The Arthrex case is a fascinating case that lies
at the intersection of technology policy on the one hand
and separation of powers questions on the other hand.
It seems to address the question
whether the Administrative Patent Judges who
staff the Patent Trial
and Appeals Board are inferior officers
or principal officers pursuant
to the appointments clause
of the Constitution, which sets forth different requirements
for appointing those two types of officers.
Arthrex owns a patent
which is directed to a knotless suture securing assembly.
And one of its competitors, Smith+Nephew filed
a petition requesting what's known
as inter partes review, before the PTAB
of some of the claims within that patent.
The appointments clause is a provision
within Article II of the Constitution.
And it authorizes certain officers who are known
as principal officers to be appointed
to their positions by the president
and with the advice and consent of the Senate.
It also spells out that other officers who are
known as inferior officers maybe appointed either
by the president with the advice and consent of the Senate
or alternatively maybe appointed by the president alone
by the courts of law or by the head of a department.
The case turns on several precedents
that the Court has decided to
draw the line between these two types of officers.
The first case is a case called Edmond versus United States.
It was decided in 1997
and it spells out what might be described
as a two-part test for drawing that line
between inferior and principal officers.
Does somebody else within the executive branch
between the president and the officer who's
at issue have the authority to remove that officer?
And does somebody else within the executive branch
have the authority to supervise that officer's decisions?
It's never been quite clear whether both
of these prongs are necessary or one is sufficient.
The second case is the famous case of Morrison versus Olson
which addressed the constitutionality
of the removal provision that protected what was known
as the independent counsel from removal by another officer
within the executive branch. The Court in that case said
for a variety of reasons adopting
what might be described as something
as a multi-factor test that the independent counsel
was in fact an inferior officer.
The United States government argues that the
PTAB scheme does not violate
the appointments clause at all.
And they argue, in a nutshell, that applying the two-part test
that I've mentioned that derives
from Edmond versus United States
the PTAB judges are in fact supervised by officials
within the Patent and Trademark Office
in a variety of ways and can be removed
for cause if necessary and as a result
that it makes them inferior officers.
Arthrex argues that PTAB judges
are not inferior officers.
By statute, decisions of the PTAB
with respect to the patentability
of claims and patents are appealable to federal court.
And they're the final decision of the executive branch.
So with respect to specific adjudications, decision-making is
lodged at least pursuant to statute solely with those judges
of the PTAB or decided with respect
to a particular patent.
The federal circuit decided that in fact the PTAB
judges were unconstitutionally appointed because according
to the federal circuit's decision, the PTAB judges
are principal officers, not inferior officers,
and must be appointed with the advice and consent
of the Senate.
The federal circuit then remedied the
constitutional violation that it identified by severing
from the statute the provision
that protects PTAB judges
from dismissal for cause.
Arthrex says that the federal circuit can't rewrite
that statute governing the PTAB.
Instead, there's a constitutional problem.
And that constitutional problem will remain
until Congress revisits the statute and creates a different
mechanism either for creating the PTAB judges
as true inferior officers or
alternatively making them principal officers.