U.S. Supreme Court upholds Patent & Trademark Office administrative inter partes review process

The U.S. Supreme Court ruled on April 24 that an administrative tribunal within the Patent & Trademark Office (PTO) has the authority to review and cancel existing patents. In a 7-2 decision, the justices rejected an argument that only federal courts may invalidate patents after they are granted. In the majority opinion, Justice Clarence Thomas said Congress gave the patent office the power to reexamine the validity of patents when it passed the Leahy-Smith America Invents Act in 2011. “The decision to grant a patent is a matter involving public rights—specifically, the grant of a public franchise,” Thomas wrote. The review system “is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration.” Drugmakers, independent inventors, and other patent holders called PTO’s in-house review system, known as inter partes review, a threat to innovation because the standard for revoking a patent is lower in that proceeding than in federal court. But technology companies say PTO’s administrative appeals process is a more efficient, less expensive way to settle disputes than fighting it out in court.