SA v. Nordberg, which opined that
Congress has the power to decline to
provide for jury trials to resolve certain types of disputes between private parties over statutory rights as
long as the rights at issue are integral
to a public regulatory scheme whose
operations Congress has assigned to
an administrative agency.
Greene’s also cited precedents holding that patents are “public rights” and
integrally related to the complex regulatory scheme that Congress assigned
to the PTO. Because PTAB’s reviews are
part and parcel of that scheme,
Greene’s argued that Congress had
power to assign these reviews to the expert agency in charge of this scheme,
namely, the PTO.
The PTO also filed a brief in response to Oil States’ petition, pointing out that Congress intended for the
AIA to “establish a more efficient and
streamlined patent system that will
improve patent quality and limit unnecessary and counterproductive litigation” in response to a “growing
sense that questionable patents are
too easily obtained and are too difficult to challenge.” The PTO brief argued that the Court should not thwart
this laudable goal.
It noted that Congress had given
several agencies besides the PTO the
power to review and correct errors in
their past decisions. PTO examiners,
like many other federal agents, sometimes make mistakes. The PTAB review
process enables correction of those
The P TO challenged Oil States’ read-
ing of the McCormick decision. The
holding in that case was that the patent
office could not cancel a patent be-
cause Congress had not given the office
power to do so. By enacting the AIA,
however, Congress conferred such
power on the PTO. The sentences from
McCormick on which Oil States relied
were only “dicta.”
Constitutional challenges to Congressional enactments are rarely successful. The Supreme Court generally gives
a broad reading to the constitutional
powers that Congress has to accomplish its goals, including the establishment of administrative tribunals.
Even so, there is reason for PTAB-pro-ponents to be worried about the Oil
States case. The Supreme Court’s jurisprudence on the powers of Article III
courts versus the powers of Congress
to establish tribunals to resolve private
disputes is very arcane, convoluted,
and far from consistent.
The Court’s job is to interpret the
Constitution. So the Justices cannot
just decide that Congress had a good
reason to establish PTAB and give it
power to extinguish erroneously
granted patents. The Justices will have
to carve a careful path through the
thicket of their past decisions to articulate standards to uphold PTAB’s patent reviews, and give guidance about
Congress’ powers to establish other
administrative tribunals, such as a
small claims tribunal within the Copyright Office.
One can hope the Justices will consider the constitutional issue in Oil
States in light of another constitutional purpose, that which underlies the
patent system: promoting the progress of useful arts. If the only way a bad
patent can get killed is through a $5
million–$10 million federal court lawsuit, lots of bad patents will go unchallenged. PTAB is an efficient mechanism to extinguish erroneously issued
patents. It will be unfortunate indeed
if the Court feels so caught in the web
of its constitutional precedents that it
cannot find a way to uphold the good
work the PTAB has been doing.
Pamela Samuelson ( firstname.lastname@example.org) is the
Richard M. Sherman Distinguished Professor of Law and
Information at the University of California, Berkeley, USA,
and a member of the ACM Council.
Copyright held by author.
the PTAB as an administrative tribunal
within of the U.S. Patent and Trademark Office (PTO). Congress gave
PTAB the power to adjudicate certain
challenges to the validity of issued patent claims. Under its theory, Oil States
contends that only Article III courts
have the constitutional authority to
adjudicate patent validity. It further
claims that under the Seventh Amendment, it has the right to a jury trial on
its patent claims.
Oil States relies on an 1898 Supreme Court opinion, McCormick
Harvesting Machine Co. v. C. Aultman
& Co., which says, among other
things, that a patent “is not subject to
being revoked or cancelled by the
President, or any other officer of the
government” because “it has become
the property of the patentee, and as
such is entitled to the same legal protection as other property.” Because
courts had, prior to adoption of the
Constitution, the power to review patent validity and infringement, the
Constitution should be understood to
have vested Article III courts, and only
Article III courts, with the power to
decide whether patents are valid.
Oil States is not the first firm to have
raised this particular constitutional
challenge. Three times previously the
Supreme Court denied petitions to review the constitutionality of the PTAB
power to extinguish patent claims.
This explains why virtually everyone
who pays attention to patent law was
surprised by Court’s decision to review
the CAFC’s decision in Oil States.
The Oil States case has many owners
of weak patents hoping the Court will
find merit in Oil States’ arguments.
Many of others are worried that the
Court will get tangled up in abstract arguments about whether patents are
“private” or “public” rights under the
Court’s complicated jurisprudence
about powers of Article III courts and
powers that Congress has to create administrative tribunals to handle certain kinds of claims.
Responses to Oil States’ Claims
Greene’s had hoped to ward off Supreme Court review by relying on
the Court’s prior lack of interest in
hearing this kind of challenge. On
the merits, it relied upon a 1989 Supreme Court opinion, Gianfinaciera
If the only way
a bad patent can get
killed is through
a $5–$10 million
federal court lawsuit,
lots of bad patents
will go unchallenged.