelo gave cities the ability to seize personal property from private owners and give it to developers for the purpose of increasing tax revenues, the court in Oil States may determine the nature of property rights granted by the PTO.  Questions posed by the justices at oral argument, however, indicate that the Court is hesitant to rule on the issue.

Under the America Invents Act (AIA) of 2011, the PTO was given authority to create a Patent Trial and Appeal Board (PTAB) to which the politically appointed head of the PTO has the authority to appoint judges on an ad hoc basis.  The PTAB was created to address concerns regarding the granting of undeserved patents.  The high rate at which the PTAB invalidates patents has led the process to be described as a “patent death squad” and a “patent killing field.”  As a result of the PTAB, we have seen more litigation, less certainty, and higher costs of innovation.  The Supreme Court should declare the inter partes review process unconstitutional or patents to be private property rights at common law to prevent negative consequences of the AIA.

The American Constitution is largely based on the idea of separation of powers, where Congress makes the law, the Executive enforces the law, and Courts interpret the law.  This structure was deliberately created by the founders to protect individual liberty and property.  Under the Seventh Amendment, the right of a trial by jury in suits at common law must be preserved.  Accordingly, since patent rights have existed at common law for hundreds of years, patents, once granted, should be treated like any other private property.  The PTAB does not have jury trials, the PTAB has strict limits on what evidence patent owners can present, and almost anyone can challenge a patent with PTAB.  Thus, the PTAB takes away the property rights of patent owners without due process.

One hypothetical posed to counsel at oral argument was whether age of the patent or reliance on it should be taken into account.  If a patent has existed for ten or twenty years and significant investment has been made based on the guaranteed right to exclude, could the PTAB nonetheless revoke such patent?  These questions aptly demonstrate one of the main issues with PTAB: the uncertainty that the PTAB poses will lead to less patenting, less risk taking, and less innovation.  These rights, whether private property or not, should be protected by due process in an article III court.  As a matter of policy and Constitutional separation of powers, the PTAB should be eliminated.

Student Bio: Terence Durkin is a 2L at Suffolk University Law School. He is currently a staff member of the Journal of High Technology, Vice-President of the Federalist Society, and President of the Christian Fellowship. Terence holds a B.A. in Economics from Wesleyan University.

Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.



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