The ruling will be closely watched by “patent trolls” and tech companies alike since both are frequent users of the ‘inter partes’ review system.
On Monday, the U.S. Supreme Court agreed has agreed to take up the matter of whether a federal administrative process frequently used by technology companies to ward off patent infringement lawsuits violates the constitutional rights of patent owners.
The matter came up when Houston-based Oil States International Inc decided to appeal to the U.S. Supreme Court of a lower court’s decision to uphold a proceeding called ‘inter partes review’ in which the U.S. Patent and Trademark Office can cancel patents the agency had previously granted.
Oil States International Inc has asserted that since U.S. Patent and Trademark Office does not provide patent owners the option of a jury trial, it thus essentially violates the right to a jury trial enshrined in the U.S. Constitution.
Under the U.S. Patent and Trademark Office administrative process, administrative law judges review a patent and decide whether the patent office made a mistake in granting it.
The Supreme Court has earlier taken a stand that there is a right to a jury trial in disputes in which a private property can be revoked.
Oil States’ position is that patents are a type of private property thus ‘inter partes’ reviews are unconstitutional.
Although the case revolves around a patent related to hydraulic fracking, tech companies are closely monitoring the case since they frequently use ‘inter partes’ reviews to invalidate patents they have been accused of infringing, said Alan Fisch, a patent lawyer Fisch Sigler, a law firm.
The inter partes review process was created by the U.S. Congress vide the America Invents Act of 2011, in order to deter companies that assert patents rights but do not by themselves create any products of their own.
In other words, inter partes review process was to deter “patent trolls”. It was designed such that it would turn out to be cheaper and faster than a litigation process.
“Use of these procedures has risen in popularity each year and has been somewhat transformative in the way patent litigation is handled,” said Neel Chatterjee, a patent lawyer at Goodwin Procter, a law firm.