High Court Says Patent Judges Must Be Appointed by President

WASHINGTON (CN) — The Supreme Court ruled Monday that administrative judges in the U.S. Patent and Trademark Office must be appointed by the president and confirmed by the Senate.

"The exercise of executive power by inferior officers must at some level be subject to the direction and supervision of an officer nominated by the president and confirmed by the Senate," Chief Justice John Roberts wrote in a 23-page majority opinion, ruling that administrative patent judges are principal officers and removing the power of the secretary of commerce to appoint them.

Roberts added that the Constitution "forbids the enforcement of statutory restrictions on the [USPTO] director that insulate the decisions of APJs from his direction and supervision."

"To be clear," he wrote, "the director need not review every decision of the [Patent Trial and Appeal Board]. What matters is that the director have the discretion to review decisions rendered by APJs. In this way, the president remains responsible for the exercise of executive power—and through him, the exercise of executive power remains accountable to the people."

The case stems from medical device manufacturer Arthrex's challenge of the validity of patent judge appointments after one ruled against the company in a patent dispute. In 2015, Arthrex had secured a patent for a medical device designed to reattach soft tissue to bone during orthopedic surgery. It later claimed that the medical manufacturer Smith & Nephew had infringed on the patent, but three APJs making up a PTAB panel found Arthrex’s patent was invalid.

Roberts wrote Monday, “Because the source of the constitutional violation is the restraint on the review authority of the director, rather than the appointment of APJs by the secretary, Arthrex is not entitled to a hearing before a new panel of APJs.”

On appeal in 2019, the Federal Circuit ruled in favor of Arthrex, saying the judges qualified as principal officers and that, as such, the secretary of commerce’s appointment of these officials violated the appointments clause of the U.S. Constitution. To make the judges inferior officers, the Federal Circuit moved to deny the judges their existing removal protections that make it difficult for the patent and trademark office to fire them.

In response, the U.S. government petitioned the Supreme Court to hear the case in June 2020. The government says the Federal Circuit mistakenly marked the judges principal officers and these removal protections should be kept in place. 

The Supreme Court heard virtual arguments in the consolidated case in March. 

While Justices Samuel Alito, Brett Kavanaugh and Amy Coney Barrett fully joined Roberts’ opinion, the case’s complicated 5-4 decision came with disputes from other justices.

Both Justices Neil Gorsuch and Stephen Breyer filed separate opinions that agreed with in part and dissented in part. Meanwhile, Justice Clarence Thomas filed a dissenting opinion.

Spanning 12-pages, Gorsuch explained in his dissenting comments that he believed that Congress is the only party that could resolve what the high court ruled Monday was patent judges’ unconstitutional appointment.

“In circumstances like these, I believe traditional remedial principles should be our guide. Early American courts did not presume a power to ‘sever’ and excise portions of statutes in response to constitutional violations. Instead, when the application of a statute violated the Constitution, courts simply declined to enforce the statute in the case or controversy at hand,” Gorsuch wrote.

He continued, “The court declines to follow this traditional path. Instead, it imagines that, if Congress had known its statutory scheme was unconstitutional, it would have preferred to make the policy choice the court makes for it today.”

Justice Breyer was joined by Justices Sotomayor and Elena Kagan in eight pages of dissenting comments, in which he described Monday’s decision as “both unprecedented and unnecessary,” as it “risks pushing the judiciary further into areas where we lack both the authority to act and the capacity to act wisely.” 

Thomas, in his own 25-page dissenting opinion, joined by Breyer, Sotomayor, and Kagan noted that this case was the first time the high court had held that Congress violated the Constitution by bestowing the appointment of a federal officer to the head of a department. 

“Just who are these ‘principal’ officers that Congress unsuccessfully sought to smuggle into the executive branch without Senate confirmation? About 250 administrative patent judges who sit at the bottom of an organizational chart, nestled under at least two levels of authority. Neither our precedent nor the original understanding of the appointments clause requires Senate confirmation of officers inferior to not one, but two officers below the president,” Thomas wrote.

Arthrex’s attorney Jeffrey Lamken of MoloLamken did not immediately return a request for comment Monday. Nor did Smith & Nephew attorney Mark Perry of Gibson Dunn or the Department of Justice.

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