Post by John Golden
On November 27, the United States Supreme Court heard oral argument in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712, a case that gives prominence to a question flagged in prior posts of May 30 and June 13: namely, whether patents involve public or private rights for purposes of the constitutionality of administrative cancellation of issued patent claims. Article III of the U.S. Constitution states, “The judicial Power of the United States, shall be vested in one Supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” The Supreme Court has held that, despite this assignment of “judicial Power” and the more general principle of separation of powers, “a matter of ‘public right’ … can be decided outside the Judicial Branch.” Stern v. Marshall, 564 U.S. 462, 488 (2011). The Court has recognized that this “public rights exception” extends beyond “actions involving the Government as a party” and encompasses “cases in which the claim at issue derives from a federal regulatory scheme, or in which resolution of the claim by an expert government agency is deemed essential to a limited regulatory objective within the agency’s authority.” Id. at 490.
In Oil States, the Court confronts the question “[w]hether inter partes review—an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents [whose claims have been challenged by a third party]—violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.” The Petitioner argues that the answer is “Yes” because issued patent rights are private property whose validity “Article III permits only courts to adjudicate.” Brief for Petitioner 3. Respondent Greene’s Energy Group argues that the answer is “No” because “[p]atent rights are public rights, that is, derived from a ‘federal regulatory scheme’ and ‘integrally related to particular Federal Government action.’ ” Brief for Respondent Greene’s Energy Group, LLC 9 (quoting Stern, 564 U.S. at 490–91). The U.S. government as “Federal Respondent” likewise argues that inter partes review addresses matters of public right and contends that the Petitioner’s “argument confuses the distinct concepts of private property and ‘private rights’—those rights that are not integrally related to federal government action.” Brief for the Federal Respondent 18, 21.
Over fifty amicus curiae briefs were filed in Oil States. These briefs are, in general, too numerous to have their contents described in this blog posting, but you can find discussions of various amicus briefs in separate postings by Dennis Crouch on the Patently-O blog dated August 20, August 28, September 1, and November 1. For purposes of disclosure, I should note that I participated in the filing of an amicus brief in support of the Respondents contending that questions of patent claims’ validity are matters of public right. Brief of Amici Curiae Professors of Administrative Law, Federal Courts, and Intellectual Property Law in Support of Respondent 18–26. This brief also noted a long-held (albeit not unanimously held) scholarly view that, under the Court’s precedents, even questions of “private right” may, generally speaking, be subjected to administrative adjudication as long as the rights in question are creatures of federal statutory law and as long as the results of administrative adjudication are subject to judicial review that is de novo on questions of law and at least in the nature of substantial-evidence review on questions of fact. Id. at 28–29. Under this view, Article III constraints seem satisfied by the Patent Act’s provision of a right to appeal the results of inter partes review to the U.S. Court of Appeals for the Federal Circuit. Id. at 29–31.