Patents

Oil States v. Greene's Energy: Why the Supreme Court Let the PTAB Cancel Patents

The Supreme Court held that inter partes review does not violate Article III or the Seventh Amendment because a patent is a public right the agency may reconsider.

February 10, 2025
The marble facade and columns of the United States Supreme Court building
The Supreme Court located the patent grant within the public-rights doctrine, letting an executive agency cancel what it had issued. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712 (U.S. Apr. 24, 2018), is the decision that secured the Patent Trial and Appeal Board’s place in the patent system. By a 6-3 vote, in an opinion by Justice Thomas, the Supreme Court held that inter partes review (IPR) — the adversarial administrative proceeding by which the U.S. Patent and Trademark Office reconsiders and can cancel claims of a patent it previously granted — violates neither Article III nor the Seventh Amendment. The Court reasoned that the decision to grant a patent is a matter involving public rights, and that IPR is simply “a second look at an earlier administrative grant.” With that holding, the most existential challenge to the America Invents Act’s centerpiece review mechanism failed, and the PTAB’s docket of thousands of petitions a year continued uninterrupted.

At a glance

  • Case: Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712
  • Court: Supreme Court of the United States
  • Decided: April 24, 2018
  • Vote: 6-3; majority by Justice Thomas; concurrence by Justice Breyer (joined by Justices Ginsburg and Sotomayor); dissent by Justice Gorsuch (joined by Chief Justice Roberts)
  • Mechanism at issue: Inter partes review under 35 U.S.C. §§ 311-319, conducted by the Patent Trial and Appeal Board
  • Constitutional provisions: Article III (judicial power) and the Seventh Amendment (right to a civil jury)
  • Holding: IPR falls within the public-rights doctrine and may be adjudicated outside an Article III court without a jury; the patent grant is a public franchise subject to the agency’s reconsideration
  • Limits the Court flagged: The opinion is narrow — it does not address retroactivity, due process, takings, or the Appointments Clause

The facts: a district-court win, then an agency reversal

Oil States Energy Services sued Greene’s Energy Group for infringing a patent on technology used in hydraulic fracturing — equipment that protects wellhead components during high-pressure operations. Greene’s Energy responded on two fronts. It defended in district court, and it petitioned the Patent Office for inter partes review of the same patent. The two tracks reached opposite conclusions on claim construction, but the agency track finished decisively: the Board instituted review and ultimately issued a final written decision concluding that the challenged claims were unpatentable.

Oil States appealed to the Federal Circuit, raising for the first time the argument that would carry the case to the Supreme Court — that Congress could not constitutionally hand the cancellation of an issued patent to an executive-branch tribunal. The Federal Circuit rejected the challenge, and the Supreme Court granted certiorari to resolve whether IPR was compatible with Article III and the Seventh Amendment.

The Article III question: public rights and the patent franchise

The structural objection was serious. Article III vests “the judicial Power” in courts whose judges enjoy life tenure and salary protection. Suits at common law that historically belonged in those courts cannot, the argument runs, be reassigned to officials who lack those protections. Oil States contended that a granted patent is a vested private property right, and that an action to cancel it — to undo a property interest — is the kind of dispute that must be resolved by an Article III judge, with the jury guaranteed by the Seventh Amendment.

The majority answered through the public-rights doctrine, the line of cases holding that Congress may assign the adjudication of certain matters to non-Article III tribunals when those matters “arise between the Government and others” and derive from a federal regulatory scheme. The decisive move was characterizing the patent grant itself. A patent, Justice Thomas wrote, is a “public franchise” — a specific grant of a right to exclude, conferred by the government under the patent statutes. Because the grant of a patent is a matter involving public rights, the reconsideration of that grant is too. IPR, the Court emphasized, “is simply a reconsideration of that grant,” conducted by “the same basic matter as the grant of a patent.” The agency that issues the franchise may take “a second look” at whether it should have issued in the first place.

The Court drew support from history. From the earliest days of the patent system, the political branches and the Privy Council in England had exercised authority to revoke improvidently granted patents. That tradition, the majority said, confirmed that adjudicating the validity of a patent grant has never been the exclusive province of the courts.

The Seventh Amendment and the limits of the holding

The Seventh Amendment argument collapsed once the Article III question was resolved. The Court has long held that when Congress properly assigns a matter to an administrative tribunal consistent with Article III, “the Seventh Amendment poses no independent bar to the adjudication of that action by a nonjury factfinder.” Because IPR could be heard outside an Article III court, no jury was constitutionally required.

What is most striking about Oil States is the breadth of what it refused to decide. The majority expressly cabined its holding. It did not address whether a patent owner could raise a due-process challenge, or whether the retroactive application of IPR to patents granted before the AIA might be unconstitutional, or whether cancellation could constitute a taking under the Fifth Amendment. The Court also flagged that its decision said nothing about the Appointments Clause status of the administrative patent judges who staff the Board — a question that would return three years later in United States v. Arthrex. The opinion is, in effect, a narrow ruling on a single structural theory, leaving a cluster of adjacent constitutional questions for another day.

Open questions

Oil States settled IPR’s basic legitimacy but seeded several disputes that continue to surface. The retroactivity question — whether subjecting pre-AIA patents to IPR upsets settled expectations — was left open and has been pressed in later litigation with limited success. The “public franchise” characterization sits uneasily with other doctrines that treat patents as property, including for takings and due-process purposes; the Court did not reconcile that tension. And by describing IPR as merely a “second look” at the original grant, the majority invited debate over how far the analogy stretches when the Board’s procedures, evidentiary standards, and adversarial posture differ markedly from initial examination. Justice Gorsuch’s dissent, joined by Chief Justice Roberts, warned that the decision let the government withdraw a property right through a process its original owners would not have recognized as adjudication — a critique that animates ongoing arguments about the proper scope of agency authority over issued patents.

Implications

  • The PTAB is here to stay. Oil States removed the threat that IPR could be invalidated wholesale, giving accused infringers a durable, lower-cost alternative to district-court validity litigation.
  • Patents are a “public franchise” for structural purposes. That framing shapes how courts analyze later constitutional challenges and signals skepticism toward treating issued patents as fully vested private property in the Article III context.
  • The narrowness is the strategy. By reserving due process, takings, retroactivity, and Appointments Clause issues, the Court left room for targeted challenges — and Arthrex later exploited one of them.
  • Forum and timing decisions matter more than ever. With IPR constitutionally secure, parallel proceedings in district court and at the Board remain a central strategic battleground, including over stays and estoppel.
  • Patent valuation absorbs administrative risk. Because any issued claim remains subject to agency reconsideration, the cancellation risk is now a permanent feature of how patents are licensed, litigated, and priced.

Frequently asked questions

Did Oil States make all inter partes review constitutional in every respect? No. The Court upheld IPR only against the specific Article III and Seventh Amendment challenges before it. It expressly declined to decide due-process, takings, retroactivity, and Appointments Clause questions, several of which have been litigated separately.

Why does calling a patent a “public franchise” matter? The label placed the patent grant within the public-rights doctrine, which allows Congress to assign certain matters to non-Article III tribunals. If a patent had instead been treated as a purely private property right, the case for requiring an Article III court and a jury to cancel it would have been far stronger.

How did Oil States relate to the same-day decision in SAS Institute v. Iancu? The Court decided both on April 24, 2018. Oil States confirmed that IPR is constitutional; SAS Institute addressed how the Board must conduct it, holding that an instituted review must reach every claim the petitioner challenged. Together they secured IPR’s existence and reshaped its mechanics.

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