United States v Arthrex, Inc., (2021), was a United States Supreme Court case related to the Appointments Clause of the United States Constitution as it related to patent judges on the Patent Trial and Appeal Board (PTAB). In a complex decision, the Court ruled that these judges were considered "primary officers" under the Appointments Clause, normally subject to appointment through the US President and the US Senate, but to remedy the matter, the Court ruled that the constitutional issue is resolved by allowing the PTAB decisions to be subject to review by the appropriately-appointed Director of the Patent Office.
Background.
The Leahy-Smith America Invents Act was passed by Congress in 2012 that significantly overhauled the United States patent system. Among features of the law, it enabled a new inter partes review of patents that could be initiated by nearly any member of the public. As this potentially would create more litigation within the United States Patent and Trademark Office, itself a division of the Department of Commerce, the Act established the Patent Trial and Appeal Board (PTAB) which included administrative patent judges (APJs) appointed through the Commerce Secretary. An inter partes review of a patent is presented to three of the PTAB judges who make a final decision to keep or invalidate some or all of the patent. Any further challenge beyond this proceeds to the United States Court of Appeals for the Federal Circuit.
In the specific case, Arthrex, Inc., a manufacturer of medical devices, had previously received a patent for a surgical device. They entered into a patent dispute with Smith & Nephew, Inc., and ArthroCare Corp., claiming the latter groups were infringing on their patent. The case moved into the PTAB, which found that Arthrex's patent was invalid. Arthrex appealed to the Federal Circuit, raising a question related to the constitutionality of the administrative judges on the PTAB. They argued that under the Appointments Clause, since the APJs were considered principal officers of the patent office, they were required to be appointed through the President and confirmed by the Senate. The Federal Circuit judges agreed with Arthrex's position, vacated the PTAB's ruling, ruled that the APJs' tenure must be changed to reflect this stance, and remanded the case back to the PTAB for a rehearing.
