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IPR Is Here to Stay, With Even Greater Stakes

On April 24, the Supreme Court issued two important decisions on the availability and scope of post-grant Inter Partes Review (IPR) by the U.S. Patent and Trademark Office. The IPR process allows the PTO to review and potentially cancel claims of a previously-granted patent based on prior art.

In Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, the Court determined that the IPR process is constitutional. In earlier proceedings, a patent’s claims had been revoked in an IPR proceeding. The patentee challenged the IPR process as violating Article III or the Seventh Amendment right to a jury trial by transferring an adjudication of private property rights to an administrative tribunal. The Court held that IPR violates neither provision, analogizing the grant of a patent to a government-granted right to build bridges or railways that can be revisited in an administrative proceeding.

In SAS Institute Inc. v. Iancu, the Court interpreted Section 318 of the Patent Act to determine that, if an IPR is to be instituted, it has to be instituted to decide the patentability of all of the claims challenged in the IPR petition. In the PTO proceedings, the IPR was only instituted on a subset of the claims that were originally challenged in the opening IPR petition. The Court held that a PTO regulation authorizing partial institution was inconsistent with the plain meaning of the statutory text.

The decision in SAS Institute is an important change in IPR practice. Previously, the PTO was frequently picking-and-choosing claims and theories from the initial petition on which to proceed to a full administrative trial. But the PTO still has substantial discretion in instituting or denying the proceedings on the whole, subject to review under the Administrative Procedures Act. Thus, while crafting the initial petition (as a petitioner) or attacking it (as a patent owner) was always important, this new requirement that the challenged claims are addressed in an all-or-nothing decision makes the preliminary, pre-institution stages of an IPR even more critical.