Do We Need a Small Claims Court for Patent Disputes?

On May 3, 2022, the Administrative Conference of the United States ("ACUS") announced that the United States Patent and Trademark Office ("USPTO") had engaged ACUS to conduct an independent study into the issues associated with, and the design of, a small claims patent court. 87 Fed. Reg. 26183 (May 3, 2022) The ACUS invites public comments on the study, which are due by July 5, 2022.

The concept of a small claims patent court is not new. This new study, however, suggests ongoing or renewed interest in such a court. Since at least the late 1980s, concerns have been raised that the cost of patent litigation in federal court "deters small- and medium-sized enterprises, including those owned by traditionally underrepresented groups, from seeking to enforce their patents." Indeed, the Department of Commerce investigated the possibility of a small claims patent court approximately 10 years ago. In 2012, then Director of the USPTO David Kappos issued a Federal Register notice seeking public comments on "whether the United States should develop a small claims proceeding for patent enforcement." 77 Fed. Reg. 74830 (Dec. 18, 2012)

The notice of this new study comes nearly a year after a bipartisan group of six senators sent a letter to the Commissioner for Patents, requesting that the USPTO engage ACUS for such a study. In that July 27, 2021 letter, Senators Christopher Coons (D-DE) John Cornyn III (R-TX) Thomas Cotton (R-AR) Mazie Hirono (D-HI) Patrick Leahy (D-VT) and Thomas Tillis (R-NC) referenced the 2012 Federal Register notice and stated that the USPTO had "not followed up on that notice" and that a new study "is warranted to refocus on this important matter." The letter requested that the USPTO fund and engage the ACUS for the study and that the study be provided to the Senate Judiciary Committee no later than December 31, 2022.

The new Federal Register notice states that the USPTO "engaged ACUS to conduct an independent survey and analysis of issues associated with and options to consider in designing a small claims patent court." The notice specifically requests public comment on the following issues:

1. Whether there is need for a small claims patent court;

2. The policy and practical considerations in establishing a small claims patent court;

3. The institutional placement, structure, and internal organization of a potential small claims patent court, including whether it should be established within the Article III federal courts, as or within an Article I court, or as an administrative tribunal;

4. The selection, appointment, management, and oversight of officials who preside over proceedings in a potential small claims patent court;

5. The subject-matter jurisdiction of a potential small claims patent court, whether participation in such proceedings would be mandatory or voluntary, and whether parties can remove cases to another administrative tribunal or federal court;

6. The procedures and rules of practice for a potential small claims patent court, including, as relevant, pleadings, discovery, and alternative dispute resolution;

7. The remedies that a potential small claims patent court would be able to provide;

8. The legal effect of decisions of a potential small claims patent court; and

9. Opportunities for administrative and/or judicial review of small claims patent court decisions.

As the enumerated issues suggest, there is a broad range of possibilities for how a small claims patent court could be structured and implemented. Whether such a court comes to fruition, and how it is structured, will impact patent holders and accused infringers alike.