The U.S. Supreme Court refused to question the legality of an administrative board that has invalidated hundreds of patents in a system that is dividing the technology and drug industries.
The justices turned away an appeal without comment from MCM Portfolio LLC, which said the board lacked the constitutional authority to throw out its patent on an adapter for transferring images from a digital-camera flash-memory card to a computer. The rebuff is a victory for HP Inc., which had been sued by MCM for infringing the patent.
The Patent Trial and Appeal Board has become a multibillion-dollar tool for companies susceptible to patent lawsuits. Apple Inc., Google Inc. and Samsung Electronics Co. have all benefited from recent decisions invalidating patents held by lesser-known tech companies.
The system has drawn opposition from the biotechnology and brand-name drug industries. The board recently threw out three patents that had protected Teva Pharmaceutical Industries Ltd.’s Copaxone multiple sclerosis drug from competition.
Under the system, set up in 2011 by Congress, competitors can ask the board to take another look at patents after they’ve been issued. The administration said a federal appeals court correctly concluded that patents are “public rights” conferred by Congress. The Supreme Court said in 1977 that Congress could authorize an administrative agency to referee disputes over at least some types of public rights.
MCM argued that the Constitution requires patent challenges to be filed in federal court, with the right to a jury trial. The appeal had support from mobile technology company Interdigital Inc. and technology licensing company Tessera Technologies Inc.
The Obama administration and HP urged the Supreme Court not to hear the appeal.
The Supreme Court earlier this year upheld the standard used by the board in assessing the validity of patents.
The case is MCM v. Hewlett-Packard, 15-1330.