Summary
In *United States v. Arthrex, Inc.* (2021), the Supreme Court held that Administrative Patent Judges (APJs) on the Patent Trial and Appeal Board (PTAB) are inferior officers whose power to issue final, unreviewable decisions on patent validity during inter partes review violates the Appointments Clause. The Court ruled that the APJs' authority is incompatible with their appointment by the Secretary of Commerce because no principal officer (such as the PTO Director) can directly review or countermand their decisions, breaking the required chain of accountability from the President. To remedy the violation, the Court severed the statutory restriction in 35 U.S.C. §6(c) that prevented the Director from reviewing PTAB decisions, thereby allowing the Director to review and overturn final PTAB rulings on behalf of the Board. The case was remanded to the Acting Director for reconsideration, reaffirming that inferior officers exercising executive power must be subject to direction and supervision by a principal officer.
Holdings
- The unreviewable authority wielded by APJs during inter partes review is incompatible with their appointment by the Secretary of Commerce to an inferior office. Only an officer properly appointed to a principal office may issue a final decision binding the Executive Branch in such proceedings.
- Section 6(c) of the Patent Act cannot constitutionally be enforced to the extent that it prevents the Director from reviewing final decisions rendered by APJs. The Director may review final PTAB decisions and issue decisions himself on behalf of the Board. The case is remanded to the Acting Director to decide whether to rehear the petition.
Questions Presented
- Whether the authority of Administrative Patent Judges to issue final decisions on behalf of the Executive Branch in inter partes review proceedings is consistent with the Appointments Clause of the Constitution.
- If not, what is the appropriate remedy to cure the constitutional defect?
Disposition
vacated
Cases Cited (10)
- Edmond v. United States, 520 U.S. 651 (1997)(applied)
- Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. 477 (2010)(applied)
- Seila Law LLC v. Consumer Financial Protection Bureau, Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. ___ (2020)(applied)
- Buckley v. Valeo, 424 U.S. 1 (1976)(applied)
- Lucia v. SEC, 585 U.S. ___ (2018)(applied)
- Oil States Energy Services, LLC v. Greene's Energy Group, LLC, 584 U.S. ___ (2018)(applied)
- Thryv, Inc. v. Click-To-Call Technologies, LP, 590 U.S. ___ (2020)(applied)
- Marbury v. Madison, 1 Cranch 137 (1803)(applied)
- Freytag v. Commissioner, 501 U.S. 868 (1991)(distinguished)
- Barnard v. Ashley, 18 How. 43 (1856)(applied)