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Challenge to the Constitutionality of the Post-Grant Review Process, Thwarted

December 23, 2015

Challenge to the Constitutionality of the Post-Grant Review Process, Thwarted

December 23, 2015

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“In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved…” unless the controversy involves the validity of a patent as determined by the Patent and Trademark Office (PTO). A patent is commonly referred to as a property right, thus the term intellectual property, but unspoken is the important distinction that a patent is a matter of public right and therefore its validity can be delegated to non-Article III courts where the Seventh Amendment does not always apply.

The constitutionality of the post-grant review process, in particular inter partes review, was recently challenged and upheld by the Federal Circuit in MCM Portfolio LLC v. Hewlett-Packard Company, No. 2015-1091 (Dec. 2, 2015). The Appellant and patent holder urged the Panel that such a review capable of revoking a patent must be tried in district court under the protections of the Seventh Amendment right to a jury trial. The Federal Circuit disagreed, explaining that “Congress has the power to delegate disputes over public rights to non-Article III courts.”[1] Although the public rights exception is typically applied to disputes involving the government, it has been extended to disputes between private parties concerning a matter of public rights.[2] Relying on a case upholding the constitutionality of binding arbitration provided by a federal statute, the Panel agreed that “Congress, acting for a valid legislative purpose to its constitutional powers under Article I, may create a seemingly ‘private’ right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary.” [3] A right is deemed “public” when it “flows from a federal statutory scheme,” are “completely dependent upon adjudication of a claim created by federal law,” and involve “a situation in which Congress devised an expert and inexpensive method for dealing with a class of questions of fact which are particularly suited to examination and determination by an administrative agency specially assigned to that task.”[4]

The grant of a patent by the US government is primarily a public concern; therefore, post-grant review of patents granted by the PTO is a process that involves a public right.[5] Congress created the PTO and delegated to it the power to issue patents, so “[i]t would be odd indeed if Congress could not authorize the PTO to reconsider its own decisions.”[6]

The continued viability of post-grant review in general, and inter partes review in particular, leaves defendants of patent infringement suits a large weapon in their arsenal to challenge the patent owner on two fronts—before the district court and at the PTO.

[1] MCM, at 10.

[2] Id.

[3] Thomas v. Union Carbide Agricultural Prod. Co., 473 U.S. 568, 593-94 (1985).

[4] MCM, at 11-12 (citing Stern v. Marshall, 131 S.Ct. 2594, 2614-15 (2011)).

[5] Id. at 13 (citing Patlex Corp. v. Mossinghoff, 758 F.2d 594, 604 (Fed. Cir. 1985))

[6] Id. at 12.

Author: Jane Du

The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.

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