At the end of June, the U.S. Supreme Court decided United States v. Arthrex, which concerned the constitutionality of the decision power of administrative patent judges (APJs). APJs are employees of the United States Patent & Trademark Office (USPTO) that, among other roles, adjudicate post-grant proceedings, such as inter partes reviews. This role of the APJs is set out in the America Invents Act (AIA), which was signed into law in 2011. Under the AIA, only the APJs may grant rehearing on their own decisions. However, unlike federal judges and other similar adjudicators, the APJs are appointed by the Secretary of Commerce, not the President.
The constitutional issue centered around the Appointments Clause, which states that only the President may appoint “principal officers” of the Executive Branch of the United States government. The parties argued whether the rehearing decision power of the APJs made them principal officers, which were appointed in violation of the Appointments Clause. The Court was faced with a difficult decision: if the APJs were found to be unconstitutional, then the validity of almost a decade of decisions (which have been relied upon by patent owners and other patent stakeholders) would be called into question.
According to the Court’s majority opinion, the prescribed role of the APJs was found unconstitutional, in violation of the Appointments Clause, since the APJs do act as principal officers based on their rehearing decision power. However, rather than finding the APJs and the prost-grant proceedings to be entirely unconstitutional, the Court held that the Director of the USPTO has the power to review and make ultimate decisions regarding rehearing of cases. Since the Director is appointed by the President, they may act as a principal officer.
It is uncertain what practical effect the Court’s decision will have on rehearing determinations going forward. Requests for rehearing are rarely granted, and it is believed that this trend will continue. However, there is some concern in the patent community that the Director, which some believe is becoming an increasingly political role, may make final rehearing determinations based on political influence.
Of course, Hovey Williams LLP will continue to monitor this case and its impact on post-grant proceedings at the USPTO. If you have any questions about this case or your own proceedings at the USPTO, please contact one of our qualified attorneys.