IPWatchdog.com is in the process of transitioning to a newer version of our website. Please be patient with us while we work out all the kinks.

Posts Tagged: "Arthrex v. Smith and Nephew"

New Vision Gaming’s Motion for Reconsideration Highlights Issues with Arthrex USPTO Director Review Mandate

In the last few weeks of 2021, patent owner New Vision Gaming & Development filed a motion for reconsideration  of a remand order issued by the U.S. Court of Appeals for the Federal Circuit. That ruling, entered in early December, remanded New Vision Gaming’s appeal of covered business method (CBM) review proceedings back to the Patent Trial and Appeal Board (PTAB) “for the limited purpose” of requesting Director review of the CBM review decisions under the U.S. Supreme Court’s Arthrex standard. New Vision Gaming’s recent motion for reconsideration raises several issues regarding the U.S. Patent and Trademark Office’s (USPTO’s) implementation of Director reviews under Arthrex, making this particular case an important one to follow through at least early 2022.

Patent Owner Tells PTAB Precedential Opinion Panel Fintiv Factor 2 Should Be Modified Post-Arthrex

On October 8, a motion was filed on behalf of K.Mizra LLC asking the Patent Trial and Appeal Board’s (PTAB’s) Precedential Opinion Panel (POP) to review a PTAB institution decision on the ground that Apple Inc. v. Fintiv (IPR2020-00019) Factor 2 should be modified. Instead of comparing the proximity of the district court’s trial date to the projected time to a PTAB final written decision (FWD), the timing should account for completion of Director Review based on the Supreme Court’s ruling in Arthrex v. Smith & Nephew, said the motion. The issue has not been previously raised before the POP to IPWatchdog’s knowledge.

CAFC Shoots Down Due Process Challenges to PTAB Structure

In an appeal from the Patent Trial and Appeal Board (PTAB) brought by Mobility Workx against Unified Patents, the U.S. Court of Appeals for the Federal Circuit today ruled that the structure of the PTAB does not violate due process rights under the U.S. Constitution. While the PTAB’s ruling was ultimately remanded to the USPTO Director for review under Arthrex v. Smith & Nephew, the court said there is no evidence that PTAB administrative patent judges (APJs) have a financial interest in instituting inter partes review (IPR) proceedings. Judge Newman dissented from the majority’s “endorsement of the status quo.”

PPAC Announcements: Hirshfeld Doubles Down on Director Review Authority; Commerce Department to File for Registration of USPTO Trademarks; Committee Requests Release of $64 Million in User Fees

During the Patent Public Advisory Committee (PPAC) quarterly meeting held today, participants provided an update on the Director Review process under the Supreme Court’s Arthrex v. Smith and Nephew ruling, among other announcements. Patent Trial and Appeal Board (PTAB) Senior Advisor and Judge Linda Horner noted that, since the ruling, 14 timely requests for Director Review have been received; 11 of those were for a batch of related inter partes reviews (IPRs). Hirshfeld this week issued two decisions on the first two requests, denying both; the rest remain pending.

USPTO Implementation of Arthrex: Questions from Administrative Law, Part I—Dismissal and Subregulatory Rulemaking

In United States v. Arthrex, No. 19-1434, 141 S.Ct. 1970 (Jun. 21, 2021), Chief Justice Roberts cured an Appointments Clause defect in the Patent Trial and Appeal Board’s (PTAB’s) organic statute by holding that 35 U.S.C. § 6(c) “cannot constitutionally be enforced to the extent that it[] prevent[s] the Director from reviewing final decisions rendered by APJs.” Arthrex, slip op. at 21. Henceforth, rehearings are no longer the exclusive domain of PTAB panels, and the U.S. Patent and Trademark Office (USPTO) must provide at least one path of review that flows through the agency head…. This article discusses a number of issues of administrative law that must be addressed before the USPTO can proceed. The PTAB now resembles a poorly-maintained building—after decades of benign neglect, and more than a little old-fashioned cheating to evade work that’s required by the statute, a stress has induced a collapse.

Hirshfeld Says He May Move Forward on Important Items If Biden Appointee Takes Too Long

IPWatchdog and LexisNexis held a “Conversation with the Commissioner of the USPTO” today, in which Drew Hirshfeld, the U.S. Patent and Trademark Office (USPTO) Commissioner for Patents, Performing the functions and duties of the Under Secretary of Commerce for Intellectual Property and Director, explained that, while he would prefer to wait until a political appointee is heading the Office to move ahead on substantive reforms, he will consider moving forward on important initiatives if necessary. “I’m trying to run the agency as if I was in this permanently, knowing I’m not and I won’t be, because I think that’s the right thing to do for the system,” Hirshfeld said. “If we’re going long enough without a nominee then maybe I need to move forward on things.”

Arthrex Aftermath: How the Landmark Supreme Court Decision Drives the PTAB’s Future

A working definition of inertia is the tendency of a body to maintain its state of rest or uniform motion unless acted upon by an external force. As it did in Oil States (S.C. 2018), inertia appears to have played a role in the Supreme Court’s decision in the United States v. Arthrex, in which the central dispute was the remedy to address the unconstitutional appointment of administrative patent judges (APJs). Possible remedies included vacating hundreds or thousands of prior final decisions by unconstitutionally appointed APJs, requiring all APJs to be confirmed by the Senate and then rehear previously-decided reviews, finding the entire statutory structure unconstitutional and handing invalidity/unpatentability determinations back to Article III Courts, removing employment protections for APJs (as the Federal Circuit did), or adding a layer of review so that inferior officers had appropriate responsibility under the Appointments Clause. Faced with these possibilities, the Supreme Court’s holding maintains the inertia of the Patent Trial and Appeal Board (PTAB) and again solidifies its role in patent litigation today.

Industry Reacts to the Supreme Court’s Arthrex Ruling: Chaos Averted – or Just Delayed?

The Supreme Court issued a split 5-4 decision earlier today, in which a plurality of the Court agreed with the U.S. Court of Appeals for the Federal Circuit (CAFC) that the structure of the Patent Trial and Appeal Board (PTAB) under the America Invents Act (AIA) has resulted in Administrative Patent Judges (APJs) being unconstitutionally appointed principal officers, but took a different approach than the CAFC to fixing the problem. Some were surprised by the conservative Court’s choice to sever the statute and ultimately hand the United States Patent and Trademark Office (USPTO) Director—a political appointee—power to review final decisions, though it was not surprising that they attempted to fashion a solution that would preserve the PTAB and inter partes review (IPR) system. Justice Gorsuch, in his partial dissent, said that he would have identified the constitutional violation, explained his reasoning, and simply “set aside” the PTAB decision at issue. Instead, said Gorsuch, “Effectively, the Court subtracts statutory powers from one set of executive officials and adds them to another.”

While the decision is not likely to have any immediate impact, it does raise questions about implications down the line, including how the USPTO and its new Director will address the ruling. Below, industry stakeholders consider what the Court did (and did not do) and provide their take on this highly anticipated holding.

In Arthrex Ruling, SCOTUS Says Director Review of Decisions, Not Power to Remove APJs, is What Matters

The Supreme Court has issued its ruling in Arthrex v. Smith & Nephew, taking a different approach to curing the statute than did the U.S. Court of Appeals for the Federal Circuit (CAFC) in 2019, and ultimately vacating and remanding the case back to the Acting Director of the U.S. Patent and Trademark Office (USPTO). While the CAFC held that the statute could be severed and rendered constitutional by making Patent Trial and Appeal Board (PTAB) Administrative Patent Judges (APJs) removeable at will, the Supreme Court said that remedy was not sufficient. The Court said: “[R]egardless whether the Government is correct that at-will removal by the Secretary would cure the constitutional problem, review by the Director better reflects the structure of supervision within the PTO and the nature of APJs’ duties.”

Newman Dissents from CAFC’s Refusal to Address Forum Selection Question in New Vision Gaming’s Arthrex Remand

U.S. Court of Appeals for the Federal Circuit (CAFC) Judge Pauline Newman dissented in part from a decision authored by CAFC Judge Moore yesterday, explaining that, while she agrees that New Vision Gaming’s request for vacatur and remand of two Patent Trial and Appeal Board (PTAB) decisions in light of Arthrex, Inc. v. Smith & Nephew, Inc. should be granted, the court’s refusal to address the “threshold issue” of proper forum is “inefficient”.

Amici and Practitioners Attempt to Read the Arthrex Tea Leaves

Yesterday, the Supreme Court heard oral arguments in the most closely-watched patent case of the term, United States / Smith & Nephew v. Arthrex. IPWatchdog reached out to some of the amici in the case, as well as patent practitioners and other stakeholders, to get their take on how the hearing went and what the future holds for the Administrative Patent Judges (APJs) of the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB). Most agreed that it’s unlikely the Court will dismantle the PTAB altogether, but that they were clearly uncomfortable with the present structure. Below, our experts weigh in on some potential outcomes.

SCOTUS Dubs PTAB/APJ Structure a ‘Rare Bird’, Pushes for Workable Remedies in Arthrex Oral Arguments

The Justices of the U.S. Supreme Court today heard arguments in United States/ Smith & Nephew v. Arthrex, in which the Court will decide whether the administrative patent judges (APJs) of the Patent Trial and Appeal Board (PTAB) are “principal” or “inferior” officers of the United States, and—if they are principal officers—whether the Federal Circuit’s 2019 fix was sufficient to cure any Appointments Clause defect. The Court generally seemed extremely skeptical of the “unusual” powers APJs seem to have compared with other administrative agencies and pushed both sides to offer reasonable solutions.

Getting Ready for Arthrex: What the Amici Are Saying

The U.S. Supreme Court has agreed to hear, on March 1, 2021, whether administrative patent judges (APJs) of the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO) are “inferior” officers properly appointed under the Appointments Clause of the U.S. Constitution (U.S. Const., art. II, § 2, cl. 2), and, if not, whether the “fix” by the Federal Circuit in Arthrex v. Smith & Nephew, 941 F.3d 1320 (Fed. Cir. 2019) worked. On February 25, 2021, the New York Intellectual Property Law Association (NYIPLA), will be presenting a special webinar titled “Getting Ready for Arthrex Oral Arguments,” which will summarize the issues presented and include presentations by representative amici on their respective positions.

Amicus eComp Consultants Urges Supreme Court to Deem PTAB APJs ‘Inferior’ Officers in Arthrex

On December 2, eComp Consultants (eComp) filed an amicus brief urging the U.S. Supreme Court to find Administrative Patent Judges (APJs) of the Patent Trial and Appeal Board (PTAB) in U.S. v. Arthrex, Inc., Nos. 19-1434/-1452/-1458. In its brief, eComp argues that the U.S. Supreme Court should reverse the decision of the Federal Circuit and confirm that APJs of the PTAB are merely inferior officers of the United States who were, therefore, constitutionally appointed. eComp’s Amicus Brief clarifies the errors in the Federal Circuit’s decision. 

What SCOTUS’ Decision to Scrutinize Social Security Act Appointments Clause Case Means for Arthrex

Last week, an order list issued by the U.S. Supreme Court indicated that the nation’s highest court had granted a pair of petitions for writ of certiorari which were then consolidated into Davis v. Saul. The petition in Davis asks the Supreme Court to determine whether claimants seeking disability benefits or supplemental security income under the Social Security Act (SSA) must exhaust their Appointments Clause challenges with the administrative law judge (ALJ) at the agency in order to obtain judicial review of that challenge in federal court. Given the Appointments Clause challenge to the Patent Trial and Appeal Board (PTAB) proceedings at issue in Arthrex v. Smith & Nephew, many patent practitioners are interested in the Supreme Court’s ultimate decision on whether such challenges can be brought up for the first time on appeal from agency proceedings when parties first claim that constitutional challenge while seeking judicial review in federal courts.