The U.S. Supreme Court heard arguments Nov. 27 on the constitutionality of a patent review system that many tech giants, including Apple Inc. and Alphabet Inc., have come to rely on.
The case, Oil States Energy Services LLC v. Greene's Energy Group LLC, centers on the so-called "inter partes review" process that Congress added to the patent law as part of the 2011 America Invents Act. Because the review process is conducted by the Patent & Trademark Office's Patent Trial and Appeal Board, or PTAB, rather than through a jury trial, some have argued the process is unconstiutional. Proponents of the process, meanwhile, say the PTAB review saves both time and money, and allows the Patent & Trademark Office to quickly fix patents awarded erroneously.
Though the dispute started over Oil States Energy Services LLC's patent on technology used for preserving wellhead equipment in the oil and gas industry, the legal case has broad implications for multiple industries, including the tech sector, where patent litigation has a reputation for being both frequent and expensive.
In an amicus brief filed by Apple in the Oil States case, the tech company said through 2016, it "had filed the most IPR [inter partes review] petitions of any petitioner, with its 267 petitions comprising almost 5% of all petitions filed since 2012." This experience, the company said, gives the company direct insight into the "salutary benefits" of the review process.
Specifically, the company said the review process allows a more targeted proceeding for determining patent validity, reducing costs. Apple cited one estimate showing that as of 2015, the average cost of litigating a single inter partes review petition was $340,000. By contrast, the mean total legal defense of defending a patent case through to trial in federal court was $9.5 million.
"Because they are time-constrained proceedings that focus on narrow legal issues, IPRs have already been very successful in saving litigants, including both patentees and accessed infringers, substantial resources," Apple said.
An amicus brief submitted by Intel Corp., Cisco Systems Inc. and Alphabet's Google Inc., among others, meanwhile, argued that the review process does not violate the Constitution because it "only enables the [Patent & Trademark Office] to correct errors in its own earlier decision to grant a patent."
Justice Ruth Bader Ginsburg agreed with that sentiment, saying during the Nov. 27 arguments that "there must be some means by which the Patent Office can correct the errors that it's made."
But Justice Stephen Breyer expressed concern with the process. "Suppose that the patent has been in existence without anybody reexamining it for 10 years and, moreover, the company's invested $40 billion in developing it. And then suddenly somebody comes in and says: Oh ... we want it re-examined, not in court but by the Patent Office," he said, calling this scenario "a problem."
