Supreme Court Approves Legality of Patent Review Process

Orange County – Last week the US Supreme Court approved the inter partes review (IPR) process for patents, which many believe helps high-tech companies fight patent infringement lawsuits and “patent trolls” more easily and at a lower cost. The justices ruled 7-2 that the U.S Patent and Trademark Office’s in-house patent review does not violate a defendant’s right under the U.S. Constitution to have a case judged by a jury and federal court.

Justices John Roberts and Neil Gorsuch disagreed with the ruling. The case arose when Oil States International Inc., a Houston based company, disputed the legality of the inter partes review process by which a trial is conducted to review the patentability of one or more claims.

While Silicon Valley is celebrating the ruling, name-brand drug-makers are not as happy with the decision. Companies labeled as “patent trolls” are known for suing other companies over patent infringement instead of making any products. The drug-maker companies are calling the IPR “a threat to innovation.”

Other companies who are celebrating the ruling are popular tech companies, such as Samsung Electronics Co Ltd. and Apple Inc., who are often involved in patent lawsuits. Among the companies who are unhappy with the ruling are AbbVie Inc., Celgene Corp., and Allergan Plc.

The inter partes review procedure was enacted on September 16, 2012 as part of the America Invents Act to manage the rising number of poor patents issued by the U.S Patent and Trademark Office in previous years. The agency’s Patent Trial and Appeal Board has canceled part, if not all, of 80 percent of the patents it has reviewed, including a patent protecting wellhead equipment owned by Oil State.

Although Clarence Thomas has called the IPR process “an extension of the Patent and Trademark Office’s decision to grant a patent,” Oil States challenged the cancelation of its patent by saying the patents are protecting private property and can only be canceled by a federal court.

Thomas continued, “Inter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration.” Paul Fucito, a patent office spokesman, said the office is cautiously contemplating April’s review to determine the impact on rulings before its administrative board runs the reviews.

The Oil State case began in 2012 when its subsidiary sued Greene’s Energy Group, another Houston-based company, for infringing Oil State’s patent related to hydraulic fracturing, or fracking, of oil wells. Greene’s Energy Group had the support of the Trump administration, Intel Corps, and Google in its victory in 2016 by the federal court. Oil State then appealed the decision which made its way to the Supreme Court.

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