Today, the Supreme Court issued two opinions relating to Inter Partes Reviews (IPRs), namely, Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712, 584 U.S. ___ (2018) and SAS Institute Inc. v. Iancu, Director, United States Patent and Trademark Office, No. 16-969, 584 U.S. ___ (2018). In Oil States, the Court considered whether IPRs violate either Article III or the Seventh Amendment of the Constitution. The Court answered in the negative and upheld the constitutionality of IPRs. Justice Thomas authored the majority opinion holding that “inter partes review is a matter that Congress can properly assign to the PTO [and therefore] a jury is not necessary in these proceedings.” Slip. op. at 17. In SAS, the Court considered whether the Patent Office must decide patentability of all claims challenged by a petitioner in an IPR. The Court answered in the affirmative. Justice Gorsuch authored the majority opinion holding that the plain text of 35 U.S.C. § 318(a) includes a directive that is “both mandatory and comprehensive.” Slip. op. at 4.
In Oil States, the Court, in affirming the Court of Appeals decision, concluded that IPRs do not violate either Article III or the Seventh Amendment of the Constitution. Article III vests the judicial power of the United States in the Supreme Court and inferior courts as established by Congress. Slip. op. at 5-6. In determining whether a proceeding involves an exercise of Article III judicial power, the Court’s precedents have distinguished between “public rights” and “private rights.” Slip. op. at 6 (citing Executive Benefits Ins. Agency v. Arkison, 573 U.S. ____ (2014)). The Court noted its precedents have given Congress significant freedom to assign adjudication of public rights to entities other than Article III courts. Slip. op. at 6. The Court determined IPRs fall into the public rights doctrine as “it involves reconsideration of the Government’s decision to grant a public franchise.” Id. In so holding, the Court noted that: “[i]nter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration.” Slip. op. at 7.
Regarding the Seventh Amendment, the Court noted that when Congress properly assigns a matter to adjudication in a non-Article III tribunal, “the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” Slip. op. at 17 (citing Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53-54 (1989); accord, Atlas Roofing Co. v. Occupational Safety and Health Review Comm’n, 430 U.S. 442, 450-455 (1977))). Thus, the Court determined since IPRs are matters Congress can properly assign to the Patent Office, a jury is not needed in IPR proceedings. Slip. op. 17.
Justice Breyer, joined by Justice Ginsburg, and Justice Sotomayor, concurring and agreeing in the judgment in full, advised that the Court’s opinion should not be read to provide that matters involving private rights may never be adjudicated other than by Article III courts. Id. at 1 (Breyer, J., concurring). Justice Gorsuch filed a dissenting opinion, in which Chief Justice Roberts joined, arguing that patent rights should be adjudicated by Article III courts. Id. at 12 (Gorsuch, J., dissenting).
In SAS, the Court, in reversing the judgement of the Federal Circuit and remanding for further proceedings, concluded that the Patent Office must decide patentability of all claims challenged by a petitioner in an IPR. The Court determined that the plain text of the governing statute, 35 U.S.C. § 318(a), provided a clear answer to whether the Patent Office may institute an IPR on fewer than all of the claims challenged by a petitioner. Slip. at op. 1. 35 U.S.C. § 318(a) provides the Patent Office “shall issue a final written opinion with respect to the patentability of any patent claim challenged by the petitioner.” Id. The Court stated the word “shall” generally imposes a nondiscretionary duty. Slip. op. at 4 (citing Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35 (1998)). The Court determined the term “any” in this context to mean “every”. Slip. op. at 1. The Court noted the Patent Office “cannot curate the claims at issue but must decide them all.” Id. Further, the Court asserted “[w]here a statute’s language carries a plain meaning, the duty of an administrative agency is to follow its commands as written.” Slip. op. at 6. The Court also stated that while the Director has a choice whether to institute IPR in accordance with the petition, the Director does not have license to institute a different IPR of his own accord. Slip. op. 6-7. Thus, “the petitioner’s petition, not the Director’s discretion, is supposed to guide the life of the litigation.” Slip. op. at 8.
Justice Ginsburg filed a dissenting opinion, in which Justice Breyer, Justice Sotomayor, and Justice Kagan joined. Justice Ginsburg argues that under the majority’s holding, the Director could exercise his right, outlined in Cuozzo Speed Technologies, LLC v Lee, 579 U.S. __, (2016) (slip op. at 9), to deny institution of IPR petitions that are considered overly broad. Slip. op. at 1 (Ginsburg, J., dissenting). At that point, petitioners could file new or amended petitions. Id. Thus, Justice Ginsburg argues that the existing strategy of partial institutions is a more efficient solution. Id. Justice Breyer also filed a dissenting opinion, in which Justice Ginsburg, Justice Sotomayor, and Justice Kagan (in part) joined. Justice Breyer argues that, contrary to the majority’s opinion, the statute is ambiguous and that the Patent Office appropriately filled the gap created by that ambiguity “through the exercise of rulemaking authority explicitly given to it by Congress…” Id. at 10 (Breyer, J., dissenting).