Supreme Court Oral Arguments on Constitutionality of Inter Partes Review
Last Monday, the Supreme Court heard oral arguments in Oil States Energy Services LLC v. Greene’s Energy Group, LLC, No. 16-712, to decide the issue on the constitutionality of the inter partes review (IPR) procedure created by the Leahy-Smith America Invents Act of 2011. IPR is an adversarial process that allows the Patent Trial and Appeal Board to reconsider the validity of issued patents on certain grounds and on challenges of prior patents and printed publications. Particularly, the Supreme Court will determine whether the review system violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.
Both sides of the issue have strong advocates. Technology companies, such as Apple, Google, and Facebook, frequently utilize IPR to fight “patent trolls”, successfully invalidating patents without going to court. IPR decisions are required within 12 months – substantially shorter than protracted patent litigation that spanned years. On the other hand, pharmaceutical companies oppose the review process as competitors often use IPR to dismantle their patents to be able to bring cheaper, generic drugs to market. Further, drug companies assert that IPR adopts a different standard for review of patent validity (versus federal courts) that is less favorable to patent holders.
Based on the oral arguments, insiders and analysts observe that majority of the justices’ comments appear to be in favor of the constitutionality of the IPR process. Justice Ruth Bader Ginsburg noted that the IPR may be a mere “error correction” mechanism for the US Patent and Trademark Office. Justices Elena Kagan and Sonia Sotomayor pointed out the availability of judicial review for IPR decisions which may allay concerns of constitutionality of the administrative proceedings. However, Justices John Roberts and Neil Gorsuch were concerned with the ease that the government is able to nullify issued patents. The Supreme Court is expected to decide the matter early next year.
Apple versus Qualcomm: New Lawsuits
The patent battle between Apple and Qualcomm continues with two new sets of claims filed this week.
Last Wednesday, Apple amended its answer to Qualcomm’s complaint before the U.S. District Court in San Diego to include a countersuit for patent infringement. Apple claims that Qualcomm’s Snapdragon 800 and Snapdragon 820 chips violate at least eight of Apple’s patents for power management in processors. Qualcomm’s chips – though not the most recent – were part of its flagship line and powered Samsung and Google phones a year ago.
On the same day, Qualcomm filed three new complaints against Apple, alleging its infringement of sixteen different patents relating to RF transceivers, power-saving measures, and multi-touch displays. The complaints likewise seek for a ban against Apple’s latest smartphone, the iPhone X. For its newest legal attack, Qualcomm relies on the cult classic Palm Pre – in 2014, the company purchased technology relating to the phone’s webOS operating system and user interface from Palm. Qualcomm’s allegations of patent infringement involve basic features of most iPhones: text responses to phone calls, screen taps for camera focus, and a multi-tasking power button.
FCC Chairman Blasts Silicon Valley Companies
In his speeches this week, Federal Communications Commission (FCC) Chairman Ajit Pai criticized Silicon Valley companies for their opposition of FCC’s plan to repeal net neutrality rules. Pai blasted “edge providers” – an FCC for such companies as Google, Facebook, YouTube, Netflix Inc., and Microsoft Corporation’s LinkedIn – for being “a much bigger actual threat to an open internet than broadband providers, especially when it comes to discrimination on the basis of viewpoint.” Pai also accused Twitter of hypocrisy noting the company clearly has “a viewpoint” and uses “that viewpoint to discriminate.”
Last week, FCC announced its plan to roll back on open-Internet regulations and to grant Internet providers broad powers to block or reduce the speed of delivery of websites and online services on the basis of content.