By Charles R. Macedo, David P. Goldberg, Chandler E. Sturm, Amster, Rothstein & Ebenstein, and Ivan Zatkovich, eComp Consultants
On December 2, 2020, amicus eComp Consultants (“eComp”) filed an amicus brief urging the U.S. Supreme Court to find Administrative Patent Judges (“APJs”) of the Patent Trial and Appeal Board (“PTAB”) in U.S. v. Arthrex, Inc., Nos. 19-1434/-1452/-1458. See Amicus Brief of eComp Consultants in Support of Petitioner, available at https://www.arelaw.com/publications/view/amicus-curiae-brief-of-ecomp-consultants-in-support-of-petitione/.
As background, in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), a Federal Circuit panel declared that “the statute [Title 35, “the Patent Act”] as currently constructed makes the APJs principal officers” and were thus appointed in violation of the Appointments Clause of the U.S. Constitution, U.S. Const. art. II, § 2, cl. 2. See 941 F.3d at 1325. Since then, the Federal Circuit in over 100 cases, including Polaris Innovations Ltd. v. Kingston Tech. Co., 792 F. App’x 820 (Fed. Cir. 2020) (per curiam), has continued to apply Arthrex I to summarily vacate, reverse, and remand final written decisions of the PTAB APJs in inter partes reviews (“IPRs”) issued on or before October 31, 2020.
In its brief, eComp argues that the U.S. Supreme Court should reverse the decision of the Federal Circuit and confirm that APJs of the PTAB are merely inferior officers of the U.S. and were, therefore, constitutionally appointed. eComp’s Amicus Brief clarifies the errors in the Federal Circuit’s decision.
Precedent Has Repeatedly Held Officers in Question Were Inferior Officers
First, eComp argues that the U.S. Supreme Court’s precedent makes clear, and there is no dispute, that PTAB APJs are “officers” of the U.S. because they “exercise significant authority.” Buckley v. Valeo, 424 U.S. 1, 125-26 (1976). eComp specifically points out that none of the U.S. Supreme Court decisions relied upon by the Federal Circuit panel found an administrative judge to be a “principal” officer. Rather, each of the cases concluded that the official in question was an “inferior” officer.
Narrow Analysis of Edmond
In addition, eComp claims that the Federal Circuit misapplied Edmond v. United States, 520 U.S. 651 (1997), which is the U.S. Supreme Court’s leading case on distinguishing principal from inferior officers for Appointment Clause purposes. In Edmond, the U.S. Supreme Court recognized that it has “not set forth an exclusive criterion for distinguishing between principal and inferior officers for Appointment Clause purposes.”. Instead of considering whether PTAB APJs are, given the totality of the circumstances, inferior officers “whose work is directed and supervised at some level by others who were appointed by presidential nomination with the advice and consent of the Senate,” eComp argues that the Federal Circuit distilled Edmond’s facts to erroneously devise a three-factor test to be tallied and mechanically applied.
Supervision and Direction of the Secretary of Commerce and Director of the PTO over APJs
Additionally, eComp argues that the Federal Circuit’s analysis failed to fully account for the extent of the PTO Director’s supervisory powers over PTAB APJs and to appreciate Congress’ intent in its Patent Act statutory changes addressing APJ Appointments Clause issues. While eComp recognizes that the Federal Circuit panel properly noted that the Director of the PTO “exercises a broad policy-direction and supervisory authority over the APJs,” eComp argues the panel’s analysis failed to give due weight to the directorial and supervisory powers the Secretary and Director—both of whom are principal officers—have over the PTAB APJs.
Congress’s Deliberate Decision
Furthermore, eComp reasons that the fact that Congress expressly changed the method of appointment of PTAB APJs to be consistent with inferior officers, and later ratified that change in Section 6 of the Patent Act, reflects a clear congressional intent that PTAB APJs should be considered inferior officers.
eComp concludes that the Federal Circuit panel below erred in rigidly applying the three factors it plucked from Edmond, in addition to improperly evaluating whether PTAB APJs’ work is sufficiently “directed and supervised” by principal officers. Instead, in view of Congress’s intent and when all of the existing control mechanisms are considered together, eComp argues that it is clear that the work of APJs is sufficiently directed and supervised by a superior officer to characterize them as inferior officers.
Charles R. Macedo is principal counsel and David P. Goldberg and Chandler E. Sturm are additional counsel for eComp on the brief. Ivan Zatkovich is the Principal Consultant for Technology and IP Consulting for eComp.