June 21, 2021

Supreme Court Decides United States v. Arthrex, Inc.

On June 21, 2021, the U.S. Supreme Court decided United States v. Arthrex, Inc., holding that, because Administrative Patent Judges are not appointed by the President or confirmed by the Senate, the Constitution’s Appointments Clause requires that their decisions on the validity of patents be reviewable by the Director of the Patent and Trademark Office.

Historically, decisions on whether inventions were patentable were made by officials appointed by the President and confirmed by the Senate. In the Leahy-Smith America Invents Act of 2011, however, Congress created the Patent Trial and Appeal Board (PTAB), staffed principally by Administrative Patent Judges (APJs) appointed by the Secretary of Commerce. The statute gives the PTAB power to declare previously issued patents invalid, without review by any other executive-branch officer. The Patent and Trademark Office, headed by a Director appointed by the President, houses the PTAB, but the statute specifies that “only” PTAB itself “may grant rehearings” of PTAB decisions — leaving PTAB decisions reviewable only by the courts.

The PTAB invalidated Arthrex, Inc.’s patent of a device for attaching tissue to bone. Arthrex challenged this invalidation, arguing that the Appointments Clause requires the President to appoint all executive officers except “inferior officers,” and that APJs are not inferior officers due to their ability to invalidate patents. The Federal Circuit agreed and struck down the portions of the statute providing that APJs cannot be removed from office except for cause.

The Supreme Court agreed, by a 5–4 vote, that the APJs’ statutory role violates the Appointments Clause. The Court explained that the Appointments Clause ensures that “the President is responsible for the actions of the Executive Branch,” and that since “the President can neither oversee the PTAB himself nor attribute the Board’s failings to those whom he can oversee,” the statutory design “conflicts with the design of the Appointments Clause to preserve political accountability."

By a separate 7–2 vote, however, the Supreme Court disagreed with the Federal Circuit’s remedy. Instead of striking down removal of APJs only for cause, the Court struck down the portion of the statute allowing only the PTAB to grant rehearings: the Director’s general statutory authority over the Patent and Trademark Office includes the power to review PTAB decisions.

The Chief Justice authored the opinion of the Court regarding the constitutional violation, joined by Justices Alito, Gorsuch, Kavanaugh, and Barrett. The Chief Justice also authored the controlling plurality opinion on the remedial question, joined by Justices Alito, Kavanaugh, and Barrett. Justice Gorsuch authored an opinion concurring on the constitutional violation and dissenting on the remedial question. Justice Breyer, joined by Justices Sotomayor and Kagan, authored an opinion dissenting on the constitutional violation but concurring in the judgment on the remedial question. Justice Thomas authored a dissenting opinion, joined only as to the constitutional violation by Justices Breyer, Sotomayor, and Kagan.

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