U.S. Supreme Court Upholds Inter Partes Review | Firm Alert

| Christy Lea

On Monday, the United States Supreme Court issued an important decision affecting all inter partes review (“IPR”) proceedings decided by the Patent Trial and Appeal Board (“PTAB”).  In United States v. Arthrex, the Supreme Court addressed the constitutionality of PTAB Administrative Patent Judges (“APJs”) issuing final decisions regarding patentability when those decisions are not reviewable by an officer appointed by the President of the United States.  The Court determined that the unreviewable authority given to APJs by Congress under the America Invents Act (AIA) was improper because APJs are not appointed by the President.  Nonetheless, the Court declined to hold the IPR process unconstitutional.  Rather, it held that PTAB decisions must be subject to review by the Director of the Patent Office, who is appointed by the President. 

The Supreme Court held that the “unreviewable authority wielded by APJs during inter partes review is incompatible with their appointment by the Secretary to an inferior office.”  Only the President, who is elected by the people and directly accountable to the people, can appoint principal officers whose decisions are not subject to review.  Because the APJs are appointed by the Secretary of Commerce, their decisions must be subject to review by the Director.

In this particular case, the Supreme Court sent the case back to the PTAB and ordered that the Acting Director of the Patent Office must decide whether to review the PTAB's final written decision canceling Arthrex’s patent.  The Court held that a limited remand to the Director provides an adequate opportunity for review by an officer appointed by the President.

As a result of the Supreme Court’s decision, IPRs will remain available to challenge patents.  Only now, the losing party may ask the Director of the Patent Office to review the PTAB's decision.  We expect the PTAB will create procedures that allow the Director to determine whether to reconsider a PTAB decision.  The details of this review process are currently unknown, but we recommend procedures to preserve the right to seek review by the Director in pending IPRs.  For more information, please contact a Knobbe PTAB trial attorney.