In a case that could have a significant impact on the interpretation and drafting of patent licensing agreements, a patent licensee filed an appeal for an en banc proceeding at the Federal Circuit to challenge the court’s finding that a forum selection clause governing disputes that “arise out of and under [the Master License Agreement]” and does not explicitly allow proceedings at the Patent Trial and Appeal Board (PTAB) prevents proceedings from being initiated at the PTAB. If this holding remains intact, many licenses having forum selection clauses that are silent about PTAB proceedings may be able to be successfully relied upon to prevent PTAB proceedings.
On March 7, 2019, the Patent Trial and Appeal Board (PTAB) designated the decision in Lectrosonics, Inc. v. Zaxcom as precedential. The order provides guidance and information on practice surrounding a patent owner’s motion to amend during an Inter Partes Review (IPR), in light of Federal Circuit case law. Generally, in an IPR proceeding, the patent owner may file one motion to amend the patent to (a) cancel any challenged patent claim and (b) for each challenged claim, propose a reasonable number of substitute claims. 35 USC 316(d)(1). This decision replaces Western Digital Corp. v. SPEX Techs, Inc., and provides further guidance on the scope of proposed substitute claims and the right of a petitioner to submit evidence during the IPR amendment cycle.
Q: What are the central issues in Oil States Energy Services v. Greene’s Energy Group?
Rory P. Pheiffer: The central issue is whether inter partes reviews (IPRs) are constitutional as administrative proceedings or if patent invalidity necessarily must be decided in accordance with Article III of the Constitution, and thus must be decided by the judicial branch. The constitutionality inquiry extends further to the Seventh Amendment—whether questions of fact related to patent invalidity should be decided by a jury. An underlying central issue used to support the respective positions for and against IPRs is whether a patent constitutes a private or public right. Oil States, the patentee who is arguing against the constitutionality of IPRs, considers patents to be private property, leaving questions of law and fact for the judiciary and jury, respectively. Greene, on the other hand, considers patents to be a public right, meaning Congress has the power to authorize an administrative body, like the United States Patent and Trademark Office (PTO), to grant patents and conduct IPRs as a mechanism to correct any errors that may have occurred in granting patents.
To date, the Supreme Court has granted certiorari (commonly referred to as cert) to five patent-related cases this term, which will result in three oral arguments likely to be decided before the end of the term. Two of the cases were consolidated into a single argument, while another case was subject to a Grant-Vacate-and-Remand (GVR) order, meaning the previous decision by the United States Court of Appeals for the Federal Circuit (CAFC) has been vacated by the Supreme Court and the case must be reconsidered by the CAFC. There are also over 20 pending Petitions for Writ of Certiorari, which may result in additional patent matters being heard by the Court this term.
Earlier this fall the United States Patent and Trademark Office (USPTO) announced the “Streamlined, Expedited Patent Appeal Pilot for Small Entities” program (the Streamlined, Expedited program), which allows small and micro entities to expedite a single ex parte patent appeal pending before the Patent Trial and Appeal Board (Board). In order to take advantage of this program, a patent applicant must:
- Be a small or micro entity appellant;
- Have only a single ex parte patent appeal pending before the Board as of September 18, 2015;
- Have no claim involved in the appeal that can be subject to a rejection under 35 U.S.C. § 112;
- For each ground of rejection that is applied to more than one claim, select a single claim as representative and only discuss that claim in the appeal for that ground;
- Agree to waive any requested oral hearing; and
- Acknowledge that any oral hearing fees paid in connection with the appeal will not be refunded.
Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.