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Supreme Court Requires USPTO Director Discretion to Review PTAB Decisions

On June 21, 2021, the Supreme Court issued its much anticipated decision in United States v. Arthrex, holding:  “Decisions by APJs must be subject to review by the Director.”  Slip op. at 20.  The Supreme Court determined that “Congress has assigned APJs ‘significant authority’ in adjudicating the public rights of private parties, while also insulating their decisions from review and their offices from removal.”  Id. at 19.  Rather than adopt the Federal Circuit’s severance of tenure protection as the fix for Administrative Patent Judge exercising power that conflicted with the Appointments Clause, the Court instead held that the Director must have discretionary review of Administrative Patent Judge decisions.  While Arthrex vests the Director with the discretion to review decisions rendered by APJs and reach his own decision, the Director’s decision remains subject to Article III review before the Federal Circuit.  By providing the Director with the “discretion to review decisions rendered by APJs,” the “President remains responsible for the exercise of executive power—and through him, the exercise of executive power remains accountable to the people.”  Id. at 23. 

Ultimately, the Supreme Court vacated the decision and remanded the case to the Federal Circuit for further proceedings consistent with its opinion.  Id.  There is still uncertainly in light of the Supreme Court’s mixed decision and how it might be implemented.  Regardless, we know at least the following:

  1. “Arthrex is not entitled to a hearing before a new panel of APJs.” Id. at 23.

  2. “[T]he appropriate remedy is a remand to the Acting Director for him to decide whether to rehear the petition filed by Smith & Nephew.” Id. at 22.

  3. “To be clear, the Director need not review every decision of the PTAB.” Id.

Although the Supreme Court’s decision was limited to the matter before it, it seems likely that the USPTO will ultimately provide a process by which the Director has the discretion to review all final written decisions by the PTAB.  Once a discretionary review process has been put into place for the Director, its impact on AIA trials before the PTAB is likely to be rare.  Many open questions arise for active cases that have received or will receive a final written decision from the PTAB before a USPTO Director discretionary review process is enacted.  For example, there are approximately 100 cases subject to a general stay Order by the PTAB in view of Arthrex.  And there are also many cases that could be appealed or are already on appeal at the Federal Circuit.  Parties in these cases will want to weigh the potential impact of the Supreme Court’s decision and adjust their strategy accordingly.  For example, an additional discretionary review may only be viewed as advantageous in certain circumstances. 

© 2021 Finnegan, Henderson, Farabow, Garrett & Dunner, LLPNational Law Review, Volume XI, Number 172
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About this Author

J. Derek McCorquindale IP Biotech Attorney Finnegan
Partner

J. Derek McCorquindale focuses his practice on patent and other intellectual property litigation, at both the trial and appellate levels. He has experience in cases before federal district courts, the International Trade Commission (ITC), the Patent Trial and Appeal Board (PTAB), and the U.S. Court of Appeals for the Federal Circuit, where he has contributed to dozens of appeals and argued successfully as lead counsel.

Derek works on cases in a wide range of industries, including pharmaceutical and Abbreviated New Drug Application (ANDA)...

571-203-2768
Jason L. Romrell IP Litigation Attorney Finnegan
Partner

Jason Romrell helps companies navigate complex, high-risk intellectual property disputes at the trial and appellate levels. He represents clients before federal district courts, the International Trade Commission (ITC), the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO), and the U.S. Court of Appeals for the Federal Circuit, where he has drafted numerous appeal briefs and has successfully argued as lead counsel.

Jason has experience in all aspects of patent litigation, including discovery, depositions, claim...

202-408-4349
Trenton A. Ward patent intellectual property attorney Finnegan Atlanta
Partner

As a former Lead Administrative Patent Judge at the Patent Trial and Appeal Board (PTAB), Trenton Ward was on the front lines of the nascent post-grant review proceedings that have evolved into a prominent position in litigation and business strategies. He draws from his experience on the bench and as a practitioner to provide the highest level of counsel to clients in services ranging from litigation to prosecution and counseling.

In his prior position, Trenton adjudicated more than 250 America Invents Act (AIA) trial proceedings, including ...

404-653-6441
Joshua L. Goldberg attorney intellectual property Finnegan Washington DC
Partner

Joshua Goldberg, leader of Finnegan’s PTAB trials section, focuses on inter partes review (IPR), covered business method (CBM), and post-grant review (PGR) proceedings before the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO), and on ensuing appeals to the U.S. Court of Appeals for the Federal Circuit.

As lead or backup counsel in more than 225 IPRs, CBMs, and PGRs, Joshua represents petitioners and patent owners in proceedings involving patents directed to industrial manufacturing, automotive, chemical,...

202-408-6092
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