The lead opinion (authored by Chief Justice Roberts, joined by Justices Alito, Kavanaugh and Barrett) declined to specify whether the APJs were acting as principal or inferior officers, the primary point of contention in the appeal. Instead, the Court held that appointment by the Secretary of Commerce made them inferior officers, but their power to issue rulings on the validity of patents that were not reviewable by a principal officer (the Director, in this instance), conflicted with that appointment.

Specifically, the Court held that the Director’s statutory supervision of the APJs was “incompatible with their status as inferior officers” and crafted a narrow remedy, granting the Director the authority to “review final PTAB decisions and, upon review, [] issue decisions himself on behalf of the Board.” The Court vacated the remedy instituted by the Federal Circuit, which authorized the Director to fire APJs at-will, reasoning that “review by the Director better reflects the structure of supervision within the PTO and the nature of APJs’ duties.”

In assessing the current structure of the PTAB, the Court identified a power imbalance that has long plagued the PTAB.

The chain of command runs not from the Director to his subordinates, but from the APJs to the Director. . . . The parties are left with neither an impartial decision by a panel of experts nor a transparent decision for which a politically accountable officer must take responsibility. . . . In all the ways that matter to the parties who appear before the PTAB, the buck stops with the APJs, not with the Secretary or Director. Slip Op. at 11-12.

Instead of providing a judicial remedy, the Supreme Court vacated the Federal Circuit’s remedy and remanded to the Director, thus leaving it to the Director’s discretion to establish procedures enabling the Director to review final decisions by the PTAB.

We conclude that a tailored approach is the appropriate one: Section 6(c) cannot constitutionally be enforced to the extent that its requirements prevent the Director from reviewing final decisions rendered by APJs. Because Congress has vested the Director with the “power and duties” of the PTO, §3(a)(1), the Director has the authority to pro­vide for a means of reviewing PTAB decisions. See also §§3(a)(2)(A), 316(a)(4). The Director accordingly may review final PTAB decisions and, upon review, may issue de­cisions himself on behalf of the Board. Slip Op. at 21.

Although the decision stripped the APJs of final decision-making authority and now places supervisory authority for all final decisions with the Director, the Supreme Court did not opine on the current due process challenges that have been raised against the Director’s implementation of PTAB policy. These due process challenges include the Director’s institution discretion, i.e., through Standard Operating Procedure 2, precedential designations, and the precedential opinion panel.

Patrick Doody is a partner and Rebecca Hale is a law clerk in Pillsbury’s Intellectual Property practice.