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Are APJs Constitutional? The Supreme Court Will Review Arthrex

On October 13, 2020, the U.S. Supreme Court agreed to take up the question of the constitutionality of the Patent Trial and Appeal Board (PTAB) under the America Invents Act (AIA).  The Supreme Court will review the decision of the Court of Appeals for the Federal Circuit in what has become well known as the Arthrex case.

Potentially thousands of PTAB decisions in the eight or so years since the AIA came into force are at stake, depending on how the Supreme Court rules on the Federal Circuit’s decision.  At minimum, a number of pending PTAB cases that have been stayed pending this appeal will be stayed for a while longer.

The Supreme Court granted certiorari in three now-consolidated appeals.  The Supreme Court will consider two questions, as the Government presented them:

  1. 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.

  2. 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.[1]

The Federal Circuit answered Question 1 by finding that administrative patent judges (APJs) in the PTAB are principal officers because they cannot be terminated in the normal course.  The Federal Circuit held AIA provision creating APJs was unconstitutional because APJs are not appointed by the President with the Senate’s advice and consent.

The Federal Circuit addressed the constitutionality issue by voiding a part of the AIA so as to make APJs inferior officers.  With this statutory change, the USPTO Director can terminate APJs.

There are several ways the Supreme Court could go in deciding these consolidated appeals:

1)         Affirm, meaning that the Federal Circuit’s ruling and solution in Questions 1 and 2 were correct;

2)         Reverse, holding that the statute is proper as written;

3)         Reverse, holding that, while the Federal Circuit correctly found the clause to be unconstitutional, the Federal Circuit’s revision to the statute was incorrect.

a) The Supreme Court could substitute its own revision; or

b) The Supreme Court could remand and order the Federal Circuit to revise the statute differently;

4)         Reverse, holding that in this situation, it is not proper for a court to rewrite a statute to preserve its constitutionality, and leaving the ultimate solution in the hands of Congress, who passed the AIA.

5)         Vacate the Federal Circuit’s decision, and remand for further proceedings to consider alternative solutions.

Of these, Option 4) is the most unlikely because this would throw the entire PTAB structure, governing not only post-issuance patent proceedings but also patent appeals within the USPTO, into chaos.  Waiting for Congress to address the issue would leave the whole patent system in limbo.

Option 1) and Option 3)a) appear most likely, because either of these would resolve the situation most expeditiously.

Option 2) is unlikely because, as the AIA is written, there does appear to be an inconsistency between the manner in which APJs are appointed (as inferior officers) and how they are treated (as principal officers).

Options 3)b) and 5) are unlikely because the Supreme Court probably would present an alternative rather than leave it to the Federal Circuit to devise a different solution.

The current lack of a full complement of Supreme Court justices also could put an interesting twist on the outcome, as the ninth justice could break a 4-4 tie which otherwise would result in affirmance of the Federal Circuit decision.


[1] The Supreme Court denied certiorari on the Government’s Question 3:  Whether the court of appeals in Arthrex erred by adjudicating an Appointments Clause challenge that had not been presented to the agency.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 288
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Frank Bernstein Patent & Intellectual Property Attorney Squire Patton Boggs Palo Alto, CA
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Frank Bernstein uses his extensive patent litigation experience to think outside the box, helping clients obtain and defend challenging patents. He has extensive experience before the US Patent and Trademark Office (both pre-grant and post-grant patent matters), as well as in US district courts in all phases of patent infringement actions (pre-filing investigations to claim construction, Markman hearings to trials and appeals). His high technology expertise includes computer hardware and software, electronics, semiconductors, wireless, e-commerce and mechanical engineering. Apple, Sony,...

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