Case Law Meeting - Arthrex v. Smith & Nephew

Arthrex, Inc. v. Smith & Nephew, Inc.

was the subject of the first meeting of the

Case Law Club

of the Boston Patent Law Association this year, held on February 13, 2020, and hosted by the New England School of Law. Fundamentally at issue in the case was whether appointment of Administrative Patent Judges (APJs) to the Patent Trial and Appeal Board (PTAB) under the America Invents Act (AIA) is in violation of the Constitution. On appeal, the Court of Appeals for the Federal Circuit (Federal Circuit) held that APJs, by virtue of a three-part test derived from precedent, would be “principal officers,” requiring nomination and appointment by the President with the “Advice and Consent of the Senate” under the Appointments Clause, but for the court’s application of the doctrine of severability. In this case, the court avoided scrapping the entire statute by selectively excepting APJs from protection against removal under a single provision. The decision by the PTAB was vacated and remanded. The parties and the government are petitioning for rehearing

en banc

, and the issues being put forth as bases are myriad. In the meantime, the parties to several other cases are asking that decisions rendered before

Arthrex

was decided also be remanded in light of the holding by the Federal Circuit.

After a brief introduction and summary of the case by Michelle Nyein of Wolf, Greenfield & Sacks, P.C., the group addressed the larger issues of: waiver/forfeiture by Arthrex (because the issue of constitutionality under the Appointments Clause was raised for the first time on appeal); the three-part test employed by the court to distinguish “principal officers” (who require appointment by the President) and “inferior officers” (who don’t); and the legal doctrine of severability, at least as applied in this case. Discussion of each of these topics prompted their own questions. For example,

If raising constitutionality for the first time is permissible as an “exceptional case” because the competency of the members of the panel below is at issue, then how far back, if at all, should the ruling be applied to cases already decided by panels of the PTAB?
Regarding each of the factors of the three-part test, namely the “power to review and reverse the officers’ decision,” the “level of supervision and oversight an appointed official has over the officers,” and the “appointed official’s power to remove the officers,” how much is enough? How do you balance these factors with any kind of predictability? How should these factors be weighted relative to each other if not evenly?
What about the solution arrived at by the court, of severing APJs from statutory removal protections? All of the parties and the government agreed that the functions of APJs are adjudicatory. If so, then is it contrary to Congressional intent to subvert the independence conferred on them by statute in order to secure political accountability in the execution of those functions? And what significance should that determination have, if any?

Case Law Club

The Case Law Club Kicks Off 2020 with

Arthrex v. Smith & Nephew

Michelle Nyein, Wolf Greenfield

and

N. Scott Pierce, Foley Hoag

These are questions that may have implications for administrative agencies beyond the United States Patent and Trademark Office. Some of the issues even touch upon notions of separation of powers, fundamental to our form of government.

Bob Asher, Committee Co-chair David Thibodeau, Kathleen Ranney and Kristina Cary

Committee co-chair Michelle Nyein, who led the discussion, considers a question

Committee co-chair Scott Pierce

The views expressed in this article do not necessarily represent those of the authors’ respective Firms or any of their clients.

NEWSLETTER ARCHIVE

Volume 51, Issue 1