Harness Dickey Principal and St. Louis patent litigator Doug Robinson was interviewed by Bloomberg Law for an article about the Federal Circuit’s attention-grabbing decision in Arthrex, Inc. v. Smith & Nephew. The October 31 decision has two main points: it says that administrative judges at the USPTO are unconstitutionally appointed, and it removes the safety net preventing PTAB judges from being fired without cause.
According to the ruling, the amount of power that tribunal judges possess should qualify them as officers who are appointed by the president and subject to Senate confirmation. Further, their current appointment is, in fact, not legally sound.
The decision is already causing a great deal of confusion among patent owners and attorneys who are currently involved in challenges before the PTAB or appeals before the Federal Circuit. The ruling does not open the doors for a flood of new appeals, however. According to the article, “The Federal Circuit said its ruling only applies to cases where litigants present an Appointments Clause challenge on appeal.”
Trying to limit rehearings to cases in which constitutionality was previously raised, however, may not work as intended because of the larger constitutional issues involved here.
The second part of the ruling also increases Director Iancu’s power at the USPTO. “After this decision, the director can essentially fire administrative judges without cause,” says Robinson. “They are more under the control of the director.”
“Perhaps the real takeaway here is a broader point,” Robinson adds. “There are many other constitutional challenges to the IPR system being raised at the Federal Circuit in various other cases, and this case indicates the larger court is at least receptive to those types of arguments — which can have a massive impact on the system if accepted.”