Post-Arthrex PTAB Appeals Mostly Moving On From Constitutional Kerfuffle

By John Evans, Dave Maiorana, and Steven Nosco* –

This is a follow up to our earlier post about the fallout from the Supreme Court’s June 21, 2021 decision in U.S. v. Arthrex, holding that PTAB APJs were unconstitutionally appointed because they exercised “principal officer” authority in their final written decisions, without having been appointed by the President and approved by the Senate, without review by a so-appointed Director.

In our last post, we reported how the Federal Circuit ordered Arthrex challengers to say how they wanted their appeals to proceed, and then other parties, including the USPTO, were to respond.  To recap, most appellants wanted to proceed to the merits, although some tried to avoid waiver.  Some appellants asked for remand to the Director, even though there is no currently appointed Director at the USPTO.  At the time of our last post, the other parties and USPTO had not responded yet.  But all the briefs are in now, and again we see some interesting trends, as discussed below.

In cases when the Arthrex challenger wanted to go to the merits, appellees and the USPTO largely agreed and said they considered the Arthrex challenge waived as a result.  We mentioned in our last post that one of the bolder Arthrex challengers asked the Federal Circuit to reverse on the merits, or otherwise remand the case.  The USPTO and appellee cried foul and said constitutional challenges are not “backup plans.”  The Federal Circuit quickly ordered the appellant to pick one:  Have its cake, or eat it.  Not both.

As for cases when the Arthrex challenger asked for remand, the responses were more varied.  In most cases, the appellees and USPTO agreed that limited remand was appropriate.  But some appellees argued that the challenge was waived because the appellant did not raise the issue early enough, i.e., before the Board, in an appellate motion, etc.  The USPTO demurred on questions about Mr. Hirshfeld’s appointment status.  Interestingly, one appellee noted that the USPTO is already a party to the appeal, and suggested that the Director could simply brief its position about the remand, thereby sparing the Federal Circuit and the parties of what looks to be an avoidable remand cycle.

Takeaways:

• The Arthrex predicament looks like it will work itself out. Most appeals held up by Arthrex challenges are moving on to the merits after waiver.
• Other appeals are being remanded. The USPTO is now receiving remands and has already issued some Director decisions.
• In some cases, appellees resist remand and maintain that Arthrex challenges were waived. Keep an eye out for Federal Circuit decisions on the waiver issue.

* Steven is a Summer Associate in Jones Day’s Cleveland Office.