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Oil States Energy Services v. Greene’s Energy Group: What You Need to Know

On June 12, 2017, The United States Supreme Court granted certiorari in Oil States Energy Services v. Greene’s Energy Group. Unlike other federal courts, the Supreme Court does not have to hear every appeal that is filed. Instead, the Court decides which cases merit its review. This process is called certiorari.

While we are unsure what the Court’s decision will be, this case will have a significant impact on patent holders and inventors. Learn more about the Oil States case below.

Oil States Energy Services v. Greene’s Energy Group

An Overview of Oil States Energy Services v. Greene’s Energy Group

In 2011, Congress passed the America Invents Act (AIA). The AIA tried to streamline intellectual property and patent processes — including the implementation of inter partes review (IPR). The United States Patent and Trademark Office (USPTO) created an administrative body (the Patent Trial and Appeal Board or PTAB) that reviews and assesses the validity of existing patents. The PTAB is not an Article III court. Therefore, the parties do not have a right to a jury trial. For this reason, some intellectual property experts and inventors question its constitutionality.

Oil States Energy Services v. Greene’s Energy Group involves a dispute over a series of fracking-related patents. During the dispute, Greene’s Energy Group requested an IPR of Oil States’ patent. The PTAB reviewed Oil States’ patent and invalidated it. While Oil States had requested the opportunity to amend its patent, the PTAB denied this request. Oil States then appealed this revocation to the Federal Circuit.

On appeal, Oil States presented multiple legal arguments, including the assertion that IPR violates the Seventh Amendment’s right to a jury trial. However, the Federal Circuit rejected this argument and summarily dismissed Oil State’s appeal on May 16, 2016. After its Federal Circuit Petition for En Banc Review was denied, Oil States petitioned the Supreme Court for a Writ of Certiorari.

In its Supreme Court petition, Oil States asked the Court to decide whether:

  • IPR violates the Seventh Amendment,
  • The IPR amendment process is inconsistent with the Court’s decision in Cuozzo Speed Techs, L.L.C. v. Lee, and
  • The “broadest reasonable interpretation” standard requires the application of traditional claim construction principles.

However, the only issue the Supreme Court agreed to hear in Oil States Energy Services v. Greene’s Energy Group was whether the IPR process is constitutional.

Are Patents Public or Private Rights?

Oil States Energy Services v. Greene’s Energy Group

The constitutionality of IPR hinges on whether patents are a public or private right. Under a series of federal decisions, including B&B Hardware v. Hargis Industries, there are distinct differences between private and public rights:

  • Private property rights: The Seventh Amendment covers private property rights. Private property disputes must be resolved in an Article III court (typically with a jury). A finding that patents are private right would make IPR unconstitutional — and might call into question all of the USPTO’s IPR patent revocations.
  • Public rights: Public rights are not protected by the Seventh Amendment. You do not have the right to a jury trial in a dispute over public rights. If the Court finds patents are a private right, it would allow the PTAB to continue its operations and affirm its decisions and practices.

In its pleadings, Oil States relies on a series of cases, primarily McCormick v. Harvesting Machine Co. v. Aultman & Co., arguing that patents are a private right and courts have the sole authority to review an inventor’s patent rights. However, Greene’s relies on the Federal Circuit’s decision and the Court’s decisions in Patlex v. Mossinghoff and Stem v. Marshall — arguing that patents are a public right and IPR is a valid dispute resolution process.

The Potential Impact of Oil States Energy Services v. Greene’s Energy Group

While IPR has its issues, jury trials are often time-intensive and costly. While some inventors and businesses can finance extended litigation, other inventors might be unable to afford a patent challenge. Moreover, it is uncertain what would happen to an inventor’s invalidated patents. Would the Supreme Court decision reinstate them? This might result in additional patent infringement litigation and uncertainty.

Regardless of whether you believe patents are a public or private right, you should keep your eye on the Oil States case. The case will likely have a deep impact on the state of patent law — calling into question the validity of IPR decisions and requiring jury trials in most patent-related litigation. The parties have filed briefs and a decision is expected by June 2018.

Bold IP Is Monitoring Oil States Energy Services v. Greene’s Energy Group

Oil States Energy Services v. Greene’s Energy Group has added significant uncertainty to the world of U.S. patent law. Furthermore, the Court’s decision might dramatically change our client’s patent and patent litigation strategies. We will continue to provide updates on this important case as they become available. You can also contact Bold IP, PLLC for information about Oil States and how it might impact your patent rights. Call us today: 888-455-1367.

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