- Posted on: Apr 30 2018
By Thomas Dunlap, Partner, DBL
The US Supreme Court issued two much-awaited opinions in the cases of Oil States Energy Services, LLC v. Greene’s Energy Group, LLC and SAS Institute Inc. v. Iancu. In Oil states, the Court upheld the Constitutionality of the (PTAB) inter partes review (IPR) process applying the public rights doctrine in the context of the government’s grant of a patent registration. This is a big deal because this decision means that an administrative court, a branch of the executive, has the right to determine whether or not a patent is valid without a jury. In an opinion authored by Justice Clarence Thomas, the Court decided that neither Article III courts, such as the Federal Circuit and Federal District Courts, nor a jury, under the 7th Amendment in the Constitution, are required to determine patent validity, stating “Inter partes review falls squarely within the public rights doctrine.” Justice Gorsuch wrote a dissenting opinion to which Chief Justice Roberts concurred.
I think this means a few things for patent litigators, patents owners and accused infringers. First, the Federal District Court will likely begin to stay more cases to allow the PTO to proceed to make invalidity determinations. Note, however in a case we argued that remains pending before the Federal Circuit, the standard on which invalidity is determined by the PTO is still in flux, see e.g. Tinnus Enterprises, LLC V. Telebrands Corporation, No. 17-1726 (Fed. Cir. 2018): Appeal of the Decision of the PTAB: oral argument – April 5, 2018. In this case, Thomas Dunlap of Dunlap Bennett & Ludwig argued on behalf of Tinnus that the Nautilus standard (Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014)) should apply particularly to all PTAB proceedings and possibly to all PTO invalidity issues. Nautilus states that a patent claim is indefinite if, when read in light of the specification and prosecution history, the claim fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention.
It is particularly interesting because Nautilus is a broader standard (more permissive for the patent holder) and for the first time in PTO history we could find, Director Iancu (of the USPTO), made the decision to withdraw his support for the PTO’s brief in support of the stricter Packard standard, stating that the PTO was reconsidering its position. This is probably the precursor to a rulemaking at the least.
Second, the ruling in Oil States was fairly narrow (“We emphasize the narrowness of our holding”), and did not foreclose a future challenge. Expect another challenger. In the meantime, patents are in a riskier position and companies should look to trade secrets protection and utilizing a combination patent and trade secret protection.
The PTO’s press secretary, Paul Fucito, summed it nicely Paul Fucito, “The USPTO is carefully considering the Supreme Court’s decisions and determining their impact on various proceedings at the PTAB.”