The Constitutionality of Administrative Patent Cancellation

Prepared for the Boston University JSTL Symposium “Bridging the Gap between the Federal Courts and the USPTO,” this article evaluates claims that adjudication of the validity of issued patents in the United States Patent and Trademark Office is unconstitutional. The constitutional challenges result from the expansion of administrative options to challenge and cancel issued patents in the America Invents Act of 2011 and have received favorable reception within the patent community and garnered at least some attention from the Federal Circuit and Supreme Court. This positive reception is surprising because the constitutional challenges are legally quite weak. Although the challenges contend that Article III prohibits administrative adjudication of issued patents, the Patent Office review procedures involve limited review of federal statutory rights in a specialized area of law within the Patent Office’s expertise and in furtherance of the Patent Office’s core regulatory objective in evaluating and issuing patent claims. Supreme Court precedent indicates that Congress can use its Article I powers to opt for administrative adjudication in such circumstances without any Article III barriers. This is confirmed by the fact that Article III courts retain significant power over patent validity issues, both on direct review from the Patent Office cancellation proceedings and through the parallel track for challenging patent validity in district court litigation. Nor is a challenge based on the Seventh Amendment right to a jury trial likely to succeed, as the Supreme Court has indicated that in the administrative context the Seventh Amendment issue is subsumed by the Article III analysis. The Takings and IP Clauses also would not bar Patent Office adjudication and cancellation of issued patents (and have only been raised in passing). In sum, because the Patent Office review procedures for issued patents are well within the mainstream of modern administrative adjudication, a finding that administrative patent cancellation is unconstitutional would not just undo Congress’s policy choices for the patent system but would also threaten large swaths of the administrative state.