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Western Group and Property Rights Expert Disappointed with Supreme Court Ruling

Apr 24, 2018 | by William Perry Pendley

DENVER, CO.  A western nonprofit, public-interest legal foundation with decades of experience defending private property rights and a renowned legal historian and property rights expert today expressed their disappointment with the failure of the Supreme Court of the United States to restore the full constitutional rights of private property owners by ruling those rights can be invalidated only by an Article III court, that is, a federal district court, after a trial by jury.  Mountain States Legal Foundation (MSLF) and James W. Ely, Jr., a professor of law at Vanderbilt University, had filed a friend of the court brief in support of Oil States Energy Services, LLC, a Texas company, that holds a patent that allows wellheads during oil and gas drilling operations to withstand the continuous pressure and abrasiveness of hydraulic fracturing fluid and, thus, protects them from severe damage, shut downs, and delays in energy production.  Despite a patent infringement lawsuit brought by the company and a ruling by a Texas federal district court in its favor, the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office instituted a parallel proceeding and invalidated the company’s patent.  MSLF and Professor Ely argue that only an Article III court, after a trial by jury, can invalidate the company’s patent.

“We are gravely disappointed at the blow this ruling strikes against the right to trial by jury,” said William Perry Pendley, president of MSLF.  “We believe Justice Gorsuch’s dissent got it right and are disappointed that only the Chief Justice joined him.”

In 2012, Oil States filed an infringement suit against Greene’s Energy Group, LLC in Texas federal district court alleging that Greene’s Energy was infringing on its patent.  Green’s Energy countered that the patent was invalid.  Subsequently, Greene’s Energy petitioned the Patent and Trademark Office’s Patent Trial and Appeal Board to invalidate, or cancel, the patent, a process that the Board began on June 10, 2014.

On June 23, 2014, the Texas federal district court ruled that “the claims … [in patent] easily inform those skilled in the art about the scope of the invention with reasonable certainty” and, thus, “the claims [by Greene’s Energy] are not invalid.”  Nonetheless, the Board continued to conduct its own review.  On May 1, 2015, the Board concluded, “by a preponderance of the evidence,” that the patent is “unpatentable” and should never have been issued.

On June 12, 2015, Oil States appealed the Board’s decision to the U.S. Court of Appeals for the Federal Circuit, arguing, in part, that the Board’s decision must be set aside because the Constitution requires patent invalidation to be determined by a jury in an Article III court.  On May 4, 2016, a panel of the Federal Circuit affirmed the Board’s decision without issuing an opinion.  On November 23, 2016, Oil States filed a timely petition for writ of certiorari.  On June 12, 2017, the Supreme Court granted the petition.

Mountain States Legal Foundation, created in 1977, is a nonprofit, public-interest legal foundation dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system.  Its offices are in suburban Denver, Colorado.

For more information:  Oil States Energy Services LLC v. Greene’s Energy Group LLC

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