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Say What? Are PTAB Judges Really 'Inferior Officers'?
Proving that even the driest of constitutional issues can have significant practical effect, the United States Supreme Court recently heard argument in United States v. Arthrex, Inc., et al., No. 19-1434. Before the Court was whether administrative judges (APJs) of the United States Patent and Trademark Office's (USPTO) Patent Trial and Appeal Board (PTAB) have been appointed unconstitutionally under the America Invents Act (2011), particularly in view of their adjudicatory function in connection with inter partes review proceedings (IPRs). More specifically, are such judges "principal officers" under the Appointments Clause of Article II, Section, Two, Clause Two of the U.S. Constitution such that, to pass muster, they must be appointed by the President and confirmed by the U.S. Senate? Or are they instead "inferior" officers, properly appointed by the Commerce Secretary in consultation with the Director of the USPTO (Director)?
The key sub-issue is whether APJs are sufficiently supervised and controlled by the Director, particularly given that they have authority to invalidate patents without review by a presidentially-appointed official at the agency (the Director). Although the PTAB can grant rehearing of a panel's final written decision and render a decision on the merits, and the Director can reconstitute and sit as part of a panel deciding whether rehearing will occur, the Director is but one of three members of the panel with no determinative vote.
Arguing in favor of constitutionality was Smith & Nephew, Inc. (S&N), which had successfully invalidated a medical device patent of Arthrex, Inc. (Arthrex) via inter partes review before the PTAB, along with the United States as intervenor. (Collectively, Petitioners). Arthrex took an opposing view.
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