NOS. 19 1434, 19 1452, 19 1458
`
`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 AMICUS CURIAE,
`AMERICAN INTELLECTUAL PROPERTY LAW
`ASSOCIATION, IN SUPPORT OF REVERSAL
`
`
`
`PATRICK J. COYNE
` PRESIDENTELECT
`AMERICAN INTELLECTUAL
`PROPERTY LAW ASSOCIATION
`1400 CRYSTAL DRIVE, SUITE 600
`ARLINGTON, VA 22202
`(703) 415 0780
`
`SOPHIE F. WANG
` COUNSEL OF RECORD
`BRYANA T. MCGILLYCUDDY
`CHOATE, HALL & STEWART LLP
`TWO INTERNATIONAL PLACE
`BOSTON, MA 02110
`(617) 248 5000
`SWANG@CHOATE.COM
`
`DECEMBER 2, 2020
`
` COUNSEL FOR AMICUS CURIAE
`
` SUPREME COURT PRESS ♦ (888) 958 5705 ♦ BOSTON, MASSACHUSETTS
`
`
`
`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 AMICUS CURIAE,
`AMERICAN INTELLECTUAL PROPERTY LAW
`ASSOCIATION, IN SUPPORT OF REVERSAL
`
`
`
`PATRICK J. COYNE
` PRESIDENTELECT
`AMERICAN INTELLECTUAL
`PROPERTY LAW ASSOCIATION
`1400 CRYSTAL DRIVE, SUITE 600
`ARLINGTON, VA 22202
`(703) 415 0780
`
`SOPHIE F. WANG
` COUNSEL OF RECORD
`BRYANA T. MCGILLYCUDDY
`CHOATE, HALL & STEWART LLP
`TWO INTERNATIONAL PLACE
`BOSTON, MA 02110
`(617) 248 5000
`SWANG@CHOATE.COM
`
`DECEMBER 2, 2020
`
` COUNSEL FOR AMICUS CURIAE
`
` SUPREME COURT PRESS ♦ (888) 958 5705 ♦ BOSTON, MASSACHUSETTS
`
`
`
`i
`
`TABLE OF CONTENTS
`
`Page
`
`TABLE OF AUTHORITIES.......................................... ii
`
`INTEREST OF THE AMICUS CURIAE..................... 1
`
`SUMMARY OF ARGUMENT....................................... 2
`
`ARGUMENT ................................................................... 4
`
`I. CONGRESS INTENDED THAT APJS BE INFERIOR
`OFFICERS UNDER THE APPOINTMENTS CLAUSE
`TO MAINTAIN THE BALANCE BETWEEN
`EFFICIENCY AND POLITICAL ACCOUNTABILITY .... 4
`
`II. THE TOTALITY OF CIRCUMSTANCES SUPPORTS
`FINDING THAT APJS ARE INFERIOR OFFICERS
`BECAUSE THEY ARE DIRECTED AND
`SUPERVISED AT SOME LEVEL BY THE
`DIRECTOR OF THE USPTO ................................... 9
`
`A. Edmond Supports a Flexible Approach
`to Appointments Clause Cases ................... 10
`
`B. The Federal Circuit’s Three Factor Test
`Does Not Take into Consideration All
`Relevant Facts ............................................ 15
`
`C. The Director’s Lack of “Unfettered” Review
`and Removal Power Does Not Outweigh
`His Substantial Direction and Supervision
`over APJs ...................................................... 19
`
`III. A FINDING OF CONSTITUTIONALITY WILL
`MOOT THE QUESTION OF REMEDY AND
`MINIMIZE DISRUPTION TO THE PATENT SYSTEM .. 25
`
`CONCLUSION ............................................................. 32
`
`
`
`
`
`
`
`ii
`
`TABLE OF AUTHORITIES
`
`Page
`
`TABLE OF AUTH ORITIES
`
`CASES
`
`Apotex Inc. v. Amgen Inc.,
`IPR2016 01542, Paper 60
`(P.T.A.B. Feb. 15, 2018) ....................................... 26
`
`Arthrex, Inc. v. Smith & Nephew, Inc.,
`941 F.3d 1320 (Fed. Cir. 2019) ............... passim
`
`Buckley v. Valeo,
`424 U.S. 1 (1976) ...............................................7, 18
`
`Edmond v. United States,
`520 U.S. 651 (1997) ........................................ passim
`
`Ex parte Hennen,
`38 U.S. 230 (1839) ......................................... 5, 7, 9
`
`Ex parte McAward,
`2015 006416 (P.T.A.B. Aug. 25, 2017) .................. 23
`
`Ex parte Mewherter,
`2012 007692 (P.T.A.B. May 8, 2013)................... 23
`
`Ex parte Siebold,
`100 U.S. 371 (1879) ................................................. 6
`
`Free Enter. Fund. v. Pub. Co. Accounting
`Oversight Bd., 561 U.S. 477 (2010) ................... 6, 9
`
`Freytag v. Commissioner,
`501 U.S. 868 (1991) ................................ 6, 9, 10, 16
`
`GoBart Importing Co. v. United States,
`282 U.S. 344 (1931) ............................................ 7, 9
`
`Hulu, LLC v. Sound View Innovations, LLC,
`IPR2018 01039, Paper 29
`(P.T.A.B. Dec. 20, 2019) ....................................... 23
`
`
`
`iii
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`In re Alappat,
`33 F. 3d 1526 (Fed. Cir. 1994) .............................. 8
`
`In re Boloro Global,
`No. 19 2349 (Fed. Cir. July 7, 2020) .................. 28
`
`In re JHO Intell. Prop. Holdings, LLC,
`No. 19 2330 (Fed. Cir. June 18, 2020) ............... 28
`
`In re Sealed Case,
`838 F.2d 476 (D.C. Cir. 1988) .............................. 6
`
`Intercollegiate Broad. Sys.
` v. Copyright Royalty Bd.,
`684 F.3d 1332 (D.C. Cir. 2012) ................ 18, 22
`
`Lectrosonics, Inc. v. Zaxcom, Inc.,
`IPR2018 01129, Paper 33
`(P.T.A.B. Jan. 24, 2020) ......................................... 23
`
`Lucia v. SEC,
`138 S.Ct. 2044 (2018) ........................... 5, 6, 7, 30
`
`Luoma v. GT Water Prods., Inc.,
`No. 19 2315 (Fed. Cir. Jan. 17, 2020) .............. 28
`
`Merck Sharp & Dohme Corp. v. Pfizer Inc.,
`IPR2017 02131, Paper 59
`(P.T.A.B. Mar. 13, 2019) ....................................... 26
`
`Moderna Therapeutics, Inc. v. Protiva
`Biotherapeutics, Inc., IPR2018 00680,
`Paper 46 (P.T.A.B. Sept. 10, 2019) ..................... 26
`
`Morrison v. Olson,
`487 U.S. 654 (1988) .................................... passim
`
`Myers v. United States,
`272 U.S. 52 (1926) ....................................... 7, 9, 21
`
`
`
`iv
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`NLRB v. SW Gen. Inc.,
`137 S.Ct. 929 (2017) ............................................. 15
`
`Piano Factory Grp., Inc. v. Schiedmayer
`Celesta GmbH, No. 20 1196
`(Fed. Cir. Oct. 26, 2020)....................................... 29
`
`SAS Institute Inc. v. Iancu,
`138 S.Ct. 1348 (2018) ..................................... 23, 24
`
`SolerSomohano v. CocaCola Co.,
`No. 19 2414 (Fed. Cir. Sept. 19, 2019) ............... 29
`
`United States v. Eaton,
`169 U.S. 331 (1898) ....................................... 5, 7, 9
`
`United States v. Germaine,
`99 U.S. 508 (1878) .................................................. 5
`
`United States v. Wilson,
`6 M.J. 214 (C.M.A. 1979) .................................. 15
`
`VirnetX Inc. v. Cisco Sys., Inc.,
` 958 F.3d 1333 (Fed. Cir. 2020) .......................... 28
`
`VirnetX Inc. v. Cisco Sys., Inc.,
`No. 19 1671 (Fed. Cir. Jan. 24, 2020) ................ 28
`
`Weiss v. United States,
`510 U.S. 163 (1994) ............................................ 9
`
`Westlake Servs., LLC
`v. Credit Acceptance Corp.,
`CBM2014 00176, Paper 28 (P.T.A.B. May
`14, 2015) ................................................................. 23
`
`CONSTITUTIONAL PROVISIONS
`
`U.S. Const. Art. II, § 2, cl. 2 .......................................... 4
`
`
`
`v
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`STATUTES
`
`10 U.S.C. § 866(a) .................................................. 13, 21
`
`10 U.S.C. § 867(a) .................................................. 14, 19
`
`10 U.S.C. § 867(c) ....................................................... 15
`
`10 U.S.C. § 1161(a).................................................13, 21
`
`15 U.S.C § 1067(a) ......................................................... 29
`
`15 U.S.C. § 1051 et seq ................................................ 29
`
`19 U.S.C. § 1337 ........................................................... 31
`
`28 U.S.C. § 594(f) ......................................................... 17
`
`28 U.S.C. § 596(a)(1) .................................................... 21
`
`35 U.S.C. § 1(a) ............................................................... 7
`
`35 U.S.C. § 3(a) ...................................................... 17, 20
`
`35 U.S.C. § 3(a)(1) ........................................................... 7
`
`35 U.S.C. § 3(a)(2)(A) ...............................................8, 23
`
`35 U.S.C. § 3(a)(4) ........................................................ 7
`
`35 U.S.C. § 3(b)(6) ...................................................... 7, 8
`
`35 U.S.C. § 6(a) .................................................... 7, 8, 17
`
`35 U.S.C. § 6(b) .........................................................8, 17
`
`35 U.S.C. § 6(c) .................................................. 7, 17, 20
`
`35 U.S.C. § 101 ............................................................. 24
`
`35 U.S.C. § 314(a)–(d) .................................................. 20
`
`
`
`
`
`vi
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`LEGISLATIVE AND EXECUTIVE MATERIALS
`
`157 Cong. Rec. S1367
`(daily ed. Mar. 8, 2011) .......................................... 8
`
`157 Cong. Rec. S5319
`(daily ed. Sept. 6, 2011) ....................................... 28
`
`Exec. Order No. 13,843,
`83 Fed. Reg. 32755 (July 10, 2018) .................... 30
`
`H.R. Rep. No. 112 98, pt. 1 (2011)............................... 7
`
`OTHER AUTHORITIES
`
`Janet Gongola,
`The Patent Trial and Appeal Board
`Who are they and what do they do?
`(Summer 2019), available at
`https //www.uspto.gov/learning and
`resources/newsletter/inventors eye/patent
`trial and appeal board who are they and
`what........................................................................ 27
`
`John F. Duffy,
`Are Administrative
`Patent Judges Unconstitutional?,
`2007 PATENTLY O PATENT L.J. 25 (2007) .............. 20
`
`Michael Goodman,
`What’s So Special About Patent Law?,
`26 FORDHAM INTELL. PROP. MEDIA &
`ENT. L.J. 797 (2016) .............................................. 27
`
`
`
`vii
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`Nancy J. Griswold & Constance B. Tobias,
`Establishing a New MeritBased Process
`for Appointing Administrative Law Judges
`at HHS, U.S. Dept. of Health and Human
`Services (Jan. 8, 2019),
`available at https //www.hhs.gov/blog/
`2019/01/08/new merit based process for
`appointing administrative law judges.
`html. ....................................................................... 31
`
`Office of Personnel Mgmt.,
`ALJs by Agency, available at
`https //www.opm.gov/services for
`agencies/administrative law judges#url=
`ALJs by Agency .................................................... 30
`
`Pet. Br.,
`Edmond v. United States,
`520 U.S. 651 (1997) (No. 96 262) ..... 10, 11, 14, 16
`
`
`
`Tr. of Oral Arg.,
`Edmond v. United States,
`520 U.S. 651 (1997) (No. 96 262) ........................ 11
`
`
`
`U.S. International Trade Commission,
`Administrative Law Judge Bios,
`available at https //www.usitc.gov/alj_bios ........... 31
`
`U.S. Navy,
`U.S. Navy Report on Military Justice for
`Fiscal Year 2019, available at
`https //jsc.defense.gov/Annual Reports/ ................ 14
`
`U.S. Social Security Administration,
`Hearings and Appeals,
`available at https //www.ssa.gov/appeals/
`about_us.html ....................................................... 31
`
`
`
`viii
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`U.S.C.A.A.F.,
`Report of the U.S.C.A.A.F.,
`FY 2019, available at https //www.armfor.
`uscourts.gov/ann_reports.htm ............................ 14
`
`USPTO,
`Alphabetical Listing of Precedential
`Decisions, Patent Trial and Appeal Board,
`available at https //www.uspto.gov/
`patents application process/appealing
`patent decisions/decisions and opinions/
`precedential........................................................... 22
`
`USPTO,
`Appendix 1 to Oct. 2019 Update to 2019
`Revised Patent Subject Matter Eligibility
`Guidance (Oct. 2019), available at
`https //www.uspto.gov/sites/default/files/
`documents/peg_oct_2019_app1.pdf .................... 24
`
`USPTO,
`USPTO Board of Patent Appeals and
`Interferences Update, Patent Public
`Advisory Committee Meeting
`(June 14, 2012), available at
`https //www.uspto.gov/sites/default/files/
`about/advisory/ppac/20120614_bpai_
`update.pdf ............................................................... 8
`
`USPTO,
`USPTO FY2020 Performance and
`Accountability Report, available at
`https //www.uspto.gov/sites/default/files/
`documents/USPTOFY20PAR.pdf ........... 8, 27, 29
`
`
`
`
`
`1
`
`
`
`INTEREST OF THE AMICUS CURIAE
`
`The American Intellectual Property Law Associ
`ation (AIPLA)1 is a national bar association repre
`senting the interests of approximately 8,500 members
`engaged in private and corporate practice, govern
`mental service, and academia. AIPLA’s members
`represent a diverse spectrum of individuals, companies,
`and institutions involved directly or indirectly in the
`practice of patent, trademark, copyright, and unfair
`competition law, as well as other fields of law
`affecting intellectual property. Our members repre
`sent both owners and users of intellectual property.
`AIPLA’s mission includes providing courts with
`
`1 In accordance with Supreme Court Rule 37.6, AIPLA states
`that this brief was not authored, in whole or in part, by counsel
`to a party, and that no monetary contribution to the preparation
`or submission of this brief was made by any person or entity
`other than AIPLA and its counsel. Specifically, after reasonable
`investigation, AIPLA believes that (i) no member of its Board
`or Amicus Committee who voted to file this brief, or any attor
`ney in the law firm or corporation of such a member, represents
`a party to the litigation in this matter (ii) no representative of
`any party to this litigation participated in the authorship of this
`brief and (iii) no one other than AIPLA, or its members who
`authored this brief and their law firms or employers, made a
`monetary contribution to the preparation or submission of this
`brief.
`
`Pursuant to Rule 37.3(a), AIPLA has obtained the parties’ consent
`to file this amicus brief, based on letters filed with this Court on
`October 28, 2020 by Smith & Nephew, Inc. and ArthroCare
`Corp., October 29, 2020 by Arthrex, Inc., and November 3, 2020 by
`the United States.
`
`
`
`2
`
`objective analyses to promote an intellectual property
`system that stimulates and rewards invention,
`creativity, and investment while accommodating the
`public’s interest in healthy competition, reasonable
`costs, and basic fairness. AIPLA has no stake in any
`of the parties to this litigation or in the result of the
`case. AIPLA’s only interest is in seeking correct and
`consistent interpretation of the law as it relates to
`intellectual property issues.
`
`
`
`SUMMARY OF ARGUMENT
`
`The Court should reverse the Federal Circuit’s
`holding that the appointment of Administrative Patent
`Judges (APJs) of the Patent Trial and Appeal Board
`(PTAB) violated the Appointments Clause of Article
`II of the U.S. Constitution. Reversal would restore
`the balance between political accountability and
`efficiency intended by the Appointments Clause and
`by Congress in creating the PTAB, avoid the far
`reaching effects of the Arthrex remedy of severance
`and rehearing, and maintain the integrity, predict
`ability, and transparency of APJ decision making for
`patent owners and challengers alike.
`
`The Federal Circuit determined that APJs are
`principal officers based on the application of a three
`factor test that looks for the presence of unfettered
`review, supervision, and removal powers. See Arthrex,
`Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1329
`(Fed. Cir. 2019). This Court in Edmond v. United
`States, however, expressly rejected an exclusive, factor
`specific approach to determining the line between
`
`
`
`3
`
`“principal” and “inferior” officer, instead favoring a
`flexible analysis to assess whether an officer is “directed
`and supervised at some level” by a presidentially
`appointed superior. 520 U.S. 651, 663 (1997). Thus,
`while the question is a close one, the totality of the
`circumstances under the flexible Edmond approach
`supports finding that APJs are inferior officers subject
`to substantial direction and supervision by a presi
`dential appointee—the Director of the United States
`Patent and Trademark Office (USPTO). Reversal of the
`Federal Circuit’s decision is therefore appropriate and
`consistent with this Court’s Appointments Clause
`jurisprudence.
`
`Reversal would also moot the need for any remedy
`and provide the least disruption to the patent system
`as a whole. The Federal Circuit sought to cure the
`constitutional defect it observed by severing applica
`tion of Title 5’s standard, federal employment removal
`protections to APJs and ordering the rehearing of each
`affected case before a new panel. This remedy, while
`seemingly straightforward, risks creating significant
`uncertainty, delay, and lack of transparency and
`accountability in the patent system. Such an outcome
`would be contrary to Congress’ intent in establish
`ing the PTAB to provide a cost effective, expeditious,
`and impartial alternative for patent challenges. For
`at least these reasons, the Court should reverse the
`decision below.
`
`
`
`4
`
`
`
`ARGUMENT
`
`I. CONGRESS INTENDED THAT APJS BE INFERIOR
`OFFICERS UNDER THE APPOINTMENTS CLAUSE TO
`MAINTAIN THE BALANCE BETWEEN EFFICIENCY AND
`POLITICAL ACCOUNTABILITY.
`
`The Appointments Clause provides the exclusive
`means for appointing “Officers of the United States.”
`U.S. Const. art. II, § 2, cl. 2. As this Court has recog
`nized, the Appointments Clause has a number of
`purposes, including to prevent “congressional encroach
`ment upon the Executive and Judicial Branches,” “to
`assure a higher quality of appointments,” and “to
`ensure public accountability for both the making of a
`bad appointment and the rejection of a good one.”
`Edmond, 520 U.S. at 659–60.
`
`The Appointments Clause prescribes different
`processes for appointing different classes of officers
`(1) “principal” officers, who must be appointed by the
`President with the advice and consent of the Senate,
`and (2) “inferior” officers, who may be appointed by
`the President, the head of an executive department,
`or a court of law without Senate input. Art. II, § 2, cl.
`2. This dual appointment approach was born of practi
`cality
`
`The Constitution for purposes of appointment
`very clearly divides all its officers into two
`classes. The primary class requires a nomina
`tion by the President and confirmation by the
`Senate. But foreseeing that when offices
`became numerous, and sudden removals
`
`
`
`5
`
`necessary, this mode might be inconvenient,
`it was provided that, in regard to officers
`inferior to those specially mentioned, Con
`gress might by law vest their appointment
`in the President alone, in the courts of law,
`or in the heads of departments.
`
`United States v. Germaine, 99 U.S. 508, 509–10 (1878).
`Thus, while the Appointments Clause “is among the
`significant structural safeguards of the constitution
`al scheme,” this Court has given proper deference to
`this “Excepting Clause,” whose “obvious purpose is
`administrative convenience.” Edmond, 520 U.S. at
`659–60. See also Lucia v. SEC, 138 S.Ct. 2044, 2056
`(2018) (Thomas, J., concurring) (“This alternative
`process for appointing inferior officers strikes a balance
`between efficiency and accountability. Given the sheer
`number of inferior officers, it would be too burdensome
`to require each of them to run the gauntlet of Senate
`confirmation.”).
`
`Inherent to the two processes permitted by the
`Appointments Clause is a certain deference to the
`judgment of the political branches in determining the
`appropriate classification of “Officers of the United
`States.” See, e.g., United States v. Eaton, 169 U.S.
`331, 343 (1898) Ex parte Hennen, 38 U.S. 230, 258
`(1839) (“that a clerk is one of the inferior officers
`. . . cannot be questioned[,]” because “[C]ongress, in
`the exercise of the power here given . . . declare[d] that
`the Supreme Court, and the District Courts shall have
`power to appoint clerks of their respective Courts”)
`(emphasis added). See also Lucia, 138 S.Ct. at 2062
`(Breyer, J., dissenting) (“Congress’ intent on the
`question matters”).
`
`
`
`6
`
`For example, in Morrison v. Olson, this Court
`considered multiple “factors relating to the ideas of
`tenure, duration . . . and duties of the independent
`counsel,” as established by Congress in the Ethics in
`Government Act of 1978. 487 U.S. 654, 672 (1988)
`(quotations and citations omitted). The Court further
`noted that the Appointments Clause’s “inclusion of
`‘as they think proper’ seems clearly to give Congress
`significant discretion to determine whether it is ‘proper’
`to vest the appointment of, for example, executive
`officials in the ‘courts of Law.’” Id. at 673. See id. at
`674 (noting further that “the selection of the appointing
`power, as between the functionaries named, is a matter
`resting in the discretion of Congress”) (quoting Ex
`parte Siebold, 100 U.S. 371, 397–98 (1879)) (emphasis
`added). See also In re Sealed Case, 838 F.2d 476, 532
`(D.C. Cir. 1988) (Ginsburg, J., dissenting) (“[T]he
`present question . . . concerns the legitimacy of a class
`ification made by Congress pursuant to its constitution
`ally assigned role in vesting appointment authority.
`That constitutional assignment to Congress counsels
`judicial deference. The chosen mode of appointment
`here indicates that Congress meant to create an
`inferior office.”) (citation omitted), rev’d sub nom.
`Morrison, 487 U.S. 654.
`
`This Court consistently has upheld the appoint
`ments of a wide range of inferior officers, established
`by Congress, having varying and often substantial
`jurisdiction and discretion. See, e.g., Lucia, 138 S.Ct.
`2044 (SEC Administrative Law Judges) Free Enter.
`Fund. v. Pub. Co. Accounting Oversight Bd., 561
`U.S. 477 (2010) (Public Accounting Oversight Board
`Members) Edmond, 520 U.S. 651 (Appellate Military
`Judges) Freytag v. Commissioner, 501 U.S. 868 (1991)
`
`
`
`7
`
`(Tax Court Special Trial Judges) Morrison, 487 U.S.
`654 (Independent Counsel) GoBart Importing Co. v.
`United States, 282 U.S. 344 (1931) (United States
`Commissioners) Myers v. United States, 272 U.S. 52
`(1926) (Postmaster First Class) Eaton, 169 U.S. 331
`(temporary Vice Consul) Ex parte Hennen, 38 U.S.
`230 (District Court Clerks). As Justice Breyer noted
`in Lucia, “[n]o case from this Court holds that Con
`gress lacks this sort of constitutional leeway in
`determining whether a particular Government position
`will be filled by an ‘Office[r] of the United States.’”
`138 S.Ct. at 2063 (Breyer, J., dissenting).2
`
`Here, Congress specifically created the separate
`roles of the Director, APJs, and the PTAB in part to
`“establish a more efficient and streamlined patent
`system that will improve patent quality and limit
`unnecessary and counterproductive litigation costs[,]”
`while ensuring that no party’s access to court is
`denied. H.R. Rep. No. 112 98, pt. 1, at 40 (2011).
`There is no question that Congress chose to vest “the
`powers and duties” of the USPTO in the Director, a
`principal officer who is appointed by the President
`with the advice and consent of the Senate and subject
`to removal by the President. 35 U.S.C. §§ 3(a)(1),
`3(a)(4). The Director is a political appointee who
`supervises and pays the APJs responsible for deciding
`patentability challenges. 35 U.S.C. §§ 1(a), 3(b)(6),
`6(a). Further, the Director may select which APJs,
`and how many of them, will preside over any pro
`ceeding. Id. § 6(c). He can also add more members to
`any given panel—including himself—and order the
`
`2 The only exception is Buckley v. Valeo, 424 U.S. 1 (1976), which
`concerned the classification of “Officers” as compared with mere
`“employees.”
`
`
`
`8
`
`case reheard if he chooses. Id. §§ 6(a), (c) Patent
`Trial and Appeal Board, Standard Operating Procedure
`2 (Revision 10) (Sept. 20, 2018) (“SOP2”). See also In
`re Alappat, 33 F. 3d 1526, 1535 (Fed. Cir. 1994) (en
`banc). Importantly, the Director is also “responsible
`for providing policy direction and management super
`vision” for the entire USPTO, including the PTAB. 35
`U.S.C. §§ 3(a)(2)(A), 6(a).
`
`In contrast, Congress chose to vest certain
`functions of the PTAB, a subpart of the USPTO, in
`numerous inferior officers—APJs—who are duly
`appointed by the Secretary of Commerce in consultation
`with the Director. Id. § 6(a). APJs review appeals of
`adverse decisions of examiners arising from patent
`applications and reexaminations, conduct derivation
`proceedings, and preside over America Invents Act
`(AIA) trial proceedings (e.g., inter partes review
`(IPR) and post grant review (PGR) proceedings). Id.
`§ 6(b). Indeed, in enacting the AIA, Congress specifically
`recognized that a “large number3 of APJs will need
`to be recruited, trained, and retained to adjudicate
`PGR and new IPR” proceedings. 157 Cong. Rec.
`S1367 (daily ed. Mar. 8, 2011). Accordingly, Congress
`gave the Director “greater flexibility in paying and
`compensating the travel of APJs.” Id. See also 35
`U.S.C. § 3(b)(6) (“The Director may fix the rate of
`
`3 Following the passage of the AIA, the number of APJs has
`significantly increased. See USPTO FY2020 Performance and
`Accountability Report, at 17, available at https //www.uspto.gov/
`sites/default/files/documents/USPTOFY20PAR.pdf (221 APJs in
`2020) USPTO Board of Patent Appeals and Interferences Up
`date, Patent Public Advisory Committee Meeting (June 14, 2012),
`available at https //www.uspto.gov/sites/default/files/about/advisory/
`ppac/20120614_bpai_update.pdf (80 APJs in 2010, but nearly
`140 APJs in 2012).
`
`
`
`9
`
`basic pay for the administrative patent judges[.]”).
`Thus, by separating and defining the roles and powers
`of the Director and APJs, Congress created a politically
`accountable officer at the head of the USPTO with
`plenary powers over agency direction and supervision,
`while simultaneously providing the public with
`efficient, expedient, and impartial decision makers in
`the limited context of patentability challenges and
`appeals.
`
`Congress made clear its intent that APJs be
`inferior officers. See Weiss v. United States, 510
`U.S. 163, 194 (1994) (Souter, J., concurring) (“in the
`presence of doubt deference to the political branches’
`judgment is appropriate”). Accordingly, holding that
`APJs are in fact principal officers upends the balance
`intended by Congress and provided for by the Appoint
`ments Clause and is inconsistent with this Court’s
`precedent. The decision below should be reversed.
`
`II. THE TOTALITY OF CIRCUMSTANCES SUPPORTS
`FINDING THAT APJS ARE INFERIOR OFFICERS
`BECAUSE THEY ARE DIRECTED AND SUPERVISED AT
`SOME LEVEL BY THE DIRECTOR OF THE USPTO.
`
`This Court has considered a wide range of non
`exclusive factors in determining whether officers are
`inferior or principal for Appointments Clause purposes.
`See, e.g., Free Enter. Fund., 561 U.S. at 485–87
`Edmond, 520 U.S. at 661–66 Freytag, 501 U.S. at
`880–82 Morrison, 487 U.S. at 671–73 GoBart
`Importing Co., 282 U.S. at 352–53 Myers, 272 U.S.
`at 163 Eaton, 169 U.S. at 343 Ex parte Hennen, 38
`U.S. at 258. These factors include, but are not limited
`to, whether the officers (1) may be removed from
`their duties by a senior official (2) are empowered to
`
`
`
`10
`
`perform only limited duties (3) are limited in juris
`diction (4) are limited in tenure or hold temporary
`offices (5) are subject to general administrative
`oversight (6) are subject to policy or regulations
`promulgated by a superior (7) may make final factual
`or legal decisions that are not subject to further
`review or (8) are intended by Congress to fall within
`the Excepting Clause. The appropriate Appointments
`Clause analysis under this Court’s precedent therefore
`requires consideration of the totality of the circum
`stances, in contrast to the limiting, three factor test
`articulated in Arthrex. Such a flexible approach
`supports finding that APJs of the PTAB are inferior
`officers.
`
`A. Edmond Supports a Flexible Approach to
`Appointments Clause Cases.
`
`In Edmond, this Court considered whether “judges
`of the military Courts of Criminal Appeals [are]
`‘inferior officers’ under the Appointments Clause even
`though, as a practical matter, their decisions are
`almost always the final word on criminal convictions
`in the military.” Pet. Br. at 1, Edmond, 520 U.S. 651
`(No. 96 262). This Court held that appellate military
`judges (AMJs) are inferior officers. Edmond, 520 U.S.
`at 666.
`
`In its brief, Edmond specifically sought to
`distinguish AMJs from the independent counsel in
`Morrison v. Olson and the special trial judges of the
`Tax Court in Freytag v. Commissioner—both of whom
`this Court had found to be inferior officers. In partic
`ular, Edmond argued that Morrison set forth specific
`criteria for classifying inferior officers. Pet. Br. at 45,
`Edmond. Edmond further argued that AMJs did not
`
`
`
`11
`
`meet these criteria because (1) AMJ appointments
`“are for indefinite terms” (2) there is “no one who is
`‘superior’ to [AMJs] since there is no appeal as of
`right to a higher court from their decisions” because
`“[t]he only further review is discretionary” and (3)
`“[m]ost significantly, the [AMJs] have a wide ranging
`power of review of both convictions and sentences in
`courts martial.” Id. at 17–18, 45–48. Edmond high
`lighted that “the greatest contrast with independent
`counsels is the total lack of supervision by anyone,
`including the appointing officers, over the daily work of
`the [AMJs].” Id. at 48 (emphasis added). Edmond also
`argued that AMJs are distinguishable from the special
`trial judges of the Tax Court primarily because “deci
`sions of the Courts of Criminal Appeals are reviewable
`only by permission, which is not often granted.” Id. at
`19, 55. See also Tr. of Oral Arg. at 7, Edmond, 520
`U.S. 651 (No. 96 262) (arguing that AMJ decisions
`“have practical finality”).
`
`This Court rejected each of Edmond’s arguments.
`See Edmond, 520 U.S. at 659–66. Specifically, the
`Court emphasized that its prior decisions “have not
`set forth an exclusive criterion for distinguishing
`between principal and inferior officers for Appointments
`Clause purposes.” Id. at 661. While the Court ack
`nowledged Edmond’s argument that its decision in
`Morrison had relied on “several factors,” the Court
`expressly rejected this interpretation of Morrison
`
`Morrison did not purport to set forth a
`definitive test for whether an office is
`“inferior” under the Appointments Clause.
`To the contrary, it explicitly stated “We need
`not attempt here to decide exactly where the
`line falls between the two types of officers,
`
`
`
`12
`
`because in our view the independent counsel
`clearly falls on the ‘inferior officer’ side of the
`line.”
`
`Id. at 661–62 (quoting Morrison, 487 U.S. at 671)
`(emphasis added). Instead, the Court made clear that
`“in the context of a clause designed to preserve
`political accountability relative to important govern
`ment assignments,” it was “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.” Id. at 663 (emphasis added). Thus,
`the Court expressly declined to set a bright line,
`multifactor test to distinguish between inferior and
`principal officers, instead adopting a context specific
`analysis focused on whether there is “direction and
`supervision” at some level by a presidentially appointed
`superior. Id. at 661–63.
`
`The Court’s decision in Edmond to eschew a test
`based on a limited number of exclusive factors is evi
`denced both in its embrace of the principles stated in
`Morrison and in its refusal to view certain factors in
`Morrison as dispositive. In particular, the Court
`agreed with Edmond that there were four factors
`that rendered the independent counsel in Morrison
`an inferior officer (1) she was subject to removal by a
`higher officer (2) she performed only limited duties
`(3) her jurisdiction was narrow and (4) her tenure
`was limited. Id. at 661 (citing Morrison, 487 U.S. at
`671–72). The Court also agreed that the third and
`fourth Morrison factors did not apply to the AMJs.
`Id. But consistent with its totality of the circumstances
`approach, the Court nonetheless concluded that AMJs,
`
`
`
`13
`
`like the independent counsel in Morrison, are inferior
`officers. Id. at 666.
`
`Specifically, the Court in Edmond was satisfied
`that AMJs were sufficiently “directed and supervised
`at some level” by both the Judge Advocate General
`and the United States Court of Appeals for the
`Armed Forces (CAAF). Id. at 663–65. The Court
`found that AMJs were subject to substantial “admin
`istrative oversight” by the Judge Advocate General,
`who could prescribe uniform rules of procedure for the
`court and formulate policies and procedure for review
`of cases. Id. at 664. Similarly, the Court highlighted
`that the Judge Advocate General could remove AMJs
`from their judicial assignment without cause. How
`ever, the Court made a point to note that “the Judge
`Advocate General’s control over Court of Criminal
`Appeals judges [wa]s, to be sure, not complete.” Id.
`The Judge Advocate General could not influence the
`outcome of individual proceedings, nor could he
`reverse decisions of the AMJs. Id. at 664–66. The
`Court likewise did not require that the Judge Advocate
`General be able to remove AMJs at will from their
`employment in order for them to qualify as inferior.
`See id. at 667 (Souter, J., concurring in part and in
`the judgment) (
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