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The decision in this case is short and non-precedential, but raises an interesting Arthrex issue on Unconstitutional Appointments.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.
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.
“The Court did not address the particular issue”
. . . and what a big surprise this is, right?
? The PTO is not a law firm. Director Iancu did not sit on this PTAB panel. By the argued disqualification logic, no one in the Justice Department could ever deal with any company anyone there had ever done any work for.
Re: ““Does your Heart Break for this Patentee?”
Yes it would if the inventor provided strong unobviousness evidence in the IPR that the PTAB panel failed to properly consider and could have raised in this appeal – instead of this argument.
Did you see their brief? They included many arguments beyond the one noted ‘of interest’ here.
I tend to view this LESS as a ‘stand-alone’ argument, and more of a necessary detriment to what the CAFC did (and should not have done) with the Arthrex case.
The CAFC employed their own version of “line item veto” and rewrote a legislative provision.
They are not legislators, and their WEAK offering of “this is what we think that THEY would have done” should be an outrage to any and all attorneys.
It should be hard to find anyone who does not think that the Sup. Ct. needs to address Arthrex APJ status. Soon, so that cases like this do not linger.
I can think of a (Royal) nine…
Do Barr’s interests “extend” to SDNY?
This was the crux:
“Given the extent of Director Iancu’s direct involvement in the litigation and the authority that Director Iancu holds over subordinate employees—particularly given the removal of their job protections pursuant to the Arthrex severance—the APJs who made the institution decision and final written decision below also had a conflict of interest. Accordingly, the PTAB should have dismissed the IPR below.”
It is interesting that the per curiam opinion here notes in a footnore:
“Snyders argues that the Arthrex remedy is insufficient because it does not allow for review of the Board’s decisions by a superior officer and is inconsistent with Congress’s intent that Administrative Patent Judges act independently. Appellant’s Br. at 15–16. We do not separately address these argument as we are bound by Arthrex. Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1338 (Fed. Cir. 2019).”
And yet, they DO (even though the same binding exists) remark on the superior officer is directly responsible MADE BY THE COURT’S extra-judicial re-writing ‘answer’ in Anthrex to MAKE the PTAB judges MORE dependent on Dir. Iancu.
Instead of a remand, I would have liked to have seen a sua sponte call for full CAFC weigh-in.
It seems likely that the Court was in effect noting that the quoted appellant arguments of paragraphs 1 and 3 of comment 3 are inconsistent – too much Director control and not enough Director control.
I think the very opposite: that it is the court’s designation of ‘director control’ that is blatantly inconsistent.
Arthrex ‘saves’ a Constitutional power by directly placing judges under the control of the director.
There is a necessary outcome of that very action that the court itself is turning a blind eye too.
And this is not even taking into account that the court’s action is ultra vires and beyond the power of the judicial branch.
Before NEWMAN, O’MALLEY, and TARANTO, Circuit Judges.
PER CURIAM.
This is how the USA promotes progress in the useful art of replacing failed heart valves. Physicians who want to leverage their ingenuity for saving lives should consider the approach by the medieval Chamberlen family whose patriarch invented the forceps. Keep your inventions as secret. link to theatlantic.com
Did you analyze the patent’s claims and the prior art before coming to the conclusion that the PTAB’s decision is wrong?
link to i.imgur.com
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