Arthrex applies to: “All agency actions rendered by those [unconstitutionally appointed] APJs”

Virnetx Inc. v. Cisco Systems and USPTO (intervenor) (Fed. Cir. 2020) (precedential rehearing denial)

In Virnetx, the Federal Circuit issued a non-precedential decision remanding and vacating the PTO decision in light of Arthrex (unconstitutionally appointed PTAB judges cannot cancel a patent).  One difference between this case and artrex is that the Virnetx patents were cancelled via pre-AIA inter partes reexamination rather than inter partes review.  The court found the difference meaningless:

Although this appeal arises out of an inter partes reexamination and not an inter partes review as was at issue in Arthrex, we see no material difference in the relevant analysis. We therefore grant VirnetX’s motion.

Slip Op. (Opinion by Judge O’Malley and joined by Judges Moore and Chen). [VirnetxArthrexI].

The PTO immediately filed a petition for panel rehearing and rehearing en banc.  Those petitions have now been denied. However, the original panel has expanded upon its original opinion in with further justification.

The PTO’s particular contention goes as follows: PTAB judges may be acting as principal officers when ruling over AIA trials, but they are not so high-and-mighty when hearing an inter partes reexamination appeal (or presumably an ex parte appeal from a patent applicant). In response, the Federal Circuit explained that an individual’s Appointment status is associated with the whole person and is related to “all of that appointee’s duties.” See Freytag v. Commissioner of Internal Revenue, 501 U.S. 868 (1991).

The court thus concludes:

[I]f these APJs are unconstitutionally appointed principal officers because of their inter partes review duties in light of Arthrex, it would appear that under Freytag vacatur would be appropriate for all agency actions rendered by those APJs regardless of the specific type of
review proceeding on appeal.

Rehearing Denial. See also Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019) en banc denied in Arthrex, Inc. v. Smith & Nephew, Inc., 953 F.3d 760 (Fed. Cir. 2020).  Multiple petitions for writ of certiorari are likely coming soon in Arthrex.

Of some interest, the PTO requested that the mandate from that case be delayed, but that motion was denied by the panel. Fed. R. App. P. 41(d)(1).  The PTO had hoped to delay holding remand IPR trials in Arthrex and other similarly situated cases.  In its denial of the stay-of-mandate, the Federal Circuit explained its position:

The delay contemplated by the United States could cause harm. All the cases in this court that are in posture similar to that of Arthrex involve patent claims deemed unpatentable by the Board. The delay contemplated by the United States would cause the continuation of stays in those proceedings and in related proceedings in district courts. Those stays have the effect of leaving the patent claims in force and also could cause the continued obligation to pay fees under license agreements that (as is common) require payment until a final adjudication of invalidity. At the same time, the limited remand proceedings required by the Arthrex decision (in no more than 81 cases) do not seem especially burdensome, given the resources of the Board, which has more than 250 members. . . . We conclude that the public interest under these circumstances favors denying the stay.

ArthrexStayDenial (March 30, 2020) Note here that, the PTAB count is “more than 100 decisions” that have been vacated under Arthrex “and more such Orders are expected.” In a General Order, Chief Administrative Patent Judge Scott Boalick has now ordered “all such cases in administrative abeyance until the Supreme Court acts on a petition for certiorari or the time for filing such petitions expires.”  This General Order from the PTAB appears contrary to the spirit of the the above-quoted order from the Federal Circuit. I expect at least one of the 100+ patentees will attempt an emergency appeal of the general suspension of activity by the PTAB.

 

The Arthrex Decision and its Cure

by Dennis crouch

The Supreme Court should release its  Arthrex decision within the next 3-4 weeks on whether PTAB Judges were appointed in accordance with US Constitutional requirements. Officers of the United States must be nominated by the President and confirmed by the Senate; inferior Officers may be appointed by a head-of-department if authorized by Congress.  US Const. Art. II, Sec. 2,  Cl. 2. PTAB Judges were implicitly deemed inferior officers by Congress and appointment authority given to the Secretary of Commerce.  However, in Arthrex, the Federal Circuit ruled that the Judges had significant independent authority and thus must be considered Principal Officers.  The case was argued to the Supreme Court on March 1, 2021 and the court is set to decide (1) whether the PTAB judges are Principal Officers; and (2) if so, what result?  The outcome has the potential to impact several thousand PTAB decisions — either by rendering them void or by confirming their validity.

The Cure: As part of its Arthrex decision, the Federal Circuit struck-out an employment protection provision as it applied to PTAB Judges; and then ruled that, without those employment protections that PTAB judges were reduced to inferior officers.  The court then ruled that its on-the-fly ointment applied cure to any post-Arthrex PTAB decision.

The Federal Circuit’s recent decision in Corephotonics, Ltd. v. Apple Inc. (Fed. Cir. May 20, 2021) offers an example of the cure.  [CorephotonicsDecision]. Timeline:

  • 2018, Apple filed an inter partes review petition to challenge Corephotonics’ U.S. Patent No. 9,538,152.
  • October 31, 2019, the Federal Circuit decided Arthrex and also issued its curative ruling.
  • Then, 32 days later (December 2, 2019), the PTAB issued its final written decision in Corephotonics–siding with Apple and finding the challenged claims obvious.

On appeal the Federal Circuit applied its precedent to hold that Arthrex cured the appointments problem for any PTAB determination issuing post-Arthrex.

Corephotonics made the clever argument that Arthrex did not actually apply to the lower courts until the mandate issued in the case.  In the Federal Circuit, the mandate typically issues 7-days after the time for filing of a petition-for-rehearing. Because a petition was filed in Arthrex, the mandate did not issue until 2020. On appeal, the Federal Circuit did not take the bait and instead found “no reason to depart from our holding in Caterpillar for purposes of resolving this appeal.”  In Caterpillar, the court did not address this particular mandate argument, but did uphold a PTAB decision issued immediately following Arthrex. See Caterpillar Paving Prods. Inc. v. Wirtgen Am., Inc., 957 F.3d 1342 (Fed. Cir. 2020).

On the merits, the Federal Circuit also affirmed — finding that substantial evidence supported the obviousness determination.  The parallel infringement action has been stayed awaiting outcome of the IPR. Corephotonics, Ltd. v. Apple, Inc., Docket No. 5:17-cv-06457 (N.D. Cal. Nov 06, 2017).

Arthrex Remands: Treat or Trick?

Guest post by Professor Andrew C. Michaels (University of Houston Law Center)

With Arthrex certiorari petitions hitting the Supreme Court over the past weeks, one issue that seems to be underappreciated is the judicial retroactivity question raised by Judge Dyk in his Bedgear concurrence, which was joined by Judge Newman.  It is fair to say that these two venerable judges don’t always agree, so on the rare occasion when they team up for a concurrence one might reasonably expect that they have a serious point.  They do, for the dozens of remands now stayed before the USPTO pending the petitions were unnecessary and at least mostly imprudent under the law of retroactivity as properly understood.  If the Supreme Court were to take up this issue, it would have an opportunity to eliminate this wasteful multiplication of administrative hearings, as well as to clarify retroactivity law.

The Supreme Court has stated: “The principle that statutes operate only prospectively, while judicial decisions operate retrospectively, is familiar to every law student.”  Rivers v. Roadway Express, Inc., 511 U.S. 298, 311-12 (1994).  But this fundamental principle was overlooked by the Federal Circuit in its Arthrex decision, where the court ruled that the relevant Administrative Patent Judges were “not constitutionally appointed at the time” they had previously issued final appealable decisions, despite the fact that the court at least purportedly cured the unconstitutionality with its as-applied severance of removal restrictions.  See Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1338-39 (Fed. Cir. Oct. 31 2019).

The Arthrex opinion’s notion that the APJs were not constitutional prior to the decision’s Halloween day release, but then spookily became constitutional as of that day, flies in the face of the Court’s basic retroactivity doctrine, under which the as-applied severance fix should have been considered retroactive.  The court’s decision to treat Halloween 2019 as the “effective date” of its as-applied severance was inappropriately more legislative than judicial in character.  See Paul J. Mishkin, Forward: The High Court, The Great Writ, and the Due Process of Time and Law, 79 Harv. L. Rev. 56, 65-66 (1965) (“the question of an effective date . . . smacks of the legislative process; for it is ordinarily taken for granted . . . that judicial decisions operate with inevitable retroactive effect”).

The Federal Circuit viewed remands as required by the Supreme Court decision in Lucia, despite the fact that in Lucia there was no judicial fix to make retroactive.  If there was a fix in Lucia it came from the agency after the relevant ALJ had heard the case, and was thus properly considered prospective only because the other branches presumptively act prospectively whereas the judiciary at least presumptively acts retroactively.  See Lucia v. SEC, 138 S. Ct. 2044, 2055 n.6 (2018); 783 Fed. Appx. 1029 (Fed. Cir. Nov. 7, 2019) (Dyk, J., concurring in the judgment, joined by Newman, J.).

The judicial retroactivity principal holds for statutory alterations and invalidations.  When a court invalidates a statute, courts generally should treat the invalid statute as though it never existed in the first place.  See Reynoldsville Casket Co. v. Hyde, 514 U.S. 749, 759-60 (1995) (Scalia, J., concurring) (“In fact, what a court does with regard to unconstitutional law is simply to ignore it.  It decides the case ‘disregarding the unconstitutional law,’ . . . because a law repugnant to the Constitution ‘is void, and is as no law.’”) (quoting Marbury v. Madison, 5 U.S. 137 (1803), and Ex parte Siebold, 100 U.S. 371, 376 (1880)).

Similarly, when a court interprets a statute, the newly announced statutory construction is properly considered to have been the law all along.  See, e.g., DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463, 469 (2015) (“judicial construction of a statute ordinarily applies retroactively”); Rivers, 511 U.S. at 312-13 (“A judicial construction of a statute is an authoritative statement of what the statute meant before as well as after the decision of the case giving rise to that construction.”).

Concurring in the court’s denial of rehearing en banc, Judge O’Malley appeared to suggest that judicial severance is an exception to these general retroactivity principals, claiming that the Court’s decision in Booker makes clear that judicial severance is “necessarily a prospective act.”  See Arthrex, 953 F.3d at 768 (citing United States v. Booker, 543 U.S. 220, 268 (2005)).    This assertion is contrary not only to retroactivity doctrine in general but also even to Booker itself, which in fact held that its judicial severance did have to be considered retroactive.  See Booker, 543 U.S. at 268 (“we must apply . . . our remedial interpretation of the Sentencing Act – to all cases on direct review”) (citing Reynoldsville, 514 U.S. at 752; Harper v. Virginia Dep’t of Taxation, 509 U.S. 86 (1993)).  Nothing in Booker carves out a judicial severance exception to foundational principles of judicial retroactivity.

The reason that a remand for rehearing was appropriate in Booker (despite the retroactivity of the severance) was that the prior statutory misrepresentation of law clearly made a difference, in that it led to Mr. Booker receiving a longer criminal sentence than he properly could have under the corrected statute.  See Booker, 543 U.S. at 227, 245-46.  Similarly in Harper, taxes had been collected under an invalid tax statute, so the Court remanded for state courts to consider refunding the taxes.  See Harper, 509 U.S. at 102.  In both of these cases, governmental action had been taken that adversely affected a party and could not have been taken under the law as correctly understood.  Retroactivity doctrine provides for discretion to remedy these situations when equities so dictate.  See, e.g., James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 543-44 (1992) (“nothing we say here precludes consideration of individual equities when deciding remedial issues in particular cases”).

The key difference though is that in Arthrex, the prior misrepresentation of law had no such effect.  There is no apparent reason to think that any of the remanded cases would have been decided differently if the relevant APJs had known that they were in fact removable at will, and any argument that actual harm is present would seem to be a tenuous.  Absent actual harm, a discretionary remand was at most prudent in the Arthrex case itself as an incentive creating reward for first winning the Appointments Clause challenge (and even that is questionable), but not in the dozens of other remanded matters.

Concurring in the denial of rehearing en banc, both Judge O’Malley and Judge Moore pointed to a government brief as having “rejected” Judge Dyk’s retroactivity argument.  See Arthrex, 953 F.3d at 764 and n.3, 767 (citing Supp. Br. of United States, Polaris v. Kingston, Nos. 2018-1768, -1831, at 13-14).  That brief asserts that the court’s as-applied severance was not “sufficient to eliminate the impact of the asserted constitutional violation on the original agency decision,” but tellingly provides no suggestion of what that impact might have been.  In any event, the requirement of at least presumptive judicial retroactivity is rooted in Article III and the Court’s jurisprudence, and cannot be overridden or waived by an executive branch brief.  See James B. Beam, 501 U.S. at 549 (Scalia, J., concurring in the judgment) (“‘the judicial Power of the United States’ . . . Art. III, § 1, must be deemed to be . . . the power to say what the law is . . . not the power to change it”).

Apart from the lack of even an assertion of any actual harm caused by the prior statutory mirage of removal restrictions, such harm is unlikely also because the Supreme Court has applied standing (specifically traceability) requirements rather loosely in the Appointments Clause context.  See Free Enterprise Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 511-12 n.12 (2010).  It is one thing to allow litigants to raise Appointments Clause challenges that make no likely difference to their case, but it is another to retrospectively vacate prior agency actions that were almost certainly unaffected by those issues, especially where doing so is not required by and in fact runs counter to the Court’s retroactivity jurisprudence.

Finally, concurring in the denial of rehearing en banc, Judge Moore downplayed the disruption of the unnecessary rehearings, stating that the Arthrex decision would result in at most eighty-one remands.  See Arthrex, 953 F.3d at 764 n.4.  Squaring this statement with the PTAB general order issued on the first of May staying over one-hundred remanded matters (and expecting more to come) pending certiorari petitions would seem to be more than trivial.  Regardless, even if the PTAB chooses not to reopen briefing or the record, a new hearing before a new panel of APJs plus a new final written decision subject to a new appeal, in each of the dozens of remanded matters, is not without significant expense, disruption, and waste.

More to the point though, the disruption is legally improper, as explained further in my forthcoming article, Retroactivity and Appointments, available here: http://ssrn.com/abstract=3650166

Constitutionality of Administrative Patent Judges

The Federal Circuit has issued two recent Arthrex-related orders of note.

In Arthrex, the Federal Circuit held that the appointment process for PTAB judges (Administrative Patent Judges) violates the Appointments Clause of Article II of the U.S. Constitution.  According to the court, these Judges are “principal officers” and thus must be appointed by the President of the United States (rather than merely the head of the Commerce Dep’t).  I explained in a prior post that the court also “issued a cy-près ruling in an attempt to limit the upset” caused by invalidating the appointments of all these judges.  “In particular, the court invalidated a portion of the statute that limited the PTO’s ability to remove APJs from the board. According to the court, that change was enough to reclassify the PTAB Judges as inferior officers that do not need presidential appointment.”  That decision is now up for en banc rehearing — with three separate petitions filed.

Principal Officers: Three En Banc Petitions in Arthrex v. Smith & Nephew

Impact on Ex Parte Examination: In the pending case of In re: Boloro Global Limited, Appeal No. 19-2349 (Fed. Cir. 2020), the Federal Circuit has ordered the USPTO to explain the impact of Arthrex on ex parte patent examination cases:

Within 14 days from the date of filing of this order, the Director [of the USPTO] is directed to submit a supplemental response, not to exceed 20 pages, addressing whether Arthrex should be extended to ex parte examination cases. Boloro’s reply to that supplemental response, which is not to exceed 10 pages, is due within seven days thereafter.

Order of February 5, 2020.

= = = = =

Polaris Innovations Ltd. v. Kingston Tech. Co., Inc., 2018-1831, 2020 WL 504974 (Fed. Cir. Jan. 31, 2020) is parallel to Arthrex and the Federal Circuit vacated the PTAB IPR decision and “remanded to the Board for proceedings consistent with this court’s decision in Arthrex.”  The interesting aspect of the decision the concurring opinion by Judge Hughes and joined by Judge Wallach.  The pair concluded that they were bound by the prior panel decision in Arthrex, but “disagree with the merits” of the holding.  The opinion explains (1) PTAB judges should be seen as inferior officers and (2) if principal officers, the Arthrex panel’s solution is highly questionable.

I believe that viewed in light of the Director’s significant control over the activities of the [PTAB] and Administrative Patent Judges, APJs are inferior officers already properly appointed by the Secretary of Commerce. But if APJs are properly considered principal officers, I have grave doubts about the remedy Arthrex applied to fix their unconstitutional appointment. In the face of an unconstitutional statute, our role is to determine whether severance of the unconstitutional portion would be consistent with Congress’s intent. Given the federal employment protections APJs and their predecessors have enjoyed for more than three decades, I find no legislative intent to divest APJs of their Title 5 removal protections to cure any alleged constitutional defect. … But, given the high standard for finding non-severability, I cannot say that the Arthrex panel’s remedy was improper.

Id.

Arthrex on Remand: Commissioner of Patents Drew Hirshfeld and the Problem of Shadow Acting Officials

Editors note – I invited Professor Nina Mendelson (University of Michigan Law School) to author a guest post after reading her 2020 Admin. Law Review article titled “The Permissibility of Acting Officials: May the President Work Around Senate Confirmation?”  The revived Arthrex case raises temporary appointments issues and asks whether Dir. Hirshfeld has the legal power to fulfill the expanded job as required by the Supreme Court’s decision. — Dennis Crouch

Guest post by Nina Mendelson,

Following one Supreme Court decision posing dangers for the integrity of all sorts of agency adjudication, the ongoing litigation in Arthrex v. Smith & Nephew, set for argument in the Federal Circuit next week on remand from the Court, may well spawn another ruling with important implications for the administrative state. That is the question of how much latitude agencies have to operate notwithstanding vacancies in principal officer positions. This post will cover the major statutory and constitutional questions raised in the case.

(1) The litigation background.

In Arthrex, a case arising out of the Patent Trial and Appeal Board’s invalidation of Arthrex’s patent claims, the Court’s majority found a constitutional violation in the statute’s allocation of inter partes review authority to the administrative patent judges (for the most part not-Senate-confirmed) who serve on PTAB, reasoning in part that, to assure political accountability, a Senate-confirmed principal officer must have final decision authority. A different coalition of Justices agreed on the remedy of severing the statutory review constraint on the PTAB’s inter partes review decisions. The Court figured this ruling would leave the Presidentially-appointed, Senate-confirmed US Patent and Trademark Office (“USPTO”) Director with full review authority in those cases.  (My colleague Rebecca Eisenberg and I have criticized United States v. Arthrex and its implications over at the Notice and Comment blog.)

Problem not solved, unfortunately.  Along with many other positions across the government requiring Senate confirmation, the USPTO Director post has been vacant since President Biden’s inauguration, now 14 months ago. Recent years have seen substantial delays in both presidential appointment and Senate confirmation of top officials, with plenty of blame to go around for widespread vacancies.

President Biden finally nominated Kathi Vidal as the next USPTO Director on January 13, 2022, and her confirmation is pending in the Senate. Meanwhile, Commissioner of Patents Drew Hirshfeld, appointed by the Secretary of Commerce and not Senate-confirmed, is presently claiming the office’s authority pursuant to a 2016 document executed by the then-USPTO Director Michelle Lee. The document, relying on the Director’s general management supervision authority, purports to grant the Commissioner of Patents the authority to carry out the “non-exclusive functions and duties” of the USPTO Director if both the Director and Deputy Director posts are vacant. On the agency’s website, Hirshfeld is not described as “acting USPTO Director,” but instead as “performing the functions and duties of the . . . Director.” In that capacity, Hirshfeld denied review of the PTAB decision invalidating Arthrex’s patent claims on October 15, 2021.

The parties have asked the Federal Circuit to address whether Hirshfeld’s claim to act based on the delegation document violates the main statute authorizing the selection and service of acting officials, which is the Federal Vacancies Reform Act (“FVRA”) of 1998, or the Appointments Clause. A lot turns on this issue, because, as I and others have written elsewhere, this tactic has been increasingly used to fill vacancies in Senate-confirmed posts without complying with the FVRA’s restrictions on “acting officials.” Officials have relied recently on delegations to claim the power to lead the Social Security Administration, Bureau of Land Management, and the Fish and Wildlife Service, not to mention to serve as the Deputy Director of Homeland Security. The result is a significant corps of shadow acting officials who use a title something like Hirshfeld’s:  not, “Acting Director” or “Acting Secretary,” say, but instead, “Performing the Duties and Functions of the [USPTO] Director.” Perhaps unlike Hirshfeld, these officials may have little experience and may claim the ability to serve long past the FVRA’s time limits. Professors Jody Freeman and Sharon Jacobs have characterized this practice as among those making agency personnel overly vulnerable to inappropriate Presidential staffing decisions. The Federal Circuit has an unusual opportunity to assess its legality.

(2) The statutory issue.

Under the FVRA, the most recent iteration of the federal vacancies law first enacted in 1868, Congress carefully delimited who can serve as an “acting officer,” and for how long, when a Presidentially-appointed, Senate-confirmed (“PAS”) post is vacant. Appointments and confirmation take time under the best of circumstances, and Presidents need some ability to ensure the government can continue to operate. The FVRA authorizes acting service in a vacant PAS post by a “first assistant” or else a Presidentially-selected senior agency official (GS-15 level or the equivalent) or other official Senate-confirmed for a different post. The FVRA allows an acting official to serve for 210 days, extended to 300 days after a President’s first inauguration (or while a nomination is pending in the Senate and in some other circumstances).  But Hirshfeld is not qualified to “act” under these categories. He is not a “first assistant.” And although he likely was eligible to act under the FVRA as a senior agency official, the President did not select him.

Does the 2016 USPTO document authorize Hirshfeld to act even if the FVRA does not?  The FVRA’s main text suggests it cannot, because the statute’s “exclusivity provision” states that the statute is the “exclusive means for temporarily authorizing an acting official,” except for another statute “expressly” authorizing an acting official. The exclusivity provision specifically bars reliance on a statute “providing general authority” to an agency head to “delegate” or “reassign” duties. The FVRA’s legislative context also supports the conclusion that the delegation strategy is impermissible. At the time Congress took up the vacancies law for reform, Clinton Administration Attorney General Janet Reno had invoked the Justice Department’s organic statute to delegate the responsibilities of the Solicitor General and multiple Assistant Attorneys General, offices requiring Senate confirmation, to individuals whom the Senate had declined to confirm. That raised Congress’s ire. Besides the FVRA’s “exclusivity” provision discussed above, legislative history included statements that the bill was meant to clarify that this sort of reliance on general management statutes was foreclosed, (see p. 17), and to “restore [the] constitutionally mandated procedures” of Presidential appointment and Senate confirmation (see p. 8).

Some have argued that other language in the FVRA nonetheless implicitly permits the delegation strategy.  The argument here is based on the FVRA’s complex enforcement provision, 5 U.S.C. 3348. Section 3348 specifies – bear with me here — that an action taken “in the performance of any function or duty” that is not in conformity with the FVRA “shall have no force or effect” and, furthermore, may not be ratified later by a legally serving officer. But Section 3348 then defines “function or duty” “[i]n this section” as “any function or duty” that is “established by statute [or regulation]”—and “required by statute [or regulation] to be performed by the applicable officer (and only that officer).” For such a function or duty, the enforcement provision specifies that if the office is vacant, “only the head of such Executive agency” may perform it. Defenders of the delegation strategy have pointed out that the “required . . . to be performed by the applicable officer (and only that officer)” language means that the enforcement provision voids only nondelegable functions when carried out by an improperly selected official. In spite of statutory text limiting the special “function or duty” definition to “this [enforcement] section” (rather than the entire Act), delegation defenders go on to argue that delegable functions should be understood as broadly exempt from all the FVRA’s requirements. On that view, responsibilities of a vacant Senate-confirmed office may be delegated to any official notwithstanding the Act, unless they are functions vested by a statute or regulation in a particular “officer (and only that officer).” The government persuaded the D.C. Circuit to accept this argument in one recent case, but in a different agency setting, a D.C. district judge saw things differently. The main selling point of such a reading is that it would surely increase the flexibility of agency heads to get the government’s work done notwithstanding confirmation delays. Its advocates also claim support in some legislative history statements (e.g., p. 18).

On the other hand, legitimating the delegation strategy could largely eliminate the FVRA’s application and undercut the President’s incentive to formally appoint PAS officials and seek Senate confirmation. This is because courts have repeatedly found subdelegation of agency functions to be presumptively permissible, whether by statute or regulation. Meanwhile, statutory and regulatory provisions that restrict such delegations by assigning duties exclusively to a particular officer are very rare. This reading also would make trivial the language in the Act’s exclusivity provision specifically barring reliance on general delegation statutes. It would render the FVRA ineffective to address the concerns that motivated the 1998 Congress–the Clinton Administration Justice Department’s use of delegations to empower unconfirmed officials to carry out PAS office responsibilities. Some might be concerned that the FVRA would not be enforceable against delegations of PAS office authority because its main enforcement provisions apply to nondelegable functions. But the FVRA’s enforcement provision is not the sole means of enforcing the FVRA. Courts can set aside any agency action taken by unauthorized officials as contrary to law under the Administrative Procedure Act, though the action could still be upheld if it were ratified later by a properly serving official, as one federal district judge has explained.

(Arthrex also argues that the Court’s holding requiring a principal officer decision renders the USPTO Director’s review authority statutorily nondelegable under the FVRA, so that Hirshfeld cannot receive the authority by delegation. This argument is unpersuasive, however, because the Arthrex holding establishing directorial review is rooted in the Appointments Clause. The opinion eliminates statutory language rather than interpreting it.)

In assessing the challenge to Commissioner Hirshfeld’s review of the PTAB’s invalidation of Arthrex’s patent claims, the Federal Circuit thus has an important opportunity to weigh in on whether agencies can legally delegate around vacant PAS offices, without concern for the qualifications of the official or the length of time they serve, or whether, instead, the FVRA precludes the creation of such shadow acting officials.

All this said, if the Senate confirms Kathi Vidal as USPTO Director soon, the Administration has a chance to make this statutory issue disappear. Because the statute and regulations do not appear to preclude a USPTO Director from revisiting review of a PTAB decision, Vidal could independently reconsider and potentially ratify the October 15, 2021, Hirshfeld decision rejecting directorial review of the PTAB decision invalidating Arthrex’s patents.

(3)  The constitutional issue.

Arthrex also challenges Hirshfeld’s service as an Appointments Clause violation. Despite that clause’s requirement of Presidential appointment and Senate confirmation for principal officers, constitutional doctrine has long tolerated at least some “acting” service by unconfirmed officials. Although the courts have yet to decide precisely how much service the Appointments Clause permits—or for how long—the likelihood that Arthrex will succeed in establishing a constitutional violation is small. The leading Supreme Court decision, United States v. Eaton, decided in 1898, approved as constitutional an unconfirmed acting general consul’s service in Bangkok. The consul general took a leave of absence for illness, and a missionary was designated to “act” by the consul general (with the State Department’s approval) for roughly ten months until a properly commissioned vice consul arrived. The Court upheld the acting officer’s service in the principal officer role as constitutional, noting that the officer was doing the work “under special and temporary conditions.” (The Court later described the acting official as a properly serving inferior officer.)

The precedential reach of Eaton today is unclear. Although the Court permitted ten months of acting service in Eaton, one might consider consular work comparatively lower impact and the need to cover the post significant, given the difficulties of travel from the U.S. to Bangkok at the time. Perhaps ten months of acting service would not be constitutionally tolerable for highly consequential domestic positions. But Justice Roberts, writing for a majority in National Labor Relations Board v. SW General, also commented that the FVRA represents “Congress . . . account[ing] for [the] reality” that a Senate-confirmed office’s responsibilities may go unperformed if a vacancy arises, thus giving the President “limited authority to appoint acting officials to temporarily perform” those responsibilities. (emphasis added). This was dicta, since the Court found that the service of the official in question violated the FVRA and did not reach the Appointments Clause issue. But the Court may have been hinting that the FVRA’s identification of eligible acting officials and minimum authorization of 210 days of service might be generally constitutionally acceptable. Justice Thomas, concurring, was the only Justice to argue that the official’s service of more than three years without Senate confirmation should be considered an Appointments Clause violation as well. Lower court rulings have offered little guidance, generally rejecting Appointments Clause challenges to acting officials, although one district court found an Appointments Clause violation in an unconfirmed official running the Bureau of Land Management for fourteen months pursuant to a delegation document that the court also found to be invalid.

In this case, Hirshfeld’s significant power to decide, unilaterally, the validity of patent claims challenged in inter partes review weighs in favor of a stricter reading of the Appointments Clause. Hirshfeld is not Senate-confirmed even in the Commissioner position. On the other hand, Hirshfeld is not exercising Cabinet-level powers, and President Biden submitted a nomination for Senate consideration less than a year after Hirshfeld began exercising the Director’s powers. Other officials serving based on delegation documents have served far longer than Hirshfeld. A ruling that Hirshfeld’s service violates the Appointments Clause could disrupt the operation of numerous agency offices, since many officials have served for similarly lengthy periods. I have argued that the Appointments Clause ought be interpreted to permit only very short periods of acting service for Cabinet-level principal officers and roughly four months for below-Cabinet-level principal officers such as the Director, far shorter than Hirshfeld’s service. But under current doctrine, as vague as it is, Arthrex’s Appointments Clause argument looks to be a long shot. If Kathi Vidal is confirmed and undertakes an independent review of the PTAB’s decision on the Arthrex patent claims, that may obviate the need to address the Appointments Clause issue altogether.

Otherwise, however, the Arthrex litigation is one of the rare cases in which a court may have the opportunity to address the legality of the in-the-weeds strategy of delegating powers around vacant PAS offices. To make the FVRA effective and to encourage the President’s proper use of the confirmation process, the Federal Circuit should interpret the FVRA to prohibit the practice.

Nina A. Mendelson is the Joseph L. Sax Collegiate Professor of Law at the University of Michigan Law School. 

Does the Temporary PTO Director have Arthrex Authority?

 

Arthrex: Federal Circuit now Staying Cases Pending Supreme Court Resolution

Uniloc 2017 LLC v. Google LLC (Fed. Cir. 2020) (Appeal Nos. 19-2277 and 19-2307)

Conventional wisdom is now that the Supreme Court will grant certiorari in Arthrex on the questions of (1) whether a PTAB judge is a principal Officer under the U.S. Constitution and if so (2) what result?

In this pair of pending inter partes review appeals, the Federal circuit has agreed with the patentee that the proper course of action at this point is to wait for a resolution of Arthrex:

Uniloc 2017 LLC moves to stay the above-captioned appeals pending final resolution of the Supreme Court’s review of Arthrex, Inc. v. Smith & Nephew, Inc, 941 F.3d 132 (Fed. Cir. 2019), reh’g denied 953, F.3d 760 (Fed. Cir. 2020). Google LLC opposes the motions. . . . The motions are granted.

UnilocStay.  These cases related to  U.S. Patent No. 7,853,000 and 7,804,948 (most of the claims found unpatentable by the PTAB).

The Federal Circuit is not the first-mover in this situation.  The cases remanded to the PTAB on Arthrex grounds have all been administratively stayed pending resolution of Arthrex.  And, the US Gov’t has filed an omnibus petition to the Supreme Court.  Uniloc explains in its stay petition:

Remand to the PTO may ultimately be unnecessary, and cases that have already been remanded are being held in abeyance pending the Supreme Court’s review of Arthrex. Accordingly, Uniloc requests that this appeal be stayed pending resolution of the Supreme Court’s review of Arthrex, including resolution of Petitions for Writ of Certiorari.

UnilocStayPetition.  Google opposed the stay — arguing, inter alia, that Uniloc had waived its Arthrex argument.

McClurg v. Kingsland, 42 U.S. 202 (1843) – Shop Rights and Retroactive Patent Statutes

by Dennis Crouch

In Arthrex, Inc. v. Smith & Nephew, Inc., 935 F.3d 1319 (Fed. Cir. 2019), the patentee (Arthrex) argued that the inter partes review is an unconstitutional due process violation when applied retroactively against pre-AIA patents. The Federal Circuit rejected the basis for the argument — Although Arthrex filed its patent applications prior to passage of the AIA, the patent issued afterward. In somewhat cryptic analysis the court worte:

That Arthrex filed its patent applications prior to passage of the AIA is immaterial. As the Supreme Court has explained, “the legal regime governing a particular patent ‘depend[s] on the law as it stood at the emanation of the patent, together with such changes as have since been made.’” Eldred v. Ashcroft, 537 U.S. 186, 203 (2003) (quoting McClurg v. Kingsland, 42 U.S. 202, 206 (1843)). Accordingly, application of IPR to Arthrex’s patent cannot be characterized as retroactive.

Id. The two cases cited by the Federal Circuit here are interesting.

McClurg is best known as the case establishing “shop-rights doctrine.”  In the case, the inventor (Harley) created a mold for casting metal cylinders so that the strongest material was toward the outer wall. Harley made the invention while on the job for the defendant Kingsland and Kingsland continued to use the invention for some time with without objection from Harley. Meanwhile, Harley obtained a patent and assigned it to McClurg who later sued Kingsland for infringement. The Supreme Court explained that such a situation created an implied license:

The Circuit Court … held that the defendants might continue to use the invention, … that they might presume a license or grant from Harley.

McClurg v. Kingsland, 42 U.S. 202 (1843).

In Arthrex, the focus on McClurg is for a different reason — congressional plenary power to legislate in the area of patent law — even retroactively.

The inventor in McClurg (Harley) obtained his patent in 1835 – a few months before passage of the Patent Act of 1836 that constituted a major revision of U.S. Patent Law.  By its terms, the new law applied to old patents (with a few exceptions) but the case challenged whether Congress had the power to take such action.  And the Supreme Court offered strong words allowing for Congress modify the law of patents without any restraint:

Whether [the appeal is] well taken or not, must depend on the law as it stood at the emanation of the patent, together with such changes as have been since made; for though they may be retrospective in their operation, that is not a sound objection to their validity; the powers of Congress to legislate upon the subject of patents is plenary by the terms of the Constitution, and as there are no restraints on its exercise.

Id. This is the portion of the decision that is quoted by the Supreme Court in Eldred and again in Arthrex. I should note that the court actually goes on to put a pretty big caveat on congressional plenary power (as mentioned justice Stevens dissent in Eldred):

… so that they do not take away the rights of property in existing patents. . . . This repeal, however, can have no effect to impair the right of property then existing in a patentee, or his assignee, according to the well-established principles of this court in 8 Wheat. 493 [a real property case]; the patent must therefore stand as if the acts of 1793 and 1800 remained in force; …

Putting these two portions of the case together, it becomes clear that Congress is free to change the laws, and have those laws be retroactive nature so long as it does not impair the property right already granted.  This caveat is a substantially more nuanced than what the Federal Circuit decided in Arthrex.

Patentee Cannot Escape Estoppel via Pre-IPR-Institution Disclaimer

The Federal Circuit decided this case in August 2019.  Arthrex recently petitioned for en banc rehearing raising again the constitutional question and noting that Eldred + McClurg were focusing on permissible retroactive congressional expansion of rights, not impermissible degradation.

Briefing begins in US v. Arthrex

US vs. Arthrex, 19-1434 (Supreme Court 2020).

Earlier this year the Supreme Court granted writ of certiorari on the PTAB appointments clause issues stemming from the Federal Circuit’s determination that (1) PTAB judges were Officers of the United States who should have been appointed by the President (rather than by the Secretary of Commerce), but (2) the appointments problem was curable by eliminating any statutory job security held by the judges (this reduced them to “inferior officers” who are properly appointed by a head of department, such as the Secretary of Commerce).  The court agreed to hear the first two questions, but not the third (regarding waiver/forfeiture).

  1. Whether, for purposes of the Appointments Clause, U.S. Const. Art. II, § 2, Cl. 2, administrative patent judges of the U.S. Patent and Trademark Office are principal officers who must be appointed by the President with the Senate’s advice and consent, or “inferior Officers” whose appointment Congress has permissibly vested in a department head.
  2. Whether, if administrative patent judges are principal officers, the court of appeals properly cured any Appointments Clause defect in the current statutory scheme prospectively by severing the application of 5 U.S.C. 7513(a) to those judges.
  3. Whether the court of appeals in Arthrex erred by adjudicating an Appointments Clause challenge that had not been presented to the agency.

July 22, 2020 Memorandum for the United States.

The case involves three parties.

  • Arthrex, whose patent is being challenged in inter partes review. Arthrex brought the appointments clause challenge, but strongly disagrees with the severing “cure.”
  • Smith & Nephew, the IPR petitioner. Smith & Nephew fundamentally argues that the the PTAB judges are at most inferior officers and thus were properly appointed.
  • US Gov’t intervened in the lawsuit to defend the PTAB decision, and also argues that PTAB judges are inferior officers.

The first round of merits briefing has been filed by the US and Smith&Nephew.  As discussed below, neither party addressed the second question — they will have an opportunity to do so after Arthrex files its opening brief later this month. Additional amicus briefs are expected this week.

US Gov’t Brief:  In its brief, the US argues strongly that PTAB administrative patent judges “are inferior officers whose appointment Congress permissibly vested in the Secretary of Commerce.”  US Government did not address the second question of curing the Appointments problem.

For its analysis, the US attempted to align its argument with the Supreme Court’s approach in Edmond v. United States, 520 U.S. 651 (1997) (Inferior officers must be “directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.”).

The Gov’t brief walks through the ways that the Secretary of Commerce and USPTO Director (both presidential appointees) possess authority to direct and supervise PTAB judges:

  • The Secretary (in consultation with the PTO director) appoints the judges.
  • The Secretary can remove the judges for “efficiency” purposes and that includes “failing to follow their supervisors’ instructions.”
  • The PTO Director has “unfettered power to decide which adjudicators will sit on any Board panel.”
  • The PTO Director has power to “promulgate regulations governing Board proceedings; issue binding policy directives, including instructions regarding how the patent laws and USPTO policies apply to particular fact patterns; and determine which Board decisions are precedential and therefore binding on future panels.”
  • “The Director has additional prerogatives regarding the conduct of individual proceedings. He may decide unilaterally whether a particular inter partes or post-grant review will proceed at all, and he possesses substantial authority over any rehearings that the Board may grant.”

Role of Rulemaking: Note here that that one important question arises regarding the extent that the Director has “given-up” authority by rulemaking and by tradition.  Under the promulgated regulations as currently in operation, the PTO Director has delegated substantial authority to the PTAB and to the Chief Judge.  An important example of this is that the PTAB determines institution decisions. A question for the Court will be the extent that those prior rulemakings should be considered when analyzing the officer-status of PTAB judges.

Mechanical Turks: In its opinions, the Federal Circuit also analyzed the situation using Edmond. In its brief, the US asserts that the court’s approach is “deeply flawed.”  Most importantly, the US argues that Edmond should be seen as providing for a flexible and open ended analysis of the level of supervision and control; whereas the Federal Circuit followed a more “mechanistic” of distilling Edmond into three discrete criteria and then focusing solely on those.

Burdensome: An additional important criteria here has to do with the burdensome nature of having the President Nominate and the Senate Confirm a large number of administrative officials. From 1836-1975, the patent judges (then called examiners-in-chief) were appointed by the President.  However, the expansion of the patent system (and administrative state in general) began to identify those appointments as an unneeded burden on the President and thus shifted their appointment to the Secretary of Commerce.  I expect that some members of the court – such as Justice Gorsuch – will see this justification as carrying little weight.

Does the Temporary PTO Director have Arthrex Authority?

by Dennis Crouch

Arthrex, Inc. v. Smith & Nephew, Inc. (Fed. Cir. 2022).

In 2021, the Supreme Court sided with the patentee in holding that the AIA trial system violated the Appointments Clause of the U.S. Constitution. The Court concluded that PTAB judges were wielding the substantial power of the U.S. Gov’t by cancelling already-issued patent claims.  The Constitution provides that officers wielding such power must be directly tied to the US President via presidential nomination and confirmation by the US Senate.  But, PTAB judges are appointed by the Secretary of Commerce and do not undergo Senate confirmation.  Rather than burning down the entire house, the Supreme Court partially rewrote the statute — adding the presidentially appointed USPTO director as an intermediary with power to accept or reject any PTAB decision stemming from an AIA trial.

The PTAB had originally sided with the patent challenger (Smith & Nephew) in finding the claims unpatentable. After the Supreme Court decision, the case was remanded back to the Patent Office so that the USPTO Director could have the final word from the administrative agency.  Commissioner for Patents Drew Hirshfeld denied the petition for director review.   Although Hirshfeld is currently the USPTO’s highest ranking official, he is not the USPTO Director, nor is he the Acting Director rather he continues in his role as Commissioner for Patents while still “performing the functions and duties of the Director.” Further, Hirshfeld was not nominated by the President or confirmed by the Senate. Rather, just like the PTAB judges found Constitutionally inadequate, Hirshfeld is an inferior officer appointed by the Secretary of Commerce.

Arthrex has now appealed its case back to the Federal Circuit — arguing that Hirshfeld’s denial does not meet the strict requirements imposed by the Constitution and the Supreme Court.  The basic argument here is simple — the Supreme Court held that the PTO’s final agency decision in an IPR must come from a presidentially appointed principal officer.

One issue here is the practicalities of running an administrative agency such as the PTO in the interim following resignation of a presidentially nominated director. From the beginning of the Republic (1791), Congress has authorized temporary appointments in situations where the full nomination-confirmation process might take too much time to complete.  Today, this process is generally provided for by the Federal Vacancies Reform.  That law outlines mechanisms for allowing a temporary acting Director absent Senate confirmation.  However, Hirshfeld does not qualify even for this statutory work-around because he was not the Deputy Director nor was he personally selected by the President.

One aspect of the appointments clause is to draw a direct link to the President.  A final difficulty for Hirshfeld is that his appointment has a 5-year tenure protection and can only be removed early for cause. 35 U.S.C. 4(b)(2).  These tenure protections further limit Presidential power over agency action.

In response, Smith & Nephew rely heavily on United States v. Eaton, 169 U.S. 331 (1898). In Eaton, the Supreme Court permitted approved of a non-presidential appointment of an officer “under special and temporary conditions.”  However, there is a strong suggestion that Eaton was an inferior Officer rather than principal Officer case.  Dir. Hirshfeld has now been standing-in as director for more than one year — on the  four-year-timeline of the Presidency, this is starting to appear permanent.

Oral arguments in this round of the appeal are set for March 30, 2022.

Briefs:

Although it is not entirely clear, it appears to me that the original merits panel of Chief Judge Moore, and Judges Reyna and Chen will retain the case and here this petition as well.  This trio decided the original case, with Judge Moore writing the opinion.  The Federal Circuit and Supreme Court both agreed that the PTAB judges were principal officers if the IPR statute was strictly followed. The Federal Circuit offered a different remedy (removing PTAB judge tenure) than the Supreme Court (adding Director Review).  Following the Supreme Court decision, the same panel issued the order to remand the case for Director Review.  However, that remand included a statement that the “court retains jurisdiction over this appeal” and that the appellate proceedings are simply stayed.  Thus, the appeal pending now is using the same docket number (18-2140) and, I expect, will be in front of the same set of judges.

Guest Post by Prof. Rai: In the Constitutional Cross-Hairs: PTAB Judges and Administrative Adjudication

Guest post by Arti K. Rai, Elvin R. Latty Professor of Law and Faculty Director, The Center for Innovation Policy, at Duke Law.

Last Thursday, in Arthrex v. Smith & Nephew (Fed. Cir. 2019), a panel of the Federal Circuit held that the administrative patent judges (APJs) at the PTAB are “principal officers” who must, under the Appointments Clause of the Constitution, be appointed by the President and confirmed by the Senate.  In contrast, the current patent statute provides for APJs to be appointed by the Secretary of Commerce in consultation with the PTO Director.  The panel further determined that it could remedy the constitutional defect by severing APJ removal protections, thereby rendering them inferior officers who can be appointed by “Heads of Departments” like the Commerce Secretary.

As this post details, the panel did a careful job of addressing one of the most knotty constitutional issues raised by PTAB adjudication.  But precisely because the issue is knotty, the panel’s decision is unlikely to represent the last step in the road.  Indeed, the USPTO has already indicated that it may seek en banc review.

All parties agreed, as did the panel (citing Professor John Duffy’s prominent 2007 Patently-O paper), that APJs are officers within the meaning of the Appointments Clause.  The only question was whether APJs are principal or inferior officers.

The panel’s conclusion regarding principal officer status rested on Justice Scalia’s 1997 opinion for the Court in Edmond v. United States.  In that case, the Court held that inferior officers must be “directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.”

According to the panel, PTAB judges lack adequate direction and supervision for two reasons: first, “presidentially appointed officers” cannot “review, vacate, or correct decisions by the APJs”; and, second, these presidentially appointed officers (specifically the Secretary of Commerce and Director) have only “limited removal power.” Although severing APJ removal protections would not give the Director review power over individual decisions, it would, according to the panel, be sufficient to demote APJs to inferior status.

The road ahead will likely be tumultuous.  At the Supreme Court, administrative law has long been a battlefield between various flavors of formalist and functionalist reasoning about how agencies fit into the executive branch and interact with the legislative and judicial branches.  Indeed, in taking its relatively formal approach to the distinction between principal and superior officer, the Edmond Court had to distinguish the considerably less formalist opinion in Morrison v. Olson, written only 9 years earlier.  In Morrison, Justice Scalia had written a stinging dissent, castigating the majority for relying on multiple indicia of inferiority, including limited responsibility, and for not recognizing that “inferior” necessarily means subordinate. Nine years later, Justice Scalia was able to secure 8 votes for his position. (Justice Souter concurred only in part.)

The Arthrex decision also comes during a period of even greater-than-usual Supreme Court turmoil over administrative adjudication.  Most relevant for present purposes, the Court has already decided a steady stream of constitutional and nonconstitutional cases involving the PTAB.  In the most prominent of these cases, Oil States Energy Services v. Greene’s Energy Group, an ideologically diverse coalition of seven Justices ultimately concluded that administrative adjudication of granted patents survived constitutional scrutiny.  But Justice Gorsuch, joined by Chief Justice Roberts, dissented in strong terms, warning against the perils of adjudication by judges who don’t enjoy Article III protections.

Of course, as the Arthrex opinion illustrates, under more formal versions of Appointments Clause jurisprudence, decisions made by actors who are not subject to significant direction and control by a presidentially appointed official may themselves be unconstitutional.  The Supreme Court’s 2018 decision in Lucia v. SEC makes it clear that the Court’s more formalist Justices, including Justices Gorsuch and Roberts, continue to take the Appointments Clause very seriously.  In that decision, all of the Justices who tend to embrace formalism, joined by Justice Kagan, held that as a constitutional matter the administrative law judges of the SEC were officers (albeit inferior officers) who had to be appointed by the politically accountable Commission.

As commentators have discussed, the juxtaposition of Oil States and Lucia in the 2018 term illuminates potential constitutional tensions in administrative adjudication.  Some formalist academics who are particularly concerned about the tension have suggested simply removing large swaths of adjudication from the administrative state and placing it instead in Article III.

Conventional administrative law has taken a different, but still relatively formal, approach.  Conventionally, whether the judge is an administrative law judge (ALJ) (a specific type of judge who enjoys very strong protections against removal) or some other type of administrative judge, she has some level of decisional independence and protection against firing.  However, the judge’s decisions are subject to a right of review by a politically appointed agency head.

What about the patent statute? The statute gives the Director overall responsibility for USPTO “policy direction and management supervision” as well as power to promulgate regulations by which the PTAB is bound.  As for specific PTAB decisions, it provides for “rehearing” of such decisions.

Consistent with the academic literature (for example, this article I coauthored) suggesting that the rehearing mechanism be used to distill from the hundreds of PTAB opinions issued each year certain precedential opinions that bind the agency, the Director has set up an elaborate “Precedential Opinion Panel” (POP) process to rehear PTAB cases that raise important issues. The POP is selected by the Director and by default consists of the Director, the Commissioner for Patents, and the Chief Judge.

The Arthrex panel did note the Director’s general supervisory powers over the PTAB, his regulatory authority, the rehearing provision, and the POP procedure. It emphasized, however, that neither the statute nor the POP procedure explicitly provide for a right of rehearing over specific cases by the Director only.  Presumably, any functional ability the Director might have to persuade the Commissioner for Patents and the Chief Judge is insufficient.

If the Supreme Court were to take the case, what it might decide is anyone’s guess. The cleanest path forward is therefore surgical Congressional intervention that gives the Director an explicit, unilateral right of review.  This approach would cure any perceived constitutional infirmity without subjecting APJs to at-will firing.  If subordination is the key to inferior status, then both formalists and functionalists might agree that, for adjudication, subordination through transparent and reasoned review of the adjudicator works better than subordination through firing.

Certiorari granted in Arthrex

by Dennis Crouch

The Supreme Court has granted Certiorari in Arthrex on the questions of whether Administrative Patent Judges (APJs) were properly appointed under the U.S. Constitution and, if not, what is the proper remedy.

None of the appellants were satisfied with the Federal Circuit’s decision in the case and each petitioned for Supreme Court review. Subsequently, the U.S. Gov’t filed a memorandum walking through what it saw as the three unifying questions presented in the case. The court has granted hearing on only the first two questions.

Questions Presented:

1. Whether, for purposes of the Appointments Clause, U.S. Const. Art. II, § 2, Cl. 2, administrative patent judges of the U.S. Patent and Trademark Office are principal officers who must be appointed by the President with the Senate’s advice and consent, or “inferior Officers” whose appointment Congress has permissibly vested in a department head.

2. Whether, if administrative patent judges are principal officers, the court of appeals properly cured any Appointments Clause defect in the current statutory scheme prospectively by severing the application of 5 U.S.C. 7513(a) to those judges.

3. Whether the court of appeals in Arthrex erred by adjudicating an Appointments Clause challenge that had not been presented to the agency.

July 22 Memorandum of U.S. Gov’t. I have marked-through the third question because the Court is directing its review only to the first two questions.

The case stems from an inter partes review (IPR) conducted by Administrative Patent Judges (APJs) at the Patent Trial & Appeal Board (PTAB).  Arthrex is the owner of U.S. Patent No. 9,179,907 — a patent claiming an assembly for securing soft tissue (such as a tendon) to a bone without requiring the surgeon to tie any knots.  Smith & Nephew successfully challenged the patent via IPR, with the PTAB APJs concluding that the challenged claims were unpatentable as anticipated.  On appeal, Arthrex challenged the decision on constitutional (appointments clause) grounds; Smith & Nephew defended the decision, and the USPTO (U.S. Gov’t) also intervened to support the decision of its PTAB judges.

At the Federal Circuit, the original decision was authored by Judge Moore and joined by Judge Reyna and Chen. The court subsequently denied en banc rehearing.  The denial include five separate opinions, including an additional opinion by Judge Moore defending her original opinion and a concurring opinion by Judge O’Malley. Judge Dyk wrote in dissent as did Judge Hughes and Judge Wallach.  Four of the Judges did not indicate their vote (Chief Judge Prost and Judges Lourie, Taranto, and Stoll). Based upon the result (en banc denial), at least two of them voted to deny rehearing.

CAFC: Arthrex Inoculated IPRs that had not yet reached Final Written Decision

Caterpillar Paving Products Inc. v. Wirtgen America, Inc. (Fed. Cir. 2020)

In 2018, Wirtgen petitioned the USPTO Director to institute an inter partes review (IPR) against Caterpillar’s US9045871 (paving machine).  The PTO initiated the IPR, and eventually concluded that the challenged claims (as well as proposed substitute claims) were all unpatentable.

On appeal, Caterpillar asked the court to vacate and remand the decision for a new-hearing with a new-panel – citing Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019).  However, the court has refused:

Unlike in prior cases in which this court has recently vacated and remanded, Arthrex issued before the Board’s final written decision in this case.

The theory of Arthrex is that the court’s cancellation of PTAB judge job security instantly cured the Constitutional appointments problem (making them inferior officers rather than principal offiers).  Here, the Arthrex cure (Oct 2019) came just before the Caterpillar final judgment (Nov 2019). Caterpillar argued that it suffered under “a year’s worth of constitutional violations.” On appeal, however, the Federal Circuit ruled that the inoculation was complete against any IPR that had not yet reached final judgement.

Caterpillar, coupled with Cienna Corp., look to place a hard limit on the number of cases requiring new paneling following Arthrex.

Now Precedential: IPR Petitioner who Waived Arthrex issue cannot Raise it on Appeal after Losing the IPR

En Banc Denial in Arthrex

by Dennis Crouch

Arthrex, Inc. v. Smith & Nephew, Inc. and U.S. as intervenor (Fed. Cir. 2020) (en banc denial)

None of the parties in this case were happy with the Federal Circuit’s original decision in Arthrex and all filed petitions for en banc rehearing.  Those petitions have now been denied in what appears to be a 8-4 split with Judges Newman, Wallach, Dyk, and Hughes expressly dissenting from the denial.  Judge Moore authored the original opinion in the case and also authored an opinion here defending that original opinion. She was joined on the opinion by her original panel members of Judges Reyna and Chen as well as Judge O’Malley explaining that (1) the original decision was correct and (2) conducting a rehearing would “only create unnecessary uncertainty and disruption.”

The Arthrex panel followed Supreme Court precedent to conclude that the administrative patent judges (APJs) of the USPTO’s Patent Trial and Appeal Board were improperly appointed principal officers. It further followed the Supreme Court’s direction by severing a portion of the statute to solve that constitutional problem while preserving the remainder of the statute and minimizing disruption to the inter partes review system Congress created.

Judge Moore Op. Concurring in the en banc denial.  This quote mentions the the “severing” element of the original panel decision. In particular, the court invalidated the removal restrictions of 5 U.S.C. § 7513 as it applies to APJs — thus making it easier for the USPTO director to remove APJs at will. This move – according to the court – was sufficient to shift APJs from principal Officers to inferior Officers and thus “save” the system.

Judge O’Malley wrote her own concurring opinion that included the following statement:

While I agree with Judge Dyk and Judge Hughes that Title 5’s protections for government employees are both important and long-standing, I do not believe Congress would conclude that those protections outweigh the importance of keeping the remainder of the AIA intact—a statute it debated and refined over a period of more than six years.

The leading dissent by Judge Dyk argues that the severance choice here is an improper, “draconian remedy” that “rewrites the statute contrary to Congressional intent.  Judges Hughes and Wallach each wrote their own dissenting opinions – arguing that APJs were already inferior officers based upon the extensive control and authority exerted by the USPTO director.

= = = = =

The basic issue in the case is the Constitutionality of the appointments process for Administrative Patent Judges (APJs) sitting on the Patent Trial & Appeal Board (PTAB).  The Appointments Clause of the U.S. Constitution indicates that all “Officers of the United States” shall be nominated and appointed by the US President with the Advice and Consent of the Senate.  The provision then goes on to say that Congress has the power to alter this process for “inferior Officers, as they think proper.” In particular, Congress may allow inferior Officers to be appointed by “Heads of Departments.”  U.S. Const. Art. II, Sec. 2, Cl. 2.  An improperly appointed officer isn’t really an officer at all and so should have no power to render judgment to cancel privately held property rights.

APJs used to be hired by the USPTO Director.  However, Prof John Duffy shook that cage in his 2007 article: Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21. In the article, Duffy argued that APJs are likely best classified as inferior Officers and thus could be appointed by a Head of Department — namely the Secretary of Commerce.  Congress quickly acted on Duffy’s submission and altered the law to fix the problem.

The America Invents Act (AIA) greatly increased the power of APJ with the advent of inter partes review (IPR) proceedings and the other AIA trials.  The PTAB has become the most frequented patent court in the country and thousands of patents have been cancelled based upon APJ rulings.

After losing before the PTAB in an inter partes review, Arthrex appealed to the Federal Circuit with the argument that the increased power granted by the AIA ratches APJs up to the status of principal Officers rather than inferior Officers.  The result of that conclusion would be that APJs would need Presidential Appointment with Senate consent.  In Arthrex, the Federal Circuit agreed with the contention, but rather than requiring Presidential Appointment, the court decided instead to invalidate a statute that provides job security to APJs.  Since job security (ability to be easily fired by someone other than the President) is an element of the inferior/principal Officer distinction, the Federal Circuit found that severing that portion of the statute was enough to change the nature of the role.

= = = =

The case offers an interesting constitutional query – but is also being used as a tool for those who are hoping for the IPR system to fail.

This week at the Supreme Court

by Dennis Crouch

Oral Argument set for October 7, 2020 in Google v. Oracle

  • (1) Whether copyright protection extends to software code and the organizational structure of a programming language; and
  • (2) Whether, as the jury found, the petitioner’s use of a software interface in the context of creating a new computer program constitutes fair use.
  • What is the role of the Jury in deciding fair use? (Raised by the Court)
  • What is the role of patents in the protection of a software code? (Raised by Crouch)

Certiorari Denied:

  • Following its first conference, the Supreme Court has denied certiorari in a number of patent cases.  In particular, the court has denied certiorari in all the patent cases ready-for-conference with the notable exception of the Arthrex cases focusing on appointments clause issues are still pending.
  • Still Pending: 
    • Constitutional challenge to Admin Patent Judges: United States v. Arthrex, Inc., No. 19-1434; Smith & Nephew, Inc. v. Arthrex, Inc., No. 19-1452; Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1458; Polaris Innovations Limited v. Kingston Technology Company, Inc., No. 19-1459.  These cases remain the most likely for certiorari. 
  • Denied:
    • Retroactive application of IPR to already applied-for patents: Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1204.
    • AIA Challenge: Sanofi-Aventis Deutschland GmbH v. Mylan Pharmaceuticals Inc., No. 19-1451;
    • Divided Infringement and 271(g): Willowood, LLC v. Syngenta Crop Protection, LLC, No. 19-1147.
    • Federal vs State Law for Patent Licensing: Cheetah Omni LLC v. AT&T Services, Inc., No. 20-68.
    • Right to a Jury Trial on Specific Performance of FRAND license: TCL Communication Technology Holdings Limited v. Telefonaktiebolaget LM Ericsson, No. 19-1269.
    • Patent Eligibility: The Chamberlain Group, Inc. v. Techtronic Industries Co., No. 19-1299.; Thomas v. Iancu, No. 19-1435; Primbas v. Iancu, No. 19-1464; Morsa v. Iancu, No. 20-32.
    • Due Process Issues Regarding Sua Sponte Judicial Order: Ameranth, Inc., Petitioner v. Domino’s Pizza, LLC, No. 19-1351.
    • Appealing IPR Termination:BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc., fka MonoSol RX, LLC, No. 19-1381.
    • Power of PTO To Exclude Patent Attorney: Polidi v. Lee, No. 19-1430; Piccone v. United States Patent and Trademark Office, No. 19-8844.
    • Obviousness – Nexus for Secondary Indicia: SRAM, LLC v. FOX Factory, Inc., No. 20-158.

This Week’s Conference: 

  • Voiding a patent after a damage award: Phazzer Electronics, Inc. v. Taser International, Inc., No. 19-1378
  • Arthrex Appointments Issue: Essity Hygiene and Health AB v. Cascades Canada ULC, et al., No. 20-131; ESIP Series 2, LLC v. Puzhen Life USA, LLC, No. 20-228; Customedia Technologies, LLC v. Dish Network Corporation, et al., No. 20-135 (also eligibility question)
  • Trade Secret Inventorship Question and Federal Jurisdiction: Acer America Corporation, et al. v. Intellisoft, Ltd., (Bruce Bierman), No. 20-313.

Response Requested:

  • The “Respondent” has a right to file a response to a petition for writ of certiorari.  However, as a strategy (and money saving device), many repondents waive their right. In cases of interest, the Supreme Court will often request a response.  However, the request for response need only be requested by a single Justice. And, some of the justices have reportedly given authority to their law clerks to file the request.
  • Recent CFR’s
    • Are the Fed. Reserve Banks “People” or “the Government”: Bozeman Financial LLC v. Federal Reserve Bank of Atlanta, et al., No. 20-333
    • Reasonable Royalty and Apportionment: Cochlear Corporation, et al. v. Alfred E. Mann Foundation for Scientific Research, et al., No. 20-362
    • Notice and Damages: Arctic Cat Inc. v. Bombardier Recreational Products Inc., et al., No. 20-355

 

Does your Heart Break for this Patentee?

by Dennis Crouch

The decision in this case is short and non-precedential, but raises an interesting Arthrex issue on Unconstitutional Appointments. 

Snyders Heart Valve LLC v. St. Jude Medical, LLC (Fed. Cir. 2020) (SnydersStJude)

Snyders’ US Patent No. 6,821,297 covers a collapsible artificial heart valve that can be attached through a blood vessel rather than open-heart surgery.

After being sued for infringement, St. Jude filed an IPR petition and won a determination that the claims would-have-been-obvious at the time of the invention. Snyders appealed.

Rather than addressing the merits of the obviousness case, the Federal Circuit has followed its precedent set by Arthrex and has has vacated the PTAB’s judgment because the judges were appointed in an unconstitutional manner. On remand, a reconstituted–and now magically constitutional–PTAB panel will re-do the trial (unless the Supreme Court intervenes before then).

In its argument, Snyders suggested that it should receive some particular treatment from the court because of a potential conflict of interest with Dir. Iancu.  Prior to joining the USPTO, Iancu was in private practice and represented St. Jude in a parallel proceedings.  Although Dir. Iancu has recused himself from the case, Snyders argues that the Director’s conflicts are not so easily erased.  Rather, an attorneys conflicts regularly extend to subordinate employees as well.  Here, the Arthrex remedy comes into play because the court in that case gave more direct authority supervisory to the PTO Director. The following argument comes from Snyders’ brief:

The concept that disqualification of an attorney may extend to that attorney’s subordinate employees is well established. For example, the American Bar Association’s Model Rules of Professional Conduct recognize a conflict where representation of a client is materially limited by an attorney’s personal interest. See Model Rules of Prof’l Conduct R. 1.7(a)(2) (2016). Those rules also recognize that disqualification of an attorney due to a personal conflict may be imputed to fellow employees where the employees would be materially limited due to their loyalty to the attorney.

Snyders Brief.

The Federal Circuit found the argument here “without merit . . . the Deputy Director’s role sufficiently removes any potential taint of the Director’s conflict.”  The Court did not address the particular issue here regarding the heightened supervisory authority of PTAB judges coming-out-of Arthrex.

 

Principal Officers: Three En Banc Petitions in Arthrex v. Smith & Nephew

by Dennis Crouch

None of the parties were happy with the outcome in Arthrex v. Smith & Nephew (Fed. Cir. 2019) and all three have now petitioned for en banc review:

In its decision, the Federal Circuit held that the appointment process for PTAB judges (APJs) violates the Appointments Clause of Article II of the U.S. Constitution.  The court explained that these judges are principal officers under the constitution and thus, must be appointed by the President of the United States rather than merely the Head of Department.  However, the court issued a cy-près ruling in an attempt to limit the upset caused by its ruling. In particular, the court invalidated a portion of the statute that limited the PTO’s ability to remove APJs from the board. According to the court, that change was enough to reclassify the PTAB Judges as inferior officers that do not need presidential appointment.  Despite its proposed “cure”, the Federal Circuit held that – in this case – the PTAB decision must be vacated and reheard in front of a new panel of APJs. “We hold that a new panel of APJs must be designated to hear the inter partes review anew on remand.”

Why is no-one happy?:

  1. The Patentee would like the case wholly thrown out and argues that the CAFC’s savings-cut was both incorrect and insufficient to convert principal officers to inferior officers.
  2. Both the Patent Challenger and USPTO as intervenor want the original final written decision reinstated (cancelling the claims) and argue that the en banc court should find the APJs were already inferior officers.  They also argue that, if APJs are principal officers then the en banc court should reconsider the appropriate remedy for such an appointments clause violation.

More to come on this.

Supreme Court Patent Law 2020: Long Conference Preview

by Dennis Crouch

While the country is still mourning the loss of Justice Ruth Bader Ginsburg and arguing over her replacement, the Supreme Court itself is set to begin its October 2020 term this week.  One of the first orders-of-business will be the Long Conference set for September 29, 2020. At that first conference of the term, the court is set to consider the pile of certiorari briefing completed over the summer.

There are a few key patent cases in the pile:

  • Constitutional challenge to Admin Patent Judges:
    • United States v. Arthrex, Inc., No. 19-1434;
    • Smith & Nephew, Inc. v. Arthrex, Inc., No. 19-1452;
    • Sanofi-Aventis Deutschland GmbH v. Mylan Pharmaceuticals Inc., No. 19-1451;
    • Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1458;
    • Polaris Innovations Limited v. Kingston Technology Company, Inc., No. 19-1459.
    • I believe that it is highly likely that the court will grant certiorari in Arthrex. 
  • Retroactive application of IPR to already applied-for patents: 
    • Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1204.
  • Divided Infringement and 271(g):
    • Willowood, LLC v. Syngenta Crop Protection, LLC, No. 19-1147.
  • Federal vs State Law for Patent Licensing:
    • Cheetah Omni LLC v. AT&T Services, Inc., No. 20-68.
  • Right to a Jury Trial on Specific Performance of FRAND license:
    • TCL Communication Technology Holdings Limited v. Telefonaktiebolaget LM Ericsson, No. 19-1269.
  • Patent Eligibility
    • As a whole: The Chamberlain Group, Inc. v. Techtronic Industries Co., No. 19-1299.
    • Software: Thomas v. Iancu, No. 19-1435.
    • Significantly more: Primbas v. Iancu, No. 19-1464.
    • Flash of Genius: Morsa v. Iancu, No. 20-32.
  • Due Process Issues Regarding Sua Sponte Judicial Order:
    • Ameranth, Inc., Petitioner v. Domino’s Pizza, LLC, No. 19-1351.
  • Appealing IPR Termination:
    • BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc., fka MonoSol RX, LLC, No. 19-1381.
  • Power of PTO To Exclude Patent Attorney:
    • Polidi v. Lee, No. 19-1430;
    • Piccone v. United States Patent and Trademark Office, No. 19-8844.
  • Obviousness – Nexus for Secondary Indicia:
    • SRAM, LLC v. FOX Factory, Inc., No. 20-158.

= = =

The court has not granted certiorari to any patent cases this term. However, Google LLC v. Oracle America, Inc., No. 18-956 is set for oral arguments on October 7, 2020.  The case focuses on copyright protection in functional aspects of software and thus may well impact patent law.  In December, the court will hear Facebook v. Duguid. Facebook is arguing that the statutory prohibition on certain debt-collection telephone calls is a violation of its free speech rights. A third case that I am watching is Van Buren v. US, which is set for oral arguments at the end of November.  In that case, the question asks “Whether a person who is authorized to access information on a computer for certain purposes violates Section 1030(a)(2) of the Computer Fraud and Abuse Act if he accesses the same information for an improper purpose.”  Here, Van Buren was a police officer who was running searches on the internal databases for a “friend.”

Supreme Court: Closing out the Docket for 2020-21

by Dennis Crouch

The US Supreme Court has almost cleaned-up its patent docket for the October 2020 term.  I still expect a decision at some point this week (by July 2) in Minerva Surgical, Inc. v. Hologic, Inc. focusing on the ongoing viability of assignor-estoppel.  The court has already decided its one other patent-focused case for the term–United States v. Arthrex, 594 U. S. ___ (2021). In Arthrex, the court altered the power of the PTO Director beyond statutory limitations in order to preserve the PTAB’s constitutional authority during IPR proceedings. A number of parallel petitions had raised the same or similar questions to Arthrex. The Court vacated and remanded some cases back to the Federal Circuit “for further consideration in light of United States v. Arthrex, Inc.” For other cases, the court simply denied certiorari. There are also several Arthrex-follow-on petitions pending that have not yet been fully briefed. I expect these will also be denied.

The court also denied certiorari in TCL Communication v. Godo Kaisha IP Bridge 1, No. 20-1545.  That case asked a couple of interesting questions regarding proof of literal infringement.  The court allowed the patentee to make assumptions about the accused devices based upon admissions that the devices conform to certain industry standards.

The lone hold-over case is American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, 20-891 focusing on patent eligibility. A petition for certiorari was filed in that case back in December 2020.  After briefing was completed, the Supreme Court then requested the views of the U.S. Government on whether the court should grant certiorari.  Those views will come from the US Solicitor General, but probably will not be submitted until November or December 2020.  The CVSG signals some amount of interest, making this case the most likely to be granted cert next year. Am. Axle asks two questions:

  1. What is the appropriate standard for determining whether a patent claim is “directed to” a patent-ineligible concept under step 1 of the Court’s two-step framework for determining whether an invention is eligible for patenting under 35 U.S.C. § 101?
  2. Is patent eligibility (at each step of the Court’s two-step framework) a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of art at the time of the patent?

A follow-on petition asks the identical questions in iLife Technologies, Inc. v. Nintendo of America, Inc.

New cases have already begun to line-up for consideration next term, starting at the end of September 2021:

  • Standing: Trademark – Standing to Cancel a TM Registration – Naked TM, LLC v. Australian Therapeutic Supplies Pty. Ltd.; See also Kaszuba v. Hirshfeld (similar issues, pro se).
  • Standing: Prisoner’s right to protect his patent rights via court action –  Tormasi v. Western Digital Corp.
  • Preclusion: Ongoing viability of the Kessler Doctrine as an expansion of traditional issue and claim preclusion. PersonalWeb Technologies, LLC v. Patreon, Inc.
  • Anticipation: Is a method claim expressly requiring use of a man-made protein anticipated by use of a naturally-occurring version of the protein.  Biogen MA Inc., Petitioner v. EMD Serono, Inc.
  • Due Process: Many of the patents cancelled via IPR had already been applied-for or issued prior to the America Invents Act of 2011.  Does that “retroactive application … violate the Due Process Clause of the Fifth Amendment to the United States Constitution?” Ultratec, Inc. v. CaptionCall, LLC
  • Writing Opinions: Does the use of Federal Circuit Rule 36 to summarily affirm decisions from the PTAB “without opinion” violate 35 U.S.C. § 144? Ultratec, Inc. v. CaptionCall, LLC (see alternative question on due process)

The court will likely act on these certiorari petitions within the first couple of weeks of the October 21 term. Each of these cases are interesting and important.  Still, it is quite possible that the Court will not grant certiorari in any new patent case for the next year.

 

A Small Step on Choice of Forum Issues with PTAB

New Vision Gaming & Development, Inc. v. SG Gaming, Inc. (Bally Gaming) (Fed. Cir. 2021)

In a pair of CBM decisions, the PTAB found New Vision’s patent claims ineligible under Section 101.  New Vision had proposed alternative claims, but those were also found to be invalid. On appeal, the Federal Circuit did not review the merits, but instead vacated and remanded on Arthrex grounds.

New Vision requests that we vacate and remand the Board’s decisions in light of Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019). Because Arthrex issued after the Board’s final-written decisions and after New Vision sought Board rehearing, New Vision has not waived its Arthrex challenge by raising it for the first time in its opening brief before this Court. Thus, we vacate and remand for further proceedings consistent with Arthrex, and we need not reach any other issue presented in this case.

Slip. Op.

Judge Newman authored an opinion that dissents in-part.  In particular, Judge Newman argued that the choice-of-forum clause in a contract between the parties required any dispute over the patent to be resolved in a Nevada-based court, not in the USPTO.  “The Board refused to respect the forum selection agreement, and proceeded to final decision of the petitions.”  Judge Newman argued that the appellate panel should consider the issue before remanding.

Judge Newman particularly wanted to decide this issue here with her colleague Judges Moore on the panel (along with Judge Taranto).   A parallel question is question under consideration in Kannuu Pty Ltd., v. Samsung Electronics Co., Ltd. (Fed. Cir. 2021).  Oral arguments are expected in that case in July 2021 before a yet-to-be-disclosed panel.

The Public Private Nature of Patents

U.S. Patent Nos. 7,451,987 and 7,325,806.  The parallel litigation (filed in Nevada) is stayed pending outcome of the CBM review. New Vision Gaming &
Development, Inc. v. Bally Gaming Inc., No. 2:17-cv-01559-APG-BNW (D.
Nev.).

Federal Circuit Limiting Damage on the PTAB Appointments Clause Issue

Customedia Tech v. Dish Network (Fed. Cir. 2019)

Customedia … submits a notice of supplemental authority identifying this court’s recent decision in Arthrex, Inc. v. Smith & Nephew, Inc., No. 2018-2140 (Fed. Cir. Oct. 31, 2019). That decision vacated and remanded for the matter to be decided by a new panel of Administrative Patent Judges (“APJs”) at the Patent Trial and Appeal Board after this court concluded that the APJs’ appointments violated the Appointments Clause. Customedia’s letters seek to assert the same challenge here, which the court construes as a motion to vacate the Board decisions here and remand in accordance with Arthrex.

We conclude that Customedia has forfeited its  Appointments Clause challenges. . . .  Customedia did not raise any semblance of an Appointments Clause challenge in its opening briefs or raise this challenge in a motion filed prior to its opening briefs. Consequently, we must treat that argument as forfeited in these appeals.