Supreme Court – Decided and Pending Constitutional Challenges

Most readers have been following the impact of the Federal Circuit’s decision in Arthrex and know that an earlier and less developed Arthrex I [i] case is on cert to the Supreme Court asking the Court to address the appointments clause and other issues. We are still waiting for the fully developed and infamous Arthrex II case to reach the Court on cert.[ii] In the wake of Arthrex II, the Federal Circuit has already issued more than 100 decisions vacating the decision of the Patent Trial and Appeal Board (“Board”) and instructing the Board to conduct further proceedings on remand before newly-designated Board panels. Several parties that have been subject to such orders have informed the USPTO that they intend to seek Supreme Court review of the order. As such, on May 1, 2020, the Chief Administrative Patent Judge issued a General Order holding all orders remanded by the Federal Circuit under Arthrex II in abeyance until the Supreme Court acts on a petition for certiorari.[iii]

But alongside the appointments clause issue in Arthrex II, there are several other cases to watch. For example Collabo Innovations v. Sony Corp.[iv], Chrimar Systems v. ALE USA Inc.[v], and General Electric Co. v. United Technologies Corp.[vi] are all on cert before the Supreme Court. And the Supreme Court recently denied cert in a case challenging sovereign immunity from PTAB challenges.[vii] Another case moving towards the Court, Virnetx v. Cisco, may challenge whether inter partes reexamination should have the same fate as AIA cases under Arthrex II.

Collabo asks the Court to address if the retroactive application of inter partes review of pre-AIA patents violates the Takings and Due Process Clause of the Fifth Amendment. The Court left this issue unresolved when it upheld the constitutionality of inter partes review in Oil States.[viii] Since Oil States, numerous academics, scholars, and professionals have questioned the constitutionality of the retroactive application of inter partes review. A finding by the Court that retroactive application of inter partes review is unconstitutional would exempt millions of patents from inter partes review.

Chrimar asks the Court to clarify when a patent judgment becomes final. Specifically, Chrimar asks: (1) “[w]hether the Federal Circuit may apply a finality standard for patent cases that conflicts with the standard applied by [the Supreme Court] and all other circuit courts in nonpatent cases” and (2) [w]hether a final judgment of liability and damages that has been affirmed on appeal may be reversed based on the decision of an administrative agency.” Several amici have filed briefs on behalf of Chimar urging the Court to grant cert and clarify the law on if and when a finally resolved dispute on the merits is open to collateral attack in administrative agency proceedings.

General Electric asks the Court to weigh in on if competitive harm alone is sufficient to confer Article III standing to appeal an inter partes review decision or if an appellant must also show concrete plans for future activity that creates a substantial risk of future infringement action. Under the current standard, a showing of economic injury as a result of an IPR decision is not enough to establish injury-in-fact and therefore standing for appellate review by an Article III court. GE argues that the current test contradicts the doctrine applied by the Supreme Court and other circuits that government action that subjects parties to competitive harm satisfies Article III’s injury-in-fact requirement. If the Court were to agree with GE, it would result in an increase in appellate review of IPR decisions brought by dissatisfied petitioners.

The Court recently denied cert in Regents of the University of Minnesota v. LSI Corp., which challenged sovereign immunity from PTAB challenges. The petition asked the Court to address if IPR proceedings brought by private respondents against the University of Minnesota are barred by sovereign immunity. The Federal Circuit, in view of its decision in Saint Regis[ix] held that state sovereign immunity does not preclude institution of IPR proceedings. It appears that the Supreme Court is unlikely to address this issue any time soon, as it has denied cert in both Saint Regis and Minnesota.

Finally, for completeness, the Supreme Court has also denied challenges to the AIA when petitioners argued it violates the Separation of Powers[x] requirement because patent validity can only be finally determined by an Article III court and also deprives patent owners of their right to a jury trial under the Seventh Amendment[xi].

We will see if the Court will address not just how PTAB procedures should proceed as they did in Couzo,[xii] SAS,[xiii] Oil States,[xiv] and Thyrv,[xv] but whether they should be able to proceed at all, as they did in Return Mail.[xvi]

Unfortunately, the Supreme Court is definitely not taking up the most pressing issue – patentable subject matter – anytime soon, denying cert nearly 50 times on Alice issues. We hope Congress will clarify patent subject matter.

Stay tuned.

[i] Petition for Writ of Certiorari, Arthrex v. Smith & Nephew, Inc., No. 19-1204 (filed April 6, 2020).

[ii] Arthrex v. Smith & Nephew, Inc., 953. F.3d 760 (Fed. Cir. 2020) (denying rehearing en banc).

[iii] General Order in Cases Remanded Under Arthrex v. Smith & Nephew Inc., 941 F.3d 1320 (Fed. Cir. 2019) (PTAB May 1, 2020) LINK.

[iv] Petition for Writ of Certiorari, Collabo Innovations v. Sony Corp., No. 19-601 (filed Nov. 4, 2019). Distributed for June 4, 2020 conference.

[v] Petition for Writ of Certiorari, Chrimar Systems, Inc. v. Ale USA, Inc., No. 19-1124 (filed Mar. 10, 2020). Cert was denied May 26, 2020.

[vi] Petition for Writ of Certiorari, General Electric Co. v. Raytheon Technologies, Corp., No. 19-1012 (filed Feb. 12, 2020).

[vii] Petition for Writ of Certiorari, Regents of the University of Minnesota v. LSI Corp., No. 19-337 (filed Sep. 12, 2019).

[viii] Oil States Energy Services, LLC v. Greene’s Energy Group, LLC., 138 S.Ct. 1365 (2018).

[ix] Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals, Inc., 896 F.3d 1322 (Fed. Cir. 2018).

[x] Petition for Writ of Certiorari, Cooper v. Lee, No. 15-955 (filed Jan. 21, 2016); Petition for Writ of Certiorari, MCM Portfolio LLC v. Hewlett-Packard Co., No. 15-1330 (filed Feb. 18, 2016.)

[xi] Petition for Writ of Certiorari, MCM Portfolio LLC v. Hewlett-Packard Co., No. 15-1330 (filed Feb. 18, 2016.)

[xii] Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016) LINK.

[xiii] SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018) LINK.

[xiv] Oil States Energy Services, LLC v. Greene’s Energy Group, LLC., 138 S.Ct. 1365 (2018) LINK.

[xv] Thryv, Inc. v. Click-To-Call Technologies, LP, 140 S. Ct. 1367 (2020) LINK.

[xvi] Return Mail, Inc. v. United States Postal Service, 139 S.Ct. 1853 (2019) LINK.

This article appeared in the May 2020 issue of PTAB Strategies and Insights. To view our past issues, as well as other firm newsletters, please click here.