`
`In the
`Supreme Court of the United States
`
`UNITED STATES of AMERICA,
`
`v.
`ARTHREX, INC., et al.
`
`Petitioner,
`
`Respondents.
`
`PoLARIS INNoVATIoNS LIMITED,
`Petitioner,
`
`v.
`KINGSToN TECHNoLoGY CoMPANY, INC., et al.
`Respondents.
`
`On PetitiOns fOr a Writ Of CertiOrari tO the United
`states COUrt Of aPPeals fOr the federal CirCUit
`
`AMICUS CURIAE BRIEF OF THE NEW YORK
`INTELLECTUAL PROPERTY LAW ASSOCIATION
`IN SUPPORT OF THE UNITED STATES’ PETITION
`FOR WRIT OF CERTIORARI
`
`ColMan raGan
`President
`New York Intellectual
`Property Law Association
`2125 Center Avenue,
`Suite 406
`fort Lee, NJ 07024
`
`MelvIn C. Garner
`Counsel of Record
`robert M. IsaCkson
`President Elect and Board
`Liaison, Amicus Briefs
`Committee
`leason ellIs llP
`one Barker Avenue
`White Plains, NY 10601
`(914) 288-0022
`garner@leasonellis.com
`Counsel for Amicus Curiae
`(Additional Counsel Listed on Inside Cover)
`July 29, 2020
`
`297460
`
`
`
`ksenIa takhIstova
`Seven Ellison Avenue
`East Brunswick, NJ 08816
`
`robert J. rando
`Second Vice President and
`Board Liaison, PTAB
`Committee
`the rando law FIrM P.C.
`6800 Jericho Turnpike,
`Suite 120W
`Syosset, NY 11791
`(516) 799-9800
`
`Charles e. MIller
`leIChtMan law PllC
`228 East 45th Street, Suite 605
`New York, NY 10017
`(212) 419-5210
`
`Counsel for Amicus Curiae
`
`
`
`i
`
`TABLE of CoNTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . i
`
`TABLE of CITED AUTHoRITIES . . . . . . . . . . . . . . ii
`
`INTEREST of AMICUS CURIAE . . . . . . . . . . . . . . . .1
`
`II. SUMMARY of THE ARGUMENT . . . . . . . . .2
`
`III. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
`
`A. The Issues Raised by the United States
`Are the Subject of Substantial Debate and
`Should be Addressed by This Court. . . . . . .5
`
`
`
`B. The Important Issues Raised by This Case
`
`Require Prompt Resolution by this Court. .9
`
`IV. CoNCLUSIoN . . . . . . . . . . . . . . . . . . . . . . . . . . .11
`
`TABLE OF CONTENTS
`
`Page
`
`
`
`ii
`
`Arthrex, Inc. v. Smith & Nephew, Inc.,
`
`953 f.3d 760 (fed. Cir. 2020) . . . . . . . . . . . . . . . . . . . .4
`
`Arthrex, Inc. v. Smith & Nephew, Inc.,
`941 f.3d 1320 (fed. Cir. 2019). . . . . . . . . . . . . . passim
`
`
`Customedia Techs., LLC. v. DISH Network Corp.,
` No. 19-1001 (fed. Cir. Dec. 23, 2019) . . . . . . . . . . . . . .9
`
`Edmond v. United States,
`
`520 U.S. 651 (1997). . . . . . . . . . . . . . . . . . . . . . .3, 5, 6, 7
`
`Free Enter. Fund v. Pub. Co. Accounting
`Oversight Bd.,
`561 U.S. 477 (2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
`
`
`
`Freytag v. Commissioner,
`
`501 U.S. 868 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
`
`In re Hennen,
`
`38 U.S. 230 (1839). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
`
`Intercollegiate Broad. Sys. v. Copyright
`Royalty Bd.,
`684 f.3d 1332 (D.C. Cir. 2012) . . . . . . . . . . . . . . . . . . .8
`
`
`
`Lucia v. SEC,
`
`138 S. Ct. 2044 (2018). . . . . . . . . . . . . . . . . . . . . . . . . . .7
`
`Morrison v. Olson,
`
`487 U.S. 654 (1988). . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
`
`TABLE OF CITED AUTHORITIES
`
`Page
`
`
`
`iii
`
`Myers v. United States,
`
`272 U.S. 51 (1926) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
`
`Polaris Innovations Ltd. v. Kingston Tech. Co.,
`
`792 fed. Appx. 820 (fed. Cir. 2020). . . . . . . . . . .3, 7, 8
`
`Steuben Foods, Inc. v. Nestle USA, Inc.,
` No. 20-1082 (fed. Cir. Dec. 18, 2019). . . . . . . . . . . . .10
`
`Uniloc 2017 LLC v. Facebook, Inc.,
` No. 18-2251 (fed. Cir. oct. 31, 2019) . . . . . . . . . . . . . .9
`
`Virtnetx Inc. v. Cisco Sys., Inc.,
` No. 19-1671 (fed. Cir. Dec. 18, 2019) . . . . . . . . . . . . .10
`
`Statutes
`
`5 U.S.C. §7513(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
`
`Constitution
`
`U.S. Const., Art. II, § 2, cl. 2 . . . . . . . . . . . . . . . . . . . . .2, 4
`
`Rules
`
`Sup. Ct. R. 30.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`Sup. Ct. R. 37.2(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`Sup. Ct. R. 37.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
`
`Cited Authorities
`
`Page
`
`
`
`iv
`
`Other Authorities
`
`Trial Statistics: IPR, PGR, CBM, UnIted states
`Patent and tradeMark oFFICe, at 3 (Nov.
`2019), https://www.uspto.gov/sites/default/
`files/documents/fy20_nov_trial_ stats.pdf
`(last visited July 23, 2020). . . . . . . . . . . . . . . . . . . . .4, 9
`
`
`
`United States Court of Appeals for the Federal
`Circuit: Appeals Filed , By Categor y,
`UnIted states CoUrt oF aPPeals For the
`Federal CIrCUIt (2019), http://www.cafc.
`uscourts.gov/sites/default/files/the-court/
`statistics/ Y TD-Activity-June-2020.pdf
`(last visited July 23, 2020). . . . . . . . . . . . . . . . . . . . . . .9
`
`
`
`Cited Authorities
`
`Page
`
`
`
`1
`
`I. INTEREST OF AMICUS CURIAE
`
`The New York Intellectual Property Law Association
`(“NYIPLA”) respectfully submits this amicus curiae
`brief in support of the petition for certiorari filed by the
`United States.1 The arguments set forth herein were
`approved on July 17, 2020 by an absolute majority of the
`officers and members of the Board of Directors of the
`NYIPLA (including any officers or directors who did
`not vote for any reason, including recusal), but do not
`necessarily reflect the views of a majority of the members
`of the NYIPLA, or of the law or corporate firms with
`which those members are associated.
`
`After reasonable investigation, the NYIPLA believes
`that no officer or director or member of the Committee on
`Amicus Briefs who voted in favor of filing this brief, nor
`any attorney associated with any such officer, director
`or committee member in any law or corporate firm,
`represents a party in this litigation.
`
`The NYIPLA is a ninety-eight-year-old professional
`association with hundreds of attorneys whose interests and
`practices lie in the area of patent, copyright, trademark,
`
`1. Pursuant to Sup. Ct. R. 37.6, NYIPLA states that no
`counsel for a party authored this brief in whole or in part, and
`no counsel or party made a monetary contribution intended to
`fund the preparation or submission of this brief. No person other
`than NYIPLA, its members, or its counsel made a monetary
`contribution to its preparation or submission. Pursuant to Sup. Ct.
`R. 37.2(a) NYIPLA states that all of the parties have consented in
`writing to the filing of the brief. Further, the counsel of record for
`all parties receive noticed of NYIPLA’s intention to file an amicus
`curiae brief at least 10 days prior to the due date for the amicus
`curiae brief as extended by Sup. Ct. R. 30.1
`
`
`
`2
`
`data privacy and other intellectual property (“IP”) law.
`It is one of the largest regional IP bar associations in the
`United States. The NYIPLA’s members include a diverse
`array of attorneys specializing in patent law, including
`in-house counsel for businesses that own, enforce, and
`challenge patents, as well as attorneys in private practice
`who prosecute patents and represent entities in various
`proceedings before the U.S. Patent and Trademark Office
`(“PTo”).
`
`Many of the NYIPLA’s member attorneys actively
`participate in patent litigation, representing both patent
`owners and accused infringers, as well as in inter partes
`review (“IPR”) and other post-issuance proceedings
`before the Patent Trial and Appeal Board (“PTAB”), and
`their appeals to the federal Circuit Court of Appeals and
`even to this Court. The NYIPLA thus brings an informed
`perspective of stakeholders to the issues presented. The
`NYIPLA, its members, and their respective clients share
`a strong interest in the issues presented in this case.
`
`II. SUMMARY OF THE ARGUMENT
`
`A federal Circuit panel in Arthrex, Inc. v. Smith &
`Nephew, Inc., 941 f.3d 1320 (fed. Cir. 2019) addressed
`whether administrative patent judges (“APJs”) serving
`on the Patent Trial and Appeal Board (PTAB) of the
`U.S. Patent Office were appointed in violation of the
`Appointments Clause, U.S. Const., Art. II, § 2, cl. 2. The
`panel held that APJs are “principal officers” under the
`Patent Act (Title 35) as it has been enacted and structured.
`Id. at 1327. As such, the appointment of APJs by the
`Secretary of Commerce was held to be a constitutional
`violation. Id.
`
`
`
`3
`
`In Polaris Innovations Ltd. v. Kingston Tech. Co.,
`792 fed. Appx. 820 (fed. Cir. 2020) the same issue was
`raised, and another panel of the federal Circuit issued
`a per curiam order remanding the case to the PTAB for
`proceedings consistent with Arthrex.
`
`Consistent with the concurring opinion in Polaris
`by Judge Hughes, in which Judge Wallach joined, the
`NYIPLA believes that the federal Circuit erred in
`Arthrex and that, “viewed in light of the Director’s
`significant control over the activities of the Patent Trial
`and Appeal Board and its Administrative Patent Judges
`(APJs), APJs are inferior officers already properly
`appointed by the Secretary of Commerce.” Id. at 821.
`
`The Arthrex panel properly relied upon Edmond v.
`United States, 520 U.S. 651 (1997) for guidance in reaching
`its decision. Edmond holds that “there is no exclusive
`criterion for distinguishing between principal and inferior
`officers.” Id. at 662–63. However, the Arthrex panel found
`that Edmond emphasized three factors: “(1) whether an
`appointed official has the power to review and reverse
`the officers’ decisions; (2) the level of supervision and
`oversight an appointed official has over the officers; and
`(3) the appointed official’s power to remove the officers.”
`Arthrex, 941 f.3d at 1329. By reducing the broad and
`flexible guidance in Edmond to these three criteria and
`basing its decision on a numerical counting of the pro and
`con factors, the Arthrex panel failed to follow the broad
`concepts in Edmond and committed error.
`
`Not only was the Arthrex decision in error, but the
`opinion also raised broad and critically important issues
`at the heart of practice before the PTAB. It has the
`
`
`
`4
`
`potential to affect numerous PTAB decisions and the
`federal Circuit’s determinations of appeals therefrom.
`As of November 2019, over 10,000 trials in post-grant
`proceedings had been held by the PTAB.2 The outcomes of
`all of these PTAB trials are put in jeopardy by the Arthrex
`decision. Thus, prompt, efficient resolution of the issues
`presented by the Government’s petition is warranted and
`requires an analysis by this Court—since no other court
`of appeals would have jurisdiction, and the federal Circuit
`has denied rehearing en banc in Arthrex. 953 f.3d 760
`(fed. Cir. 2020).
`
`Significantly, all parties to this action seek review by
`this Court in three separate petitions.
`
`III. ARGUMENT
`
`The NYIPLA believes that the Court should grant
`certiorari in this case and adopt the formulation of the
`first issue presented by the United States in its Petition,
`namely:
`
`1. Whether, for purposes of the Appointments Clause,
`U.S. Const. Art. II, § 2, Cl. 2, administrative
`patent judges of the U.S. Patent and Trademark
`office are principal officers who must be
`appointed by the President with the Senate’s
`advice and consent, or “inferior officers” whose
`appointment Congress has permissibly vested in
`a department head.
`
`2. Trial Statistics: IPR, PGR, CBM, UnIted states Patent
`and tradeMark oFFICe, at 3 (Nov. 2019), https://www.uspto.gov/
`sites/default/files/documents/fy20_nov_trial_stats.pdf.
`
`
`
`5
`
`United States Pet. for a Writ of Certiorari, Arthrex, Inc.
`v. Smith & Nephew, Inc.
`
`The NYIPLA submits this amicus curiae brief in
`support of the Court accepting the United States’ petition.
`The NYIPLA takes no position on which party should
`ultimately prevail on the merits of the underlying dispute.
`
`A. The Issues Raised by the United States Are the
`Subject of Substantial Debate and Should be
`Addressed by This Court
`
`The issues raised by the United States in its Petition
`are the subject of substantial and ongoing debate, which
`has to be resolved by the Court. There is no dispute
`that APJs are “officers of the United States” because
`they “exercise significant authority.” Arthrex at 1328.
`However, whether they are principal officers, requiring
`appointment by the President with the advice and consent
`of the Senate, or inferior officers who may be appointed
`by the Secretary of Commerce in accordance with the
`America Invents Act (“AIA”), a law passed by Congress,
`is subject to significant debate.
`
`Basing its analysis on Edmond v. United States, 520
`U.S. 651 (1997), the Arthrex panel noted that, as clearly
`stated in Edmond, there is no “exclusive criterion for
`distinguishing between principal and inferior officers for
`Appointments Clause purposes.” Arthrex, Inc. v. Smith
`& Nephew, Inc., 941 f.3d 1320, 1328–29. However, the
`panel went on to hold that Edmond emphasized three
`factors: “(1) whether an appointed official has the power
`to review and reverse the officers’ decisions; (2) the level
`of supervision and oversight an appointed official has
`
`
`
`6
`
`over the officers; and (3) the appointed official’s power to
`remove the officers.” Id. at 1329. The panel determined
`that factors (1) and (3) weighed in favor of APJs being
`found principal officers, and factor (2) weighed in favor
`of APJs being found inferior officers. Id. on this basis
`it determined that APJs are principal officers. In doing
`so, the Arthrex court ignored the statement in Edmond
`that “we think it evident that ‘inferior officers’ are officers
`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,” which
`corresponds only to factor (2). Edmond, 520 U.S. at 663.
`
`The Arthrex panel relied heavily on factor (3), i.e., “the
`appointed official’s power to remove the officers.” 941 F.3d
`at 1329. It noted that the “only actual removal authority
`the Director or Secretary have over APJs is subject to
`limitations by Title 5. Title 35 [§3(c)] does not provide
`statutory authority for removal of the APJs.” Id. at 1333.
`Title 5 permits removal of agency employees “only for
`such cause as will promote the efficiency of the service.”
`5 U.S.C. §7513(a). Therefore, the Arthrex court held that
`the perceived constitutional infirmity could be overcome
`by “partial invalidation of the statutory limitations on the
`removal of APJs.” Id.at 1338. on the issue of the power
`to remove APJs, the government disagreed, arguing that
`“the Director can remove an APJ based on the authority
`to designate which members of the Board will sit on
`any given panel, … exclude any APJ from a case who he
`expects would approach the case in a way inconsistent with
`his views, … potentially remove all judicial function of an
`APJ by refusing to assign the APJ to any panel, … [and]
`remove an APJ from an inter partes review mid-case if
`he does not want that particular APJ to continue on the
`
`
`
`7
`
`case.” Id. at 1332. Also, Judge Hughes, in his concurrence
`in Polaris Innovations Ltd. v. Kingston Tech. Co., 792
`fed. Appx. 820 (fed. Cir. 2020) opined that removal under
`the “efficiency of service” standard is sufficient, together
`with the Director’s supervision, to make the APJs inferior
`officers. Id. at 827. Thus, the Arthrex panels weighing of
`factor (3) in favor of finding the APJs “principal officers”
`turns on the degree to which an APJ can be removed, not
`the absence of removal power per se. As a consequence,
`the status of APJs is currently disputed.
`
`The Arthrex panel’s decision that APJs are “principal
`officers” of the United States relies upon several cases
`from this Court that could be characterized as having
`analogous statutory frameworks. However, in every single
`one of those cases, this Court concluded that the officers in
`question were “inferior officers” under the Appointments
`Clause, to wit:
`
`• Lucia v. SEC, 138 S. Ct. 2044 (2018) (SEC
`Administrative Law Judges are inferior officers);
`
`• Free Enter. Fund v. Pub. Co. Accounting Oversight
`Bd., 561 U.S. 477 (2010) (Public Company Accounting
`Oversight Board members are inferior officers);
`
`• Edmond v. United States, 520 U.S. 651 (judges
`of the Coast Guard Court of Criminal Appeal are
`inferior officers);
`
`• Freytag v. Commissioner, 501 U.S. 868 (1991)
`(Special Trial Judges for the Tax Court are inferior
`officers);
`
`
`
`8
`
`• Morrison v. Olson, 487 U.S. 654 (1988) (independent
`counsel created by provisions of the Ethics of
`Government Act of 1978 are inferior officers);
`
`• Myers v. United States, 272 U.S. 51 (1926) (post-
`master first class is an inferior officer); and
`
`• In re Hennen, 38 U.S. 230 (1839) (clerks of district
`courts are inferior officers).
`
`furthermore, a decision by a three-judge panel of
`the D.C. Circuit, holding that Copyright Royalty Judges
`are principal officers, is the sole authority relied upon
`by the Arthrex panel to support its conclusion that APJs
`are principal officers. See Intercollegiate Broad. Sys. v.
`Copyright Royalty Bd., 684 f.3d 1332, 1340 (D.C. Cir.
`2012).
`
`The existence of a split of opinion in the federal
`Circuit is demonstrated by the present cases: three
`federal Circuit judges have held one way in Arthrex,
`and two others have suggested in Polaris that they would
`reach the opposite conclusion.3
`
`Thus, respectfully, in view of the dearth of on-point
`supporting authority from this Court, and the unlikely
`event the issue will be considered by a lower court, the
`issue should be addressed by this Court now.
`
`3. Judges Moore, Reyna and Chen in Arthrex, and Judges
`Hughes and Wallach in Polaris.
`
`
`
`9
`
`B. The Important Issues Raised by This Case
`Require Prompt Resolution by this Court
`
`The issues raised in the petitions here exist in many
`cases pending before the federal Circuit and will impact
`more cases going forward. As of November 2019, over
`10,000 trials had been held by the PTAB.4 The outcomes
`of all of these PTAB trials are put in jeopardy by the
`decision in Arthrex.
`
`Also, forty-three percent of the federal Circuit’s
`caseload (over 600 appeals) in 2019 were appeals from
`the PTo.5 In addition to the three petitions filed here,
`the Federal Circuit is seeing analogous petitions filed in
`other cases, including:
`
`• Uniloc 2017 LLC v. Facebook, Inc., No. 18-2251
`(fed. Cir. oct. 31, 2019) (petition for rehearing and
`rehearing en banc filed on December 2, 2019 and
`currently pending);
`
`• Customedia Techs., LLC. v. DISH Network Corp.,
`No. 19-1001 (fed. Cir. Dec. 23, 2019) (per curiam)
`(denying petition for rehearing and rehearing en
`banc) (Newman, J., dissenting).
`
`4. Trial Statistics: IPR, PGR, CBM, UnIted states Patent
`and tradeMark oFFICe, at 3 (Nov. 2019), https://www.uspto.gov/
`sites/default/files/documents/fy20_nov_trial_stats.pdf (last visited
`July 23, 2020).
`
`5. United States Court of Appeals for the Federal Circuit:
`Appeals Filed, By Category, UnIted states CoUrt oF aPPeals
`For the Federal CIrCUIt (2019), http://www.cafc.uscourts.gov/
`sites/default/files/the-court/statistics/YTD-Activity-June-2020.
`pdf (last visited July 23, 2020).
`
`
`
`10
`
`Importantly, the government has not only intervened
`in this case, but also in numerous other cases where these
`issues are being raised, opposing appellants’ motions to
`vacate and remand pending resolution of this petition. See,
`e.g., Intervenor’s opp’n to Appellant’s Mot. to Remand,
`Steuben Foods, Inc. v. Nestle USA, Inc., No. 20-1082 (fed.
`Cir. Dec. 18, 2019); Intervenor’s Opp’n to Appellant’s Mot.
`to Remand, Virnetx Inc. v. Cisco Sys., Inc., No. 19-1671
`(fed. Cir. Dec. 18, 2019).
`
`These proceedings, and proceedings in other pending
`cases, indicate the existence of significant uncertainty
`and debate amongst the stakeholders as to the panel’s
`decision in Arthrex, buttressing the importance of review
`by this Court.
`
`The Arthrex panel itself stated that:
`
`The issue presented today has a wide-ranging
`effect on property rights and the nation’s
`economy. Timely resolution is critical to
`providing certainty to rights holders and
`competitors alike who rely upon the inter
`partes review scheme to resolve concerns over
`patent rights. … This is an issue of exceptional
`importance.”
`
`Id. at 1327.
`
`The damage caused by continuing uncertainty cannot
`be overstated. Respectfully, this Court needs to act
`quickly and decisively.
`
`
`
`11
`
`IV. CONCLUSION
`
`for the foregoing reasons, the NYIPLA respectfully
`urges the Court to grant the United States’ petition for
`a writ of certiorari.
`
`MelvIn C. Garner
`Counsel of Record
`robert M. IsaCkson
`President Elect and Board
`Liaison, Amicus Briefs
`Committee
`leason ellIs llP
`one Barker Avenue
`White Plains, NY 10601
`(914) 288-0022
`garner@leasonellis.com
`
`ksenIa takhIstova
`Seven Ellison Avenue
`East Brunswick, NJ 08816
`
`Dated: July 29, 2020
`
`ColMan raGan
`President
`New York Intellectual
`Property Law Association
`2125 Center Avenue,
`Suite 406
`fort Lee, NJ 07024
`
`robert J. rando
`Second Vice President and
`Board Liaison, PTAB
`Committee
`the rando law FIrM P.C.
`6800 Jericho Turnpike,
`Suite 120W
`Syosset, NY 11791
`(516) 799-9800
`
`Charles e. MIller
`leIChtMan law PllC
`228 East 45th Street,
`Suite 605
`New York, NY 10017
`(212) 419-5210
`
`Counsel for Amicus Curiae
`
`