Supreme Court upholds patent dispute process
WASHINGTON – The Supreme Court avoided an upheaval in the way patent disputes can be resolved out of court by siding with regulators over judges.
Tuesday’s 7-2 ruling was written by Justice Clarence Thomas, who said Congress gave the Patent and Trademark Office the power to reconsider patents rather than relying only on courts.
“The decision to grant a patent is a matter involving public rights — specifically, the grant of a public franchise,” he said. The review process “is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration.”
Justice Neil Gorsuch dissented and was joined by Chief Justice John Roberts. The majority opinion, Gorsuch said, “invites us to retreat from the promise of judicial independence.”
“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,” he said.
The case, while obscure to most Americans, had attracted an onslaught of legal papers from major companies and trade groups on both sides of the system that Congress created in 2011.
On the winning side were the nation’s largest tech companies, including Apple, Google, Facebook and Twitter. They argued the Patent Trial and Appeal Board remained the best way to quash suspect patents, including those obtained by so-called patent “trolls” as a way to extract royalties. On the losing side were major pharmaceutical companies and others seeking to return to a system under which only courts, not regulators, decided such disputes.
More than 7,000 petitions have been filed and more than 1,300 patents canceled through the process. There currently are some 2.1 million patents in force, valued at $886 billion.
The dispute was between two energy companies arguing over equipment that protects wellheads during hydraulic fracturing, or “fracking.” Oil States Energy Services, the company challenging the administrative appeals process, said it altered 400 years of judicial review dating back to the British Empire.
But Justice Ruth Bader Ginsburg said the process merely gives the Patent and Trademark Office a streamlined method for correcting its own errors. In Great Britain hundreds of years ago, she asked during oral argument, “the King couldn’t say, ‘I made a mistake?’ ”