Supreme Court Saves IPRs by Allowing PTO Director to Review Patent Judges’ Decisions

| Jeremy Anapol

U.S. v. Arthrex, Inc.

Before the United States Supreme Court. Majority opinion by Chief Justice Roberts. On writ of certiorari to the United States Court of Appeals for the Federal Circuit.

Summary: A statute preventing the PTO Director from reviewing IPR decisions caused these decisions to violate the Constitution, but allowing such review by the Director remedied that violation.

A panel of administrative patent judges (APJs) decided that claims of an Arthrex patent should be cancelled following inter partes review (IPR). Arthrex appealed this decision, arguing that the appointment of APJs to the Patent Trial and Appeal Board (“PTAB”) at the U.S. Patent and Trademark Office (“PTO”) was unconstitutional. According to Arthrex, the APJs were appointed using procedures that the Constitution prescribed for “inferior officers,” but the authority they exercised to cancel patent claims made them “principal officers.”

The Supreme Court majority held that the APJs’ authority to render IPR decisions without review by superior executive officers was unconstitutional. Although the PTO Director has administrative oversight over the APJs, he could not directly review their decisions because 35 U.S.C. § 6(c) allows review only by the PTAB itself. Without review by the Director, the APJs were exercising the authority of “principal officers,” not “inferior officers.”

The Court held that the appropriate remedy for the constitutional violation was to permit the Director to review IPR decisions and issue such decisions on behalf of the PTAB.

Justice Gorsuch concurred in the Court’s holding that the APJs’ authority in IPRs was unconstitutional, but dissented to argue that Congress should prescribe the remedy.

Justice Thomas dissented to argue that no constitutional violation occurred and that, in any event, the majority’s remedy was inappropriate.

Justice Breyer, joined by two other Justices, agreed with Justice Thomas that no constitutional violation occurred, but joined the majority’s remedial holding.

Editor: Paul Stewart