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.
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.