Last week, the Federal Circuit released its ruling on the constitutionality of Patent Trial and Appeal Board judge appointments (Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 2018-2140 (Fed. Cir. October 31, 2019)).   Arthrex had appealed from a PTAB decision holding certain claims of U.S. Patent No. 9,179,907 unpatentable, arguing to the Federal Circuit that the appointment of PTAB Administrative Patent Judges (“APJs”) by the Secretary of Commerce violated the Appointments Clause of the Constitution.   Under that provision, “principal officers” of the United States may only be appointed by the President, with Senate confirmation.  The Federal Circuit agreed that the appointment was unconstitutional on the ground that APJs were “principal officers,” because no presidentially-appointed officer (such as the PTO Director) could review, vacate, or correct their decisions, and because of certain restrictions against their removal.   After determining that the current structure was unconstitutional, the Federal Circuit followed the Supreme Court’s guidance in Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010), and remedied the constitutional violation by severing the portion of the Patent Act which restricts removal of APJs.  This, the Federal Circuit explained, was sufficient to then render APJs as “inferior officers,” and to avoid a constitutional appointment problem.  Because the PTAB’s final written decision was issued by a panel constituted in violation of the Appointments Clause, the Federal Circuit vacated and remanded, ordering that Arthrex’s case be heard in front of a new panel of APJs.  The last major Appointments Clause case was decided by the Supreme Court in June 2018.

The PTO is considering seeking review of the decision by the full Federal Circuit.  A petition to that effect would have to be approved by the Solicitor General of the United States (an official of the Department of Justice) and would be due December 2, 2019.  Notably, in the last major Appointments Clause case, the Solicitor General decided to abandon defense of the federal statute (governing administrative law judges), reversing the position of the agency, and successfully urged before the Supreme Court that the ALJs’ appointment was unconstitutional.