In a highly anticipated – and stunning – decision, the US Supreme Court today ruled not only that the Patent Trial and Appeal Board (PTAB) was constitutionally prohibited from entertaining Inter Partes Review proceedings, but that because of this lack of constitutionality, the entire “America Invents Act” (AIA), passed by Congress and signed into law by President Obama in 2011, was null and void.
Oil States Energy Services is the holder of a patent that was challenged by Greene’s Energy Group, LLC before the PTAB in an Inter Partes Review proceeding, a proceeding created by the AIA. The PTAB found the patent to be invalid, and the Court of Appeals for the Federal Circuit (CAFC) affirmed. Oil States petitioned to the Supreme Court, arguing that once granted, patents are private rights, and therefore patent owners can only be divested of those rights by a court created under Article III of the Constitution. The PTAB, as an administrative body, is an Article I court, not an Article III court, and therefore, argued Oil States, not authorized to invalidate a patent.
In recent years, the Supreme Court has weighed in with many decisions that people in the patenting community viewed as anti-patent, such as limiting patentees’ ability to obtain injunctions, and most notably taking the 1952 patent statute that was enacted to separate the questions of patentability and patent-eligibility, and introducing judicially-created rules that conflate those two questions, transporting the statute back to its pre-1952 state.
Since its inception, the PTAB has heard hundreds of challenges to patents, and has gained a reputation as the place where patents go to die, even being termed by the then-Chief Judge of the CAFC a “patent death squad”. It was therefore surprising that in a 9-0 decision, the Court ruled that the PTAB did not have jurisdiction to hear those challenges, and that such challenges could only be heard by an Article III court. Writing for the Court, Justice Stephen Breyer stated, “Invalidating patents is OUR turf, PTAB. Hands off!”
Even more shocking was that the Court went beyond what the parties had requested or plead, and noted that since the PTAB-creating provisions were invalid, and the AIA contained a non-severability clause, the entire AIA was unconstitutional and therefore null and void. Again, in the words of Justice Breyer, “Congress, don’t mess with the Constitution.”
The result means that hundreds of patents invalidated by the PTAB must now be reinstated, and thousands of patent applications rejected under the AIA must be examined afresh under the pre-AIA statute. It also calls into question the validity of thousands of patents granted under the AIA. Writing in a concurrence, Justice Ruth Bader Ginsburg noted, “Sure, 21 years ago in Warner-Jenkinson I cautioned against post-facto discounting the expectations of an already-existing patentee with respect to prosecution history estoppel, and here the result is far more than that. But it was Congress that created this mess, not us, so let Congress do the cleaning up. Besides, a little uncertainty spices up life.”
Purim sameakh, everyone.
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