Supreme Court upholds patent review process in victory for tech companies
Richard Wolf, USA TODAY Published 10:07 a.m. ET April 24, 2018 | Updated 3:48 p.m. ET April 24, 2018
Supreme Court patents
(Photo: Michael Owens, USAT)
CONNECT
TWEET
LINKEDIN
COMMENT
EMAIL
MORE
WASHINGTON — The Supreme Court on Tuesday avoided an upheaval in the way patent disputes can be resolved out of court by siding with regulators over judges.
The ruling was 7-2 and was written by Justice Clarence Thomas, who said Congress gave the Patent and Trademark Office the power to reconsider patents rather than relying only on courts.
"The decision to grant a patent is a matter involving public rights — specifically, the grant of a public franchise," he said. The review process "is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO's authority to conduct that reconsideration."
Justice Neil Gorsuch dissented and was joined by Chief Justice John Roberts. The majority opinion, Gorsuch said, "invites us to retreat from the promise of judicial independence."
"Until recently, most everyone considered an issued patent a personal right — no less than a home or farm — that the federal government could revoke only with the concurrence of independent judges," he said.
The case, while obscure to most Americans, had attracted an onslaught of legal papers from major companies and trade groups on both sides of the system that Congress created in 2011. Billions of dollars hung in the balance.
On the winning side were the nation's largest tech companies, including Apple, Google, Facebook and Twitter. They argued that the Patent Trial and Appeal Board remained the best way to quash suspect patents, including those obtained by so-called patent "trolls" as a way to extract royalties.
On the losing side were major pharmaceutical companies and others seeking to return to a system under which only courts, not regulators, decided such disputes.
During oral arguments in November, some of the court's conservative justices said the process gives the executive branch powers that belong to federal judges. Liberal justices said Congress simply gave federal officials the ability to correct mistakes.
More than 7,000 petitions have been filed and more than 1,300 patents canceled through the process, saving both sides time and money. There currently are some 2.1 million patents in force, valued at $886 billion.
The dispute was between two energy companies arguing over equipment that protects wellheads during hydraulic fracturing, or "fracking." Oil States Energy Services, the company challenging the administrative appeals process, said it altered 400 years of judicial review dating back to the British Empire.
But Justice Ruth Bader Ginsburg said the process merely gives the Patent and Trademark Office a streamlined method for correcting its own errors. In Great Britain hundreds of years ago, she asked during oral argument, "the King couldn't say, 'I made a mistake?'"
In his dissent, Gorsuch said such mistakes should go to judges, not bureaucrats.
"Because the job of issuing invention patents traditionally belonged to the executive, the court proceeds to argue, the job of revoking them can be left there too. But that doesn't follow," he said.
"Just because you give a gift doesn't mean you forever enjoy the right to reclaim it.
Richard Wolf, USA TODAY Published 10:07 a.m. ET April 24, 2018 | Updated 3:48 p.m. ET April 24, 2018
Supreme Court patents
(Photo: Michael Owens, USAT)
CONNECT
TWEET
COMMENT
MORE
WASHINGTON — The Supreme Court on Tuesday avoided an upheaval in the way patent disputes can be resolved out of court by siding with regulators over judges.
The ruling was 7-2 and was written by Justice Clarence Thomas, who said Congress gave the Patent and Trademark Office the power to reconsider patents rather than relying only on courts.
"The decision to grant a patent is a matter involving public rights — specifically, the grant of a public franchise," he said. The review process "is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO's authority to conduct that reconsideration."
Justice Neil Gorsuch dissented and was joined by Chief Justice John Roberts. The majority opinion, Gorsuch said, "invites us to retreat from the promise of judicial independence."
"Until recently, most everyone considered an issued patent a personal right — no less than a home or farm — that the federal government could revoke only with the concurrence of independent judges," he said.
The case, while obscure to most Americans, had attracted an onslaught of legal papers from major companies and trade groups on both sides of the system that Congress created in 2011. Billions of dollars hung in the balance.
On the winning side were the nation's largest tech companies, including Apple, Google, Facebook and Twitter. They argued that the Patent Trial and Appeal Board remained the best way to quash suspect patents, including those obtained by so-called patent "trolls" as a way to extract royalties.
On the losing side were major pharmaceutical companies and others seeking to return to a system under which only courts, not regulators, decided such disputes.
During oral arguments in November, some of the court's conservative justices said the process gives the executive branch powers that belong to federal judges. Liberal justices said Congress simply gave federal officials the ability to correct mistakes.
More than 7,000 petitions have been filed and more than 1,300 patents canceled through the process, saving both sides time and money. There currently are some 2.1 million patents in force, valued at $886 billion.
The dispute was between two energy companies arguing over equipment that protects wellheads during hydraulic fracturing, or "fracking." Oil States Energy Services, the company challenging the administrative appeals process, said it altered 400 years of judicial review dating back to the British Empire.
But Justice Ruth Bader Ginsburg said the process merely gives the Patent and Trademark Office a streamlined method for correcting its own errors. In Great Britain hundreds of years ago, she asked during oral argument, "the King couldn't say, 'I made a mistake?'"
In his dissent, Gorsuch said such mistakes should go to judges, not bureaucrats.
"Because the job of issuing invention patents traditionally belonged to the executive, the court proceeds to argue, the job of revoking them can be left there too. But that doesn't follow," he said.
"Just because you give a gift doesn't mean you forever enjoy the right to reclaim it.
3
