Federal Circuit: IPR Proceedings are Constitutional

In MCM Portfolio v. HP (Fed. Cir. 2015), a three-judge panel of the Federal Circuit held that the Inter Partes Review (IPR) system implemented by the U.S. Patent and Trademark Office under the America Invents Act of 2011 (AIA) does not violate any sections of the U.S. Constitution.

The appealed IPR decision by the Patent and Trial Appeal Board (PTAB) had concluded that the challenged patent claims would have been obvious over a combination of two prior art references. MCM appealed on various grounds, including assertions that the IPR system violates Article III and the Seventh Amendment of the U.S. Constitution.

In addressing those assertions, the court relied on Supreme Court decisions upholding Congress’s power to delegate disputes over public rights to non-Article III courts, as well as Federal Circuit decisions upholding the ex parte reexamination statute under Article III and Seventh Amendment challenges. The court then held that the IPR system does not violate those sections of the U.S. Constitution. In particular, the court wrote that

The teachings of the Supreme Court … compel the conclusion that assigning review of patent validity to the PTO is consistent with Article III…

and

Because patent rights are public rights, and their validity susceptible to review by an administrative agency, the Seventh Amendment poses no barrier to agency adjudication without a jury.

MCM Portfolio has the opportunity to request rehearing en banc. However, potential parties to IPR proceedings will likely continue to operate under the assumption that the IPR system will remain in place.

Buchanan Ingersoll & Rooney’s Patent Office Litigation Practice Group has significant experience in Patent Office litigations, such as IPR, Post Grant Review (PGR) and Interference matters. To date, the firm has assisted with over 40 Patent Office litigation matters on behalf of both patent owners and petitioners and has filed 10 Petitions for IPRs, four petitions for Covered Business Method Reviews and two favorable Final Written Decisions denied on behalf of patent owners.

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