The IPR system is a viable administrative procedure in so far as it does not violate Article III or the Seventh Amendment of the U.S. Constitution.
Background / Facts: The patent on appeal here from rejection at the PTO during inter partes review (IPR) proceedings is directed to systems for coupling a computer system with a flash memory storage system. The Patent Trial and Appeal Board (“Board”) determined that the accused infringer’s petition demonstrated a reasonable likelihood that the challenged claims were invalid as obvious and instituted IPR. Thereafter, the Board issued a final decision holding that the challenged claims would have been obvious.
Issue(s): Whether the IPR system violates Article III or the Seventh Amendment of the U.S. Constitution.
Holding(s): No. “The teachings of the Supreme Court in Thomas, Schor, and Stern compel the conclusion that assigning review of patent validity to the PTO is consistent with Article III.” Noting that it is “bound by prior Federal Circuit precedent,” the Federal Circuit concluded that it “see[s] no basis to distinguish the reexamination proceeding in Patlex from inter partes review. … Because patent rights are public rights, and their validity susceptible to review by an administrative agency, the Seventh Amendment poses no barrier to agency adjudication without a jury.”