Zerify Inc (ZRFY)

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The Supreme Court acknowledged the Patent Office rules differ from those in court, but said the agency had taken a reasonable approach.
The Supreme Court on Monday blessed new government procedures for challenging patents, a win for companies that argued the fledgling process was a better, more cost-effective way to weed weak patents out of the system.

The ruling is a blow for companies that favor strong patent protections, such as those in the pharmaceutical and biotechnology industry. It is a boost for technology companies like Alphabet Inc.’s Google GOOG, +0.72% and Apple Inc. AAPL, +0.58% that have taken advantage of new procedures at the U.S. Patent and Trademark Office to challenge the validity of patents they believed made weak claims to new innovations.

The case focused on Patent Office regulations that implemented part of a 2011 congressional overhaul of the nation’s patent system. Many supporters of the law argued there were too many questionable patents in the U.S. and it was too slow and expensive to challenge them in court.

The 2011 law created quicker and cheaper procedures for contesting patents in front of the Patent Office instead of in front of a federal judge. But some argued the procedures overcompensated and made patents too vulnerable. That is because the Patent Office adopted challenger-friendly legal standards that were different than those used in courts.

Justice Stephen Breyer, writing the court’s opinion, said the Patent Office approach “helps to protect the public” by preventing individuals and companies from claiming overly broad patents.