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).