Inter Partes Review Held Constitutional

Inter Partes Review (IPR) is a trial proceeding conducted by the Patent Trial and Appeal Board (PTAB) where a third-party can challenge a patent’s validity based on prior art patents or printed publications.  Created in 2011 by Congress to combat “weak” patents previously issued by the U.S. Patent and Trademark Office (USPTO), IPRs often resulted in cancellation of all or part of a patent 80% of the time.  While many patents are rightfully cancelled for lack of novelty or obviousness concerns, IPRs gave third-parties the ability to burden new patent owners with defending the proceeding, taking away resources from creating innovative products.  This especially hurt the pharmaceutical and tech industries.  Many questioned whether this procedure was constitutional because it takes place in outside of federal court without the right to a jury trial.

Noting Article I gives Congress the power to grant patents or authorize others (such as the USPTO) to do so, the Supreme Court held IPR constitutional because patents are a matter of private right and Congress has significant latitude to assign adjudication of this right to non-Article III courts.  Writing for the majority, Justice Thomas said “when Congress properly assigns a matter to adjudication in a non-Article III tribunal, ‘the Seventh amendment poses no independent bar to the adjudication of that action by a non-jury factfinder.”

To help avoid an IPR, practitioners can adopt best patent-drafting practices and use post-grant procedures to his or her advantage.  By thorough prior art searches and including narrow patent claims, practitioner may decrease the likelihood of an entire patent becoming invalidated through the IPR process.  Practitioners should also remember that reexamination proceedings are available as a proactive approach to avoiding an IPR.  Through the reexam proceeding, a patent owner may submit additional prior art that raises a substantial question of patentability to the Patent Office and request patentability be reassessed.  A favorable outcome could avoid an IPR down the road.

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