United States v. Arthrex, Inc.

Last updated

United States v. Arthrex, Inc.
Seal of the United States Supreme Court.svg
Supreme Court of the United States
Argued March 1, 2021
Decided June 21, 2021
Full case nameUnited States v. Arthrex, Inc., et al.; Smith & Nephew, Inc., et al. v. Arthrex, Inc., et al.; Arthrex, Inc. v. Smith & Nephew, Inc., et al.
Docket nos. 19-1434
19-1452
19-1458
Citations594 U.S. ___ ( more )
Holding
The unreviewable authority of Administrative Patent Judges is incompatible with their status as inferior officers. The Director of the Patent and Trademark Office, as their principal officer, may review such decisions and, upon review, may confirm or revise the decisions.
Court membership
Chief Justice
John Roberts
Associate Justices
Clarence Thomas  · Stephen Breyer
Samuel Alito  · Sonia Sotomayor
Elena Kagan  · Neil Gorsuch
Brett Kavanaugh  · Amy Coney Barrett
Case opinions
MajorityRoberts (Parts I and II), joined by Alito, Gorsuch, Kavanaugh, Barrett
PluralityRoberts (Part III), joined by Alito, Kavanaugh, Barrett
Concur/dissentGorsuch
Concur/dissentBreyer, joined by Sotomayor, Kagan
DissentThomas, joined by Breyer, Sotomayor, Kagan (Parts I and II)

United States v. Arthrex, Inc., 594 U.S. ___ (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 "principal 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.

Contents

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 claims of the patent. Any further challenge beyond this proceeds to the United States Court of Appeals for the Federal Circuit. [1]

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 reflex this stance, and remanded the case back to the PTAB for a rehearing. [1]

Supreme Court

Arthrex, Smith & Nephew, and the government all petitioned to the Supreme Court for review of the Federal Circuit's decision. While Smith & Nephew and the government sought to challenge the general finding of the Federal Circuit, Arthrex was not satisfied that the Circuit's remedy related to the changes in tenure resolved the constitutionality problem, believing this was a matter that Congress was required to solve. [1] The Court granted certiorari in October 2020. [1] Oral arguments were held on March 1, 2021.

The Court's decision was issued on June 21, 2021. [1] The Supreme Court, by a 5–4 vote, vacated the Federal Circuit's ruling and remanded the case for review. The majority opinion, written by Chief Justice John Roberts and joined by Justices Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett, found the APJs were principal officers with "unreviewable authority" under the Appointments Clause, and thus their appointment outside of the President and Senate was unconstitutional. [2] Roberts wrote "The unreviewable executive power exercised [...] is incompatible with their status as inferior officers. Only an officer properly appointed to a principal office may issue a final decision binding the executive branch in the proceeding before us." [2]

Turning to the matter of a remedy, the Court ruled in a 7–2 decision that the matter can be resolved by having all PTAB judicial decisions be subject to review by the Director of the patent office, who is appointed through the normal Appointments Clause process. Alito, Kavanaugh and Barrett joined Roberts in the plurality opinion on this matter. Justice Stephen Breyer wrote an opinion dissenting on the issue of APJs under the Appointments Clause, but concurring on the remedy judgement, joined by Sonia Sotomayor and Elena Kagan. [1] The Court further ruled that prior PTAB decisions were not overruled but did allow such cases to be subject to the same review by the patent office director. [1]

Justice Clarence Thomas wrote a dissenting opinion to both decisions to which Justices Breyer, Sotomayor, and Kagan joined in regards to the decision related to the Appointments Clause. Thomas believed the APJs should have been classified as inferior officers and thus not subject to the Appointments Clause. [3] Thomas wrote "The court today draws a new line dividing inferior officers from principal ones. The fact that this line places administrative patent judges on the side of ambassadors, Supreme Court justices and department heads suggests that something is not quite right." [2] In his dissent-in-part, Breyer wrote "Today’s decision is both unprecedented and unnecessary, and risks pushing the judiciary further into areas where we lack both the authority to act and the capacity to act wisely." [2]

Justice Gorsuch wrote separately to dissent on the remedy, stating he would have turned to Congress to determine how to resolve the matter through their preferred system. [3]

Related Research Articles

Bush v. Gore, 531 U.S. 98 (2000), was a landmark decision of the United States Supreme Court on December 12, 2000, that settled a recount dispute in Florida's 2000 presidential election between George W. Bush and Al Gore. On December 8, the Florida Supreme Court had ordered a statewide recount of all undervotes, over 61,000 ballots that the vote tabulation machines had missed. The Bush campaign immediately asked the U.S. Supreme Court to stay the decision and halt the recount. Justice Antonin Scalia, contending that all the manual recounts being performed in Florida's counties were illegitimate, urged his colleagues to grant the stay immediately. On December 9, the five conservative justices on the Court granted the stay, with Scalia citing "irreparable harm" that could befall Bush, as the recounts would cast "a needless and unjustified cloud" over Bush's legitimacy. In dissent, Justice John Paul Stevens wrote that "counting every legally cast vote cannot constitute irreparable harm." Oral arguments were scheduled for December 11.

<span class="mw-page-title-main">Stephen Breyer</span> US Supreme Court justice from 1994 to 2022 (born 1938)

Stephen Gerald Breyer is an American lawyer and jurist who served as an associate justice of the U.S. Supreme Court from 1994 until his retirement in 2022. He was nominated by President Bill Clinton, and replaced retiring justice Harry Blackmun. Breyer was generally associated with the liberal wing of the Court. He is now the Byrne Professor of Administrative Law and Process at Harvard Law School.

In the United States, a recess appointment is an appointment by the president of a federal official when the U.S. Senate is in recess. Under the U.S. Constitution's Appointments Clause, the president is empowered to nominate, and with the advice and consent (confirmation) of the Senate, make appointments to high-level policy-making positions in federal departments, agencies, boards, and commissions, as well as to the federal judiciary. A recess appointment under Article II, Section 2, Clause 3 of the Constitution is an alternative method of appointing officials that allows the temporary filling of offices during periods when the Senate is not in session. It was anticipated that the Senate would be away for months at a time, so the ability to fill vacancies in important positions when the Senate is in recess and unavailable to provide advice and consent was deemed essential to maintain government function, as described by Alexander Hamilton in No. 67 of The Federalist Papers.

Neither software nor computer programs are explicitly mentioned in statutory United States patent law. Patent law has changed to address new technologies, and decisions of the United States Supreme Court and United States Court of Appeals for the Federal Circuit (CAFC) beginning in the latter part of the 20th century have sought to clarify the boundary between patent-eligible and patent-ineligible subject matter for a number of new technologies including computers and software. The first computer software case in the Supreme Court was Gottschalk v. Benson in 1972. Since then, the Supreme Court has decided about a half dozen cases touching on the patent eligibility of software-related inventions.

The Board of Patent Appeals and Interferences (BPAI) was an administrative law body of the United States Patent and Trademark Office (USPTO) which decided issues of patentability. Under the America Invents Act, the BPAI was replaced with the Patent Trial and Appeal Board (PTAB), effective September 16, 2012.

The Appointments Clause of the United States Constitution empowers the President of the United States to nominate and, with the advice and consent (confirmation) of the United States Senate, appoint public officials. Although the Senate must confirm certain principal officers, Congress may by law invest the appointment of "inferior" officers to the President alone, or to courts of law or heads of departments.

<span class="mw-page-title-main">Ketanji Brown Jackson</span> US Supreme Court justice since 2022 (born 1970)

Ketanji Onyika Brown Jackson is an American lawyer and jurist who is an associate justice of the Supreme Court of the United States. Jackson was nominated to the Supreme Court by President Joe Biden on February 25, 2022, and confirmed by the U.S. Senate and sworn into office that same year. She is the first black woman and the first former federal public defender to serve on the Supreme Court.

Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010), was a 5–4 decision by the U.S. Supreme Court in which the Court ruled that laws enabling inferior officers of the United States to be insulated from the Presidential removal authority with two levels of "for cause" removal violated Article Two of the United States Constitution.

The Patent Trial and Appeal Board (PTAB) is an administrative law body of the United States Patent and Trademark Office (USPTO) which decides issues of patentability. It was formed on September 16, 2012, as one part of the America Invents Act. Prior to its formation, the main judicial body in the USPTO was the Board of Patent Appeals and Interferences (BPAI).

National Labor Relations Board v. Noel Canning, 573 U.S. 513 (2014), was a United States Supreme Court case in which the Court unanimously ruled that the President of the United States cannot use his authority under the Recess Appointment Clause of the United States Constitution to appoint public officials unless the United States Senate is in recess and not able to transact Senate business. The Court held that the clause allows the president to make appointments during both intra-session and inter-session recesses but only if the recess is of sufficient length, and if the Senate is actually unavailable for deliberation, thereby limiting future recess appointments. The Court also ruled that any office vacancy can be filled during the recess, regardless of when it arose. The case arose out of President Barack Obama's appointments of Sharon Block, Richard Griffin, and Terence Flynn to the National Labor Relations Board and Richard Cordray as the director of the Consumer Financial Protection Bureau.

Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), was a United States Supreme Court case in which the Court held that the two-part Seagate test, used to determine when a district court may increase damages for patent infringement, is not consistent with Section 284 of the Patent Act.

Oil States Energy Services, LLC v. Greene's Energy Group, LLC, 584 U.S. ___ (2018), was a United States Supreme Court case in which the Court held that the inter partes review process granted by Congress to the United States Patent and Trademark Office for challenging the validity of patents, rather than a jury trial, is constitutional and did not violate either Article III of the Constitution nor the Seventh Amendment.

SAS Institute Inc. v. Iancu, 584 U.S. ___ (2018), was a United States Supreme Court case in which the Court held the United States Patent and Trademark Office, when conducting an inter partes review, must make judgement on all patent claims contested by the petitioner.

Lucia v. Securities and Exchange Commission, 585 U.S. 237 (2018), was a decision by the Supreme Court of the United States on the status of administrative law judges of the Securities and Exchange Commission. The Court held that they are considered inferior officers of the United States and so are subject to the Appointments Clause and must be appointed through the President or other delegated officer of the United States, rather than hired. As "inferior" officers, their appointments are not subject to the Senate's advice and consent role.

Iancu v. Brunetti, No. 18–302, 588 U.S. ___ (2019), is a Supreme Court of the United States case related to the registration of trademarks under the Lanham Act. It decided 6–3 that the provisions of the Lanham Act prohibiting registration of trademarks of "immoral" or "scandalous" matter is unconstitutional by permitting the United States Patent & Trademark Office to engage in viewpoint discrimination, which violates the Free Speech Clause of the First Amendment.

Freytag v. Commissioner of Internal Revenue, 501 U.S. 868 (1991), is a United States federal court case in which the Supreme Court of the United States decided the characteristics of inferior officers of the United States for the purposes of the Appointments Clause.

Department of Homeland Security v. Thuraissigiam, 591 U.S. ___ (2020), was a United States Supreme Court case involving whether the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, which limits habeas corpus judicial review of the decisions of immigration officers, violates the Suspension Clause of Article One of the U.S. Constitution. In the 7–2 opinion, the Court ruled that the law does not violate the Suspension Clause.

Financial Oversight and Management Bd. for Puerto Rico v. Aurelius Investment, LLC, 590 U.S. ___ (2020), was a United States Supreme Court case in which the Court held that appointments to the Financial Oversight and Management Board for Puerto Rico are not subject to the restrictions in the Appointments Clause of the U.S. Constitution. The Court held that all officers of the United States are subject to the Appointments Clause even if their duties relate to Puerto Rico. However, the power they exercise must be primarily federal in nature for the Clause to apply. If the officer exercises powers primarily of a local nature, even if created by federal law, then the officer is not "of the United States" and is exempt from compliance with the Clause. As members of the Board are primarily concerned with the governance of Puerto Rico, even though their decisions have potentially nationwide consequences, their powers are primarily local in nature and need not be appointed in compliance with the Clause.

Van Buren v. United States, 593 U.S. 374 (2021), was a United States Supreme Court case dealing with the Computer Fraud and Abuse Act (CFAA) and its definition of "exceeds authorized access" in relation to one intentionally accessing a computer system they have authorization to access. In June 2021, the Supreme Court ruled in a 6–3 opinion that one "exceeds authorized access" by accessing off-limit files and other information on a computer system they were otherwise authorized to access. The CFAA's language had long created a 4–3 circuit split in case law that led to the failed introduction of Aaron's Law, and this decision narrowed the applicability of CFAA in prosecuting cybersecurity and computer crime.

Thryv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367, was a 2020 decision by the United States Supreme Court regarding whether inter partes review institution decisions by the United States Patent and Trademark Office were subject to judicial review. Writing for the majority, Justice Ruth Bader Ginsburg issued an opinion finding that such decisions were not judicially reviewable. Justices Neil Gorsuch and Sonia Sotomayor dissented from the majority's ruling, arguing that neither Congress or the Constitution authorized a lack of judicial review of such decisions.

References

  1. 1 2 3 4 5 6 7 Quillin, George; Gills, Jeanne (June 21, 2021). "Justices scale back "unreviewable authority" of administrative patent judges". SCOTUSblog . Retrieved June 28, 2021.
  2. 1 2 3 4 Liptak, Adam (June 21, 2021). "Supreme Court Says Over 200 Patent Judges Were Improperly Appointed". The New York Times . Retrieved June 21, 2021.
  3. 1 2 Bornstein, Scott J.; Briggs, Heath J.; Schindler, Barry J. (June 23, 2021). "In United States v. Arthrex, Supreme Court Holds Administrative Patent Judges' Decisions Must Be Reviewed by the Director of the U.S. Patent and Trademark Office". National Law Review . Retrieved June 28, 2021.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.