Shapiro Arato Files Amicus Brief In Support Of Supreme Court Challenge To PTO’s Inter Partes Review Procedure

On August 31, 2017, Shapiro Arato filed a brief in the United States Supreme Court for InterDigital, Inc.; Power Integrations, Inc.; Xperi Corporation; Fallbrook Technologies, Inc.; and Cummins-Allison Corp. as amici curiae in support of the petitioner in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, et al., No. 16-712.  As leading innovators in a variety of fields—including wireless communications, power conversion, and audio and imaging technologies—these companies invest heavily in the research and development of technologies and rely on the patent system to protect those investments.

The question presented in Oil States is whether inter partes review—an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents—violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.  The petitioner argued that inter partes review violates Article III and the Seventh Amendment because it permits an executive branch agency to adjudicate challenges to private property rights.

We argued in the amicus brief that there is an additional dimension to the constitutional problem.  Under Federal Circuit precedent, the PTO’s cancellation of a patent through inter partes review must be given effect in litigation so long as any part of that litigation remains pending—even if a jury has already determined that the patent is valid and that conclusion has already been affirmed on appeal.  Adjudicating patent validity through inter partes review therefore permits the PTO to overturn jury verdicts and unravel final judgments, eroding the constitutional protections of Article III and the Seventh Amendment.

This aspect of inter partes review also exacerbates the negative consequences of patent cancellation on the economy and the court system by inhibiting incentives to innovate and increasing opportunities for litigation gamesmanship by patent infringers.  For technology companies like amici, investing in research and development requires predictable and enforceable patent rights.  Inter partes review, however, destabilizes the patent system and prevents patent owners from even relying on jury verdicts and judgments won against infringers.

Partner Alexandra A.E. Shapiro and Fabien Thayamballi authored the brief, a copy of which is available here.