The US Supreme Court will soon weigh the constitutionality of "inter partes reviews," a procedure that has been hailed by many in the tech sector as one of the most effective ways of weeding out bad patents.

The Supreme Court has often overturned Federal Circuit rulings in recent years, and that pattern has generally led to rulings that are praised by opponents of so-called "patent trolls," a colloquial term for non-practicing entities—the licensing shops that file the majority of patent lawsuits. But if the Supreme Court continues that pattern in one of its next cases, it could actually result in the wholesale elimination of one of the most powerful tools for fighting patent trolls.

On Monday, the high court granted a petition to hear Oil States Energy Services v. Greene's Energy Group, which directly challenges the legality of inter partes reviews, often abbreviated as IPRs. Boiled down, an IPR petition is a request for the US Patent and Trademark Office to reconsider whether it should have granted a certain patent in the first place. If the USPTO takes up an IPR petition, the result is a kind of "litigation-light," with briefing by lawyers and a short trial-like procedure at the USPTO. The IPR process was created by the 2011 America Invents Act, and the reviews got underway in 2012.

IPRs follow a process that is substantially faster, and a whole lot cheaper, than trying to invalidate a patent in district court.

Statistics for the first few years show that IPRs have been effective. According to statistics compiled by Unified Patents, a defensive patent group that files IPRs on behalf of its member companies, 73.8 percent of IPRs that were instituted by the Patent Trials and Appeals Board—more than 1,200 procedures in all—result in a cancellation of all claims. Meanwhile, 13.4 percent result in a cancellation of some claims, while just 12.8 percent of IPRs result in the patents being fully upheld.

When it passed, the America Invents Act was considered too tepid by many advocates of patent reform, who were hoping for new rules that would put a stop to spurious patent lawsuits brought by non-practicing entities. But together with the US Supreme Court's 2014 Alice Corp. decision, IPRs turned out to have a huge effect on the landscape of patent trolling.

The main effect is that IPRs can often be completed for low-six-figure sums, as opposed to the millions of dollars required to take a patent case through trial. Even winning at an earlier stage of a case could easily cost several hundred thousand dollars. IPRs have dramatically lowered the costs of fighting patent-holding entities, and the Electronic Frontier Foundation was even able to mount an IPR to challenge a so-called "podcasting" patent with a simple online fundraiser that asked for $30,000 (but got far more).

IPRs have not, and likely cannot, solve the problem of patent trolls that thrive by seeking nuisance settlements from small businesses for five-figure sums. But for companies with some resources, the IPR process has dramatically lowered the cost of standing up and fighting back.

To take a recent example, Cloudflare retaliated against one firm it branded a "patent troll" by crowd-sourcing prior art and announcing it would seek to invalidate all of the firm's patents. That strategy would have been utterly impossible without IPRs. The review process has made the kind of big six-figure settlements that once routinely lined the coffers of patent licensing firms increasingly rare.

The success of the IPR process has also made it a target for companies and individuals that profit from patent licensing and are lobbying to roll back or limit the process. Tech sector and pro-reform lobbyists, meanwhile, have made defending IPRs a cornerstone cause.

Patents: Private property or “public regulation?”

While the majority of patent cases involve software and high-tech hardware, there are a few other industries that see pretty active patent litigation between competing companies, and that includes the oil and gas sector.

Oil States Energy Services owns US Patent No. 6,179,053, which describes a way of locking in place a "mandrel," or protective tube, during hydraulic fracturing (or "fracking"). The named inventor is Murray Dallas, an employee of Stinger Wellhead Protection, which later became a subsidiary of Oil States.

In 2012, Oil States filed a lawsuit against a competitor, Greene's Energy Group, in the Eastern District of Texas. A year into the litigation, Greene's asked the USPTO for an inter partes review, which was granted. The Patent Trial and Appeal Board ultimately ruled that the '053 patent claims were old hat, because they had all been encompassed by an earlier Canadian patent application.

Since then, Oil States has been arguing that the PTAB decision was a mistake. The company appealed to the Federal Circuit, which hears all patent appeals. But a panel of judges on that appeals court denied Oil States' appeal without even a full written opinion.

Oil States petitioned (PDF) the Supreme Court in November, arguing that the whole IPR process violates the US Constitution.

"Suits to invalidate patents must be tried before a jury in an Article III forum, not in an agency proceeding," wrote Oil States lawyers, referring to the section of the US Constitution describing the judicial branch.

The brief argues that patent infringement cases have been heard in courts of law in England, and in front of juries, going back some 200 years before the founding of the American republic.

"Disregarding this long line of precedent, inter partes review takes a patent infringement claim out of the jury's hands and entrusts it to bureaucrats," claims Oil States. The company views patents as "a property right, complete with the most important characteristic of private ownership—the right of exclusion."

Since patents are private property, and not a "public regulatory scheme," they can't be taken away by a government agency, argues Oil States.

In opposition, Greene's stated (PDF) that the Federal Circuit has found that neither Article III, nor the Seventh Amendment's right to a jury trial, renders the IPR process unconstitutional, and "further review is not warranted."

The Department of Justice also filed a brief (PDF) suggesting that the Supreme Court skip the case, arguing that Oil States' "challenges lack merit and do not raise any question warranting this Court's review."

"Should the Supreme Court find IPRs unconstitutional, we believe that non-practicing entity (NPE) activity will surge," said Kevin Jakel, CEO of Unified Patents. "The cost of litigation and NPE settlements will also rise without the PTAB to resolve the validity issues quickly and cost effectively."