Well I believe in [the patent system] and the only thing that scares me is [Oil States]
Within the small community of IP practitioners and commentators, the word is whispered almost Keyser Soze-like: OilStates. A patent, the Constitutionally-protected right to exclude others from practicing your invention, has an incredible history in the United States of encouraging innovation. Many great companies have relied on their patents to vault them to prominence. However, from the mid 1990s through 2011, patent litigation continued to rise as more and more patent owners began to sue companies for infringing patents, along with the rise in litigation referred to as “troll” or “non-practicing entity” litigation. In 2011, Congress passed the America Invents Act (AIA), and American businesses rejoiced because it, in some ways, slowed the rising tide of patent litigation and costs to companies. One of the most relevant aspects of the AIA has been the creation of the Inter Parties Review (IPR) system, which gives the Patent Office a “second-look” at issued patents and determines whether they are invalid. Many companies have relied on the IPR process to slow down or avoid patent litigation entirely.
But everyone is waiting with bated breath for a result on the Supreme Court’s decision in Oil States Energy Services, LLC v. Green’s Energy Group, LLC. In that case, the Supreme Court is deciding whether the IPR procedure is constitutional. While it appears most prognosticators do not predict that the Supreme Court will blow up the entire IPR regime created by Congress nearly 7 years ago, it appears that the industry believes that this may be just the first attack on the IPR regime taken up by the Supreme Court, not the only one. Most are predicting a 5-4 defeat of Oil States’ argument, with the conservative wing of the Supreme Court not having enough votes to find that the PTO has unconstitutionally deprived patent owners of a trial by jury.
It may seem strange that one decision will have a great impact across the whole technology industry, but it will. Companies still rely on the patent system to encourage innovation, they feel that the IPR system streamlines that process to weed out bad patents. Inventors feel like they have lost much of the fundamental right to own an invention as was promised in the Constitution. If the IPR process is changed, it will be considered a loss for corporate America and a win for small inventors, even though it will likely have repercussions that are unanticipated, just like the AIA did 7 years ago (no one thought the IPR process would be the most significant aspect of that legislation).