The question of whether the manner in which administrative patent judges (APJs) have been appointed to the Patent Trial and Appeal Board violates the Appointments Clause of the Constitution is headed to the U.S. Supreme Court. On October 13, 2020, the Supreme Court granted petitions for a writ of certiorari to review the Federal Circuit’s decision in Arthrex, Inc. v. Smith & Nephew, Inc., in which the Federal Circuit ruled that the U.S. Secretary of Commerce’s practice of appointing APJs, as set forth in Title 35, is unconstitutional for failure to comply with the Appointments Clause of the Constitution.
To remedy the constitutional defect, the Federal Circuit severed the portion of the Patent Act that prevents the Secretary of Commerce from removing APJs without cause. The case was then remanded to the Patent Trial and Appeal Board (“PTAB”) for a hearing before a new panel of APJs. The Federal Circuit denied rehearing, with four judges dissenting.
In its analysis, the Federal Circuit considered whether APJs are “Officers of the United States,” and if so, whether they are inferior or principal officers. The Federal Circuit determined that the APJs were principal officers, and therefore must be appointed by the president and confirmed by the senate. The Federal Circuit’s decision resulted in the remand of numerous PTAB cases that had reached final written decisions. The Chief Administrative Patent Judge issued a general order holding in abeyance more than 100 cases, and additional cases remanded to it, until the Supreme Court acts on a petition for certiorari.
The Supreme Court granted certiorari on two questions raising common questions across the three petitions filed by the government, Smith & Nephew (the petitioner), and Anthrex (the patent owner):
- 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.
- 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.
If the Supreme Court sides with the petitioner, and reverses the Federal Circuit’s ruling that APJs are principal officers, then question 2 will be moot. However, if the Supreme Court agrees with the Federal Circuit’s determination, then question 2, which addresses the appropriate remedy for the Appointments Clause defect, must be addressed.
Arthrex will likely be argued in early 2021 and decided by July 2021. We will continue to monitor this important case and keep you apprised of further developments.