You recall that a short while ago, in Oil States Energy Servs., LLC v. Greene's Energy Group, LLC, 138 S. Ct. 1365 (2018), the Supreme Court held that patents are a form of "public property" (more like a government-created entitlement), and thus Congress can withhold the usual Article III tribunal and a jury when the validity of that property is challenged. The majority held that "inter partes review," under which the Patent and Trademark Office administratively reconsiders (and may cancel) previously-issued patents, does not run afoul of the Constitution because a patent is a "public right," and therefore more like a grant of a franchise than classic common law property.
Although the Court validated inter partes review, it left open the question of whether a patent owner who has her patent (in thousands of cases, these patents were issued before inter partes review was adopted) invalidated via administrative inter partes review would have a claim against the federal government for a taking, noting that patents may be "property for purposes of the Due Process Clause or the Takings Clause" (think rails-to-trails and Preseault).
Well, here's that claim squarely presented in a case we've been following.
In Celgene Corp. v. Peter, 931 F.3d 1342 (Fed. Cir. 2019), the Federal Circuit concluded that the invalidation of an issued patent was not a taking. The (former) patent owner's cert petition asks this Question Presented:
When Congress passed the America Invents Act (AIA) in 2011, it created a new administrative proceeding called “inter partes review” for reviewing the validity of previously issued patents. See Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 6, 125 Stat. 284, 299-313 (2011). In the same Act, Congress created the Patent Trial and Appeal Board, a new administrative tribunal for conducting inter partes review. Id. § 7. That Board, now numbering 270-plus “administrative patent judges,” was given the retroactive power to cancel patent rights conferred prior to enactment of the AIA, “even though that procedure was not in place when [those patents] issued.” Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC, 138 S. Ct. 1365, 1379 (2018). In just its first four years, the Board invalidated more than 16,600 patent claims, most of which were likely issued before inter partes review was enacted.This case presents a question expressly left open in Oil States:Whether retroactive application of inter partes review to patents issued before passage of the America Invents Act violates the Takings Clause of the Fifth Amendment.
Lots to absorb here: takings, "vested rights" and reliance, there's even a quasi-Contracts Clause vibe. So we shall be following along.
Petition for a Writ of Certiorari, Celgene Corp. v. Peter, No. 19-1074 (Feb. 26, 2020)
