Supreme Court Upholds Legality of Patent Review Process
Patent reform —
Supreme Court upholds patent review process, dealing trolls a blow
A key part of the 2011 America Invents Act is ramble, high court rules.
Overstate / Justice Clarence Thomas, front, wrote the bulk opinion.
The Supreme Courtroom on Tuesday upheld the constitutionality of a process for challenging low-quality patents. Since its creation in 2011, this "inter partes review" (IPR) procedure has dramatically lowered the cost of defending against frivolous patent litigation.
The procedure allows an executive branch agency—not the courts—to revoke a patent afterwards it has been granted. Critics merits that runs afoul of the Constitution's requirement that simply the courts can deprive people of their holding.
But the Supreme Court didn't buy it. In a vii-2 decision written by Justice Clarence Thomas, the nation's highest court ruled that patent rights were fundamentally a government-granted privilege that could properly come up with strings attached. 1 such condition is the risk that the patent office might change its heed and invalidate a patent that it had previously canonical.
The ruling preserves 1 of defendants' most potent weapons against patent trolls. Challenging a patent in court can cost millions of dollars. As a consequence, prior to 2011, it often made sense for defendants to settle a patent case even if they believed that the patent wouldn't stand up in courtroom.
Simply then Congress passed the America Invents Human activity, which created a new administrative process chosen inter partes review. That process cuts the cost of challenging a patent downwardly to the low six figures. It has shifted the playing field for patent litigation, allowing the targets of frivolous patent lawsuits to fight back without going broke in the process. The new Supreme Court ruling puts that process on a firm constitutional footing, which should make life difficult for patent trolls for years to come.
The case was actually about the nature of patent rights
The legal challenge to the IPR Process came from an oil company called Oil States Energy Services, which owns a patent on a method for securing a drilling tool to an oil well. In 2012, Oil States sued another oil company, Greene's Energy Group, in the patent-friendly Eastern Commune of Texas. Greene'due south used the IPR process to challenge the patent, and the patent role concluded that it was invalid.
Only Oil States sued, arguing that the Constitution requires an IPR-like process to occur in the judicial branch—not in an executive co-operative agency similar the patent part. Executive branch agencies exercise non have the independence of judges, and they don't necessarily offering all of the due-process protections provided to litigants by the judicial arrangement.
While the argument was officially over the difference between the executive and judicial co-operative, this was really a dispute about the nature of patent rights. Are patents fundamentally a government-granted monopoly (a "public right," in legal jargon), or are they a grade of private property akin to a home or machine?
The Constitution provides robust legal protections, including a guarantee of due process through the judicial co-operative, to private holding: a law assuasive a federal agency to take someone's home or business without the approving of the courts would be unconstitutional.
But it doesn't brand sense to extend that same level of protection to government-granted monopolies. Subsequently all, the public involvement may require curtailing or eliminating these kinds of monopolies in the hereafter.
"Congress can grant a franchise that permits a company to erect a toll bridge but qualify the grant past reserving its authorization to revoke or ameliorate the franchise," the court's majority wrote, citing a 101-year-erstwhile precedent on the topic. "The same is true for franchises that permit companies to build railroads or telegraph lines."
The big question, then, was which category a patent savage into. The courtroom's seven-member majority ruled that patents are "public rights"—rights granted by government and discipline to subsequent revision by the executive branch. The IPR process, the majority wrote, involves "afterthought of the government's decision to grant a public franchise." In other words, it's more like a government-granted privilege to run a toll bridge than it is like your belongings right in your home.
And this basic philosophical disagreement—are patents better thought of every bit government monopolies or private rights?—undergirds many of the patent cases the Supreme Court has heard in recent decades. During the 1980s and 1990s, the courts (particularly the patent-loving Federal Circuit court) increasingly came to see patents as analogous to conventional property rights. This had the consequence of tilting the field in favor of patent holders, since it made patents easy to defend and difficult to challenge.
But in the last 12 years, the Supreme Court has beat back many of these patent-friendly decisions, making patents weaker and easier to challenge. A landmark 2006 ruling made information technology more than difficult for plaintiffs to get injunctions in patent cases—a correct that is routinely granted to holders of conventional property rights just which gives patent holders massive amounts of leverage. A 2007 ruling made it easier to challenge patents that are obvious, while a 2008 ruling held that patent protections are "exhausted" once a product is sold to a customer—the patent holder can't require subsequent use of the same production to get a separate license. The Supreme Court has also limited patent protection for abstract ideas, human being genes, and computer software.
None of these rulings was explicitly about whether patents are monopolies or property rights. Merely the question implicitly shapes how courts think about these kinds of questions. Monopolies are by and large viewed with skepticism; property rights are non. "Allowing petitioners to patent risk hedging would preempt use of this approach in all fields and would effectively grant a monopoly over an abstract idea," the Supreme Court wrote in its 2010 ruling on patenting abstract ideas.
Tuesday's ruling is important in its ain correct, every bit it preserves a process that has had a real affect on the patent-litigation problem. Just it'due south also a barometer of how the Supreme Court'due south justices are thinking about the patent system more more often than not. The fact that seven of the nine justices continue to view patents equally a government-granted franchise, not a form of property rights, suggests that the high court'south more-than-decade-long smackdown of pro-patent jurisprudence could proceed for years to come up.
Source: https://arstechnica.com/tech-policy/2018/04/supreme-court-upholds-important-weapon-in-the-fight-against-bad-patents/
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