Argument Preview

A constitutional question will be argued next week in a patent case entitled Evolved Wireless LLC v. ZTE (USA) Inc. This case presents, however, a total of three issues:  (1) “Whether the Board erred in concluding the patent claims at issue are unpatentable, by failing to properly apply its own adopted claim construction”; (2) “Whether the Board erred by refusing to consider the declaration of Evolved’s expert on the sole ground that it did not include a statement referring to penalty of perjury”; and (3) “Whether the proceedings violated Evolved’s Fifth Amendment Constitutional rights.”

Evolved Wireless LLC’s opening brief argues that “Petitioners presented no evidence, and the Board identified no teaching, of prior art” disclosing a particular claim limitation. Evolved further argues that “the Board did not require Petitioners to follow the proper procedure, and thus did not give Evolved an opportunity to submit corrected declarations containing the inadvertently omitted ‘under penalty of perjury’ language from its expert’s declarations.” Finally, Evolved contends that “[t]he IPR procedure was unconstitutionally applied retroactively to take Evolved’s property without due process or just compensation in violation of the Fifth Amendment of the U.S. Constitution.”

Three response briefs were filed.

The United States intervened. In its response brief, it argues that “Evolved Wireless has forfeited its constitutional challenge by failing to press it before the Board” and, anyway, that “[a]pplying the AIA’s inter partes review provisions to patents that had issued before Congress enacted the AIA comports with the Constitution.” “As an initial matter,” argues the government, “conducting inter partes review of a pre-AIA patent is not a retroactive application of the law because it does not impose new legal consequences on pre-AIA conduct.” Even if this argument is incorrect, however, the government contends that “inter partes review would easily comport with due process.” Finally, the United States takes the position that “applying inter partes review to patents issued before the AIA’s enactment does not effect a Fifth Amendment taking without just compensation.”

In its response brief, ZTE argues that the Board’s decision is “a thorough and well-reasoned final written decision supported by substantial evidence ” ZTE further argues that “the Board properly exercised its discretion in declining to give any weight to Evolved’s defective, unsworn expert declaration.” ZTE closes by arguing that “the Court should reject Evolved’s Constitutional challenges to the inter partes review proceeding [because] the Board did not take away anything to which Evolved was ever entitled, nor did the Board retroactively deny any due process rights.”

In their response brief, Apple and Microsoft argue that “substantial evidence supports the Board’s decision” regarding the prior art, “[t]he Board did not abuse its discretion in giving no weight to Evolved’s expert,” and “IPR proceedings are neither a taking nor a retroactive law that violates due process.”

Evolved’s reply brief takes the stance that “the evidence cited by the Appellees and the Board fails to disclose [the] novel aspects of the claims.” It goes on to state that “[the] unfair disregard of Evolved’s evidence simply illustrates part of the Constitutional problems with retroactively depriving patentees of due process protections of Article II Court proceedings for adversarial disputes regarding patent validity.”

The constitutional issues raised in this case are important ones, and their resolution may have broad consequences for many patents that have been subjected to inter partes review proceedings. Given the Supreme Court’s statement in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC that its “decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause,” these types of challenges should not be surprising. Moreover, the Federal Circuit will no doubt be deciding these issues with an eye toward potential future Supreme Court review in this or another case.