The U.S. Supreme Court recently decided a landmark patent case. In United States v. Arthrex, Inc., the Court held that the appointment process of the Patent Trial and Appeal Board (“PTAB”)’s administrative patent judges (“APJs”) was unconstitutional. The Court specifically considered whether APJs are “principal officers” who must be appointed by the President and confirmed by the Senate or – as argued by the United States Patent and Trademark Office (“PTO”) – whether they are “inferior officers” who can be appointed by the Secretary of Commerce. The Court found that since APJs have the “unreviewable authority” to issue decisions that affect the validity of existing patents (i.e., property rights of private parties) they are technically “principal officers.” The Appointments Clause of the Constitution provides that only the President, with the advice and consent of the Senate, can appoint principal officers. As a result, and instead of changing the APJs appointment process or dismantling the entire Board, the Court arrived at a decidedly creative remedy. The Court decided to keep the structure of the PTAB judges intact and interpreted the Patent Act to give the PTO Director (a presidentially appointed official) the power and discretion to review and overturn final decisions of the APJs by rehearing. Ironically, the PTO is in the process of selecting a new Director at this time and the current Acting Director does not have Senate confirmation.
In response to the Court’s decision in Arthrex, the PTO has now implemented an interim Director Review Process by which a party can request review by the Director of final decisions. The Director may also unilaterally review a PTAB final written decision. More information on the interim Director review process and how to make a request can be found on the USPTO Arthrex information page of the PTO website. Keep in mind, this is only an interim process that may change with the appointment of a new Director and in response to public input that is being solicited and can be submitted by email to Director_Review_Suggestions@uspto.gov. (In fact, Google has already asked the PTO Director to review a June PTAB ruling upholding part of a Hammond Development International Inc. patent.)
The Arthrex decision should not change anything at the Trademark Trial and Appeal Board (the other adjudicative body of the PTO). This is because the newly enacted Trademark Modernization Act appears to already address this problem by confirming the PTO Director’s authority to “reconsider, and modify or set aside,” a decision of the Trademark Trial and Appeal Board. The Trademark Modernization Act became law on December 27, 2020 and should be fully implemented and take effect on December 27, 2021.
However, as with most Supreme Court decisions regarding the PTO, the impact of the Arthrex decision will develop over time and is likely to be the source of further litigation as stakeholders jockey to take advantage of the decision or avoid its consequences.