Landmark SCOTUS Ruling Upholds the Inter Partes Review Process

The Supreme Court of the United States (SCOTUS) ruled today in the case of Oil States Energy Services, LLC, v Greene’s Energy Group, LLC, that the inter partes review (IPR) process for reviewing patents does not violate the Constitution by adjudicating public rights outside of an Article III court. The Court ruled 7 to 2, with Chief Justice John Roberts and Justice Neil Gorsuch dissenting.

Justice Clarence Thomas delivered the opinion of the Court, which held that, under legal precedent, Congress has “significant latitude” to assign adjudication of public rights to entities other than courts, and the IPR process “falls squarely within the public-rights doctrine;” because the decision to grant a patent is a matter involving public rights. The reconsideration of such a grant through the IPR process “involves the same basic matter as the grant of a patent” and thus falls under the United States Patent and Trademark Office’s (PTO) authority. The fact that an IPR takes place after the initial grant of the patent “does not make a difference here,” as the patents remain subject to the PTO’s authority.

In his dissenting opinion, Justice Gorsuch decried the decision, writing that, “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. But in the statute before us Congress has tapped an executive agency, the [PTO], for the job.”

While the case at hand involved 2 oilfield services companies and the review patents that covered an apparatus and a method for protecting equipment used in hydraulic fracturing, the decision has wide-reaching impacts across industries, including the biologics and biosimilars field; the IPR process has become particularly important for biosimilar developers to challenge patents on biologic drugs. Had the Court ruled that IPRs were unconstitutional, not only would ongoing IPR-related petitions be in jeopardy, but new patent challenges would have likely had to resort to potentially lengthier, more costly patent litigation in the federal courts.

Christopher Bruno, JD, an associate in the Intellectual Property group at Schiff Hardin LLP, told The Center for Biosimilars^® in an email that “The Supreme Court’s Oil States decision reaffirms the constitutionality of an administrative process that has been a popular forum for challenging biologics parents. I expect that IPRs will remain a powerful alternative for companies seeking means other than a lengthy Biologics Price Competition and Innovation Act lawsuit to obtain patent certainty.”

Ha Kung Wong, JD, partner at partner at Fitzpatrick, Cella, Harper and Scinto, told The Center for Biosimilars^®, also via email, "We'll likely continue to see increased success of invalidity challenges for biologic patents that are instituted, particularly for method of treatment patents, which could be an issue for innovation."