June 21, at United States v. Arthrex, the United States Supreme Court ruled in a 5-4 opinion that the Patent Administrative Judges (APJ) of the Patent Trial and Appeal Board (PTAB) are unconstitutionally appointed under clause appointment of the Constitution.
Specifically, Chief Justice John Roberts, writing for the majority, concluded that “the non-reviewable power exercised by the JPAs in the inter partes review is inconsistent with their appointment by the Secretary [of Commerce] to a lower office… Congress has given the APJs “significant authority” to rule on the public rights of private parties, while isolating their decisions from any review and their offices from revocation. ”
The court then answered the question of what to do if the administrative patent judges were found to be unconstitutionally appointed. Rather than turning to the draconian result advanced by Arthrex and invalidating the entire inter partes control procedure (DPI), the tribunal, by a vote of 7-2, used the modern doctrine of severability to separate the unconstitutional sections of 35 USC § 6 (c), while leaving the rest of the law intact.
A tailor-made approach
Here, applying a “tailor-made approach”, the court ruled that the director of the United States Patent and Trademark Office (USPTO) should be able to review final PTAB decisions made by administrative patent judges and , therefore, have the final say.
The court explained that allowing such a review makes the APJ’s inferior officers who are validly appointed by the Secretary of Commerce. In doing so, the court struck down part of 35 USC § 6 (c), which provides that “[o]Only the Patent Trial and Appeal Board can grant new hearings.
The Supreme Court ruling makes it clear that the Director of the USPTO may, if he or she wishes, review the final written decisions relating to the PTAB IPR.
The tribunal made sure to underline two points in this regard. First, the manager “does not need to review every decision of the PTAB”. The USPTO provided advice on June 29 on how it would work in practice by implementing an interim rule to meet the court’s mandate.
More specifically, in this interim procedure, a review can be initiated “ex officio by the Director or requested by a party to a PTAB proceeding”.
Second, the court’s opinion extends only to IPR proceedings and “did not address the supervision of the Director over other types of arbitrations conducted by the PTAB, such as the review process for which the Director claimed unilateral power to grant a patent ”.
In practice, as the APJs are now dispossessed of final authority over IPR decisions, it remains to be seen how often the politically appointed director will intervene to review the decisions of the three-judge APJ panels.
Many practitioners believe that given the vast experience of APJs, it will be rare for the director to reverse a panel’s decision. And even if the Director does intervene, the United States Court of Appeals for the Federal Circuit will continue to act as an appeal safety net to detect any aberrant decision of the PTAB.
To this end, many practitioners believe that the Arthrex The decision essentially maintains the status quo with DPI and PTAB.
This column does not necessarily reflect the opinion of the Bureau of National Affairs, Inc. or its owners.
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Aziz Burgy is a partner and patent attorney at Axinn, Veltrop & Harkrider LLP. He has served as senior advisor to clients before the Patent Trial and Appeal Board, United States District Courts, the United States Court of Appeals for the Federal Circuit, and the United States International Trade Commission.