United States: Patent System After Oil States And SAS – What's The Future?

On April 24th, the Supreme Court decided two important cases related to the United States Patent & Trademark Office's inter partes review (IPR) proceedings for reconsidering the prior grant of a patent – Oil States Energy Services, LLC v. Greene's Energy Group, LLC, No. 16-712 (Oil States) and SAS Institute Inc. v. Iancu, 16-969 (SAS).

By way of background, the IPR is a procedure at the U.S. Patent & Trademark Office ("PTO") to determine issues of patent validity, and is an alternative to seeking determination of those issues in federal court. In an IPR, a petitioner files a petition with the PTO asking the PTO to institute proceedings to invalidate some or all claims of an already issued patent based on prior art. In response, the patent holder is able to argue the validity of the challenged claims. The PTO's Patent Trial and Appeal Board (PTAB) institutes or denies institution of the IPR based on the petition and response. Prior to SAS, in some instances, the PTAB would institute an IPR on fewer claims than were presented in the petition and deny institution on the remaining claims in the petition. The PTAB would then issue a final written decision only regarding the patentability of this limited set of claims.

Although anyone can file IPRs, they are most commonly pursued by companies that find themselves on the receiving end of a patent infringement allegation. The IPR process provides a relatively cost-efficient mechanism for determining whether the asserted patent is valid , and often results in resolution of the issues between the parties outside of federal district court litigation.

The IPR process has been incredibly effective both from a results standpoint and a cost standpoint. From September 16, 2012 through March 31, 2018, where a final written decision was issued in an IPR, at least some claims were found unpatentable in 81% of IPRs, with all claims being found unpatentable in 65% of IPRs. Furthermore, the IPR process is a cost effective solution. Rather than the multi-million dollar litigation that often arises in patent litigation cases, an IPR often falls in the $200,000 – $400,000 range. This effective tool is often used as a shield by those parties having an invalid patent enforced against them.

The first of the April 24th decisions reaffirmed the constitutionality of the IPR system. The patent owner in that case had asserted that the IPR process was unconstitutional in that issues of patent validity are handled by an administrative body in the PTO rather than in a federal court, and that patent owners were thus denied a trial by jury. Ruling in favor of Foley & Lardner client Greene's Energy Group, LLC, in Oil States, the Supreme Court upheld the constitutionality of the IPR process before an administrative tribunal (i.e., PTAB). The Supreme Court rejected arguments that patents are private rights that must be handled by a court. Rather, the Supreme Court decided that a patent is a public monopoly or franchise that is granted by the PTO, and the IPR process protects the public's interest in seeing that these monopolies are kept within a legitimate scope. Since the Supreme Court identified the rights as "public," the Supreme Court stated that these rights can be properly adjudicated before an administrative tribunal such as the PTAB. As a result, the Supreme Court rejected arguments that the patent holder is entitled to a trial before an Article III court and a jury trial under the Seventh Amendment.

On the same day, in SAS, the Supreme Court eliminated the PTAB's ability to decide only a subset of the issues raised by the IPR petitioner. Often times, the PTAB would institute IPRs for only a few of the claims challenged by the petitioner, and would not address the issues raised with respect to the other claims. In its decision, the Supreme Court followed the plain language of the statute that grants the PTO the ability to conduct IPRs. In referencing the statute, the Supreme Court stated that, where an IPR is instituted, the "[PTAB] shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner." As a result, the PTAB must issue a final written decision on all claims that have been challenged in the petition following institution of the IPR. The practical import of this holding remains to be seen, since it would seem that the PTAB's practice of not addressing certain challenged claims likely telegraphed its view that the challenger's arguments were not persuasive and that those claims remain patentable. If that is the case, then we would expect that the PTAB will simply make such views explicit in future final IPR decisions.

Now that the Supreme Court has upheld the constitutionality of the IPR process and decided that all challenged claims must be addressed in the final decision, what does all this mean for the future of the patent system? In short, the patent system is only strengthened as a whole.

Businesses have and continue to thrive through innovation. In the Motor City, we see companies of all sizes developing autonomous vehicle technology, researching alternative energy, and everything between. We see these companies continue to expand their patent portfolios because of their research and development in these emerging, exciting technology areas.

These recent cases should only ramp up the ever-moving machine of innovation. Some patent holders may see the Oil States decision as an issue. These patent holders may see the IPR process as a tool that should be removed – "Leave it up to the courts" they may think. But the IPR is a mechanism to reassess and eliminate patents that should have never been issued. That may be seen as unfair to those patent holders who feel disenfranchised because their "rights" are being stripped away. However, looking at the patent system as a whole leads to one logical conclusion – such patent holders were never entitled to those rights in the first place. Oil States can be viewed as an affirmation of this effective tool which ensures certain patents are in fact valid. Some of these "disenfranchised" patent holders are likely the same entities who intend to use their patents in an attempt to financially exploit businesses and other parties.

Furthermore, even patent holders who are faced with an IPR should reap benefits from the April 24th decisions. In particular, SAS ensures that patent holders will receive a final written decision on all claims challenged in an IPR petition. For those claims that were unsuccessfully challenged, the patent holder will be able to point to the PTAB decision as supporting the patentability of their claims. This is a resounding win to patent holders. Instead of a decision not to institute an IPR on some claims (i.e., claims more likely to be found valid), patent holders receive an opinion stating that, despite the petitioner's position, certain claims are valid over the considered prior art. Patent holders receive all the benefits that such an opinion entails, such as estoppel against that petitioner.

In combination, the Oil States and SAS decisions only shore up the patent system as a whole. These decisions confirm a tool used to verify a patent holder is entitled to the full scope of their monopoly, and where such is the case, the patent holder receives validation of their rights from the very entity that issued their patent. While the future is unknown, these outcomes seem brighter than the headlights of an autonomous, electric vehicle.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions