Oil States v. Greene’s [SCOTUSbrief]
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Oil States v. Greene’s [SCOTUSbrief]


The parties are two energy companies, Oil
States Energy Services, LLC and Greene’s Energy Group, LLC. The petitioner on the case, Oil States Energy
Services, is a company that makes fracking equipment. Oil States sued Greene’s for infringing two
of Oil States patents. Greene’s then asked the Patent Trial and Appeal
Board to review whether the patents were properly issued, and whether the patents were valid. The PTAB said the patents were unpatentable. Oil States versus Greene’s raises two interesting
issues. The first issue is Article III Separation
of Powers. And Article III guarantees that for matters
dealing with property, for matters dealing with private rights, you need a judiciary
that’s independent and accountable to no one but the rule of law. Because the PTAB is a creation of Congress
and it’s an animal of the Executive Branch, PTAB judges are selected by the director of
the patent office, who’s a political appointee. And the composition of panels at the PTAB
can be adjusted to promote, or to put the thumb on the scale. So it raises a host of interesting Article
III Separation of Powers issues. What must only be done at a federal court? What can an administrative agency do? The second related issue that it raises is
the question of whether a patent is a public right or private property. If a patent is a public right, like a Taxi
cab medallion, or like some other business license that’s given by the government, then
it’s perfectly reasonable for an administrative agency to have its own body that reviews and
potentially revokes issued patents. Because a patent does not exist but for the
United States Patent and Trademark Office, the Patent and Trademark Office has the right
to revoke what is issued. If a patent is found to be private property,
you can not have the Patent Trial and Appeal Board deciding whether a patent is invalid. Because if something’s private property, the
answer will likely be that only an Article III court can take that property. Greens’ argument is that a patent is a public
right. Article 1, Section 8 of the Constitution provides
that Congress may pass laws that are intended to promote innovation to promote the useful
arts. But, it’s not a right that must exist, it’s
something Congress may do. And the way Congress implemented Article I,
Section 8 was through passing the Patent Act, which empowered the United States Patent and
Trademark Office to review and grant patents. The way Oil States has presented this issue
is as one of the Separation of Powers. There’s a reason why there are three separate
and independent branches of government. The judiciary exists so disputes over property
can be adjudicated in an impartial and unbiased manner. Oil States argues that patents are private
property rights. Because a patent is a private property right,
disputes can only occur in a federal court and must be heard by a jury. Although these patents deal with fracking
technology, the implications of this case will span wide sectors of the economy, from
pharmaceuticals, to software, to automotive components, to medical devices, to anything
that is protected by a patent. And when the administrative state growing
in power and importance, it’s a timely question for the Supreme Court to consider.

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