Arthrex Update: New Amicus Briefs and USPTO Petition

Activity surrounding the requests for the Supreme Court’s review of the holdings in Arthrex v. Smith & Nephew I and Arthrex v. Smith & Nephew II continues to increase. As outlined in “A Guide to Arthrex: Activity Heats Up in Petitions Pending with Supreme Court”, four petitions for writs of certiorari have been filed:  U.S. v Arthrex, No. 19-1434, Smith & Nephew v. Arthrex, No. 19-1452, Arthrex v. Smith & Nephew, No. 19-1458, and Arthrex v. Smith & Nephew, No. 19-1204.  Now, three more amicus briefs have been filed by US Inventor, TiVo and Comcast, and on July 27, an additional consolidated petition for certiorari filed by the U.S. Government and USPTO Director Andrei Iancu asked the Court to review 39 Federal Circuit rulings affected by Arthrex.

US Inventor

On August 4, US Inventor, Inc. filed an amicus brief in Arthrex v. Smith & Nephew, No. 19-1458 to provide additional reasons why the Supreme Court should review the U.S. Court of Appeals of the Federal Circuit’s (CAFC) remedy for the “adjudged unconstitutionality” in Arthrex.  US Inventor is a non-profit association of inventors founded to protect the intellectual property rights of individuals and small businesses. In the petition, US Inventor noted that is has “long believed that something is wrong with the structure of the Patent Trial and Appeal Board (PTAB) [and in the Arthrex decision], the court of appeals validated those beliefs.”

The petition sets forth US Inventor’s position that the CAFC was correct in holding that Administrative Patent Judges (APJs) are unconstitutionally appointed, but incorrect in its remedy, i.e. “abolition of APJ tenure protection”, because it does not “change anything about the character of APJ validity decisions that might downgrade APJ employment status from principal officer to that of inferior or non-officer.” US Inventor suggested an alternate remedy for consideration by the Supreme Court: “sever[ing] the statute so that patentability determinations continue as Congress intended, only with APJs downgraded to making advisory patentability decisions”, thereby making APJs inferior or non-officers. According to US Inventor, “all that would need to happen under this alternative remedy…is severance of the part of the statute that makes final written decisions on patentability binding.” In conclusion, US inventor requested that the Supreme Court grant certiorari to consider the correct remedy and at least retroactively convert APJ decisions into advisory and non-binding decisions.

TiVo

On August 5, TiVo, Inc. filed an amicus brief in the same case, asserting its position that the CAFC correctly held that the inter partes review statute required that APJs be appointed by the President with the advice and consent of Congress, but that the CAFC’s remedy of making APJs removable at will creates a problem of APJs not being able to preside over IPR proceedings by issuing final decisions in accordance with the Administrative Procedures Act. TiVo also urged that APJ’s removal protections are not severable from the remainder of the statute. Thus, TiVo noted that if “one provision of a statute is found unconstitutional, the remainder of the statute must also be invalidated if it is ‘evident that Congress would not have enacted those provisions which are within its power, independently of those which are not.’” Tivo concluded by asserting that the need for the Supreme Court’s review is “urgent” because “until the [CAFC’s] error is fixed, every single decision the Board renders will be invalid.”

Comcast

On August 3, Comcast Cable Communications, LLC submitted an Amicus brief in Smith & Nephew v. Arthrex, No. 19-1452. Comcast opined that the CAFC was incorrect in holding that APJs were improperly appointed, whereby the CAFC “invalidated the appointments of over 200 administrative patent judges who collectively decide hundreds of post-grant validity challenges every year.” Noting that doctrines of waiver, forfeiture, and administrative exhaustion would normally limit such consequences, Comcast noted that the CAFC excused the patent holder’s failure to raise the Appointments Clause challenge before the PTAB in the present case, but has also “categorically excused the forfeiture of all

patentholders who have belatedly included an Appointments Clause challenge in their appellate briefing.” Thus, Comcast concluded that the Supreme Court should grant at certiorari in at least this case and No. 19-1434 to address the CAFC’s forfeiture and Appointments Clause holdings.

USPTO’s Consolidated Petition for Certiorari

Further, on July 27, the U.S. Government and Andrei Iancu, Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (USPTO), filed a consolidated petition for certiorari seeking review of 39 orders of the CAFC, wherein the CAFC vacated the Board’s final decisions based on Arthrex, and remanded the case to be reheard by a different panel of the Board.

The petition specifically asks the Court to weigh in on the following questions:

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 the court of appeals erred by adjudicating Appointments Clause challenges brought by litigants that had not presented such a challenge to the agency.

It goes on to argue that the Federal Circuit’s holding in Arthrex that Patent Trial and Appeal Board (PTAB) administrative patent judges (APJs) had not been constitutionally appointed ­– and its fix for that holding – were erroneous for the reasons argued in the government’s separate petition in United States v. Arthrex, Inc., No. 19-1434.

If the Supreme Court grants the government’s petition in No. 19-1434 and reverses the CAFC’s judgment in Arthrex and/or Polaris Innovations Ltd. v. Kingston Technology Co. and 19-1459, “its decision will undermine the [CAFC’s] subsequent rulings in these dozens of other cases in which it applied Arthrex’s holdings to reach the same result,” says the petition, adding that the appropriate action in that case would be to vacate the CAFC’s decisions and remand for further proceedings.