The patent owner MCM appealed the PTAB’s holding in an inter partes review proceeding that the claims of the patent were invalid as being obvious on three grounds.  First, MCM contends that the PTAB erred by instituting the IPR over MCM’s argument that the requestor HP was in privity with Pandigital whom MCM had sued more than one year earlier.  The PTAB held that HP was not in privity with Pandigital and the court held that, under 35 U.S.C. §314(d), review of the PTAB’s decision to initiate the IPR proceeding is forbidden. 

Second, MCM contends that the IPR proceedings are unconstitutional, because any action revoking a patent must be tried in an Article III court with the protections of the Seventh Amendment.  The court disagreed, holding that, based on analogous Supreme Court cases, patent reexamination and inter partes review proceedings are constitutional under Congress’ power to delegate disputes over public rights to non-Article III courts and that the Seventh Amendment is generally inapplicable in administrative proceedings where jury trials would be incompatible with administrative adjudication and would interfere with the agency’s role in the statutory scheme.  Third, MCM contends the PTAB’s obviousness decision was erroneous.  The court, however, held that substantial evidence supported the PTAB’s obviousness decision.

MCM Portfolio LLC v. Hewlett-Packard Co., Case No. 2015-1091 (December 2, 2015); Opinion by: Dyk, joined by Prost and Hughes; Appealed From: Patent Trial and Appeal Board.  Read the full opinion here.

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