Arthrex’s Initial Merits Brief – Making the Case for Patent Judges as Principal Officers

30 December 2020 PTAB Trial Insights Blog
Authors: Randy J. Pummill George E. Quillin

Progress in the Arthrex case before the Supreme Court continues as Arthrex submitted its initial merits brief on December 23rd. We have previously discussed the decision by the Federal Circuit, the Supreme Court’s grant of certiorari, the questions presented (docketed as 19-1434), initial briefs from Smith & Nephew and the United States, and some of the arguments made in the amicus briefs filed in support of their positions . 

In this post, we review Arthrex’s merits brief, which takes the position that the Federal Circuit was correct in finding administrative patent judges (APJs) are principal officers, but the Federal Circuit’s remedy of severing APJs’ tenure protections was incorrect.  Instead, Arthrex advocates a position that severance is inappropriate and Congress must resolve the constitutional issues surrounding APJs.

APJs as principal officers

Arthrex’s argument is centered on the notion that patent judges are principal officers under the Appointment Clause.  The argument flows in three main points. 

First, Arthrex argues that patent judges are principal officers because the statutory framework requires them to be in order to maintain political accountability.  Arthrex underpins its argument with a discussion about the intent of the Appointments Clause, noting that the principal/inferior officer structure ensures the proper balance of political accountability.  “By requiring the President’s personal involvement in the selection of principal officers, the Clause enables the public to place the blame of a bad nomination … upon the President singly and absolutely.”Inferior officers, on the other hand, must be supervised by a principal officer in order to maintain political accountability.  Arthrex takes the position that the powers held by patent judges necessitate political accountability for their decisions.    

Second, Arthrex argues that patent judges are principal officers because in determining whether an officer is principal or inferior, the key consideration is whether decisions by that officer are reviewable by another with a direct tie to the President.  Arthrex points out that in previous Supreme Court cases where an adjudicative officer was found to be an inferior officer, superior officers had authority to review the decisions.Inferior officers are those “whose work is directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.”According to Arthrex, because their decisions cannot be reviewed by the Director and are only appealable to the Federal Circuit, the decisions of patent judges are not sufficiently reviewable by a principal officer.  This leads to the conclusion that patent judges themselves must be principal officers. 

Third, Arthrex argues that the expansion of the authority of patent judges under the AIA clearly makes patent judges principal officers.  Arthrex gives a brief history of how the role of patent judges has changed over time, with particular attention paid to the expansion of power that came under the AIA.  Arthrex also compares the relative power of patent judges to that of other administrative officers and asserts that patent judges are most closely akin to other principal officers.    

Remedy

Arthrex argues that the severance of APJs’ tenure protections was improper because it does not result in a statute that is “constitutionally valid.” Specifically, Arthrex argues that eliminating tenure protections does not resolve the lack of ability to review an APJ’s decisions. Even without tenure protections, an APJ’s decision is not reviewable by a superior officer, and firing an APJ does not vacate their decisions. Thus, “[r]emoval is a poor tool for supervising the one way administrative judges exercise executive authority: deciding cases.”4

Arthrex also argues that severance of APJs’ tenure protections is not consistent with Congress’ basic objectives in enacting the statute to congress, because Congress “would not have enacted a regime that includes neither tenure protections for [APJs] nor any review by an accountable agency head.”As Arthrex puts it, tenure protections are critical to impartiality.

Arthrex turns to remedies that it considers appropriate, each of which would require legislation from Congress, rather than a judicial action. 

Next Steps

Amicus briefs in support of Arthrex are due December 30th.  Smith & Nephew and the United States are due to file their respective consolidated response and reply briefs on January 22nd.  Continue checking the PTAB Trial Insights Blog for analysis on these and future developments in the upcoming weeks. 

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1 Arthrex Merits Brief at 17 (quoting The Federalist No. 77, at 461 (Hamilton) (Clinton Rossiter ed. 1961)).

Arthrex Merits Brief at 25 (citing Freytag v. Commisioner, 501 U.S. 868 (1991) and Lucia v. SEC, 138 S. Ct. 2044 (2018)). 

Arthrex Merits Brief at 18 (quoting Edmond v. United States, 520 U.S. 651, 663 (1997)). 

Arthrex Merits Brief at 46.

5 Arthrex Merits Brief at 47.

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