Supreme Court Set to Rule on Constitutionality of Administrative Patent Judges - Fordham Intellectual Property, Media & Entertainment Law Journal
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Supreme Court Set to Rule on Constitutionality of Administrative Patent Judges

Supreme Court Set to Rule on Constitutionality of Administrative Patent Judges

On Tuesday, October 13, 2020, the Supreme Court granted certiorari in Arthrex, Inc. v. Smith & Nephew, Inc.1 The Court consolidated three related cases into two central issues:

1. Whether patent administrative judges need to be appointed by the President with the advice and consent of the Senate, as outlined in the Appointments Clause; and

2. If patent administrative judges do fall under the Appointments Clause, whether the Federal Circuit adequately resolved the improper appointment of these judges.2

 

The Court granting certiorari represented a culmination of tensions between administrative and patent law. Parties can challenge the validity of patents through inter partes review (IPR), an administrative proceeding in which a panel of Administrative Patent Judges (APJs) from the Patent Trials and Appeals Board (PTAB) determines the validity of a patent.3 These reviews allow parties to skip over patent litigation, saving time and costs.4 Currently, APJs are approved by the Secretary of Commerce.5 How APJs receive their positions defines the critical issue in front of the Supreme Court.

The Appointments Clause in the Constitution allows the President to “appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States,” with the “Advice and Consent of the Senate.”6 Officers and judges that have been appointed through this process are considered “principal officers.”7 The Appointments Clause also allows the appointment of officers “in the President alone, in the Courts of Law, or in the Heads of Departments,” which bypasses the Senate approval process.8 Officers and judges appointed in this capacity are referred to as “inferior officers.”9 In a critical decision in 2019, the Federal Circuit ruled in Arthrex that the APJs were to be considered “principal officers,” and essentially were unconstitutionally appointed.10

The original disagreement in Arthrex, Inc. v. Smith & Nephew, Inc. involved U.S. Patent No. 9,179,907 (‘907 patent), granted to Arthrex.11 The ‘907 patent claimed a knotless suture securing assembly, which would allow surgeons to reattach tendons to the bone with greater ease.12 Smith & Nephew challenged the validity of the ‘907 patent through an inter partes review.13 The PTAB declared that the ‘907 patent was invalid.14 Arthrex subsequently appealed to the Federal Circuit.

In the appeal, Arthrex challenged the PTAB ruling, arguing that APJs were not properly appointed and thus could not issue this ruling.15Arthrex contended that APJs, given their responsibility and role in the USPTO, should be considered principal officers that are required to be appointed by the President and subject to the advice and consent of the Senate.16 Since these judges were not subject to these nomination procedures, the PTAB ruling should be considered invalid.17

The Federal Circuit agreed with Arthrex and found that the proceeding held by the PTAB invalid.18 The court stated that the classification of appointed officers as “principal officers” or “inferior officers” depends on three major factors: the presence of a superior that reviews the decisions made by the officer, how closely the officer’s work is supervised or overseen by another Executive official, and how easily the officer is removed.19

As for the first factor, the Federal Circuit found that the opinions issued by the panel of APJs were considered final and not reviewable, weighing against the APJs as inferior officers.20 The court found that the Director of the PTAB did have sufficient supervisory power over the judges to deem the judges as inferior officers.21 However, the Director only can only assign APJs to panels; PTAB judges cannot be removed from office without cause.22 Because of these removal restrictions, the Federal Circuit felt that APJs were closer to principal, as opposed to inferior officers.23 The three factors together indicate that the judges are considered principal officers, and thus must be subject to the nomination and approval process.24

Due to the incorrect nomination process, the Federal Circuit then pondered how to alleviate the situation.25 The court followed precedent and severed part of the statute requiring removal for cause from applying to APJs.26 The Federal Circuit then remanded the case back to the PTAB for a new panel of judges to hear the case.27

The original decision was met with some shock and concern, as the implications of the Federal Circuit’s decision undermined the role of the administrative patent judges.28 A flurry of cases followed the Federal Court’s decision, trying to clarify the parameters of the ruling, and multiple certiorari petitions were filed.29 Experts expressed mixed opinions regarding how the Supreme Court will view the Federal Circuit’s ruling, especially with the passage of Justice Ginsburg.30 Given the Supreme Court’s recent track record of viewing administrative law cases relatively skeptically, the outcome of the Arthrex case will certainly be worth watching.


  1. Smith & Nephew, Inc. v. Arthrex, Inc. No 19-1452, 2020 WL 6037207 (U.S. Oct. 13, 2020).

  2. See Memorandum for the United States at 6­–7, Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1458 (U.S. July 22, 2020).

  3. See Inter Partes Review, U.S. Pat. & Trademark Off., https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/trials/inter-partes-review [https://perma.cc/J9GM-K4K4].

  4. See Ryan Kennedy, Which Invalidity Avenue to Take: Inter Partes Review Verses Post-Grant Review, IPWatchdog (July 31, 2018) https://www.ipwatchdog.com/2018/07/31/which-invalidity-avenue-ipr-verses-post-grant-review/id=99460/[https://perma.cc/HJH9-9JPE].

  5. See About our administrative patent judges, U.S. Pat. & Trademark Off., https://www.uspto.gov/sites/default/files/documents/ptab_brochure_v2_4_10_14.pdf (last visited Oct. 26, 2020).

  6. U.S. Const. art. II, §2 cl. 2.

  7. See Jeffrey McCoy & Oliver Dunford, Symposium: The future of the appointments clause, SCOTUSblog (June 21, 2018, 3:42 PM) https://www.scotusblog.com/2018/06/symposium-the-future-of-the-appointments-clause/ [https://perma.cc/YGH2-89YW].

  8. U.S. Const. art. II, §2 cl. 2.

  9. McCoy & Dunford, supra note 7.

  10. See Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1335 (Fed. Cir. 2019), cert. granted, 2020 WL 6037207 (U.S. Oct. 13, 2020) (No. 19-1452).

  11. Smith & Nephew, Inc. v. Arthrex, Inc., No, IPR2017–00275, 2018 WL 2084866, at *1 (P.T.A.B. May, 2, 2018).

  12. Id. at *2.

  13. Id. at *1

  14. Id. at *18

  15. See Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1324 (Fed. Cir. 2019), cert. granted, 2020 WL 6037207 (U.S. Oct. 13, 2020) (No. 19-1452).

  16. Id. at 1327.

  17. See id.

  18. Seeid.at 1324 (vacating and remanding case).

  19. Id. at 1329.

  20. Id. at 1329–31.

  21. Id. at 1331–32.

  22. Id. at 1333.

  23. Id. at 1333–34.

  24. Id. at 1335.

  25. Id. at 1335–38.

  26. Id. at 1338.

  27. Id. at 1339.

  28. See What’s Next After Arthrex? Reactions Suggest Limited Immediate Effect, But Some Question Whether CAFC Fix Will Hold, IPWatchdog (Nov. 3, 2020) https://www.ipwatchdog.com/2019/11/03/whats-next-arthrex-reactions-suggest-limited-immediate-effect-question-whether-cafc-fix-will-hold/id=115570/ [https://perma.cc/7VU2-E3C6] (last updated Nov. 4, 2019).

  29. See Steve Brachmann, Federal Circuit Issues Several Rulings Defining Contours of ArthrexDecision, IPWatchdog (May 17, 2020) https://www.ipwatchdog.com/2020/05/17/federal-circuit-issues-several-rulings-defining-contours-arthrex-decision/id=121656/ [https://perma.cc/29K8-UMAW].

  30. See Eileen McDermott, Patent Stakeholders Weigh in on High Court Decision to Hear Arthrex, IPWatchdog (Oct. 13, 2020) https://www.ipwatchdog.com/2020/10/13/patent-stakeholders-weigh-high-court-decision-hear-arthrex/id=126291/ [https://perma.cc/4ZAL-3Z5L].

Anna Zhou

Anna Zhou is a second-year J.D. candidate at the Fordham University School of Law, and a staff member of the Intellectual Property, Media & Entertainment Law Journal. She is also a member of the Fordham Law Moot Court Board, and secretary for Fordham Asian Pacific American Law Students Association. She holds a B.A. in Chemistry from Williams College.