In United States v. Arthrex, Inc., the Supreme Court held that the unreviewable authority of Administrative Patent Judges ("APJs") violates the Appointments Clause of the Constitution. On June 21, 2021, the Court handed down its opinion, declaring unenforceable Section 6(c) of the America Invents Act with respect to the unreviewability of final decisions issued by APJs.
The constitutionality argument was first raised by Arthrex at the federal circuit after its surgical device patent was invalidated by the U.S. Patent and Trademark Office ("PTO"). The question presented to the Court was whether the nature of APJs' responsibilities is consistent with their method of appointment. No party disputed whether APJs are "officers" under the Constitution, but rather whether the APJs were "inferior officers," in which case their method of appointment would be permissible, or "superior officers," who must be appointed by the President with the advice and consent of the Senate. APJs sit on panels composed of three members on behalf of the Patent Trial and Appeal Board ("PTAB"), which is an executive adjudicatory body within the PTO. The PTAB can reexamine patents issued by the PTO, and can declare patents to be invalid, including during the adversarial inter partes review process.
Justice Roberts, writing for a splintered Court, held that APJs were inferior officers because no superior executive officer reviewed their decision. The Court rejected the DOJ's argument that APJs are under the supervision of the Director of the PTO because the Director has options available to effectively review PTAB decisions, including, e.g., stacking a panel with APJs whose approaches align more with his or her own. The majority held that such measures obfuscate the contours of accountability demanded by the Appointments Clause.
Justice Thomas, writing the principal dissent, argued that limited review of an officer's decisions does not make that officer a superior one. Both Justice Gorsuch and Justice Breyer wrote separately, each concurring in part and dissenting in part. Justice Gorsuch's main concern was the due process afforded to individuals whose vested property rights are in question, while Justice Breyer's opinion emphasized the importance of allowing Congress to decide the appropriate degree of oversight for inferior officers.
Commentary Ryan Plesh
This case is as notable for what it does not do as for what it does. Justice Roberts' opinion avoided the extreme route of striking the entirety of inter partes review as unconstitutional. The majority opinion does not clarify whether APJs are principal officers appointed in violation of the Appointments Clause or inferior officers acting beyond the permissible scope of their powers. The Court focuses not on what APJs are, but what they may do, and the constitutional violation that follows. This decision, allowing the Director to review final decisions of APJs, manages to preserve the inter partes review system by placing the center of authority for PTAB decision-making closer to a politically accountable official.
Cadwalader's Dash Cole contributed to this article and analysis.
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