Oil States Energy Services, LLC v. Greene's Energy Group, LLC
584 U.S. 325
SCOTUS2018Background
- The America Invents Act created inter partes review (IPR), allowing the PTO’s Patent Trial and Appeal Board (PTAB) to reconsider and cancel issued patent claims on specified prior-art grounds; petitions may be filed by any non-owner.
- IPR procedure: Director decides whether to institute (unreviewable); if instituted, PTAB conducts adjudication with discovery, briefs, oral hearing, and issues a final written decision; Federal Circuit reviews final PTAB decisions.
- Oil States held a patent for wellhead protection equipment and sued Greene’s Energy for infringement; Greene’s petitioned for IPR in parallel to the district-court infringement litigation.
- PTAB cancelled the challenged claims; Oil States appealed to the Federal Circuit and raised constitutional challenges that IPR violates Article III and the Seventh Amendment by permitting non-Article III adjudicators (and no jury) to cancel patents.
- The Supreme Court granted certiorari to decide whether IPR is unconstitutional as an Article III/usurpation of judicial power or as a Seventh Amendment jury-right violation.
Issues
| Issue | Oil States' Argument | Greene’s / Government's Argument | Held |
|---|---|---|---|
| Whether IPR violates Article III by allowing a non-Article III forum to cancel issued patents | Patent revocation is a private right; once issued patents are property, only Article III courts (with judges and juries) may adjudicate invalidity | Patent grants are public franchises/public-rights matters; Congress may assign reconsideration of grants to the PTO | IPR does not violate Article III — patent grants are public rights and IPR is a permissible administrative reconsideration |
| Whether IPR violates the Seventh Amendment right to jury trial | Patent validity adjudication requires jury trial when adjudicating private rights | When Congress validly assigns a matter to non-Article III adjudication, the Seventh Amendment does not require a jury | IPR does not violate the Seventh Amendment — no jury required for matters properly assigned to the PTO |
| Whether historical practice and precedents showing patents as private property forbid administrative cancellation | Early U.S. cases treated patents as property and courts historically decided validity; this history means only courts can revoke patents | Historical English practice (Privy Council revocations) and the public-franchise nature of patents show executive administrative revocation has precedent; statutory schemes can validly change procedures | Historical practice does not decisively bar IPR; Court finds sufficient historical and doctrinal support to treat patents as public franchises subject to administrative review |
| Whether IPR’s court-like procedures transform it into impermissible judicial exercise | Procedural similarities to courts (trials, judges, evidence rules) mean IPR is effectively judicial and must satisfy Article III | Labeling and procedures alone do not convert a public-rights administrative process into an Article III exercise | Procedures resembling judicial ones do not by themselves render IPR unconstitutional; no “looks like” test applied |
Key Cases Cited
- United States v. Duell, 172 U.S. 576 (public-rights characterization of patents)
- Ex parte Bakelite Corp., 279 U.S. 438 (definition of public-rights matters)
- Crowell v. Benson, 285 U.S. 22 (public-rights doctrine and delegation to executive/legislative departments)
- McCormick Harvesting Machine Co. v. Aultman, 169 U.S. 606 (historical recognition of patents as property; prior statutory context)
- United States v. American Bell Telephone Co., 128 U.S. 315 (patent rights as property in historical cases)
- Stern v. Marshall, 564 U.S. 462 (limits on conferring Article III power and discussion of public/private rights)
- Granfinanciera, S. A. v. Nordberg, 492 U.S. 33 (Seventh Amendment does not independently bar nonjury factfinding when matter permissibly assigned to non-Article III forum)
- Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (public interest in patentability standards and preventing removal of knowledge from public domain)