shutterstock_367887608The Federal Circuit ruled on Wednesday that the Patent Trial and Appeal Board’s inter partes review process, and presumably all AIA review processes, does not violate Article III of the U.S. Constitution.1

The appellant, MCM Portfolio LLC, argued that “any action revoking a patent must be tried in an Article III court with the protections of the Seventh Amendment”2 and thus, inter partes reviews, and all PTAB reviews that can deem a patent invalid, are unconstitutional.

In ruling against MCM, the Federal Circuit relied on Supreme Court precedent that “inter partes review provisions, do not violate Article III.”3 The court noted that Congress can delegate disputes over public rights to federal agencies (i.e., non-Article III courts). Public rights, as defined by the Supreme Court, are those rights that are “integrally related to particular federal government action.”4 The court noted that as a practical matter, “[i]t would be odd indeed if Congress could not authorize the PTO to reconsider its own decisions.”5

As to a right to a jury trial under the Seventh Amendment, the Federal Circuit again relied on Supreme Court jurisprudence that the Seventh Amendment is “generally inapplicable in administrative proceedings” where such jury trials would substantially interfere with the agency’s ability to adjudicate.6 The court therefore held that because patent rights are public rights reviewable by the USPTO, the Seventh Amendment presents no barrier to PTAB adjudication without a jury.

The CAFC did not address MCM’s contention that the PTAB erred in instituting the inter partes review, noting that the 35 U.S.C. § 314(d) “no appeal” clause makes an inter partes review decision “final and nonappealable” prohibiting the courts from reviewing such a decision.7 The court did, however, affirm the PTAB’s final decision that MCM’s patent was invalid.

1 MCM Portfolio LLC v Hewlett-Packard Company, No. 2015-1091, slip op (Fed. Cir. December 2, 2015).
2 U.S. Const. amend. VII (“In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law”).
3 MCM at 9-10
4 MCM at 11 (citing Stern v. Marshall, 131 S. Ct. 2594, 2613 (2011)) (internal quotes omitted).
5 MCM at 12
6 MCM at 14 (citations omitted).
7 35 U.S.C. § 314(d) (“NO APPEAL. – The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”); see also Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015).