In Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, the Supreme Court ruled that inter partes reviews (IPRs) do not improperly divest the courts of their judicial authority and do not violate the Seventh Amendment’s guarantee of a trial by jury.

Oil States sued Greene’s Energy, alleging that it infringed a patent directed to hydraulic-fracturing equipment. Greene’s Energy challenged the patent’s validity in the district court and brought an IPR at the Patent Office. The district court construed the patent’s claims in a way that foreclosed Greene’s Energy’s prior-art challenges, but, just a few months later, the Patent Office reached a different result, finding the prior art anticipated the patent.

Oil States appealed to the Federal Circuit, arguing that IPRs violated the constitutional guarantee of a trial by jury in an Article III court. The Federal Circuit affirmed the Board, and the Supreme granted certiorari on this issue.

Oil States’s Article III challenge was premised on the principal that the Constitution vests the judicial power of the United States “in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” As a result, Congress may not confer the government’s “judicial power” in a non-Article III Court—such as  the PTAB. The Court rejected this challenge, holding that IPRs fall squarely within the so-called public-right doctrine and therefore do not require trial by an Article III court.

A patent is a public right, and the USPTO has the authority to nullify that right.

The Court has distinguished between “public rights” and “private rights.” When dealing with the former class of rights, Congress is afforded “significant latitude” in assigning adjudication of those rights to a non-Article III court. The public-rights doctrine applies to disputes “arising between the government and others, which from their nature do not require judicial determination and yet are susceptible of it.” The Court cited early precedents establishing that patent grants were a public right because they involve the government transferring valuable rights from the public to inventors, empowering the latter to exclude others from the scope of their invention. From this, the Court concluded that an IPR involves the “same basic matter as the grant of a patent,” qualifying it as     a public right. Specifically, the PTAB applies the same statutory requirements that the Office does when granting a patent. And when a patent is cancelled in an IPR, the public is freed from the patent monopoly.

The Court rejected Oil States’s argument that a patent is form of private property entitled to the protection afforded such property. The Court also rejected the idea that the historical practice of trying patent validity before Article III courts suggested a different result. The Court again reverted to a key foundation of the public-rights doctrine, which recognizes that many public-rights disputes can be decided by the courts, but it does not follow they must be under the Constitution. The Court concluded that simply because the courts can and have adjudicated patent validity, it does not follow that they must decide patent validity.

The Court concluded its opinion by rejecting the Seventh Amendment challenge because the right to a jury trial has no application in cases heard by non-Article III entitites.