by Dennis Crouch
Arthrex v. Smith & Nephew (Fed. Cir. 2022)
In this ongoing litigation IPR litigation, Arthrex has filed another petition for rehearing — arguing that it still has not received the promised “Director Review” sufficient to cure the appointments clause problem apparent in the prior PTAB decision cancelling its patent claims.
The Supreme Court remanded this case so Arthrex could seek review of the Patent Trial and Appeal Board’s decision by a principal officer appointed by the President and confirmed by the Senate. On remand, Arthrex never received that principal officer review. Instead, Arthrex’s petition was denied by Commissioner Hirshfeld, who purported to exercise the Director’s functions during a vacancy in the office.
Arthrex’s particular argument focuses on the Federal Vacancies Reform Act providing “the exclusive means for temporarily authorizing an acting official to perform the functions and duties” of a principal office. Hirshfeld did not qualify for that role under FVRA. If you recall, Hirshfeld was never particularly identified as the “acting director” as a linguistic twist around the statute. Rather, Hirshfeld’s title was “performing the functions and the duties” of the Director.
The merits of the IPR turned on the Board’s decision that Arthrex’s purported priority application did not provide written description support of the challenged claims. The result was that Arthrex could not claim the benefit of that earlier filing data and intervening various prior art references rendered the claims invalid. In its petition, Arthrex also focuses on this issue and argues that “the Board acted beyond the scope of its statutory grant of authority” when it considered the Section 112 issues. Rather, under §311(b), review is limited only to consideration of Section 102/103.
Arthrex Petition 2022. Jeffrey Lamkin argued the case before the Supreme Court and continues to represent Arthrex in this appeal.
Caught in filter…
The petition questions:
“Whether the Patent and Trademark Office’s delegation of authority to Commissioner Hirshfeld to review final decisions of the Patent Trial and Appeal Board during a vacancy in the Director’s office violates the Federal Vacancies Reform Act.”
I have not had the chance to read through the petition to see what type of supporting arguments are provided, but the first question that occurred to me upon reading this first question was: exactly WHO delegated authority to Commissioner Hirshfeld in that game-playing NON-Title authority?
While we may colloquially treat the USPTO as a monolith, the administrative agency is — and must be — NOT so. It must have a delegable chain of command. In this technical-legal view, “The Agency” has NO authority to delegate authority – in the name of, or by the action of, the agency writ large.
Some SINGLE PERSON — with proper authority — must be traced to that is able to confer that delegation of authority.
IF this is swept under the rug, we will have yet another blatant sign of Deep State manipulation – and EVERY attorney should be appalled.
It’s because SCOTUS hates patents and treats the patent system as the red headed step child locked in the basement part of the Constitutional family. They should have struck down PTAB in Oil States and told Congress to try again. PTAB is the king’s privy court. Full stop. The problem being this red headed thing Congress created and SCOTUS hacked on yet approved and threw into the basement is going to seep into all the other Agencies.
+1
This rehearing petition even admits that the subject Fed. Cir. Arthrex remand decision already considered the FVRA statute and “Despite that provision, the panel held that the Patent and Trademark Office could authorize Commissioner Hirshfeld to perform all the Director’s functions during a vacancy simply by promulgating a delegation of authority to that effect.” One does not normally get rehearings to re-decide the same issues without presenting new or unconsidered controlling law or facts.
Indeed, request for reconsideration from the PTO is strange. Surely appealing the CAFC ruling to the SCOTUS or requesting reconsideration at the CAFC en banc would be a more efficient follow-up to their CAFC panel loss.
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