Nos. 19-1434, 19-1452, and 19-1458
`In the Supreme Court of the United States
`
`
`
`UNITED STATES OF AMERICA, PETITIONER
`v.
`ARTHREX, INC., ET AL.
`
`
`
`ON WRIT OF CERTIORARI
`TO THE UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`
`
`REPLY AND RESPONSE BRIEF
`FOR THE UNITED STATES
`
`
`
` ELIZABETH B. PRELOGAR
`Acting Solicitor General
`Counsel of Record
`MALCOLM L. STEWART
`Deputy Solicitor General
`MICHAEL D. GRANSTON
`Deputy Assistant Attorney
`General
`JONATHAN Y. ELLIS
`Assistant to the Solicitor
`General
`SCOTT R. MCINTOSH
`MELISSA N. PATTERSON
`COURTNEY L. DIXON
`Attorneys
`Department of Justice
`Washington, D.C. 20530-0001
`SupremeCtBriefs@usdoj.gov
`(202) 514-2217
`
`DAVID L. BERDAN
`General Counsel
`THOMAS W. KRAUSE
`Solicitor
`FARHEENA Y. RASHEED
`Deputy Solicitor
`MOLLY R. SILFEN
`DANIEL KAZHDAN
`Associate Solicitors
`United States Patent and
`Trademark Office
`Alexandria, Va. 22314
`
`(Additional Captions On Inside Cover)
`
`
`
`

`

`
`
`SMITH & NEPHEW, INC., ET AL., PETITIONERS
`SMITH & NEPHEW, INC., ET AL., PETITIONERS
`’U.
`v.
`ARTHREX, INC., ET AL.
`ARTHREX, INC., ET AL.
`
`
`
`ARTHREX, INC., PETITIONER
`ARTHREX, INC., PETITIONER
`’1).
`v.
`SMITH & NEPHEW, INC., ET AL.
`SMITH & NEPHEW, INC., ET AL.
`
`
`
`
`
`

`

`QUESTIONS PRESENTED
`1. Whether, for purposes of the Appointments
`Clause, U.S. Const. Art. II, § 2, Cl. 2, administrative pa-
`tent judges of the U.S. Patent and Trademark Office are
`principal officers who must be appointed by the Presi-
`dent with the Senate’s advice and consent, or “inferior
`Officers” whose appointment Congress has permissibly
`vested in a department head.
`2. Whether, if administrative patent judges are
`principal officers, the court of appeals properly cured
`any Appointments Clause defect in the current statu-
`tory scheme prospectively by severing the application
`of 5 U.S.C. 7513(a) to those judges.
`
`
`(I)
`
`

`

`TABLE OF CONTENTS
`
`Page
`Summary of argument ................................................................. 1
`Argument:
`I. Administrative patent judges are inferior officers
`whose appointment Congress validly vested in the
`Secretary of Commerce .................................................. 5
`A. From start to finish, the work of
`administrative patent judges is subject to
`significant supervision and direction by
`Senate-confirmed officers ........................................ 6
`B. The Appointments Clause does not require
`that every decision by an inferior officer must
`be subject to review and possible modification
`by a principal officer ............................................... 18
`1. The Appointments Clause imposes no
`exclusive criterion for inferior-officer
`status .................................................................. 18
`2. History provides no sound basis for
`treating principal-officer review as an
`indispensable prerequisite to inferior-
`officer status ...................................................... 25
`II. If the Court concludes that administrative patent
`judges are principal officers under the current
`scheme, the Court should affirm the Federal
`Circuit’s remedial holding severing the statutory
`removal restrictions ....................................................... 31
`A. Administrative patent judges’ modest tenure
`protections may be severed from the rest of
`the statute ................................................................ 31
`B. The existence of other potential means to cure
`any Appointments Clause problem does not
`cast doubt on the court of appeals’ approach ....... 40
`Conclusion ................................................................................... 43
`
`(III)
`
`

`

`IV
`
`TABLE OF AUTHORITIES
`
`Cases:
`
`Page
`
`Abrams v. Social Security Administration,
`703 F.3d 538 (Fed. Cir. 2012) ............................................... 7
`Ayotte v. Planned Parenthood of N. New England,
`546 U.S. 320 (2006).................................................. 32, 38, 39
`Barr v. American Ass’n of Political Consultants,
`Inc., 140 S. Ct. 2335 (2020) ........................................... 32, 42
`BioDelivery Scis. Int’l, Inc. v. Aquestive Therapeu-
`tics, Inc., 935 F.3d 1362 (Fed. Cir. 2019),
`cert. denied, 141 S. Ct. 254 (2020) ..................................... 13
`Bowsher v. Synar, 478 U.S. 714 (1986) .................................. 9
`Brown v. Department of the Navy, 229 F.3d 1356
`(Fed. Cir. 2000), cert. denied, 553 U.S. 949 (2001) ............ 7
`Cobert v. Miller, 800 F.3d 1340 (Fed. Cir. 2015) .................. 7
`Cooper Techs. Co. v. Dudas, 536 F.3d 1330
`(Fed. Cir. 2008) ............................................................. 10, 11
`Cuozzo Speed Technologies, LLC v. Lee,
`136 S. Ct. 2131 (2016) ....................................... 11, 16, 17, 38
`DBC, In re, 545 F.3d 1373 (Fed. Cir. 2008),
`cert. denied, 558 U.S. 816 (2009) ....................................... 30
`Department of Transportation v. Association of
`American Railroads, 575 U.S. 43 (2015) ......................... 22
`Edmond v. United States, 520 U.S. 651 (1997) .......... passim
`Exum v. Department of Homeland Security,
`446 Fed. Appx. 282 (Fed. Cir. 2011) ................................... 7
`Facebook, Inc. v. Windy City Innovations, LLC,
`973 F.3d 1321 (Fed. Cir. 2020) ........................................... 11
`Free Enterprise Fund v. Public Co. Accounting
`Oversight Bd., 561 U.S. 477 (2010) ........................... passim
`Freytag v. Commissioner, 501 U.S. 868 (1991) ............ 20, 30
`Glidden Co. v. Zdanok, 370 U.S. 530 (1962) ....................... 29
`
`
`
`

`

`V
`
`Page
`
`Cases—Continued:
`Intercollegiate Broad. Sys., Inc. v. Copyright
`Royalty Bd., 684 F.3d 1332 (D.C. Cir. 2012),
`cert. denied, 569 U.S. 1004 (2013) ......................... 32, 33, 34
`Kalaris v. Donovan, 697 F.2d 376 (D.C. Cir.),
`cert. denied, 462 U.S. 1119 (1983) ............................... 16, 35
`Lucia v. SEC, 138 S. Ct. 2044 (2018) ..................................... 8
`Medtronic, Inc. v. Robert Bosch Healthcare
`Sys., Inc., 839 F.3d 1382 (Fed. Cir. 2016),
`cert. dismissed, 137 S. Ct. 2113 (2017) .............................. 13
`Mistretta v. United States, 488 U.S. 361 (1989) ................. 11
`Morrison v. Olson, 487 U.S. 654 (1988) ......................... 21, 24
`Myers v. United States, 272 U.S. 52 (1926) ........................ 24
`Oil States Energy Servs., LLC v. Greene’s Energy
`Grp., LLC, 138 S. Ct. 1365 (2018) ................................ 16, 38
`Reagan v. United States, 182 U.S. 419 (1901) .................... 35
`SEC v. Chenery Corp., 332 U.S. 194 (1947) ......................... 15
`Seila Law LLC v. CFPB, 140 S. Ct. 2183
`(2020) ............................................................... 8, 31, 34, 35, 42
`Shoaf v. Department of Agric., 260 F.3d 1336
`(Fed. Cir. 2001) ..................................................................... 9
`Staats v. USPS, 99 F.3d 1120 (Fed. Cir. 1996) ............... 9, 10
`Strand v. United States, 951 F.3d 1347 (Fed. Cir.
`2020), cert. denied, No. 20-111 (Dec. 7, 2020) .................. 41
`United States v. Allred, 155 U.S. 591 (1895) ....................... 36
`United States v. Grace, 461 U.S. 171 (1983) ....................... 39
`United States v. National Treasury Emps. Union,
`513 U.S. 454 (1995).............................................................. 38
`United States ex rel. Dunlap v. Black, 128 U.S. 40
`(1888) .................................................................................... 15
`Utica Packing Co. v. Block, 781 F.2d 71
`(6th Cir. 1986) ...................................................................... 17
`Withrow v. Larkin, 421 U.S. 35 (1975) ................................ 15
`
`
`
`

`

`VI
`
`
`
` §
`
`
`
` §
`
`Page
`
`Constitution and statutes:
`U.S. Const.:
`Art. II:
`§ 2, Cl. 2 ............................................................ 5, 18, 29
`Appointments Clause ................................. passim
`Art. III .................................................................. 16, 29, 37
`Act of April 10, 1790, ch. 7, § 1, 1 Stat. 109-110 .................. 35
`Act of Feb. 21, 1793, ch. 11, 1 Stat. 318:
`§ 1, 1 Stat. 318-321 ........................................................... 25
`§ 9, 1 Stat. 322-323 ........................................................... 25
`Act of July 4, 1836, ch. 357, 5 Stat. 117 ................................ 25
` 1, 5 Stat. 117-118 ........................................................... 27
`§ 2, 5 Stat. 118 .................................................................. 27
`§ 7, 5 Stat. 119-120 ........................................................... 26
`§ 8, 5 Stat. 120-121 ........................................................... 26
`Act of Mar. 3, 1839, ch. 88, §§ 11-12,
`5 Stat. 354-355 ..................................................................... 26
`Act of Mar. 2, 1861, ch. 88, § 2, 12 Stat. 246-247 ........... 26, 27
`Act of July 8, 1870, ch. 230, 16 Stat. 197:
`§ 2, 16 Stat. 198-199 ......................................................... 28
`§ 31, 16 Stat. 202 .............................................................. 28
`Act of Mar. 2, 1927, ch. 273, 44 Stat. 1335:
`§ 3, 44 Stat. 1335-1336 ..................................................... 28
`§§ 3-6, 44 Stat. 1335-1336 ................................................ 27
`§ 8, 44 Stat. 1336 .............................................................. 27
` 11, 44 Stat. 1336-1337 ................................................... 27
`Act of Aug. 25, 1958, Pub. L. No. 85-755,
`72 Stat. 848 .......................................................................... 29
`Act of Jan. 2, 1975, Pub. L. No. 93-601, 88 Stat. 1956 ........ 29
` 2, 88 Stat. 1956 .............................................................. 36
`Act of Aug. 12, 2008, Pub. L. No. 110-313,
`§ 1(a)(1), 122 Stat. 3014 ...................................................... 30
`
` §
`
`

`

`VII
`
`Page
`Statutes—Continued:
`Administrative Procedure Act, 5 U.S.C. 701 et seq. ............. 7
`5 U.S.C. 706(2)(B) ............................................................ 17
`Leahy-Smith America Invents Act, Pub. L. No.
`112-29, 125 Stat. 284 ........................................................... 11
`Patent Act of 1952, ch. 950, 66 Stat. 792
`(35 U.S.C. 1 et seq.):
`§ 3, 66 Stat. 792-793 ......................................................... 29
`§ 7, 66 Stat. 793 .......................................................... 28, 29
`§ 141, 66 Stat. 802 ............................................................ 28
`§ 145, 66 Stat. 803 ............................................................ 28
`35 U.S.C. 2(b)(2)(A) ......................................................... 14
`35 U.S.C. 3 .......................................................................... 7
`35 U.S.C. 3(a) ............................................................. 36, 40
`35 U.S.C. 3(a)(1)............................................................... 14
`35 U.S.C. 3(a)(2)(A) ................................................... 12, 14
`35 U.S.C. 3(a)(4)............................................................... 38
`35 U.S.C. 3(b)(2)(C) ......................................................... 36
`35 U.S.C. 3(b)(3)(A) ......................................................... 28
`35 U.S.C. 3(c) ................................................................... 36
`35 U.S.C. 6 (1926) ............................................................ 27
`35 U.S.C. 6 ........................................................................ 36
`35 U.S.C. 6(c) ................................................................... 40
`35 U.S.C. 131 .................................................................... 28
`35 U.S.C. 134 .................................................................... 37
`35 U.S.C. 135(a) ............................................................... 14
`35 U.S.C. 306 .................................................................... 37
`35 U.S.C. 314(a) ............................................................... 14
`35 U.S.C. 316(a) ............................................................... 11
`35 U.S.C. 316(a)(4) ..................................................... 11, 14
`35 U.S.C. 317(a) ............................................................... 37
`35 U.S.C. 318(a) ............................................................... 13
`
`
`
`

`

`VIII
`
`Page
`Statutes—Continued:
`35 U.S.C. 324(a) ............................................................... 14
`35 U.S.C. 324(e) ............................................................... 14
`35 U.S.C. 326(a) ............................................................... 11
`35 U.S.C. 326(a)(4) ........................................................... 14
`35 U.S.C. 328(a) ............................................................... 13
`Patent and Trademark Office Efficiency Act,
`Pub. L. No. 106-113, § 4717, 113 Stat. 1501A-580
`to 1501A-581 ........................................................................ 29
`Trademark Modernization Act of 2020, Pub. L. No.
`116-260, Div. Q, Tit. II, Subtit. B, § 228
`(Dec. 27, 2020) ..................................................................... 41
`5 U.S.C. 3105 ............................................................................ 7
`5 U.S.C. 7511(b)(8) ................................................................. 35
`5 U.S.C. 7513(a) ..................................................................... 33
`5 U.S.C. 7521(a) ............................................................. 7, 8, 35
`8 U.S.C. 1324b(e) ................................................................... 23
`8 U.S.C. 1324b(i)(1) ................................................................ 23
`10 U.S.C. 837 (1994) ............................................................... 20
`10 U.S.C. 867(c) (1994) .......................................................... 22
`12 U.S.C. 5491(c)(3) ................................................................. 8
`15 U.S.C. 7217(d)(2) ............................................................... 15
`33 U.S.C. 921(b) ..................................................................... 23
`33 U.S.C. 921(c) ...................................................................... 23
`41 U.S.C. 7105 ........................................................................ 23
`41 U.S.C. 7105(c) .................................................................... 35
`41 U.S.C. 7105(d) ................................................................... 35
`41 U.S.C. 7107 ........................................................................ 23
`
`Miscellaneous:
`1 Annals of Cong. (1789) (Joseph Gales ed., 1834) ............. 35
`
`
`
`
`

`

`IX
`
`Page
`
`Miscellaneous—Continued:
`Michael Asimow, Administrative Conference of the
`U.S., Federal Administrative Adjudication
`Outside the Administrative Procedure Act (2019) ......... 23
`P. J. Federico, Evolution of Patent Office Appeals,
`22 J. Pat. Off. Soc’y 838 (1940) .......................................... 26
`H.R. Rep. No. 98, 112th Cong., 1st Sess. Pt. 1 (2011) ........ 38
`Harold J. Krent, Presidential Control of
`Adjudication Within the Executive Branch,
`65 Case W. Res. L. Rev. 1083 (2015)................................. 15
`Patent Trial and Appeal Board, Standard Operating
`Procedure 2 (Revision 10) (Sept. 20, 2018),
`https://go.usa.gov/xwXem .................................................. 16
`3 Joseph Story, Commentaries on the Constitution
`of the United States (1833) ................................................. 18
`2019 Revised Patent Subject Matter Eligibility
`Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) ......................... 12
`U.S. Patent and Trademark Office, PTAB Trial
`Statistics: FY20 End of Year Outcome Roundup,
`IPR, PGR, CBM, https://go.usa.gov/xAfPc ..................... 17
`
`
`
`
`
`
`
`
`
`

`

`In the Supreme Court of the United States
`
`
`
`No. 19-1434
`UNITED STATES OF AMERICA, PETITIONER
`v.
`ARTHREX, INC., ET AL.
`
`
`
`No. 19-1452
`SMITH & NEPHEW, INC., ET AL., PETITIONERS
`v.
`ARTHREX, INC., ET AL.
`
`
`
`No. 19-1458
`ARTHREX, INC., PETITIONER
`v.
`SMITH & NEPHEW, INC., ET AL.
`
`
`
`ON WRIT OF CERTIORARI
`TO THE UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`
`
`REPLY AND RESPONSE BRIEF
`FOR THE UNITED STATES
`
`
`
`SUMMARY OF ARGUMENT
`I. Under the Court’s existing analytic framework,
`this case is straightforward. Administrative patent
`judges on the United States Patent and Trademark
`
`(1)
`
`

`

`2
`
`Office’s (USPTO’s) Patent Trial and Appeal Board
`(Board) are inferior officers, because from start to fin-
`ish their work is “directed and supervised at some level”
`by the Secretary of Commerce and the USPTO Direc-
`tor, both of whom are presidentially appointed, Senate-
`confirmed Executive Branch officials. See Edmond v.
`United States, 520 U.S. 651, 663 (1997).
`A. Arthrex’s attempts to discount those officials’
`oversight powers are unpersuasive. While the Secre-
`tary can remove a judge from federal service only for
`misconduct that is likely to affect an agency’s work, fail-
`ing to follow the Director’s binding regulations and
`binding policy guidance readily qualifies. And although
`the Director’s unfettered removal authority applies
`only to judicial assignments, not federal service, the Ed-
`mond Court found precisely that type of removal au-
`thority to be a powerful tool for control.
`The Director’s independent authority to issue bind-
`ing policy guidance, as well as his unilateral authority
`to designate or de-designate Board decisions as prece-
`dential, fill any gap in his ability to establish the general
`policies that the judges must apply. And while the Di-
`rector is not authorized to reverse a final Board decision
`unilaterally, he can institute or de-institute Board pro-
`ceedings at any time before the Board renders its deci-
`sion. That power, combined with the Director’s sub-
`stantial control over any rehearing after a final decision
`is issued, provides significant control over each of those
`individual proceedings.
`Contrary to Arthrex’s contention, the Secretary’s and
`Director’s exercise of these statutory oversight author-
`ities—either singly or in combination—is consistent
`with the overall statutory scheme and with due process
`requirements. The Patent Act expressly contemplates
`
`
`
`

`

`3
`
`that the Director will both establish general USPTO
`policy and participate in individual Board proceedings.
`And there is no inherent unfairness in his exercise of
`those authorities to serve legitimate goals.
`B. Arthrex proposes a new categorical rule, under
`which an administrative judge cannot be an inferior of-
`ficer unless a Senate-confirmed officer can exercise
`plenary review over her decisions. Under this Court’s
`precedents, however, there is no exclusive criterion for
`inferior-officer status,
`including for administrative
`judges. Although review authority can provide one sig-
`nificant means for control, it is not the only way—and not
`always the best way—to ensure effective supervision.
`Arthrex’s appeal to history and tradition is also una-
`vailing. Since 1793, Congress has frequently granted
`final decisionmaking authority on patent rights to offi-
`cials who had not received Senate confirmation. Indeed,
`throughout the period (since 1980) when the USPTO
`has been authorized to reconsider the validity of previ-
`ously issued patents by re-examination, that task has
`always been entrusted to non-Senate-confirmed agency
`officials. And since 1870, initial patent examiners (who
`no one contends are principal officers) have been au-
`thorized to issue the Executive Branch’s final word in
`granting patent rights. Far from supporting Arthrex’s
`position, this longstanding congressional practice pro-
`vides powerful evidence that final authority to deter-
`mine the validity of a patent is not enough to make the
`decisionmaker a principal officer of the United States.
`II. If the Court concludes that administrative patent
`judges are principal officers under the current statu-
`tory scheme, the Court should affirm the court of ap-
`peals’ remedial holding, severing the judges’ modest
`tenure protections to render them inferior officers.
`
`
`
`

`

`4
`
`A. When it identifies a constitutional flaw in a federal
`statute, this Court applies a strong presumption in fa-
`vor of invalidating only particular unconstitutional pro-
`visions or applications of the law, while leaving the rest
`in force, as long as the remainder of the statutory
`scheme can function independently. Here, the remain-
`ing Patent Act provisions will function as Congress in-
`tended if administrative patent judges are removable at
`will. And nothing in the Act’s text or history indicates
`that, if affording tenure protections rendered the stat-
`ute unconstitutional, Congress would have preferred to
`forgo inter partes reviews entirely rather than to have
`such reviews conducted by officials who can be removed
`at will.
`Arthrex’s contrary assertions are misguided. Al-
`though the Court has sometimes permitted tenure pro-
`tections for certain Executive Branch adjudicators, it
`has never required them. And while Congress has af-
`forded tenure protections for administrative judges in
`some circumstances, most prominently under the Ad-
`ministrative Procedure Act, it has not uniformly done
`so. Nothing in the Patent Act suggests that the modest
`tenure protections afforded to administrative patent
`judges under that law are critical to its operation. And
`there is no barrier to the Court’s invalidating those re-
`moval restrictions only as applied to administrative pa-
`tent judges.
`B. The possibility of other potential cures to any Ap-
`pointments Clause violation does not counsel against
`following the court of appeals’ approach. If severing ad-
`ministrative patent judges’ removal restrictions would
`not cure any constitutional problem the Court identi-
`fies, or if it would introduce a new constitutional infir-
`
`
`
`

`

`5
`
`mity, the Court should consider other remedial ap-
`proaches. But the mere possibility that other potential
`responses exist does not foreclose the Court from
`adopting any solution at all.
`ARGUMENT
`I. ADMINISTRATIVE PATENT JUDGES ARE INFERIOR
`OFFICERS WHOSE APPOINTMENT CONGRESS VALIDLY
`VESTED IN THE SECRETARY OF COMMERCE
`USPTO administrative patent judges are inferior of-
`ficers who may be validly appointed under the Appoint-
`ments Clause by the “Head[ ]” of their “Department[ ],”
`Art. II, § 2, Cl. 2, rather than by the President with the
`advice and consent of the Senate. The court of appeals
`reached a different conclusion only by employing a
`deeply flawed, mechanical application of this Court’s
`decision in Edmond v. United States, 520 U.S. 651
`(1997), and by failing to appreciate the numerous ways
`in which the Secretary of Commerce and the Director
`of the USPTO direct and supervise those judges’ work.
`Except for a passing footnote, Arthrex does not de-
`fend that approach. Instead, while disputing various as-
`pects of the government’s description of the Secretary’s
`and Director’s supervisory authority, Arthrex princi-
`pally advocates a new test for determining inferior-
`officer status, at least for officials who perform adjudi-
`catory functions. Arthrex’s criticisms of the govern-
`ment’s application of Edmond are misguided, and its ar-
`guments for wholesale replacement of the Court’s tra-
`ditional approach are unpersuasive. The court of ap-
`peals’ judgment should be reversed.
`
`
`
`

`

`6
`
`A. From Start To Finish, The Work Of Administrative
`Patent Judges Is Subject to Significant Supervision and
`Direction By Senate-Confirmed Officers
`Under Edmond, inferior officers are those “whose
`work is directed and supervised at some level by others
`who were appointed by Presidential nomination with
`the advice and consent of the Senate.” 520 U.S. at 663.
`Two Senate-confirmed officers—the Secretary and the
`Director—possess a variety of mechanisms that operate
`in both independent and mutually reinforcing ways to
`provide substantial direction and supervision to admin-
`istrative patent judges. Arthrex’s efforts to dismiss or
`discount those oversight authorities lack merit.
`1. a. The Secretary exercises significant control over
`administrative patent judges through his authority to
`appoint all such judges, and his concomitant authority
`to remove them from federal service under the permis-
`sive efficiency-of-the-service standard. U.S. Br. 26-27.
`Particularly when combined with the Director’s author-
`ity to set binding policy for the Office, see pp. 10-12, in-
`fra, the Secretary’s appointment and removal authority
`provides a meaningful tool for oversight and control.1
`Arthrex emphasizes (Br. 36-38) that the Federal Cir-
`cuit has interpreted the efficiency-of-the-service stand-
`ard to require “misconduct * * * likely to have an ad-
`
`
`1 As our opening brief explains (at 4 n.1), a somewhat different
`removal standard applies to a small number of administrative pa-
`tent judges who are members of the Senior Executive Service. Nei-
`ther the court of appeals nor Arthrex has suggested that those
`judges should be classified differently for purposes of the Appoint-
`ments Clause. See Arthrex Br. 37 n.7. In any event, none of those
`judges served on the Board panel that ruled in this case. See U.S.
`Br. 5 n.1.
`
`
`
`

`

`7
`
`verse impact on the agency’s performance of its func-
`tions,” Brown v. Department of the Navy, 229 F.3d
`1356, 1358 (Fed. Cir. 2000), cert. denied, 533 U.S. 949
`(2001), and characterizes (Br. 38) that standard as a
`“sharp[ ] limit[ation]” on the Secretary’s authority. But
`at least in the present statutory context, that interpre-
`tation poses no serious impediment to the Secretary’s
`supervision of administrative patent judges’ work. A
`civil servant’s failure or refusal to follow a superior’s
`binding instructions or policy is misconduct. See U.S.
`Br. 27 (citing, e.g., Cobert v. Miller, 800 F.3d 1340, 1351
`(Fed. Cir. 2015)). And when an administrative judge en-
`gages in such misconduct while carrying out her adjudi-
`cative work on behalf of the agency, an adverse impact
`on agency functions is the likely result. See, e.g., Exum
`v. Department of Homeland Security, 446 Fed. Appx.
`282, 283-284 (Fed. Cir. 2011) (per curiam) (upholding,
`under the efficiency-of-the-service standard, the re-
`moval of an immigration officer who had failed to follow
`agency policies when “adjudicat[ing] applications of al-
`iens seeking to become lawful permanent residents”).
`Arthrex asserts (Br. 37) that the Federal Circuit has
`held to the contrary, but the single case it cites is inap-
`posite. Abrams v. Social Security Administration, 703
`F.3d 538 (Fed. Cir. 2012), involved the removal of an ad-
`ministrative law judge under the “good cause” removal
`standard in 5 U.S.C. 7521(a) established by the Admin-
`istrative Procedure Act (APA), 5 U.S.C. 701 et seq., for
`judges appointed under 5 U.S.C. 3105. 703 F.3d at 543
`(quoting 5 U.S.C. 7521(a)); see 5 U.S.C. 7521(a). As the
`court below held (and Arthrex does not dispute), an ad-
`ministrative patent judge’s removal is not governed by
`Section 7521(a) because administrative patent judges
`are appointed under 35 U.S.C. 3, not 5 U.S.C. 3105. See
`
`
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`

`8
`
`Pet. App. 18a n.4. Thus, as the court below explained,
`their removal requires “a lower threshold” than under
`the Federal Circuit’s prior construction of Section
`7521(a). Ibid.; see Lucia v. SEC, 138 S. Ct. 2044, 2061
`(2018) (Breyer, J., concurring in the judgment in part
`and dissenting in part) (noting the government’s disa-
`greement with that interpretation of Section 7521(a)).
`This Court’s decision in Seila Law LLC v. CFPB,
`140 S. Ct. 2183 (2020), is also not to the contrary. In
`Seila Law, the Court held unconstitutional a provision
`that limited the permissible grounds for removing the
`CFPB Director—the single head of an independent
`agency—to “inefficiency, neglect of duty, or malfeasance
`in office.” Id. at 2193 (quoting 12 U.S.C. 5491(c)(3)). The
`Court found that this removal standard, as it had previ-
`ously been understood, interfered with the President’s
`ability to fulfill his responsibilities under the Take Care
`Clause and violated the separation of powers in the con-
`text of that case. See 140 S. Ct. at 2197. And it declined
`to adopt a different statutory interpretation to address
`that constitutional infirmity, noting that the appointed
`amicus had failed to offer “any workable standard de-
`rived from the statutory language.” Id. at 2206. That
`reasoning, which concerned the permissible interpreta-
`tion of different statutory language in response to dis-
`tinct constitutional concerns, has no bearing on the
`scope or efficacy of the removal authority that the Sec-
`retary possesses under the efficiency-of-the-service
`standard here.
`b. In addition to the Secretary’s authority to appoint
`and remove administrative patent judges from federal
`service entirely, the Director has independent and
`
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`

`9
`
`unfettered authority with respect to those officers’ “ju-
`dicial assignment[s],” Edmond, 520 U.S. at 664. U.S.
`Br. 27-29.
`Arthrex suggests that a subordinate must “fear and,
`in the performance of his functions, obey” only a supe-
`rior with the power to remove the officer from federal
`service altogether. Br. 38 (quoting Bowsher v. Synar,
`478 U.S. 714, 726 (1986)). But as Arthrex acknowledges
`(Br. 39), the Judge Advocate General in Edmond was
`authorized to remove his inferior officers only from
`their judicial assignments, not from federal service. See
`U.S. Br. 40. The Court nevertheless found, citing the
`very passage in Bowsher on which Arthrex relies, that
`the ability to remove administrative judges from their
`judicial assignments provided a “powerful tool for con-
`trol.” Edmond, 520 U.S. at 664.
`Arthrex also argues (Br. 38) that, although some ad-
`ministrative patent judges would welcome the “paid va-
`cation,” divesting a judge of her judicial assignments
`would constitute a “constructive” removal from federal
`service. To establish constructive removal, a claimant
`must actually resign and then show “that the agency ef-
`fectively imposed the terms of the employee’s resigna-
`tion or retirement, that the employee had no realistic
`alternative but to resign or retire, and that the em-
`ployee’s resignation or retirement was the result of im-
`proper acts by the agency.” Staats v. USPS, 99 F.3d
`1120, 1124 (Fed. Cir. 1996); see Shoaf v. Department of
`Agric., 260 F.3d 1336, 1341 (Fed. Cir. 2001) (construc-
`tive removal requires “working conditions * * * so in-
`tolerable * * * that a reasonable person in the em-
`ployee’s position would have felt compelled to resign”).
`Arthrex identifies no reason to conclude that relieving an
`administrative patent judge of her judicial assignments
`
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`

`10
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`would meet that “demanding legal standard,” Staats,
`99 F.3d at 1124, particularly since an administrative pa-
`tent judge can be assigned meaningful non-judicial
`work, see U.S. Br. 28.
`In any event, Arthrex does not (and could not plausi-
`bly) suggest that declining to designate a judge to sit on
`a particular panel (or rehearing panel), or to hear a par-
`ticular category of cases, would constitute a construc-
`tive removal. In light of the other available means for
`direction and supervision, the Court need not decide
`whether that unfettered case-specific designation au-
`thority would be sufficient standing alone to render
`administrative patent judges inferior officers. It is
`enough to recognize that it provides the Director with
`one effective means, among many, for directing and su-
`pervising the judges’ work—indeed, one that can be
`more effective than the more drastic binary authority
`possessed by the Judge Advocate General in Edmond.
`U.S. Br. 40.
`2. The Director also exercises significant control
`over administrative patent judges’ work through the
`creation of general agency policies, including by prom-
`ulgating regulations governing the Board’s adjudica-
`tory process, issuing binding policy directives, and de-
`termining what, if any, precedential weight a final
`Board decision will receive. U.S. Br. 28-33.
`Arthrex contends that the Director possesses “no
`general rulemaking authority over substantive patent-
`ability standards.” Br. 43 (citing Cooper Techs. Co. v.
`Dud