Federal Circuit, December 2, 2015, 2015-1091

Author: Doug Agoposowicz

In MCM, the Federal Circuit held that inter partes review proceedings do not violate Article III or the Seventh Amendment of the U.S. Constitution.

Appellant MCM owns U.S. Patent No. 7,162,549 ("the '549 patent"), directed towards error correction for flash memory.  In 2013, Appellee Hewlett-Packard petitioned for inter partes review of the '549 patent, asserting that several of the claims were invalid based on five prior art references.

In response, MCM asserted, among other defenses, that the IPR proceedings violate Article III and the 7th Amendment of the U.S. Constitution because MCM has a Constitutional right to have validity determined by an Article III Court with a jury trial.

The PTAB held that the claims of the '549 patent were invalid based on obviousness, and further held that the IPR proceedings do not violate Article III or the 7th Amendment of the U.S. Constitution, relying on Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985) (holding that reexaminations do not violate Article III or the 7th Amendment).

On appeal, the Federal Circuit affirmed the PTAB, holding that the IPR proceedings do not violate Article III of the U.S. Constitution.  The Federal Circuit relied on the judicially created "public rights doctrine", which states that Congress has the power to delegate disputes over "public rights" to non -Article III courts.  The Court noted that a "public right" is defined as a right which is "integrally related to particular federal government action", Stern v. Marshall, 131 S. Ct. 2594 (2011), and since the patent right derives from an extensive federal regulatory scheme, the Federal Circuit held that the IPR proceedings are "public rights", and thus, are covered by the "public rights doctrine". 

The Federal Circuit further held that the IPR proceedings do not violate the 7th Amendment of the U.S. Constitution right to trial by jury, citing to Curtis v. Loether, 415 U.S. 189 (1974), which upheld "congressional power to entrust enforcement of statutory rights to an administrative process or specialized court of equity free from the structures of the Seventh Amendment".

Lastly, the Federal Circuit affirmed the PTAB’s determination of obviousness of the challenged claims, finding the PTAB’s factual findings supported by substantial evidence.