IPR of Pre-AIA Patents Does Not Run Afoul of the Takings Clause

In Celgene Corp. v. Peter, Nos. 2018-1167, 2018-1168, 2018-1169, 2018-1171 (Fed. Cir. July 30, 2019), the Federal Circuit had an opportunity to address a situation that was explicitly noted by the Supreme Court in Oil States: retroactively applying AIA procedures, such as IPR, to pre-AIA patents. Specifically, was the PTO committing an unconstitutional taking when it finds a pre-AIA patent invalid in an IPR? The Federal Circuit answered no.

After affirming the PTAB’s decision that certain claims of two particular pre-AIA patents were obvious, Chief Judge Prost and Judges Bryson and Reyna unanimously held that the retroactive application of IPRs to pre-AIA patents is not an unconstitutional taking. The Court arrived at this conclusion largely by comparing IPRs to pre-AIA review mechanisms, such as ex parte and inter partes reexaminations, to see if they differed in substance or procedure enough to amount to a taking. The Court concluded that they did not. While IPRs and reexaminations differ in some ways, the Federal Circuit reasoned that the mechanisms share the same grounds for review, standard of proof, claim construction standard, and purpose. Further, the Director of the PTO has the same discretion to initiate IPRs as he or she did in initiating reexaminations.

The Court compared these similarities to the differences—that IPRs are adjudicative and have discovery, briefing, and an oral hearing—and concluded that the PTO did not commit an unconstitutional taking in applying IPRs to pre-AIA patents.