In its orders of October 13, 2020, the U.S. Supreme Court granted petitions for writ of certiorari to three cases involving Arthrex, Inc., dealing with the constitutionality of the PTAB’s judges: United States v. Arthrex, Inc. (Docket No. 19-1434), Smith & Nephew, Inc. v. Arthrex, Inc. (Docket No. 19-1452), and Arthrex, Inc. v. Smith & Nephew, Inc. (Docket No. 19-1458).
Issues are limited to Q1-Q2 of 7/22/20 Memo; consolidated cases with 1 hour of oral argument. The issues are: (1) Whether, for purposes of the Constitution’s appointments clause, administrative patent judges (APJs) 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; and (2) whether, if APJs 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.
To recap, the Appointments Clause is Art. II, §2, Cl. 2:
He [The President] shall have power, by and with the advice and consent of the Senate, to make treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the advice and consent of the Senate, shall appoint ambassadors, other public ministers and consuls, judges of the Supreme Court, and all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the President alone, in the courts of law, or in the heads of departments.
(emphasis added.)
The Arthrex decision by the Fed Circuit (and the subsequent denial of the petition for rehearing) caused a seismic shift in the challenges to the post-grant proceedings, which started with the constitutionality of the post-grant regime itself, decided by the Supreme Court in its Oil States decision in 2018,[1] and has now culminated with the Arthrex cases.
This consolidated case before the Supreme Court is groundbreaking because it cuts to the heart of the post-grant proceeding system initiated by the AIA in 2011 as an overhaul of U.S. patent law. By eliminating the process of having APJs appointed by the Director of the USPTO, and forcing the process into the Senate’s advice and consent requirement, would invalidate nearly all of the PTAB decisions issued since the AIA was enacted. We will continue to follow oral arguments and update the blog in due course.
[1] 584 U.S.___, 138 S. Ct. 1365 (2018), cert. granted, 137 S. Ct. 2239 (2017), affirming, 639 F. App’x 639 (Fed. Cir. 2016).