`In the Supreme Court of the United States
`UNITED STATES OF AMERICA,
`Petitioner,
`
`
`
`
`
`v.
`ARTHREX, INC., ET AL.,
`Respondents.
`
`
`
`SMITH & NEPHEW, INC., ET AL.,
`Petitioners,
`
`v.
`ARTHREX, INC., ET AL.,
`Respondents.
`
`ARTHREX, INC.,
`
`
`
`Petitioner,
`
`v.
`SMITH & NEPHEW, INC., ET AL.,
`Respondents.
`
`
`
`On Writs of Certiorari to the
`United States Court of Appeals for the Federal Circuit
`
`
`BRIEF OF AMICI CURIAE ENGINE ADVOCACY
`AND ELECTRONIC FRONTIER FOUNDATION
`IN SUPPORT OF PETITIONER
`
`Jef Pearlman
`Abigail A. Rives
`ENGINE ADVOCACY
`Counsel of Record
`INTELLECTUAL PROPERTY &
`700 Pennsylvania Ave. SE
`TECHNOLOGY LAW CLINIC
`Second Floor
`UNIVERSITY OF SOUTHERN
`Washington, DC 20003
`CALIFORNIA GOULD
`
`SCHOOL OF LAW
`Alexandra H. Moss
`699 Exposition Blvd.
`ELECTRONIC FRONTIER
`Los Angeles, CA 90089
`FOUNDATION
`
`(213) 740-7088
`815 Eddy Street
`jef@law.usc.edu
`San Francisco, CA 94109
`
`Counsel for Amici Curiae
`
`
`
`
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`TABLE OF AUTHORITIES ....................................... iii
`INTEREST OF AMICI CURIAE ................................. 1
`SUMMARY OF ARGUMENT ..................................... 2
`ARGUMENT ................................................................ 4
`I. The Federal Circuit Misclassified APJs Because
`It Overstated APJ Authority and Oversimplified
`the Principal Officer Analysis. .............................. 4
`A. Reading Too Much into Edmond, the
`Federal Circuit Manufactured a Rigid
`Test Inconsistent with Precedent and
`Practical Reality. ............................................ 5
`B. The Federal Circuit’s Failure to Consider
`the Similarities Between APJs and
`USPTO Employees Led It to Misclassify
`APJs as Principal Officers. ............................ 7
`C. A Healthy and Efficient Patent System
`Relies on Examiners and APJs Applying
`Policy Without Creating It. .......................... 14
`II. If the Court Concludes APJs are Principal
`Officers, Judicial Severability Should be Used to
`Preserve the IPR System Congress Created to
`Stem the Tide of Abusive Patent Litigation. ...... 16
`A. IPRs Increase Patent Quality, Promote
`the Public Interest, and Benefit Small
`Businesses. ................................................... 17
`
`
`
`
`
`
`
`
`
`
`
`
`
`ii
`B. IPRs are Critical to Startups and the
`Economy Because They Reduce Costs,
`Reduce Abusive Litigation, and Protect
`Innovation ..................................................... 22
`CONCLUSION .......................................................... 28
`
`
`
`
`
`
`
`iii
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Blonder-Tongue Labs. Inc. v. Univ. Of Ill.
`Found.,
`402 U.S. 313 (1971) .......................................... 17, 18
`Cardinal Chem. Co. v. Morton Int’l, Inc.,
`508 U.S. 83 (1993) .................................................. 18
`Consumer Watchdog v. Wis. Alumni Research
`Found.,
`753 F.3d 1258 (C.A. Fed. 2014). ............................ 20
`Cuozzo Speed Techs., LLC v. Lee,
` 136 S. Ct. 2131 (2016). .................................... 14, 21
`Edmond v. United States,
`520 U.S. 651 (1997) ............................................ 5, 11
`Edward Katzinger Co. v. Chi. Metallic Mfg.
`Co.,
`329 U.S. 394 (1947) ................................................ 17
`Freytag v. Comm’r of Internal Revenue,
`501 U.S. 868 (1991) ............................................ 4, 13
`Lear, Inc. v. Adkins,
`395 U.S. 653 (1969) ................................................ 18
`Lucia v. Sec. and Exch. Comm’n,
`138 S. Ct. 2044 (2018) .............................................. 5
`Morrison v. Olson,
`487 U.S. 654 (1988) ........................................ 5, 6, 12
`Oil States Energy Servs., LLC v. Greene’s
`Energy Grp.,
`138 S. Ct. 1365 (2018) .............................. 8, 9, 10, 13
`
`
`
`
`
`iv
`Personal Audio, LLC v. Elec. Frontier Found.,
`867 F.3d 1246 (Fed. Cir. 2017) .............................. 20
`Thryv, Inc. v. Click-To-Call Techs. LP,
`140 S. Ct. 1367 (2020) ............................................ 18
`United States v. Gantt,
`194 F.3d 987 (9th Cir. 1999) .................................... 7
`United States v. Hilario,
`218 F.3d 19 (1st Cir. 2000) ...................................... 6
`
`Statutes and Regulations
`5 U.S.C. § 7513(a) ................................................ 12, 13
`35 U.S.C. § 3 ............................................................... 15
`35 U.S.C. § 3(a)(2)(A) ................................................. 11
`35 U.S.C. § 3(b)(4) ........................................................ 7
`35 U.S.C. § 6 ................................................................. 9
`35 U.S.C. § 134 (2006) ............................................... 15
`35 U.S.C. § 141 (2006) ............................................... 15
`35 U.S.C. § 311(a) ...................................................... 19
`35 U.S.C. § 311(b) ...................................................... 10
`35 U.S.C. § 316(a) ...................................................... 11
`35 U.S.C. § 316(c) ......................................................... 9
`37 C.F.R. § 1.104 ........................................................ 10
`37 C.F.R. § 1.105 ........................................................ 10
`37 C.F.R. § 1.132 ........................................................ 10
`37 C.F.R. § 1.133 ........................................................ 10
`
`Other Authorities
`Am. Intellectual Prop. Law Ass’n, 2019 Report
`of the Economic Survey (2019) ............................... 26
`
`
`
`
`
`v
`Amy L. Landers, The Antipatent: A Proposal
`for Startup Immunity, 93 Neb. L. Rev. 950
`(2015) ................................................................ 23, 25
`Christopher R. Leslie, The Anticompetitive
`Effects of Unenforced Invalid Patents, 91
`Minn. L. Rev. 101 (2006) .................................. 23, 25
`Colleen Chien, Of Trolls, Davids, Goliaths, and
`Kings, 97 N.C. L. Rev. 1571 (2009). ....................... 23
`Collen Chien, Startups and Patent Trolls, 17
`Stan. Tech. L. Rev. 461 (2014) ................... 22, 23, 24
`Cost of Inter Partes Review: Everything You
`Need to Know, UpCounsel,
`https://perma.cc/B63W-F9LM ................................ 26
`Dennis Crouch; Board of Patent Appeals and
`Interferences (BPAI), Patently-O (Mar 4,
`2008), https://perma.cc/LEG3-6LAE ..................... 15
`Engine, Patent Review is Working for Startups,
`https://perma.cc/9AP8-UN9K ................................ 27
`Engine, Startups Need Comprehensive Patent
`Reform Now, https://perma.cc/8E7R-S46Q ........... 25
`Fed. Trade Comm’n, to Promote Innovation:
`The Proper Balance of Competition and
`Patent Law and Policy (2003) ................................ 24
`H.R. Rep. No. 112-98 (2011) ................................ 18, 27
`Ian Hathaway, Tech Starts: High-Technology
`Business Foundation and Job Creation in the
`United States, Kauffman Found. (2013),
`https://perma.cc/P7GX-5Y6D ................................. 22
`
`
`
`
`
`vi
`Jean O. Lanjouw & Mark Schankerman,
`Enforcement of Patent Rights in the United
`States, in PATENTS IN THE KNOWLEDGE BASED
`ECONOMY 145 (Wesley M. Cohen & Stephen
`A. Merrill eds., 2003).............................................. 24
`Joe Mullin, New Study Suggests Patent Trolls
`Really Are Killing Startups, Ars Technica
`(June 11, 2014), https://perma.cc/5D3U-
`BGVL ...................................................................... 25
`Josh Landau; Inter Partes Review: Five Years,
`Over $2 Billion Saved; Patent Progress
`(Sept. 14, 2007) https://perma.cc/GP5M-
`LVJX ....................................................................... 21
`Manual of Patent Examining Procedure
`§ 2106 ...................................................................... 10
`Manual of Patent Examining Procedure
`§ 716.01(a) .............................................................. 11
`Manual of Patent Examining Procedure,
`Foreword ................................................................. 11
`Mark A. Lemley, Rational Ignorance at the
`Patent Office, 95 N.W. Law Rev. 1495 (2001). ...... 15
`Patents: Improving Quality and Curing
`Defects: Hearing Before the Subcomm. on
`Cts, the Internet, and Intell. Prop, 107th
`Cong. 1 (2001), https://perma.cc/NA3P-YG42 ....... 19
`Robin Feldman, Patent Demands & Startup
`Companies: The View from the Venture
`Capital Community, 16 Yale J.L. & Tech.
`236 (2014) ............................................................... 24
`Ryan Damon et al., Five Years Later: Lessons
`Learned from the First Inter Partes Review,
`ACC Docket (May 3, 2018),
`https://perma.cc/NV72-XYXM ............................... 19
`
`
`
`
`
`vii
`Stuart Graham and David Mowery; Software
`Patents: Good News or Bad News?,
`Intellectual Property Rights in Frontier
`Industries (Robert W. Hahn ed., 2005),
`https://perma.cc/3EGZ-GK2W ............................... 15
`Stuart J.H. Graham, et al., High Technology
`Entrepreneurs and the Patent System:
`Results of the 2008 Berkeley Patent Survey,
`24 Berkley Tech. L.J. 1255 (2009)
`https://perma.cc/8BD2-2AVN ................................ 23
`U.S. Small Bus. Admin. Off. Advoc., Small
`Businesses Generate 44 Percent of U.S.
`Economic Activity (Jan. 30,2019),
`https://perma.cc/PPB2-ACPW ............................... 22
`Unified Patents, 1st Half 2018: Patent Dispute
`Report (June 28, 2018),
`https://perma.cc/QP73-YEGH ................................ 19
`USPTO, U.S. Patent Statistics Chart,
`https://perma.cc/Y86S-XHV3 (2019) ...................... 15
`
`
`
`
`
`1
`
`INTEREST OF AMICI CURIAE
`Amici are
`two organizations
`representing
`innovators and businesses from all sectors of the
`economy. They are dedicated to ensuring that the
`patent system works as intended to foster innovation,
`in part through effective administrative mechanisms
`for voiding invalid patents.1
`is a non-profit
`Engine Advocacy (“Engine”)
`technology policy, research, and advocacy organization
`that bridges the gap between policymakers and
`startups, working with governments and high-
`technology, growth-oriented startups across the
`nation to support the development of technology
`entrepreneurship. Engine has worked with the White
`House, Congress, federal agencies, and state and local
`governments to discuss policy issues, write legislation,
`and introduce the tech community to Washington
`insiders.
`The Electronic Frontier Foundation (“EFF”) is a
`non-profit civil liberties organization that has worked
`for 30 years to protect consumer interests, innovation,
`and free expression in the digital world. EFF and its
`more than 30,000 active members have a strong
`interest in helping the courts and policymakers ensure
`
`
`1 Pursuant to Supreme Court Rule 37, the parties have consented
`to the filing of this brief, and all parties’ consents are on file with
`the clerk. No counsel for a party authored this brief in whole or
`in part, and no party or counsel for a party made a monetary
`contribution intended to fund its preparation or submission. No
`person other than the amici or their counsel made a monetary
`contribution to the preparation or submission of this brief.
`
`
`
`
`2
`that patent law serves the interests of creators,
`
`innovators, and the general public.
`Amici write to share the perspective of innovation-
`driven communities in general, and high-technology
`startups in particular, that holding administrative
`patent judges (“APJs”) of the Patent Trial and Appeal
`Board
`(“PTAB”)
`unconstitutionally
`appointed
`undermines the critically important inter partes
`review (“IPR”) system. IPRs and other post-grant
`proceedings are vital to a healthy and functioning
`patent system that promotes more innovation than it
`deters. Dismissing current APJs or otherwise
`dismantling, undoing, or delaying IPRs would wreak
`havoc on the patent system by amplifying the
`propagation
`of wrongly
`granted patents
`in
`contravention of Congress’s intent and the public’s
`interest.
`
`SUMMARY OF ARGUMENT
`The questions before this Court are whether APJs
`are inferior or principal officers and, if the latter,
`whether the Federal Circuit’s application of severance
`to save post-issuance review proceedings was correct.
`This Court’s answers are of more than theoretical
`significance: they will have powerful practical
`consequences for startups, innovators, technology
`users, and the administration of the patent system.
`The Federal Circuit’s deeply
`flawed approach
`threatens that system’s overriding goal: to promote
`innovation and economic growth by granting
`statutorily-limited exclusive rights when—and only
`when—the statutory requirements have been met.
`
`
`
`
`
`3
`The Federal Circuit misclassified APJs as
`
`principal officers because it ignored the similarities
`between APJs and patent examiners and overstated
`the similarities between APJs and administrative law
`judges (“ALJs”) in other agencies. This error flows
`directly from the court’s application of a new, rigid test
`that is inconsistent with Supreme Court precedent.
`And the error is critical because it places IPRs at risk,
`potentially harming startups, innovators, and the
`entire patent ecosystem.
`A proper analysis demonstrates APJs are, at
`most, inferior officers. APJs are functionally closer to
`federal employees—in particular, patent examiners—
`than to principal officers like the Director. APJs and
`examiners both have the same core goal: to ensure that
`only valid patents are permitted to enter and remain
`in the marketplace. Both must follow the policies and
`procedures set by the Director of the United States
`Patent and Trademark Office (“USPTO”). Both are
`limited by law in what factors they can consider and
`what determinations they can make, with APJs often
`being more limited. And APJs, like other inferior
`officers, are subject to removal by a principal officer.
`Although the Federal Circuit misclassified APJs,
`it was correct that severance is the best remedy to the
`perceived constitutional problem. IPR is a critical tool
`that helps innovators, startups, and the public at
`large. IPR provides a second layer of examination for
`patents that are being asserted but were wrongly
`granted, resulting in improved patent quality for all.
`Severance is both legally correct and necessary to
`ensure that IPR and other post-grant proceedings
`remain available to innovators.
`
`
`
`
`
`4
`Amici urge the Court to apply a fact-bound,
`
`multifaceted test and classify APJs as, at most,
`inferior officers. However, should the Court classify
`APJs as principal officers, it should affirm the use of
`severance for resolving the constitutional issue to
`ensure IPR remains available to innovators.
`
`ARGUMENT
`I. The Federal Circuit Misclassified APJs
`Because It Overstated APJ Authority and
`Oversimplified
`the Principal Officer
`Analysis.
`In its decision, the Federal Circuit strayed from
`this Court’s precedent and constructed a three-factor
`weighing test derived from the particular facts of
`Edmond v. United States, 520 U.S. 651 (1997). As a
`result, the court failed to consider the role APJs play
`in practice, including the relationship between APJs
`and patent examiner employees. It ignored the
`functional similarities between examiners and APJs,2
`the Director’s supervisory and policy-making powers
`over each role, and critical distinctions between APJs
`and less-analogous ALJs this Court has deemed
`principal officers.
`that
`confirms
`precedent
`This
`Court’s
`distinguishing between employees, inferior officers,
`and principal officers is a multifaceted and fact-bound
`inquiry, not a strict test based on exclusive criteria.
`See Freytag v. Comm’r of Internal Revenue, 501 U.S.
`868, 881 (1991) (argument based only on “authority to
`
`2 Indeed, the Federal Circuit does not mention examiners a single
`time in its opinion. See Pet. App. at 1a-33a.
`
`
`
`
`5
`enter a final decision . . . ignores the significance of the
`
`duties and discretion that special trial
`judges
`possess.”); see also Lucia v. Sec. and Exch. Comm’n,
`138 S. Ct. 2044 (2018); Edmond, 520 U.S. 651;
`Morrison v. Olson, 487 U.S. 654 (1988). This Court
`should consider all relevant facts and properly apply
`its precedent to them. Doing so will demonstrate that
`APJs are not principal officers.
`A. Reading Too Much into Edmond, the
`Federal Circuit Manufactured a Rigid
`Test Inconsistent with Precedent and
`Practical Reality.
`Instead of engaging in a case-specific inquiry of all
`relevant facts about APJs, including how their role
`compares to that of USPTO employees who also make
`final patentability decisions—patent examiners—the
`Federal Circuit constructed an artificial and rigid
`three-factor test that lacks support in the case law.
`Moreover, the narrow test the Federal Circuit applied
`led it to construct strained analogies between APJs
`and ALJs who carry out different functions in different
`agencies that, unlike the USPTO, are not responsible
`for granting twenty-year monopolies.
`is no
`Despite acknowledging that “[t]here
`‘exclusive
`criterion
`for distinguishing between
`principal and inferior officers for Appointments
`Clause purposes,’” Pet. App. at 37a (quoting Edmond,
`520 U.S. at 661), the Federal Circuit treated three
`factors as effectively dispositive, structuring its
`analysis around those factors and dismissing any
`others as “completely absent” without elaboration. Id.
`at 9a-22a (using three factors discussed in Edmond as
`headings).
`
`
`
`
`6
`The Federal Circuit’s misreading of Edmond flies
`
`in the face of this Court’s precedent, which uses
`entirely different
`factors where appropriate to
`evaluate an officer’s status. As this Court has
`observed, the “line between ‘inferior’ and ‘principal’
`officers is one that is far from clear.” Morrison, 487
`U.S. at 671. In Morrison, the Court held that the
`independent
`counsel was an
`inferior officer,
`performing a case-specific analysis of facts unrelated
`to those it considered in Edmond. See id. at 670-73.
`Instead, the Court stressed multiple
`important
`considerations favoring an inferior officer designation
`for the independent counsel, including:
`• the lack of “authority to formulate policy for
`the Government or the Executive Branch”;
`• the lack of “administrative duties outside of
`those necessary to operate her office”;
`• the provision subjecting her to removal by the
`head of
`the department—the Attorney
`General—for “good cause.”
`Id. at 671-72. Each of these considerations applies
`with equal force to the APJs at issue here.
`As noted in Judge Dyk’s dissent from the denial of
`rehearing en banc, other circuit courts have reconciled
`Edmond with Morrison by conducting a multifaceted,
`fact-specific inquiry—rather than applying a rigid rule
`that turns on the same three factors in each and every
`case. Pet. App. at 274a. For example, in United States
`v. Hilario, the First Circuit held that officers may “be
`considered inferior officers if the nature of their work
`suggests sufficient limitations of responsibility and
`authority,” even if principal officers do not direct and
`supervise them. 218 F.3d 19, 25 (1st Cir. 2000); see
`
`
`
`
`7
`also United States v. Gantt, 194 F.3d 987, 999 n.6 (9th
`
`Cir. 1999) (overruled on other grounds) (recognizing
`that “supervision by a superior officer is a sufficient
`but perhaps not a necessary condition to the status of
`inferior officer”).
`The Court should take this opportunity to confirm
`the path laid out in Edmond and Morrison, and it
`should reject the Federal Circuit’s unduly rigid
`approach.
`to
`B. The Federal Circuit’s Failure
`Consider the Similarities Between APJs
`and USPTO Employees Led It to
`Misclassify APJs as Principal Officers.
`The Federal Circuit’s decision is narrowly
`focused on comparing APJs to other types of “judges.”
`But to properly classify APJs, it is critical to consider
`their role and status within the context of their
`agency, the USPTO, and thus in relation to both
`employee examiners and principal officers like the
`Director. In its analysis, the Federal Circuit ignored
`important
`functional and structural similarities
`between examiners and APJs that, when properly
`considered, compel the conclusion that APJs are not
`principal officers. If anything, these similarities
`strongly suggest that the work APJs do is much closer
`to that of examiners than that of the Director. At most,
`APJs should be classified as inferior officers, but only
`after a full analysis of their role.
`i. APJs Are Functionally Similar to Patent
`Examiner Employees.
`Patent examiners—who are federal employees,
`see, e.g., 35 U.S.C. § 3(b)(4)—perform similar functions
`
`
`
`
`8
`to APJs. Fundamentally, both serve the same goal:
`
`ensuring the USPTO allows only patents that comply
`with the statutory requirements for patentability to
`exist in the marketplace. They are the gatekeepers
`who can stop deficient applications from unjustly
`restricting competition.
`The essential function of verifying patentability is
`first carried out by an examiner, whose decision is
`“subject to the qualification that the [USPTO] has ‘the
`authority to reexamine—and perhaps cancel—a
`patent claim’ in an inter partes review . . . outside of
`an Article III court.” Oil States Energy Servs., LLC v.
`Greene’s Energy Grp., 138 S. Ct. 1365, 1374 (2018)
`(citation omitted). As this Court has recognized, the
`purpose of pre-issuance examination is fundamentally
`the same as post-grant review. See id. (“The primary
`distinction between [IPRs] and the initial grant of a
`patent is that [IPR] occurs after the patent has
`issued.”).
`In exercising this authority prior to issuance,
`patent examiners perform substantially the same
`tasks the Federal Circuit relied on in classifying APJs
`as principal officers: they hear testimony, issue
`written decisions, and “ultimately decid[e] the
`patentability of the claims at issue.” Pet. App. at 8a.
`While the Federal Circuit noted that IPR has a
`“functional resemblance” to litigation, id. (quotation
`omitted), it ignored the many functional, structural,
`and practical similarities between APJs and USPTO
`employees.
`The Federal Circuit focused on the court-like
`terminology of IPR procedures rather than the
`examination-like substance of what APJs actually do.
`See Pet. App. at 8a (emphasizing that APJs “oversee
`
`
`
`
`9
`discovery,” “hear oral arguments,” and “issue final
`
`written decisions”). But, as this Court has held, these
`appearances can be deceiving: using “court-like
`procedures does not necessarily mean [the agency] is
`exercising the judicial power.” Oil States, 138 S. Ct. at
`1378 (citing Freytag, 501 U.S. at 878). Court-like
`terminology can be similarly misleading. See id. (“This
`Court has rejected the notion that a tribunal exercises
`Article III judicial power simply because it is “called a
`court and its decisions called judgments.”) (citing
`Williams v. United States, 289 U.S. 553, 563 (1933)).
`In substance and in form, what APJs do and what
`patent examiners do is largely the same. Both
`Supreme Court and Federal Circuit precedent confirm
`that these similarities fall squarely within a proper
`Appointments Clause analysis.
`First, APJs and examiners perform the same core
`function: deciding whether claims are patentable
`under controlling U.S. law. See Pet. App. at 8a
`(emphasizing the authority an APJ exercises in
`“ultimately deciding the patentability of the claims at
`issue”) (citing 35 U.S.C. § 318(a)); Oil States, 138 S. Ct.
`at 1370 (“When an inventor applies for a patent, an
`examiner reviews the proposed claims and the prior
`art to determine if the claims meet the statutory
`requirements.”) (citing 35 U.S.C. §§ 112, 131). If
`anything, examiners have more authority to make
`ultimate decisions of patentability: they issue final
`decisions on patentability individually while APJs can
`only do so with the majority support of three-member
`panels. See 35 U.S.C. §§ 6, 316(c).
`Second, APJs and examiners perform that same
`core function in the same manner: by comparing the
`claimed invention to prior art in the relevant field.
`
`
`
`
`10
`Again, APJs have the more limited role: during IPRs,
`
`they assess patentability, but “only under section 102
`or 103 and only on the basis of prior art consisting of
`patents or printed publications.” 35 U.S.C. § 311(b).
`By contrast, a patent examiner “reviews the proposed
`claims and the prior art to determine if the claims
`meet the statutory requirements” of the Patent Act—
`including those beyond sections 102 and 103. Oil
`States, 138 S. Ct. at 1370 (citing 35 U.S.C. §§ 101, 102,
`103, 112, 131). This includes prior art evidence beyond
`patents and printed publications as well as
`enablement,
`indefiniteness, patentable
`subject
`matter, and other non-prior-art reasons for invalidity.
`See, e.g., 37 C.F.R. § 1.104 (directing examiners to
`conduct a “thorough investigation of the available
`prior art”); id. § 1.105 (authorizing submission, inter
`alia, of “any non-patent literature . . . that relates to
`the claimed invention”); Manual of Patent Examining
`Procedure
`(“MPEP”) § 2106
`(“Examiners should
`determine whether a claim satisfies the criteria for
`subject matter eligibility . . . .”).
`Third, APJs and examiners rely on the same kind
`of evidence in making patentability decisions. For
`example, APJs consider “affidavits, declarations, . . .
`written memoranda,” and testimony provided in “an
`oral hearing.” Oil States, 138 S. Ct. at 1371 (citing 35
`U.S.C. §§ 316(a)(8), 316(a)(10)). Patent examiners can
`similarly consider written applications, affidavits,
`declarations, and
`testimony provided
`in oral
`interviews with applicants. See 37 C.F.R. § 1.132
`(authorizing examiners to consider written affidavits
`and declarations); id. § 1.133 (authorizing examiners
`to conduct oral interviews with applicants). Patent
`examiners, like APJs, can even weigh evidence of this
`kind to make factual determinations related to
`
`
`
`
`11
`patentability, such as secondary considerations of non-
`
`obviousness. See MPEP § 716.01(a).
`Thus, the Federal Circuit overestimated the
`limited responsibilities that in fact make APJs much
`more like patent examiners than the principal officers
`who supervise them both.
`ii. The Director’s Supervisory Power Over
`Both APJs and Examiners Demonstrates
`APJs Are Not Principal Officers.
`Both APJs and patent examiners must follow the
`policies and procedures set by the Director, who is a
`principal officer. This supervision further illustrates
`the absurdity of classifying APJs as principal officers
`when they, like patent examiners, are inferior to the
`Director within the context of the USPTO.
`In Edmond, the Court held that judges of the
`Coast Guard Court of Criminal Appeals were inferior
`officers largely because of the Judge Advocate
`General’s “administrative oversight,” including the
`power to “prescribe uniform rules of procedure” and
`“formulate policies” for the court. 520 U.S. at 664
`(quotation omitted). Here, like the Judge Advocate
`General, the Director provides “policy direction . . . for
`the Office” and “prescribes regulations” setting forth
`standards and procedures for APJs to follow during
`IPRs. 35 U.S.C. §§ 3(a)(2)(A), 316(a). And critically,
`the Director has the power to set policy that governs
`both APJs and examiners. See MPEP, Foreword
`(“Examiners will be governed by the applicable
`statutes, rules, decisions, and orders and instructions
`issued by the Director . . . .”).
`APJs and patent examiners must follow policies
`and procedures that the Director sets and cannot
`
`
`
`
`12
`themselves set rules. The fact that APJs are much
`
`more like employees than principal officers highlights
`the inferior nature of their role.
`iii. The Secretary of Commerce’s Power to
`Remove APJs Demonstrates APJs are
`Inferior Officers.
`By law, APJs receive the same employment
`protections as USPTO employees and, therefore, may
`be terminated for “such cause as will promote the
`efficiency of the service.” 5 U.S.C. § 7513(a). The
`Federal Circuit concluded this factor weighs in favor
`of classifying APJs as principal officers, even though it
`also applies to examiner-employees. See Pet. App. at
`20a.
`In Morrison, however, the Court held that the
`same type of removal provision supported classifying
`the independent counsel as an inferior officer. 487 U.S.
`at 672. The Court held that the Attorney General’s
`power to remove the independent counsel for good
`cause “indicates that [the independent counsel] is to
`some degree ‘inferior’ in rank and authority.” Id. at
`671. It explained that the “good cause” removal
`provision does not “impermissibly burden[] the
`President’s power to control or supervise the
`independent counsel” and leaves the executive “ample
`authority to assure that the counsel is competently
`performing” his or her duties. Id. at 692.
`Under Morrison, the Secretary of Commerce’s
`authority to remove APJs should weigh against
`classifying APJs as principal officers. Like the
`Attorney General in Morrison, who was the only
`officer who could remove the independent counsel, 487
`U.S. at 663, the Secretary of Commerce may remove
`
`
`
`
`13
`APJs for “such cause as will promote the efficiency of
`
`the service,” 5 U.S.C. § 7513(a). The Secretary’s broad
`removal power over APJs should likewise indicate that
`APJs are inferior in rank and authority to the
`principal officers, like the Secretary, who can remove
`them.
`
`iv. APJs Are Distinct from Other Types of
`ALJs Because They Adjudicate Matters
`Involving Public Rights.
`APJs differ in critical ways from ALJs in other
`contexts. To be sure, APJs carry out duties that bear a
`semblance to ALJs in other areas of the law. For
`example, the special trial judges of the Tax Court,
`whom this Court deemed inferior officers in Freytag,
`501 U.S. 868, “take testimony, conduct trials, rule on
`the admissibility of evidence,” and hold positions that
`are “‘established by Law.’” Id. at 881-82 (quoting U.S.
`Const. art. II, § 2, cl. 2). But that similarity should not
`be overstated: IPRs are unique proceedings that
`combine aspects of agency examination with trial-like
`features to resolve matters involving public rights.
`As this Court has explained, “[IPR] includes some
`of the features of adversarial litigation,” but “remains
`a matter involving public rights, one ‘between the
`government and others, which from its nature does not
`require judicial determination.’” Oil States, 138 S. Ct.
`at 1378 (citing Ex parte Bakelite Corp., 279 U.S. 438,
`451
`(1929)). APJs are unique because
`their
`determinations—however trial-like the process—are
`fundamentally about the correctness of the agency’s
`decision to grant a monopoly for the twenty years of a
`patent’s term.
`
`
`
`
`
`14
`IPRs exist in order to “offer[] a second look at an
`
`earlier administrative grant of a patent” to the agency
`responsible for granting it. Cuozzo Speed Techs., LLC
`v. Lee, 136 S. Ct. 2131, 2144 (2016). When an APJ
`panel decides a granted patent is invalid, which may
`render private litigation unnecessary, the primary
`benefit is to the public. Cancelling patents that should
`never have been issued “helps protect the public’s
`‘paramount interest in seeing that patent monopolies
`... are kept within their legitimate scope.’” Id. (quoting
`Precision
`Instrument Mfg. Co. v. Automotive
`Maintenance Machinery Co., 324 U.S. 806 (1945) and
`citing H.R. Rep. No. 112-98, at 39-40 (2011) (IPR is an
`“efficient system for challenging patents that should
`not have issued”) (emphasis added)).
`are
` In
`this
`respect,
`IPR
`proceedings
`fundamentally different from adversarial proceedings
`between private individuals and government entities
`accusing them of wrongdoing, such as those before the
`Tax Court in Freytag and the Coast Guard Court of
`Criminal Appeals in Edmond. In IPR proceedings, the
`entity alleged to have acted wrongly is the government
`in issuing a patent that does not comply with the law.
`C. A Healthy and Efficient Patent System
`Relies on Examiners and APJs Applying
`Policy Without Creating It.
`APJs provide a crucial layer of post-issuance
`agency review between the examiners (employees) and
`the Director and federal judiciary (principal officers).
`As described above, this review is defined by law to be
`similar to but even more limited than the initial
`examination.
`
`
`
`
`
`15
`While the details have changed over time, the
`
`structure is old and well-established. Intra-agency
`review traces its lineage to examiners-in-chief and the