IPRs Are Constitutional! No Violation of Article III or Right to a Jury

In MCM Portfolio v. Hewlett-Packard, No. 2015-1091 (Fed. Cir. Dec. 2, 2015), the Federal Circuit held that an inter partes review (IPR) does not violate Article III or the Seventh Amendment.

HP instituted an IPR against MCM.  In arguing for the unconstitutionality of IPRs, MCM relied on the 1898 Supreme Court decision in McCormick Harvesting Machine v. Aultman, where the PTO rejected the original claims during a reissue proceeding that the patentee ultimately abandoned.  Because the reissue was abandoned, the Supreme Court found the PTO’s rejection a nullity, such that only the courts could invalidate the patent.

The Federal Circuit held that McCormick did not address Article III or “forbid Congress from granting the PTO the authority to correct or cancel an issued patent.”  Rather, the Federal Circuit explained that “Congress has the power to delegate disputes over public rights to non-Article III courts,” and that the PTO serves an important public purpose: “to correct the agency’s own errors in issuing patents in the first place.” As a result, the court held that the right to jury “is generally inapplicable in administrative proceedings.