Detroit patent attorney Glenn Forbis authored a new article appearing on the Automotive World website in which he discusses patent value, the upcoming Supreme Court decision Oil States v. Greene Energy, and what could be a major sea change in patent litigation in the U.S.
Central to the article is the question of Inter Partes Reviews. IPRs are a process by which petitioners challenge the validity of already-issued patents. This process takes place at the Patent Trial and Appeal Board within the United States Patent and Trademark Office, and is led by a panel of three administrative law judges. These judges are, effectively, employees of the USPTO, which, in turn, is part of the Executive Branch of the U.S. Government. At stake in Oil States v. Greene Energy is whether the IPR process violates the Constitution by taking a private right — which patents are generally acknowledged to be — out of federal courts and into the USPTO, thereby violating the separation of powers.
If IPRs are found unconstitutional, petitioners would lose a more cost- and time-efficient route for finding competitor patents invalid. Similarly, defendants in patent infringement lawsuits would lose the ability to have charges nullified by arguing at the PTAB that the patent should not have been granted in the first place.
From the perspective of the patent owner, however, as the ability to enforce a patent goes up, so does its value.
This is not necessarily great news for the auto industry who, “despite maintaining very large patent portfolios themselves,” Forbis says, “have generally been on the defensive side of patent infringement lawsuits.” Many of these suits are filed by non-practicing entities. Should IPRs be found unconstitutional, the auto industry may lose this controversial but mighty weapon.