Analysing SCOTUS Oral Arguments in Oil States and SAS Institute

On November 27, 2017 the U.S. Supreme Court heard oral arguments in Oil States Energy Services v. Greene’s Energy Group and SAS Institute v. Matal, two cases involving the Patent Trial and Appeal Board (PTAB). Managing Intellectual Property contacted Finnegan partners Erika Arner and Josh Goldberg for their predictions on how the court will rule based on the oral arguments.

The Oil States case revolves around whether America Invents Act proceedings are unconstitutional. Erika said, “Based on the oral argument, it sounds like the Court is split but at least four justices seem to believe that IPRs are constitutional. The availability of judicial review, including de novo review of legal questions, and the existence of due process requirements, seemed to give several justices comfort that patent owners are adequately protected in the IPR process.”

Several justices voiced concerns about the ability of an executive branch agency to revoke patent rights. She said, “Their concerns over patent owners’ reliance and investment reminded me of the 'settled expectations’ concerns the Court has addressed for the last 10 or 15 years in a number of different patent cases. At the end of the day, though, my guess is that the Court will leave for another day the question of what happens to a patent owner who loses patent rights after heavily investing over a long period of patent term, particularly because that isn’t the argument by petitioners here."

Josh weighed in on the SAS Institute arguments, noting that the court seemed divided on whether the case is about final written decisions or institution decisions. He said, “On the front end, Justice Kennedy asked whether the Board could refuse to grant review unless the petitioner reduced the number of challenged claims, and both sides agreed the Board could do this. On the back end, Justice Alito wondered whether anything in the statute prevented the Board from instituting a streamlined procedure for dealing with claims that were found at the outset to have no likelihood of success. As a practitioner representing both petitioners and patent owners before the Board, I was glad to see that the justices were considering how the Board could proceed if its current practices were found unacceptable."

He added, "I was also glad to see that the justices were considering the practical consequences of different potential decisions. For example, Justice Sotomayor recognized that requiring the Board to address all claims would allow a petitioner to challenge only a single claim with particularity but receive a hearing on several other claims if review was instituted."

Goldberg also doesn’t believe that the outcome of the case will significantly benefit petitioners over patent owners or vice versa, although he does believe it should bring greater certainty to this important area of the law and allow both sides to make more informed decisions on whether and how to proceed in IPRs.