Monday March 1: US v. Arthrex — Was the PTAB Unconstitutionally Appointed

by Dennis Crouch

United States v. Arthrex, Inc. (Supreme Court 2021)

  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.

On Monday, March 1, 2021, the Supreme Court will hear oral arguments in this important case focusing on administrative power of the USPTO Patent Trial & Appeal Board.  PTAB judges have cancelled thousands of issued patents — that judicial role (with little direct control guidance from the USPTO Director) suggests that the PTAB judges are “Officers of the United States” that must be appointed by the President.  Although PTAB decisions are not directly reviewable by the USPTO Director, the director has substantial authority in controlling panel selection, rules of practice, and job performance.  All those suggest that perhaps the judges are “inferior Officers” that may be appointed by a Head of Department – such as the Secretary of Commerce.  If the Principal Officer theory prevails, the potential result is that a substantial number of PTAB Decisions will be rendered void.

The Federal Circuit decision in the case was a bit quirky, to be mild. The appellate court agreed with the patentee that the judges were Principal Officers that should have been appointed by the President.  However, the court also purported to “save” the appointments by eliminating some of the statutory rights provided to the Judges under the APA via judicial fiat. That severing, according to the court, was sufficient to reduce the judges once again to Inferior officers.

None of the parties were satisfied with this result, and each petitioned for writ of certiorari.  The Supreme Court granted the writ (as to the two questions above) and consolidated the cases.

I contacted my Mizzou Colleague and Constitutional Law Scholar Prof. Tommy Bennett for his take on the case.  Bennett agrees that the parties have presented differing theories of authority and power.  If you focus only on decisional authority, then Arthrex has a case that these are Officers requiring presidential appointment.  However, the staffing and organizational authority lies with the PTO Director who can “appoint, assign, and re-assign any APJ for any reason [and] set the rules and procedures by which PTAB proceedings are conducted.”  Prof. Bennett explained to me: “Which of these two views of authority prevails will, I think, determine how the case turns out.”

I also contacted Mark Perry for some commentary. Perry is arguing on behalf of the patent challenger Smith & Nephew and provided the following statement.

The PTO Director is charged by statute with providing policy direction and management supervision to the Office, including the Board.  APJs can’t start work without his approval, they have to follow his procedural and substantive guidance while working, and he has a variety of means to review their work.  Moreover, only the Director confirms or cancels patent claims at the conclusion of IPR proceedings, and thus he bears political accountability for final decisions. APJs are inferior Officers under the Appointments Clause, just as their predecessors have been since the Patent Office was created in 1836.

I’ll note here that the 1952 Patent Act required that the PTAB Judges (formerly Chief Examiners) be “appointed by the President, by and with the advice and consent of the Senate.” 35 U.S.C. 3 (1952). This does not mean that it was required, but suggests a close case.  The requirement of presidential appointment ended in 1975 when the duty of appointments was pushed-down to the Secretary of Commerce.  Appointments were later pushed-down further to the USPTO Director until Prof. John Duffy suggested that approach was unconstitutional.

March 1 Oral arguments are set to be divided as follows:

  • 15 minutes for US Gov’t Intervenor
  • 15 minutes for the patent challenger Smith & Nephew
  • 30 minutes for the patentee Arthrex

Deputy Solicitor General Malcolm Stewart will represent the U.S. at oral arguments.  Stewart has been part of the case from the beginning. Although his bosses have changed, I don’t believe that the Gov’t position has substantively wavered.  Mark Perry of Gibson Dunn will argue on behalf of Smith & Nephew; and Jeff Lamkin of MoloLamkin for the patentee.

At the briefing stage, the US Gov’t presented an additional waiver challenge — arguing that the patentee had not preserved its right to appeal on the appointments challenge. SCOTUS declined to hear that issue in this case. However, the issue is central to a parallel appointments challenge in Carr v. Saul.  That case is looking at whether administrative law judges deciding cases under the Social Security Act should have been appointed by the President

Whether a claimant seeking disability benefits under the SSA forfeits an appointments-clause challenge to the appointment of an administrative law judge by failing to present that challenge during administrative proceedings.

DocketCarr v. Saul is set for oral arguments on March 3, 2021.  I expect opinions in the cases will be released together later this term.

49 thoughts on “Monday March 1: US v. Arthrex — Was the PTAB Unconstitutionally Appointed

    1. 5.1

      Be nice if more people recognized and discussed the underlying Rule of Law so that when the Court strays, proper and universal umbrage would be so deafening that the Court would be compelled to NOT be scriviners and would honor such things as Separation of Powers.

      Would you not rather have that than ‘predictions?’

  1. 4

    Prediction: either 9-0 unconstitutional without Director review, remedied by severing the language denying review, or 9-0 the current scheme establishes enough control to maintain the APJ’s as inferior officers.

    The court seeks comity where it can find it, and they most often seem to find it in patent cases.

    They won’t go down the path saying the APJ’s are Principal Officers and they won’t remove the entire IPR scheme after so many cases / so much experience with it.

    1. 4.1

      No way will this be 9-0 either way. This strikes to a core dispute between the left and the right.

      Also, there is nothing that can just be struck from the AIA that would give the director full review of the IPRs. So, the justices will have to get their blue pencil out and add it.

      1. 4.2.1

        Gorsuch was talking about bluelining Section 6(c)

        (c)3-Member Panels.—
        Each appeal, derivation proceeding, post-grant review, and inter partes review shall be heard by at least 3 members of the Patent Trial and Appeal Board, who shall be designated by the Director. Only the Patent Trial and Appeal Board may grant rehearings.

        I do not see this matter in any way being a vehicle for the right wing members of the court to dismantle the Administrative State. They know that some executive branch adjudication must occur, and they would be opposed on general terms in a vast increase in the number of Principal Officers doing that work.

        I do think they will seek comity and the narrowest remedy and I expect a 9-0 decision. Nobody has a horse in this race that they care about very much, at least as it would appear from the argument transcript.


            Maybe something like this:

            (c)3-Member Panels.—
            Each appeal, derivation proceeding, post-grant review, and inter partes review shall be heard by at least 3 members of the Patent Trial and Appeal Board, who shall be designated by the Director. Only the Patent Trial and Appeal Board may grant rehearings.

            And as usual ‘the Director” would almost surely be held to mean that person or their designees.


              Martin, that is clever strikeouts. But that isn’t really about the review.

              What it needs is plenary review by the director. It needs about what they did for trademarks.

              And, my prediction is below. I like predictions because so many people claim to know the law so well on here but then won’t predict the outcome of cases. Predictions really put you out there as to whether you understand the judicial system.


                I like predictions because so many people claim to know the law so well on here but then won’t predict the outcome of cases

                Sorry, Night Writer, but THAT is one humungous miss.

                As you are WELL aware of, the score board is broken.

                Your view of the value of predictions would only make sense if the actual results of the score board reflected a PROPER application of the law.

                Making predictions otherwise might be fairly easy — and would be heavily dependent on the particulars of the panel members of the case being prognosticated.

                There IS a difference between understanding the “know the law well” and the ‘understand the PLAYERS of the judicial system.’

                The state of disarray (the Gordian Knot) is DIRECTLY reflective of my comments – regardless of ‘predictions.’

                1. anon, I said “whether you understand the judicial system.”

                  Get it? It includes all that. It is a test of whether you understand what is going on.

                2. I DO understand it – that’s why I drew the contrast to your first assertion of predictions being a gauge of “know the law well.”

                  Slow down.

                3. I think to be able to make good predictions you have to understand the law and how it is applied.

                  If you don’t know the law well, then your predictions will not be consistently good.

                  If you don’t know the judiciary well, then your predictions will not be consistently good.

                  They are both necessary but neither is sufficient.

                4. That’s just it – no, you don’t need any of that you in order to make good predictions.

                  Even a Lemming could make a good prediction on certain matters before the Supreme Court because the Supreme Court themselves do not appear to know — or care — about the law.

                  It is actually pretty easy to set up patent predictions that are higher than average:

                  Is it bad for patent holders? Then the Court will go for it.

                  Even worse though, is that “predicting” merely on a Desired Ends makes a mockery of the Means to those Ends, which IS an even larger problem with patent jurisprudence.

                5. I do not think that anything NEEDS BE DONE about that.

                  As I have indicated, your “liking” is simply not at point, not required, and has no bearing on any merits of any discussion on patent law matters.

                  Why in the world would you think otherwise?

                6. I care not at all whether you choose to report my REPLIES to your game playing.

                  I do care that you seem intent on not learning a lesson in your abject cyberstalking.

                7. The phrase you choose to use is clearly not appropriate here.

                  It’s as if you really do not care at all what any response would be.

                8. Why do you bother inserting such falsehoods, Shifty?

                  It is abundantly clear – or at least it should be by now, that your game playing of posting in random spots on (currently) 13 different threads – with ZERO tie to the prior conversations or topic of the thread and ONE HUNDRED percent tie to being to or about me, has drawn a readership of just three people: you, me, and the editor.

                  How is your assertion or me ‘pretending’ even working for you?

                  How is this not ONLY confirming my position?

                  Do you realize how self-defeating your games are?

    2. 4.3

      Good bet, but 9-0 full unanimity is a long shot for the part about “severing the language denying review” as that still requires holding part of an act of Congress unconstitutional.

  2. 3

    Prediction: 5-4 unconstitutional. Remedy. Just like the Trade Trial Board all decisions are reviewable by the director. Remand with a review by the director.

    1. 3.1

      Also, WOW! The split between the Rs and Ds is so deep. The Ds want an administrative state where you pretty much have no rights and the Rs want you to have rights.

      Bryer as is typical is leading the charge to enslave us all.

      (And, just think I am generally a liberal democrat who favors liberal democratic policies. But the D party of today is a totalitarian nightmare.)

      1. 3.1.1

        The guy arguing that it is Constitutional is just —flat out–obnoxious.

        I guess when the facts are against you, you have to become obnoxious.

        Sad thing is that the Kagen/Breyer pair of totalitarian sleaze balls would hold it Constitutional.

      2. 3.1.2

        Yea; just as untold millions of Americans have done . . . I didn’t leave the Democratic Party.

        They left me; and us.

        Decades ago.

    2. 3.2

      Is your “remedy” actually within the power of the Court to write into law?

      Serious question.

      Hint: the answer is “No.”

      1. 3.2.1

        anon, it is the Scotus. It is not about what is Constitutional but about what they are going to do.

        I would tend to agree that they don’t have the authority to write the law, but after listening to the oral arguments, I’d bet that my prediction is right.


          Oh, I here you, and was not challenging your prediction – just noting that if the Rule of Law were to be properly adhered to, then some other remedy would be in order.


              Expressly not.

              Further, the next time you speak with an attorney, draw a conversation with them about their state oath, and whether or not the Supreme Court (merely one of the three branches) is placed higher than the Constitution itself.


                anon, you are right about the Scotus not following the Constitution but in today’s political climate nothing will be done about it and no politician gives a hoot. Nothing will change in our lifetime.

                So telling clients to pursue this is not in their best interests.

                1. Turning a blind eye and not living up to that part of your state oath that places the Constitution above each of the three branches of the government in some type of defeatist attitude makes you a part of the problem.

                  No one is saying “don’t serve the interests of your clients.”

                  That’s a false conclusion.

                  I fully “get” the ‘legal realism’ of the day, with a Congress more obsessed with li$t€ning to the voices of Big Corp, and the struggle for power in a rad i cally polarized poli/philosophical setting of today.

                  But that only makes it more important — not less — for those like us attorneys who desire strong innovation protection to speak up.

    3. 3.3

      If it turns out to be unconstitutional, it’s still not clear to me why the rationale might not also apply to primary patent examiners with signatory authority as a decision to grant or allow patents in the first instance is not automatically reviewed by the Director and not the subject of an appeal to the PTAB.

      1. 3.3.2

        Because the examining corps operates under the authority of the Director. See 35 USC 3 (“In general.—The powers and duties of the United States Patent and Trademark Office shall be vested in an Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.”)

        In contrast, the Board has its own independent grant of statutory authority in 35 USC 6. See also Animal Legal Defense Fund v. Quigg, 932 F.2d 920, 928-929 (Fed. Cir. 1991) (“the Board’s authority … rests on an independent grant.”)


          J. Doerre,

          Several of your posts have been top notch – normally I speak to those that I disagree with (typically no need to echo those I agree with), but worth noting your contributions.

          Thank you.

    4. 3.4

      It was Congress that made the TTAB decisions reviewable by the Director. Why would SCOTUS remand the case to do what Congress decided not to do?

      1. 3.4.1

        Congress deciding not to do something (or to do something that is self-conflicting) is not ‘an answer.’

        There is something broken in the current process, and the Court is being asked to do something about that brokenness.

        The better question (and focus) would be to ask what are the proper available remedies that the Court could engage in.

        IF the Court is boxed in or constrained in its choices, and must choose a drastic one, then inte11ectual honesty (and respect for the Rule of Law) should prevail.

        Everyone here should also recognize that there is often a gulf between “should” and “does.”

  3. 1

    What the Executive Branch Administrative Agency is, is.

    Perhaps though, the question before the High Court should reflect what the other branches, the Legislative Branch and the Judicial Branch have considered these Administrative Agency ‘judges’ to be.

    In the AIA (as reflected in the decision of Oil States), both other branches appear to bank on the PTAB as being a true neutral power that stands as an alternative to the neutrality of the Judicial Branch.

    Push too hard for a focus on why the PTAB ‘judges’ are NOT neutral, and you (should) incur the necessary implication that the AIA and Oil States are improper.

    This line of reasoning is important to understand just WHY “principal officers” is even a point.

    1. 1.1

      Great thoughts. Perhaps pulling the Arthrex string will cause the entire AIA garment to come apart. Let’s hope so.

      1. 1.1.1

        I am not certain about that.

        Last discussed, it was pointed out that such was indeed a possibility, although there were TWO different situations involved in whether or not the AIA was intended to be a “full rise or fall as one” type of thing.

        It’s been awhile, and I do not think that I earmarked a hyperlink back to that last discussion.

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