By Tom Engellenner
A Halloween decision by the U.S. Court of Appeals for the Federal Circuit ruled has concluded that the way administrative patent judges (APJs) are appointed to the Patent Trial and Appeal Board (PTAB) is unconstitutional and vacated the decision before the court with a remand that the case be heard again by another PTAB panel. The case is Arthrex v. Smith & Nephew No. 2018-2140 (Fed. Cir., Oct. 31, 2019).

The decision cures this problem going forward by severing a portion of the enabling legislation that prevents the administrative judges from being fired except for cause. The Fed. Circuit decision essentially makes all PTAB judges subject to dismissal by the secretary of Commerce without cause.

The Arthrex decision, however, does appear to create a class of litigants who have already received a final written decision on a patent challenge and are still in their pre-appeal period. Those parties — if they choose to appeal and raise this “appointments” issue — may also be able to get their decisions vacated and remanded.

According to the Fed. Cir. decision by Judges Moore, Chen and Reyna, PTAB judges do not receive enough oversight and supervision from the Director of the U.S. Patent and Trademark Office (USPTO) to be considered “inferior” officers under the U.S. Constitution and, hence, exempt from the Senate confirmation process. (“Principal” officers must be appointed by the president and confirmed by the Senate, while “inferior” officers can be appointed by heads of departments.)

The Fed. Cir. Panel chose the “narrowest remedy” by stripping the PTAB administrative judges of their exemption from dismissal without cause, rather than applying its ruling to the entirety of cases rendered so far by the PTAB:

Thus, we conclude that the appropriate remedy to the constitutional violation is partial invalidation of the statutory limitations on the removal of APJs. Continue reading →