CRS Considers Implications of Supreme Court Case on Patent Judge Appointments

The Congressional Research Service ("CRS") considered the potential implications to administrative agency adjudications of a case concerning patent judge appointments currently before the Supreme Court.

In a "Legal Sidebar," CRS reviewed the central issue before the Supreme Court in United States v. Arthrex, Inc. ("Arthrex"): "whether APJs [i.e., administrative patent judges] exercise enough power with sufficient independence such that the U.S. Constitution’s Appointments Clause requires that they be appointed by the President with the advice and consent of the Senate." At stake is the potential to disrupt the statutory framework established in the 2011 America Invents Act ("AIA") which allowed APJs to oversee adversarial proceedings before the Patent Trial and Appeal Board ("PTAB") and to adjudicate the validity of issued patents through inter partes review ("IPR") and post-grant review ("PGR"). The broader implication is how a Supreme Court decision as to the PTAB may effect other administrative agencies.

The CRS concluded that if the Supreme Court in Arthrex holds that:

• APJs are inferior officers, then the PTAB's current structure would be upheld as constitutional;

• APJs are principal officers because the Director of the U.S. Patent and Trade Office ("PTO") cannot unilaterally review PTAB decisions, then the constitutional problem may be cured by allowing the PTO Director to review;

• APJs are principal officers because the PTO Director cannot remove APJs without cause, then the constitutional problem may be cured by no longer granting APJ removal protection; and

• APJs are principal officers and severability of the removal power cannot cure the constitutional problem, then the Supreme Court could strike down the IPR and PGR framework established under the AIA.

Should the Supreme Court invalidate the system, Congress would have to restore the IPR/PGR system with a modified structure that passes constitutional muster.

The CRS noted that the Appointments Clause would be satisfied if the President were to appoint APJs, even if inferior officers, with the consent of the Senate. This process would remedy the constitutional problem while also maintaining the current relationship between the PTO Director and the PTAB.

Oral arguments were heard on March 1, 2021.