Supreme Court Will Decide Constitutionality of Patent Appeal Board Appointments

By | October 14, 2020

The U.S. Supreme Court on Tuesday agreed to decide whether more than 100 technology disputes must be reheard because judges were unconstitutionally appointed to a U.S. Patent and Trademark Office tribunal in a case arising from a medical device patent challenge.

The justices said they would review a 2019 lower court decision that found a “constitutional defect” in how Patent Trial and Appeal Board judges are appointed. That ruling came in an appeal by privately held Florida-based medical device company Arthrex of a patent tribunal three-judge panel’s decision that invalidated part of one of its patents that had been challenged by British-based rival Smith & Nephew PLC.

The tribunal, created by Congress in 2011, is an administrative court run by the U.S. Patent and Trademark Office and it takes a second look at patents issued by the agency and often cancels them, much to the dismay of some inventors.

The tribunal has proven popular with big technology companies such as Apple Inc. and Alphabet Inc.’s Google LLC, which often ask it to cancel patents they have been sued for violating. Litigation before the tribunal is seen by many companies as a more efficient alternative to resolving cases in federal court.

Unlike U.S. District Courts, the tribunal has more than 200 judges who are government employees appointed by the U.S. commerce secretary rather than nominated by the president and confirmed by the Senate.

The U.S. Court of Appeals for the Federal Circuit, which specializes in patent litigation, ruled that these tribunal judges have considerable power and autonomy, making them the sort of “principal officers” who must be appointed by the president and confirmed by the Senate under the U.S. Constitution.

To remedy this constitutional problem, the Federal Circuit struck down part of a law dealing with how these tribunal judges can be removed from power.

The court’s remedy allowed the board to continue operating. Still, the Federal Circuit has said that more than 100 technology disputes may need to be reheard before new panels of tribunal judges.

Arthrex, Smith & Nephew and the U.S. government all appealed the Federal Circuit’s decision to the Supreme Court. U.S. government lawyers have argued that the patent office’s director, who was Senate confirmed, directs and supervises tribunal judges so they are not “principal officers” requiring Senate approval.

(Reporting by Jan Wolfe; editing by Grant McCool)

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