April 26, 2018

SCOTUS avoids the administrative elephant in the room

By Brian T. Hodges Senior Attorney

Earlier this week, the US Supreme Court issued its decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, upholding by a 7-2 margin the inter partes review process used by the Patent Trial and Appeal Board to invalidate already-issued patent claims. At issue was whether this process must be heard by an Article III court, not an administrative agency. Although intellectual property is not a common topic at PLF, the Foundation filed an amicus brief to ensure that a decision would not erode the people’s right to have claims affecting property or liberty determined by an independent judiciary.

Thankfully, Oil States is a very narrow decision. Writing for the Court, Justice Thomas upheld inter partes review upon the conclusions that the rights secured by issuance of a patent are not among the type of traditionally “private” rights that fall within the exclusive jurisdiction of Article III courts. Instead, the issuance of a patent establishes a “qualified” interest, which is subject to statutory requirements. Based on this, the Court explained, that patents—unlike traditional property rights—fall within the “public rights doctrine” and, therefore, do not require a judicial determination when challenged. Congress was authorized to establish an administrative procedure for reevaluating the validity of patents.

Justice Thomas emphasized that the Court did not decide the validity of the inter partes process itself, nor did it decide due process or retroactivity questions.

The fight over whether traditional private rights fall exclusively within the jurisdiction of Article III courts, however, remains simmering in the background. Writing in concurrence, Justice Breyer, joined by Justices Ginsburg and Sotomayor, commented that “the Court’s opinion should not be read to say that matters involving private rights may never be adjudicated other than by Article III courts, say, sometimes by agencies.”

Meanwhile, Justice Gorsuch dissented, joined by Chief Justice Roberts, recognizing that administrative agencies are staffed by political appointments and are the improper venue for adjudication of valuable private rights. Justice Gorsuch concluded that enforcing the line between the courts and the political branches of government is essential to individual rights and liberties:

Today’s decision may not represent a rout but it at least signals a retreat from Article III’s guarantees. Ceding to the political branches ground they wish to take in the name of efficient government may seem like an act of judicial restraint. But enforcing Article III isn’t about protecting judicial authority for its own sake. It’s about ensuring the people today and tomorrow enjoy no fewer rights against governmental intrusion than those who came before. And the loss of the right to an independent judge is never a small thing. It’s for that reason Hamilton warned the judiciary to take “all possible care . . . to defend itself against” intrusions by the other branches. The Federalist No. 78, at 466. It’s for that reason I respectfully dissent.

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