On June 5, non-practicing entity eCharge Licensing, LLC filed a declaratory judgment suit against the USPTO (and director Michelle Lee) in the Eastern District of Virginia, seeking a declaration of unconstitutionality of the sections of the America Invents Act providing for inter partes review.  On the same day, eCharge also filed a motion for summary judgment on the issue of constitutionality of the Act.

In its complaint and motion for summary judgment, eCharge argued that the inter partes review process violates a patent owner’s right to have the issue of patent validity decided by a jury in an Article III court.  According to eCharge, “purely private disputes between patent owners and alleged infringers” should not be decided by Article I tribunals such as the Patent Trial and Appeal Board (PTAB).  eCharge also argued that inter partesreview proceedings violate a patent owner’s right to a jury trial under the Seventh Amendment. 

On July 23, the USPTO filed its own motion for summary judgment on the issue.  The USPTO argued that, contrary to eCharge’s assertions, patent rights are public rights, and are therefore within the so-called “public rights” doctrine, which allows for matters involving public rights to be decided by tribunals outside of the Judicial Branch. 

Both eCharge and the USPTO examined prior jurisprudence relating to a more familiar USPTO procedure: ex parte reexamination.  In prior lawsuits challenging the constitutionality of ex parte reexamination—on grounds similar to those asserted by eCharge against inter partes review—the U.S. Court of Appeals for the Federal Circuit has found ex parte reexamination to be on solid constitutional footing.  Thus, eCharge’s arguments emphasized the differences between ex parte reexamination and inter partes review, and the USPTO’s arguments equated the two proceedings for purposes of the dispute.

Ultimately, eCharge is likely to have a very difficult time convincing the district court to declare inter partes review unconstitutional.  The prior jurisprudence relating to public rights and ex parte reexamination appears to favor the USPTO’s position, and courts are generally reluctant to declare duly enacted legislation unconstitutional.  Even so, it will be interesting to see how the district court rules on the issue at the summary judgment stage.

The case is J. Carl Cooper and eCharge Licensing, LLC v. Michelle K. Lee and the United States Patent and Trademark Office, No. 1:14-cv-672 in the United States District Court for the Eastern District of Virginia.