Can Agencies Adjudicate Patentability?

Can agencies adjudicate patents once they are issued, or can patents be altered only through judicial proceedings? The Supreme Court recently decided in Oil States Energy Services v. Greene’s Energy Group for the former view and upheld the constitutionality of an administrative review process that opponents say violates the rights of patent holders. The current issue of Regulation contains two articles that argue strongly for and against these two views of patents.

In “The Patent System at a Crossroads,” Jonathan Barnett, a law professor at the University of Southern California, argues that Oil States is a pivotal moment in a decades-long erosion of intellectual property rights. In his view, this erosion is misguided.

Barnett contends that the criticisms of a strong patent-rights system overlook recent empirical evidence and have overestimated the impact and scope of problems including “patent trolls” (firms that own patents but do not manufacture products), “royalty stacks” (the total demands of multiple intellectual property holders for remuneration leave too little revenue left for the manufacturer), and “patent thickets” (complex and conflicting legal claims that increase transaction costs for manufacturers).

In “Miles to Go Before We Sleep,” Jonathan Stroud, chief intellectual property officer at Unified Patents, argues that Barnett ignores other evidence that supports the elimination of “weak” patents through an administrative process created by the 2011 America Invents Act.

Stroud argues that patents are and always have been a complex regulatory framework designed by Congress to incentivize innovation rather than simple property. The administrative process at issue in Oil States is just another in a long series of adjustments to the patent system.

After reading these two articles readers can decide for themselves how they view the Court’s decision.

Written with research assistance from David Kemp.