Are PTAB judges constitutional? This week the Supreme Court granted certiorari to answer this question.
In Arthrex v. Smith & Nephew, the Federal Circuit considered whether the appointment of administrative patent judges violates the Appointments Clause of the Constitution. The Appointments Clause requires the president to appoint principal officers, who then must be confirmed by the Senate before taking office. In contrast, inferior officers can be appointed by heads of departments (like the Secretary of State or Commerce). This system of appointment accounts for the different levels of authority principal and inferior officers have, as principal officers enjoy less oversight and are difficult to remove from office, and inferior officers are supervised in the same way as other employees.
Because people do not vote for principal officers, and their job functions can have significant impacts on individuals’ livelihoods, the Appointments Clause allows the public to have some connection to these officers through the elected officials who must confirm them. The Arthrex Court acknowledged the importance of this system, citing Free Enterprise Fund v. Public Company Accounting Oversight Board for the proposition that “people do not vote for the ‘Officers of the United States,’ the public relies on the Appointments Clause to connect their interests to the officers exercising significant executive authority.”
Before Arthrex, administrative patent judges were appointed by the Secretary of Commerce, in consultation with the Director of the USPTO. That might make PTAB judges inferior officers. However, unlike most inferior officers, PTAB judges exercise significant authority and discretion: overseeing discovery, hearing oral arguments, applying Federal Rules, and – most significantly – issuing legal decisions that determine patentability. In addition, PTAB judges cannot be removed easily from office.
After considering whether PTAB judges were constitutional, the Federal Circuit determined PTAB judges were unconstitutionally appointed and severed the limitations on their removability. As a result of the Federal Circuit’s decision, over 100 cases have been remanded to the PTAB for rehearing. The Supreme Court will now determine if PTAB judges were unconstitutionally appointed and, if so, how that affects the Patent Act, the America Invents Act, and the numerous patents that have been litigated at the PTAB.