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.
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.
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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.