Does the Temporary PTO Director have Arthrex Authority?

by Dennis Crouch

Arthrex, Inc. v. Smith & Nephew, Inc. (Fed. Cir. 2022).

In 2021, the Supreme Court sided with the patentee in holding that the AIA trial system violated the Appointments Clause of the U.S. Constitution. The Court concluded that PTAB judges were wielding the substantial power of the U.S. Gov’t by cancelling already-issued patent claims.  The Constitution provides that officers wielding such power must be directly tied to the US President via presidential nomination and confirmation by the US Senate.  But, PTAB judges are appointed by the Secretary of Commerce and do not undergo Senate confirmation.  Rather than burning down the entire house, the Supreme Court partially rewrote the statute — adding the presidentially appointed USPTO director as an intermediary with power to accept or reject any PTAB decision stemming from an AIA trial.

The PTAB had originally sided with the patent challenger (Smith & Nephew) in finding the claims unpatentable. After the Supreme Court decision, the case was remanded back to the Patent Office so that the USPTO Director could have the final word from the administrative agency.  Commissioner for Patents Drew Hirshfeld denied the petition for director review.   Although Hirshfeld is currently the USPTO’s highest ranking official, he is not the USPTO Director, nor is he the Acting Director rather he continues in his role as Commissioner for Patents while still “performing the functions and duties of the Director.” Further, Hirshfeld was not nominated by the President or confirmed by the Senate. Rather, just like the PTAB judges found Constitutionally inadequate, Hirshfeld is an inferior officer appointed by the Secretary of Commerce.

Arthrex has now appealed its case back to the Federal Circuit — arguing that Hirshfeld’s denial does not meet the strict requirements imposed by the Constitution and the Supreme Court.  The basic argument here is simple — the Supreme Court held that the PTO’s final agency decision in an IPR must come from a presidentially appointed principal officer.

One issue here is the practicalities of running an administrative agency such as the PTO in the interim following resignation of a presidentially nominated director. From the beginning of the Republic (1791), Congress has authorized temporary appointments in situations where the full nomination-confirmation process might take too much time to complete.  Today, this process is generally provided for by the Federal Vacancies Reform.  That law outlines mechanisms for allowing a temporary acting Director absent Senate confirmation.  However, Hirshfeld does not qualify even for this statutory work-around because he was not the Deputy Director nor was he personally selected by the President.

One aspect of the appointments clause is to draw a direct link to the President.  A final difficulty for Hirshfeld is that his appointment has a 5-year tenure protection and can only be removed early for cause. 35 U.S.C. 4(b)(2).  These tenure protections further limit Presidential power over agency action.

In response, Smith & Nephew rely heavily on United States v. Eaton, 169 U.S. 331 (1898). In Eaton, the Supreme Court permitted approved of a non-presidential appointment of an officer “under special and temporary conditions.”  However, there is a strong suggestion that Eaton was an inferior Officer rather than principal Officer case.  Dir. Hirshfeld has now been standing-in as director for more than one year — on the  four-year-timeline of the Presidency, this is starting to appear permanent.

Oral arguments in this round of the appeal are set for March 30, 2022.


Although it is not entirely clear, it appears to me that the original merits panel of Chief Judge Moore, and Judges Reyna and Chen will retain the case and here this petition as well.  This trio decided the original case, with Judge Moore writing the opinion.  The Federal Circuit and Supreme Court both agreed that the PTAB judges were principal officers if the IPR statute was strictly followed. The Federal Circuit offered a different remedy (removing PTAB judge tenure) than the Supreme Court (adding Director Review).  Following the Supreme Court decision, the same panel issued the order to remand the case for Director Review.  However, that remand included a statement that the “court retains jurisdiction over this appeal” and that the appellate proceedings are simply stayed.  Thus, the appeal pending now is using the same docket number (18-2140) and, I expect, will be in front of the same set of judges.

42 thoughts on “Does the Temporary PTO Director have Arthrex Authority?

  1. 10

    Reported today that “The Federal Circuit requested a reply in support of a combined petition in Corephotonics, Ltd. v. Apple Inc., a case that raised questions related to the Appointments Clause.”

  2. 9

    Dear Dennis @ 1.1 —

    > She could put her blessing on Hirshfeld’s actions and
    > that could moot the whole thing.

    Nope. Vacancies Reform Act 5 U.S.C. § 3348(d) – an action by an invalidly-non-appointed placeholder like Hirshfeld “shall have no force or effect” and “may not be ratified.”

    Decades ago, Congress got fed up with hanky-panky and corner-cutting, and put real teeth into the Vacancies Reform Act, to ensure that agencies would have validly-appointed politically-accountable heads within 210 days. Almost all agencies took the law seriously. For instance, many asked the President to issue Executive Orders that cover the bases.

    After much research, there’s only one agency whose lawyers didn’t bother. The United States Patent and Trademark Office.

    1. 9.2

      As I have pointed out (notably to Paul Morgan, who cannot be bothered with such things), the USPTO insisted on playing games with Hirshfield, not even naming him “Acting,” but instead went with the time-unlimited “performing the duties of” —showing the disdain of the “inner circle” at the Office for legislated constraints on Executive administrative agencies.

      And certainly while not all examiners are affected by this Bureaucratic hubris, there certainly are those who ARE emboldened.

    2. 9.3

      Dave, neither Dennis or I were asserting that Hirshfeld’s IPR reconsideration decisions themselves were valid. Rather, that the new and properly appointed PTO Director [or above] could reconsider those same IPR reconsideration requests and properly re-decide them, thus mooting this appeal.
      I also noted that the Fed. Cir. does not even need decide this issue simply by holding that the reconsideration petition itself does not raise legally sufficient grounds for a reconsideration order by anyone. [Which would make the Hirshfeld non-appointment issue a purely hypothetical question].

  3. 8

    “Does the Temporary PTO Director have Arthrex Authority?”

    Short answer: No.

    Long answer: No.

  4. 7

    Is “Arthrex” just the Latin word for “kicking the can down the road”?

      1. 7.1.2

        Good one.
        As a general question, why do so many CPCs and GCs duck their duties to their stockholders by not challenging the legal fees for all their expensive O.C. “Hail Marys” we see so often on this blog, including all the clear loser certs?


          What basis do you have for inserting your predisposed “so many” comment?

          Your feelings, even your anecdotal experiences, do not support your loaded question.

  5. 6

    Off-topic question:
    Is there any PTAB or Federal Circuit decision that addresses USPTO policy with regard to claim interpretation by an examiner for whom English is a second language?

    1. 6.1

      Interesting question, but I would doubt that any such animal exists, given that the USPTO requires use of English as the official language.

      I just do not see a substantive case arising in which one side would persist that anything other than English would be acceptable.

      1. 6.1.1

        “the USPTO requires use of English as the official language.”

        . . . just not the high-level, great-command of English use that proper examination requires.

    2. 6.2

      Why would that matter? The standard for claim interpretation has nothing to do with the Examiner’s proficiency in the English language or lack thereof. I have seen many unreasonable interpretation positions taken by US-born, native English speaking examiners. Are you discriminating based on national origin?

      1. 6.2.1

        “The standard for claim interpretation has nothing to do with the Examiner’s proficiency in the English language or lack thereof.”

        Ugh. You can’t honesty believe this.

        Discriminating based on national origin?

        Sorry, but this is about the ability to effectively understand and communicate at the high, professional level necessary to carry out the critically-important job of innovation examination.

        National origin has nothing to do with it.


      2. 6.2.2

        Oh brother, anonymous, another far left extremist. A woke wan kie.

        I’ve had several instances where the examiner had difficulty with English but at the same time wanted to force ridiculous claim interpretations on me. One didn’t even know what a common word meant but at the same time would tell me what the claim meant.

        It is an interesting question regarding deference if that deference should extend to a situation where the expertise regards English and the person does not have expertise with English.

      3. 6.2.3

        Claim drafting involves a lot of nuance. Yes, even US-born, English-speakers can have trouble understanding nuance, but foreign-born speakers for whom English is a second-language can have even greater difficulty understanding the subtleties of English.

  6. 5

    The USPTO and Federal Circuit don’t have to follow the law, they are free to make it up as they go.

    1. 5.1

      … learning their lesson from the Supreme Court, no less.

      (who cares that the Constitution delegated authority to write patent law to the Legislative Branch)

  7. 4

    I don’t know. Seems like if the president just lets a temporary replacement sit there for a year and there isn’t any compelling reason why they haven’t been replaced that this is implicitly an appointment.

    1. 4.1

      Plus the tenure issue doesn’t seem like it is dispositive in that the president could still remove him and have another employee of the USPTO take the role.

    2. 4.2

      Isn’t any compelling reason?

      You mean, besides the APA and the Arthrex case itself?

      Do I even have to point out that “implicit” appointments are not vetted as was the point of the Arthrex case?


      1. 4.2.1

        I guess you are right anon. I guess that the functions of the PTO should be reduced until the director is appointed.

        I guess allowing this just permits this endless procrastinating on the part of these politicians who are probably busy counting the money they put in their pockets during the election.


          For me what is worse is that this simply reflects the lack of actual care about promoting innovation in this country by the politicians (on both sides of the aisle).

          Vacuum of leadership only emboldens the Efficient Infringers.


            The objective evidence is that the USA is no longer number 1 (as it had been for decades) in all the major fields and that patent filing from US inventors is falling.

    3. 4.3

      > implicitly an appointment.

      …thereby avoiding the need for Senate confirmation, which is why implicit appointments should be a problem.

      That said, it’s rather shocking that the D’s haven’t managed to finish forming their government by now given: (i) they have control the Senate; and (ii) the Senate isn’t doing much else; and (iii) they have a good chance of loosing control in a couple months.

  8. 3

    Ex post facto “blessing” cannot cure prior improper authority.

    Criminy guys – THIS is a case about proper authority. I see a level of tone-deafness that is appalling.

  9. 2

    It seems to me a waste of money and resources at all levels. Couldn’t the Government act reasonably and have the Secretary of Commerce review the decision? She is confirmed and in place, no?

  10. 1

    What are the chances that this IPR-finality-disruptive issue [of whether or not Drew Hirshfeld has authority to review IPR reconsideration petitions for the PTO Director] might be simply “waffled” by the Fed. Cir. – by holding that this reconsideration petition itself does not raise legally sufficient grounds for reconsideration orders by anyone?
    [The Fed. Cir. presumably must realize that if their decision was simply “no” to the stated question, that this could affect many other federal agencies with regularly long delayed appointments and Congressional approvals of all top officials, and would seem ripe for cert?]

    1. 1.1

      Vidal will likely be confirmed around the time of oral arguments. She could put her blessing on Hirshfeld’s actions and that could moot the whole thing.


            Unless the statute specifically calls out “USPTO Director.” The fact that the Director nominally reports to the Commerce Secretary may just be a line on an org chart.

      1. 1.1.3

        How would Vidal have the legal authority to retrospectively give a stamp of approval to such previously-rendered decisions?

    2. 1.2

      [Not to mention that we will have a new PTO Director in place before the Fed. Cir. needs to decide this case who could presumably moot all these challenges by simply adopting Drew Hirshfeld’s IPR reconsideration petition decisions, whether granted or denied?]

Comments are closed.