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On June 21, 2021, the United States Supreme Court issued its long-awaited decision in United States v. Arthrex, No. 19-1434, 2021 U.S. LEXIS 3124, *1, *20 (June 21, 2021). In Arthrex, the Court analyzed whether administrative judges on the Patent Trial and Appeal Board (“PTAB”), the executive agency that conducts inter partes review (“IPR”), would retain their power to make final decisions for patent validity. Because the Administrative Patent Judges (“APJ”) are not constitutionally appointed the Supreme Court held the United States Patent and Trademark Office (“PTO”) Director should have direct oversight power of those decisions.
The Court determined the responsibilities of the APJs were inconsistent with the method of their appointment. The Commerce Secretary appoints the APJs (thus fulfilling the AIA’s identification of APJs as inferior officers), but the Court held “APJs have the ‘power to render a final decision on behalf of the United States’ without any such review by their nominal superior or any other principal officer in the Executive Branch.” Id. at *1, *20. Based on this inconsistency, the Court held the APJs were unconstitutionally appointed. Rather than punting the issue to Congress to correct, however, the Court held the proper remedy was to give the PTO Director authority to review and oversee any decision made by a PTAB panel. The Court specifically held the Director need not review every decision of the PTAB, but, for the IPR process to withstanding constitutional scrutiny, the Director must have the discretion to review decisions rendered by the APJs. Id. at *39.
Soon after the Court released the Arthrex opinion, the PTO created an interim procedure in which a party could seek review of a PTAB decision. First, the PTO Director could initiate a rehearing sua sponte. Second, a party who received a final written decision by an PTAB panel could request a Director rehearing if the application was made within thirty (30) days of receiving a final decision. The PTO Director will rehear these reviews alone, and the rehearings are only available for reviews that have reached a final decision. If the Director’s review is initiated sua sponte, the parties to the proceeding will be given notice and potentially an opportunity for briefing. The Director’s review can address any issue of law or fact, and the Director will apply the de novo standard of review. The PTO has not yet released its long-term, procedure that complies with the Arthrex decision. Freeman, Mathis and Gary will provide additional information once this procedure is formalized.
The case is United States v. Arthrex, case number 19-1434.