The Patent Office doesn’t always do the best job. That’s how Personal Audio managed to get a patent on podcasting, even though other people were podcasting years before Personal Audio first applied for a patent. As we’ve detailed on many occasions, patents are often granted on things that are known and obvious, giving rights to patent owners that actually belong to the public. As a result, it’s important for the public to have the ability to challenge bad patents.
Unfortunately, challenging bad patents in court can be hard and very expensive. In court, challenges are often decided by a judge or jury with little technical knowledge. Courts also require a high level of proof (“clear and convincing”) that can be hard to come by, especially after the passage of time.
In order to help alleviate that problem, in 2011 Congress passed the America Invents Act, which created new procedures at the Patent Office to challenge patents. Those challenges are heard by an expert panel and can lead to the patent’s cancellation if a challenger can show “by a preponderance of the evidence” that the patent should not have issued in the first place.
This procedure, known as inter partes review or IPR for short, has been controversial. Some patent owners claim that IPRs make it too easy to invalidate patents. EFF and others have supported the IPR process, because it provides an efficient alternative to litigation for companies threatened by bad patents and because it provides an opportunity for groups like EFF to challenge bad patents that harm the public interest.
A company called Oil States is challenging the procedure at the Supreme Court, arguing that it violates the Constitution because it allows a panel of experts at the Patent Office to decide a patent’s validity, rather than a judge and jury. Together with Public Knowledge, Engine Advocacy, and R Street Institute, EFF filed an amicus brief explaining why that’s incorrect, and why members of the public should remain free to challenge bad patents at the Patent Office.
In our amicus brief, we detail the long history of patents being used as a public policy tool, and how Congress has long controlled how and when patents can be canceled. We explain how the Constitution sets limits on granting patents, and how IPR is a legitimate exercise of Congress’s power to enforce those limits.
We also discuss how IPRs also make policy sense. We discuss why IPRs were created in the first place. The Patent Office often does a cursory job reviewing patent applications. There is some justification for this given that the Office receives over 600,000 patent applications per year. The vast majority of these patents will never be valuable and will never be asserted against others. Given that it is hard to tell during the application phase which patents are going to become economically important, it makes some sense to focus energy on more closely reviewing patents only when they do become important. IPRs allow for that “second look” to make sure the Patent Office didn’t make a mistake in issuing a patent, and are generally only brought to challenge patents that have become economically valuable.
But if Oil States’ argument is successful, a company can take advantage of the more-than-lax Patent Office examination to get a patent, and then prevent that “second look.” The public will be burdened with massive costs and uncertainty in being forced to only challenge those patents in court, in front of judges and juries who, despite best efforts, are often overwhelmed by technology.
Inter partes review is one of the few ways members of the general public can challenge bad patents. It’s the procedure EFF used to challenge the infamous podcasting patent that was used to threaten small podcasters. The Patent Office found that the claims EFF challenged shouldn’t have been issued, and that decision was affirmed by the U.S. Court of Appeals for the Federal Circuit. (The case remains on appeal as Personal Audio has requested that the appeals court rehear the case en banc.) More recently, the Initiative for Medicines, Access & Knowledge (I-Mak) has used inter partes review to challenge patents held by Gilead on a drug used to combat Hepatitis C. I-Mak estimates [PDF] that patents on the drug increase the costs to consumers by approximately $10 billion.
The Oil States case is one of the most important cases in patent law in the last decade, if not longer. Many interested parties have filed briefs (copies are available on SCOTUSblog). We hope the Supreme Court recognizes that IPRs are a reasonable—and constitutional—Congressional response to bad patents.