Even though patent cases have become a regular feature of the Supreme Court’s docket in recent years, for the IP community there was an extra buzz about the place yesterday as the justices heard two disputes concerning inter partes review (IPR).
For starters, around 20 protesters from the small inventor community, who remain bitterly opposed to IPRs, were gathered on the courthouse steps brandishing signs such as “the PTAB killed my start-up”. The protest may have been relatively small and well behaved, but its impact could be heard inside the court’s press room where seasoned Supreme Court reporters got perhaps their first glimpse at just how deep feelings run on this issue. “Protesters? For a patent case!” one of them muttered.
Then inside the courtroom there was a smattering of the great and the good from the IP stakeholder community, including USPTO acting head Joe Matal, Chief Judge of the Patent Trial and Appeal Board (PTAB) David Ruschke and his number two Scott Boalick, several aides who helped author the America Invents Act (AIA), leaders from the various IP law associations and numerous members of the patent bar from private practice.
It was one of those rare occasions when the Supreme Court hears two patent cases back-to-back. The second, SAS Institute v Matal, focused on whether the PTAB, when it institutes an IPR, should review all of the challenged claims or only some; but it’s fair to say that much of the focus was on the first suit up, Oil States Energy Services v Greene’s Energy Group.
Ever since cert was granted in the case last summer anticipation has built around whether the justices might sound the death knell for IPRs. Depending on who you speak to, the wildly popular post-issuance reviews have either become an effective tool for invalidating poor quality patents or a way of extinguishing fairly granted property rights. The question as presented by Oil States was whether the IPR process violates the constitution by extinguishing property rights through a non-Article III forum without a jury.
Such has been the interest in the case that almost 60 amicus briefs were filed, which SCOTUS blog pegged as the most that a case has attracted this term and more than any case in over a year. Many of those briefs supported eliminating IPRs, but in the run up to yesterday’ oral arguments the smart money appeared to be on a ruling that found them to be constitutional.
As the arguments got under way Justices Kagan and Ginsburg seemed particularly interested in asking Oil States’ counsel how IPRs could be distinguished from ex parte and inter partes re-exam (the latter was effectively replaced by IPR) as an adjudicatory process. In other words, if IPRs die how do you justify keeping post-issuance re-exams? Justice Breyer, another member of the liberal wing of the court, focused on why this process should be any different to the numerous adjudicatory procedures that take place within other parts of the government.
Chief Justice Roberts raised the controversial issue of panel packing by which the USPTO director adds judges to a case to try to ensure a particular decision. Roberts was clearly troubled by this, asking the Department of Justice’s counsel Malcolm Stewart: “Does it comport to due process to change the composition of the adjudicatory body halfway through the proceeding?”
That led to an amusing exchange with Stewart after he made reference to the PTAB’s chief judge. “The chief judge?” Roberts queried. Stewart eventually responded: “An executive branch official. The chief judge of the PTAB.” Roberts then quipped: “When we say “judge” we usually mean something else.”
The greatest scepticism expressed about the IPR process came from Justice Gorsuch, the newest member of the court. For many, this was the first opportunity to get a close look at his approach and as a member of the court’s conservative wing it was not a surprise that he drew parallels between the grant of a patent and other property rights. He asked the counsel for Greene’s Energy Group how it would work if land patents were subject to the same kind of re-examination as patents and could be taken away years after they had been granted. He then pursued the same line of questioning with the Department of Justice’s lawyer, although it wasn’t clear if he was taking other members of the court with him.
His questions did suggest that there would be at least one vote in favour of doing away with IPRs. That may not be enough to reach a finding against the process, but Gorsuch’s readiness to draw parallels between patents and other property rights does at least suggest that his involvement is going to be particularly worth following in future Supreme Court patent cases.
So where does this leave the likely outcome in Oil States? Speaking to both sides after the arguments it was clear that the pro-IPR side felt confident of a comfortable victory, while those on the anti side seemed undeterred as they tried to count which justices might join Gorsuch. Patent cases tend to finish in a 9-0 result, but the anti side seemed to appreciate that if they were going to emerge victorious, it would be by the finest of margins.
One from the anti side who was in the courtroom expressed disappointment that more of what they see as the injustices of the PTAB such as “gang tackling” of patent owners were not raised. “Unfortunately my hopes and expectations diverge,” he commented in the aftermath. Whichever way you read yesterday’s arguments, for many members of the IP community it would still be surprise if the court were to strike down IPR. Those protesters may not be done with their placards just yet.