`
`Nos. 19-1434, 19-1452, 19-1458
`
`IN THE
`Supreme Court of the United States
`
`UNITED STATES OF AMERICA,
`
`v.
`
`ARTHREX, INC., ET AL.,
`
`
`
`Petitioner,
`
`Respondents.
`
`
`On Writ of Certiorari to the United States Court
`of Appeals for the Federal Circuit
`
`BRIEF FOR AMICUS CURIAE INTEL CORP.
`IN SUPPORT OF PETITIONERS
`
`
`
`
`
` DONALD B. VERRILLI, JR.
` Counsel of Record
`GINGER D. ANDERS
`MUNGER, TOLLES & OLSON LLP
`601 Massachusetts Avenue NW
`Suite 500 E
`Washington, D.C. 20001
`(202) 220-1100
`donald.verrilli@mto.com
`JORDAN D. SEGALL
`MUNGER, TOLLES & OLSON LLP
`350 S. Grand Ave., 50th Floor
`Los Angeles, CA 90071
`(213) 683-9208
`
`Counsel for Amicus Curiae Intel Corp.
`(Additional captions on inside cover)
`
`
`
`
`
`
`
`
`
`SMITH & NEPHEW, INC., ET AL.,
`
`v.
`
`ARTHREX, INC., ET AL.,
`
`ARTHREX, INC.,
`
`v.
`
`SMITH & NEPHEW, INC., ET AL.,
`
`
`
`Petitioners,
`
`Respondents.
`
`
`Petitioner,
`
`Respondents.
`
`
`
`
`
`
`
`
`
`
`i
`
`TABLE OF CONTENTS
`
`Page
`
`II.
`
`TABLE OF AUTHORITIES ........................................... iii
`INTEREST OF AMICUS CURIAE ................................. 1
`INTRODUCTION AND SUMMARY OF THE
`ARGUMENT ................................................................... 2
`ARGUMENT ................................................................... 5
`I. ADMINISTRATIVE PATENT JUDGES
`ARE INFERIOR OFFICERS. ................................ 5
`IF THIS COURT CONCLUDES THAT
`ADMINISTRATIVE PATENT JUDGES
`ARE IMPROPERLY APPOINTED, IT
`SHOULD SEVER THEIR REMOVAL
`PROTECTIONS...................................................... 7
`A. Severing the removal restrictions is
`consistent with this Court’s severability
`doctrine and avoids disruption to the inter
`partes review system. .......................................... 8
`B. Eliminating tenure protections will not
`undermine congressional intent because
`Congress has already elected to cabin the
`independence of administrative patent
`judges. ................................................................ 12
`III. THE OTHER REMEDIAL OPTIONS
`PROPOSED BY THE PARTIES
`THREATEN SUBSTANTIAL
`DISRUPTION TO THE INTER PARTES
`REVIEW SYSTEM. .............................................. 18
`
`
`
`
`
`ii
`
`A. This Court should reject Arthrex’s
`startling suggestion that the Court
`decline to adopt any remedy. ............................. 18
`B. Expanding the scope of the Director’s
`authority undermines the benefits of the
`PTAB’s structure. .............................................. 23
`CONCLUSION .............................................................. 26
`
`
`
`
`
`iii
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`FEDERAL CASES
`
`Arthrex, Inc. v. Smith & Nephew, Inc.,
`953 F.3d 760 (Fed. Cir. 2020) .............................. 18
`
`Ayotte v. Planned Parenthood of N.
`New England,
`546 U.S. 320 (2006) .......................................... 8, 13
`
`Barr v. Am. Ass’n of Political
`Consultants, Inc.,
`140 S. Ct. 2335 (2020) .................................... 3, 8, 9
`
`Brown v. Dep’t of the Navy,
`229 F.3d 1356 (Fed. Cir. 2000) ............................ 13
`
`Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131 (2016) .......................................... 11
`
`Drink Tanks Corp. v. GrowlerWerks, Inc.,
`No. 3:16-cv-410-SI, 2016 WL 3844209
`(D. Or. July 15, 2016) ........................................... 20
`
`Edmond v. United States,
`520 U.S. 651 (1997) ...................................... 3, 6, 10
`
`Fed. Mar. Comm’n v. S.C. State Ports Auth.,
`535 U.S. 743 (2002) .............................................. 17
`
`Free Enter. Fund v. Pub. Co. Accounting
`Oversight Bd.,
`561 U.S. 477 (2010) ................................ 6, 8, 11, 19
`
`
`
`
`
`iv
`
`Intercollegiate Broad. Sys., Inc. v.
`Copyright Royalty Bd.,
`684 F.3d 1332 (D.C. Cir. 2012) ...................... 10, 11
`
`Milner v. Dep’t of Navy,
`562 U.S. 562 (2011) .............................................. 19
`
`Murphy v. NCAA,
`138 S. Ct. 1461 (2018) ............................................ 8
`
`Nidec Motor Corp. v. Zhongshan Broad
`Ocean Motor Co. Matal,
`868 F.3d 1013 (Fed. Cir. 2017) ...................... 14, 15
`
`Precision Instrument Mfg. Co. v.
`Automotive Maintenance Machinery Co.,
`324 U.S. 806 (1945) .............................................. 11
`
`Ramspeck v. Fed. Trial Examiners
`Conference,
`345 U.S. 128 (1953) .............................................. 16
`
`Regan v. Time, Inc.,
`468 U.S. 641 (1984) ................................................ 8
`
`SAS Inst., Inc. v. Iancu,
`138 S. Ct. 1348 (2018) .......................................... 23
`
`Seila Law LLC v. Consumer Fin. Prot. Bureau,
`140 S. Ct. 2183 (2020) .......................... 9, 11, 18, 24
`
`Thryv, Inc. v. Click-To-Call Techs., LP,
`140 S. Ct. 1367 (2020) .......................................... 22
`
`
`
`
`
`v
`
`United States v. Grace,
`461 U.S. 171 (1983) .............................................. 10
`
`Wong Yang Sung v. McGrath,
`339 U.S. 33 (1950) ................................................ 16
`
`REGULATORY CASES
`
`Social Sec. Admin. v. Long,
`113 M.S.P.R. 190 (2010) ...................................... 13
`
`CONSTITUTIONAL PROVISIONS
`
`U.S. Const. art. II, § 2, cl. 2 ......................................... 6
`
`U.S. Const. art. III, § 1 .............................................. 15
`
`FEDERAL STATUTES
`
`5 U.S.C. 3105 ............................................................. 14
`
`5 U.S.C. 5372(b)(2) .................................................... 15
`
`5 U.S.C. 7513(a) ..................................................... 9, 13
`
`5 U.S.C. 7521 ............................................................. 13
`
`15 U.S.C. 1501 ............................................................. 6
`
`Patent Act of 1952, 35 U.S.C. 1 et seq. ............. passim
`
`35 U.S.C. 3(a) ......................................................... 6
`
`35 U.S.C. 3(b)(6) ................................................... 15
`
`35 U.S.C. 3(c) ...................................................... 3, 9
`
`
`
`
`
`vi
`
`35 U.S.C. 6 ............................................................ 15
`
`35 U.S.C. 6(a) ....................................................... 25
`
`35 U.S.C. 6(c) .................................................. 14, 23
`
`35 U.S.C. 102 ........................................................ 25
`
`35 U.S.C. 103 ........................................................ 25
`
`35 U.S.C. 311 ........................................................ 17
`
`35 U.S.C. 314(b) ................................................... 20
`
`35 U.S.C. 315(c) .................................................... 14
`
`Leahy-Smith America Invents Act,
`Pub. L. No. 112-29, 125 Stat. 284 (2011) .............. 2
`
`FEDERAL REGULATIONS
`
`77 Fed. Reg. 48680 (Aug. 14, 2012) .......................... 20
`
`LEGISLATIVE MATERIALS
`
`157 Cong. Rec. S1352 (daily ed. Mar. 8, 2011) ......... 24
`
`H.R. Rep. No. 112-98, pt. 1 (2011), as
`reprinted in 2011 U.S.C.C.A.N. 67 ...................... 11
`
`S. Rep. No. 97-275 (1981), as reprinted
`in 1982 U.S.C.C.A.N. 11 ...................................... 25
`
`
`
`
`
`vii
`
`OTHER AUTHORITIES
`
`Am. Intellectual Prop. Law Assoc.,
`Report of the Economic Survey (2017) ................. 22
`
`Josh Landau, Inter Partes Review: Five
`Years, Over $2 Billion Saved, Patent
`Progress (Sept. 14, 2017), available
`at https://www.patentprogress.org/
`2017/09/14/inter-partes-review-
`saves-over-2-billion/ ............................................. 20
`
`Julie E. Cohen & Mark A. Lemley,
`Patent Scope and Innovation in the
`Software Industry, 89 Cal. L. Rev. 1
`(2001) .................................................................... 22
`
`Michael D. Frakes & Melissa F.
`Wasserman, Is the Time Allocated to
`Review Patent Applications Inducing
`Examiners to Grant Invalid Patents?
`Evidence from Microlevel Application
`Data, 99 Rev. Econ. Stat. 550 (2017) .................. 21
`
`Stuart Minor Benjamin & Arti K. Rai,
`Administrative Power in the Era of
`Patent Stare Decisis, 65 Duke L.J.
`1563 (2016) ........................................................... 16
`
`PTAB Standard Operating Procedure 1,
`available at https://www.uspto.gov/
`sites/default/files/documents/SOP%
`201%20R15%20FINAL.pdf ............................ 14, 25
`
`
`
`
`
`viii
`
`PTO, Trial Statistics: IPR, PGR, CBM
`(Sept. 2020), available at
`https://www.uspto.gov/sites/default/fi
`les/documents/trial_statistics_20200
`930.pdf ............................................................ 12, 19
`
`PTO, U.S. Patent Statistics Chart,
`Calendar Years 1963–2019 (Apr.
`2020), available at
`https://www.uspto.gov/web/offices/ac/
`ido/oeip/taf/us_stat.htm ....................................... 21
`
`PTO, Organizational Structure and
`Administration of the Patent Trial
`and Appeal Board, available at
`https://www.uspto.gov/sites/default/fi
`les/documents/Organizational%20Str
`ucture%20of%20the%20Board%20M
`ay%2012%202015.pdf .......................................... 25
`
`
`
`
`
`
`
`
`
`
`1
`
`INTEREST OF AMICUS CURIAE1
`
`
`Intel Corporation is a global leader in the design and
`manufacture of semiconductor products, including hard-
`ware and software products for networking, telecommu-
`nications, cloud computing, artificial intelligence, auton-
`omous driving, and other applications. Intel’s chips
`power a large percentage of the world’s computers, from
`everyday desktops and laptops to the servers that form
`the backbone of the modern digital economy.
`Intel holds a substantial patent portfolio; it routinely
`places in the top ten annually in number of patents
`granted by the U.S. Patent and Trademark Office. Not
`surprisingly, Intel is frequently involved in patent liti-
`gation before the federal courts. While Intel has de-
`fended its innovations as a patent-litigation plaintiff in
`the past, over the last fifteen years Intel’s experience—
`like that of many technology companies—has increas-
`ingly been as a defendant in suits brought by sophisti-
`cated non-practicing entities seeking return on litiga-
`tion as a portfolio investment strategy. Intel has a sub-
`stantial interest in high-quality patents that promote
`social welfare and represent genuine inventions—and
`an equally strong interest in the efficient functioning of
`the inter partes review system, which Congress enacted
`
`
`1 Pursuant to Supreme Court Rule 37.6, counsel for amicus cu-
`riae state that no counsel for a party authored this brief in whole
`or in part, and no party or counsel for a party, or any other person
`other than amicus curiae or their counsel, made a monetary con-
`tribution intended to fund the preparation or submission of this
`brief. All parties have consented in writing to the filing of this
`brief.
`
`
`
`
`2
`
`precisely to address erroneously granted patents that
`hinder innovation and encourage abusive litigation.
`Intel’s experience with inter partes review confirms
`that it is an invaluable means of combating weak and
`overbroad patents, particularly those asserted by non-
`practicing entities. In light of the increasing offensive
`assertion of invalid patents by third parties who are
`strangers to their issuance, especially in areas of emerg-
`ing technology, Intel believes that inter partes review
`performs a critical function within the patent system.
`Should this Court hold that the administrative patent
`judges who adjudicate post-grant review proceedings
`are invalidly appointed, Intel has a particular interest
`in ensuring that the remedy implemented by this Court
`preserves the inter partes review system with minimal
`disruption.
`INTRODUCTION AND SUMMARY
`OF THE ARGUMENT
`
`
`In the Leahy-Smith America Invents Act, Pub. L. No.
`112-29, 125 Stat. 284 (2011), Congress empowered ad-
`ministrative patent judges employed by the Patent and
`Trademark Office (PTO) to conduct inter partes review
`proceedings, which provide a streamlined and inexpen-
`sive process for revisiting the agency’s initial patenta-
`bility determination. In the eight years since the inau-
`guration of the system, inter partes review has proven
`durably popular and highly effective. Inter partes re-
`view is also constitutional, because administrative pa-
`tent judges are inferior officers whose activities are di-
`rected and supervised by two presidentially appointed
`and Senate-confirmed officers, the Director of the PTO
`and the Secretary of Commerce. If the Court concludes
`
`
`
`
`3
`
`that administrative patent judges are inferior officers,
`however, it should take care to adopt a remedy that
`broadly preserves the post-issuance review system as
`Congress intended it to operate. The best way to do that
`is to ratify the narrow remedy adopted by the court be-
`low: severing the provisions of 35 U.S.C. 3(c) to the ex-
`tent they apply the tenure protections of Title 5 to ad-
`ministrative patent judges.
`I. Administrative patent judges are inferior officers.
`The Federal Circuit adopted an overly narrow reading
`of this Court’s Appointments Clause cases in holding
`that the Patent Trial and Appeal Board’s (PTAB) admin-
`istrative patent judges are principal officers. The essen-
`tial characteristic of an inferior officer is that her work
`is “directed and supervised at some level” by principal
`officers. Edmond v. United States, 520 U.S. 651, 663
`(1997). That is clearly the case here, where the Director
`exerts substantial control over administrative patent
`judges, including by dictating the composition of individ-
`ual panels of judges and controlling certain conditions
`of the judges’ employment.
`II. If this Court concludes that administrative patent
`judges are improperly appointed inferior officers, sever-
`ing their removal protections is the remedy that best
`honors congressional intent and preserves the orderly
`functioning of the inter partes review system.
`A. When a statute contains a constitutional flaw,
`courts apply a “strong presumption of severability.”
`Barr v. Am. Ass’n of Political Consultants, Inc., 140 S. Ct.
`2335, 2350 (2020). The preference for severance rather
`than invalidation of the statute avoids ahistorical spec-
`ulation about congressional preferences in favor of sal-
`vaging the duly enacted statute to the greatest extent
`
`
`
`
`
`4
`
`possible. Here, the court of appeals’ narrow remedy—
`severing administrative patent judges’ tenure protec-
`tions so that they are removable at-will—is the narrow-
`est remedy that is sufficient to cure any Appointments
`Clause violation by rendering administrative patent
`judges inferior officers (assuming they are not already).
`That remedy also best preserves the fundamental pur-
`pose of inter partes review, which is to provide a stream-
`lined and cost-effective forum for invalidating patents
`that issued improperly.
`B. Arthrex’s principal argument against the court of
`appeals’ severance remedy is that severing Title 5’s ten-
`ure protections will diminish the adjudicative independ-
`ence that is, in Arthrex’s view, “essential” to Congress’s
`purpose in creating inter partes review. Pet. for Cert.,
`Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1458 (U.S.
`filed June 30, 2020) 20, 24 (“Arthrex Pet.”). That argu-
`ment is incompatible with the statutory design, which
`already subjects administrative patent judges to signif-
`icant control by the Director. Limitations on the inde-
`pendence of administrative patent judges include, inter
`alia: removal protections that are weaker than those en-
`joyed by other administrative law judges; the Director’s
`plenary authority to select the judges that compose any
`given inter partes review panel; the Director’s right to
`expand panels to secure uniformity for Board decisions;
`and the Director’s power to control the pay of adminis-
`trative patent judges.
`These restraints on administrative patent judges’ in-
`dependence serve important congressional purposes,
`particularly avoiding inconsistent adjudications. More-
`over, the unique nature of inter partes review lessens
`concerns about undesirable political pressure on adjudi-
`cators. Unlike administrative enforcement proceedings,
`
`
`
`
`5
`
`inter partes review is an intra-agency error-correction
`mechanism. Any bias or political pressure in favor of
`the Executive’s prerogatives therefore would, if any-
`thing, favor patent owners who face losing the patent
`rights granted by the agency.
`III. The other remedial options proposed by Arthrex
`or considered by the court below are inferior to severing
`the administrative law judges’ removal protections. Ar-
`threx’s suggestion that the Court simply invalidate the
`inter partes review system and let Congress fix the prob-
`lem would throw the patent system into chaos and se-
`verely undermine the important error-correction role
`that inter partes review has served for the past eight
`years. Alternatively, granting the Director new author-
`ity to review and revise PTAB decisions once they issue
`is grossly incompatible with the statutory structure. It
`would also undermine the benefits of having multi-
`member panels of subject-matter experts decide inter
`partes reviews, in a context in which accurate fact-find-
`ing is a paramount consideration.
`ARGUMENT
`
`
`
`I.
`
`ADMINISTRATIVE PATENT JUDGES
`ARE INFERIOR OFFICERS.
`The Federal Circuit wrongly held that the PTAB’s
`administrative patent judges are principal officers
`whose appointments by a head of department are inva-
`lid under the Appointments Clause. U.S. Pet. App. 6a-
`22a. That Clause requires that principal officers be ap-
`pointed by the President and confirmed by the Senate,
`but permits “inferior Officers” to be appointed by “the
`
`
`
`
`
`6
`
`Heads of Departments.” U.S. Const. art. II, § 2, cl. 2; Ed-
`mond v. United States, 520 U.S. 651, 659 (1997). In Ed-
`mond, the Court explained that the essential character-
`istic of an inferior officer is that her “work is directed
`and supervised at some level by others who were ap-
`pointed by Presidential nomination with the advice and
`consent of the Senate.” 520 U.S. at 663.
`The court of appeals read Edmond as imposing a
`rigid requirement that an officer is inferior only if at
`least one of two conditions is satisfied: she is removable
`at will by another official, or her decisions are subject to
`direct review by principal officers. In fact, the Court in
`Edmond made clear that the determination whether
`particular officers are inferior depends on the cumula-
`tive effect of the various superior officers’ powers to su-
`perintend them. See id. at 664-665 (examining the sun-
`dry supervisory powers of the Coast Guard Judge Advo-
`cate General over the Coast Guard Court of Criminal
`Appeals). Subsequent decisions confirm that the infe-
`rior-officer inquiry is a pragmatic one that asks whether,
`in light of the statutory and regulatory scheme as a
`whole, the officer’s work is subject to meaningful super-
`vision by principal officers. E.g., Free Enter. Fund v. Pub.
`Co. Accounting Oversight Bd., 561 U.S. 477, 510 (2010)
`(members of the Public Company Accounting Oversight
`Board were inferior officers because the SEC had re-
`moval powers and “other oversight authority”).
`Viewed holistically, there is little question that the
`PTO’s administrative patent judges are “directed and
`supervised” by the Director of the PTO and, ultimately,
`by the Secretary of Commerce, both of whom are ap-
`pointed by the President and confirmed by the Senate.
`See 15 U.S.C. 1501; 35 U.S.C. 3(a). Although the PTAB’s
`
`
`
`
`
`7
`
`final written decisions are not reviewable by the Direc-
`tor or the Secretary, administrative patent judges are
`subject to substantial control by the Director, both with
`respect to the broad policies that the judges must apply
`in adjudicating individual cases, and with respect to the
`judges’ judicial assignments and certain conditions of
`their employment. See pp. 12-17, infra. Those features
`ensure that, to the extent that administrative patent
`judges’ decisions reflect policy judgments, those judg-
`ments are meaningfully supervised by the Director. In-
`tel therefore agrees with the United States’ argument
`that administrative patent judges are inferior officers
`whose appointment by the Secretary of Commerce com-
`ports with the Appointments Clause. U.S. Br. 16-45.
`II.
`IF THIS COURT CONCLUDES THAT AD-
`MINISTRATIVE PATENT JUDGES ARE
`IMPROPERLY APPOINTED, IT SHOULD
`SEVER THEIR REMOVAL PROTEC-
`TIONS.
`If the Court concludes that administrative patent
`judges’ appointments are invalid, it should adopt the
`remedy chosen by the court of appeals and narrowly ex-
`cise the limited statutory restrictions on removing ad-
`ministrative patent judges from federal service. That is
`the remedy most consistent with this Court’s severabil-
`ity principles, most faithful to Congress’s intent in en-
`acting the America Invents Act, and least disruptive to
`the inter partes review system as a whole. Arthrex’s con-
`trary argument—that Congress must have considered
`tenure protections essential to the inter partes review
`system—fails to account for the many ways in which ex-
`isting law enables the Director to exercise substantial
`control over administrative patent judges.
`
`
`
`
`
`8
`
`A.
`
`Severing the removal restrictions is con-
`sistent with this Court’s severability doc-
`trine and avoids disruption to the inter
`partes review system.
`1. This Court applies “a strong presumption of sev-
`erability.” Barr v. Am. Ass’n of Political Consultants, Inc.,
`140 S. Ct. 2335, 2350 (2020) (AAPC). “Generally speak-
`ing, when confronting a constitutional flaw in a statute,”
`courts try “to limit the solution to the problem,” prefer-
`ring “to sever its problematic portions while leaving the
`remainder intact.” Ayotte v. Planned Parenthood of N.
`New England, 546 U.S. 320, 328-329 (2006). Even when
`a statute contains no severability clause, “the presump-
`tion is in favor of severability,” Regan v. Time, Inc., 468
`U.S. 641, 653 (1984), unless it is evident that severing
`the unconstitutional provision would result in “a scheme
`sharply different from what Congress contemplated.”
`Murphy v. NCAA, 138 S. Ct. 1461, 1482 (2018).
`This categorical preference for “surgical severance”
`rather than “wholesale destruction” obviates the need to
`“imaginatively reconstruct a prior Congress’s hypothet-
`ical intent.” AAPC, 140 S. Ct. at 2350-2351. If this Court
`concludes that administrative patent judges’ appoint-
`ments are invalid, that defect would be the result of “a
`number of statutory provisions that, working together,
`produce a constitutional violation.” Free Enter. Fund,
`561 U.S. at 509. In such cases, the Court eschews “edi-
`torial freedom” or speculation about Congress’s prefer-
`ences, and instead chooses the narrowest severance op-
`tion that remedies the constitutional violation. Id. at
`509-510 (declining to “blue-pencil” a sufficient number
`of the Board’s responsibilities so that its members would
`
`
`
`
`
`9
`
`no longer be officers); see also Seila Law LLC v. Con-
`sumer Fin. Prot. Bureau, 140 S. Ct. 2183, 2210-2211
`(2020) (“We think it clear that Congress would prefer
`that we use a scalpel rather than a bulldozer in curing
`the constitutional defect we identify today.”).
`This Court should therefore decline Arthrex’s invita-
`tion (Pet. 16) to engage in ahistorical speculation about
`whether Congress was “more concerned about providing
`a potent new mechanism for canceling patents” or about
`“the impartiality of the adjudicative process through
`which those property rights may be revoked.” Rather,
`the Court’s task is to craft a minimally disruptive rem-
`edy to “salvage rather than destroy the rest of the law
`passed by Congress and signed by the President.”
`AAPC, 140 S. Ct. at 2350.
`2. The court of appeals correctly concluded that sev-
`erance of the removal protections applicable to adminis-
`trative patent judges is most consistent with the Court’s
`longstanding severability principles.
`a. The court of appeals chose a narrow remedy that
`does no violence to the Patent Act’s text and does not
`encroach on Congress’s legislative domain. Section 3(c)
`of the Patent Act provides that Title 5, which governs
`civil-service protections, applies to “Officers and employ-
`ees of the Office.” 35 U.S.C. 3(c). The court severed the
`application of that provision to administrative patent
`judges, with the result that administrative patent
`judges are no longer entitled to be removed “only for
`such cause as will promote the efficiency of the service,”
`5 U.S.C. 7513(a), but instead are removable at will. U.S.
`Pet. App. 28a. Although that remedy does not involve
`striking particular words from the statute, invalidating
`and severing a particular application of the statute is a
`
`
`
`
`
`10
`
`common remedy, even when the unconstitutional appli-
`cation does not correspond to a particular word in the
`statute. See, e.g., United States v. Grace, 461 U.S. 171,
`183-184 (1983).
`That remedy is sufficient to cure any Appointments
`Clause violation by rendering administrative patent
`judges inferior rather than principal officers. If this
`Court concludes that administrative patent judges are
`principal officers, that conclusion will likely reflect an
`assessment that the patent judges’ adjudication of post-
`grant review and other proceedings is not subject to suf-
`ficient supervision by other principal officers, including
`the Director. Rendering the judges removable at will en-
`sures that their work, including their adjudication of in-
`dividual cases, will be “directed and supervised” by the
`Director. Edmond, 520 U.S. at 663. Although the PTAB
`panel’s decisions will still represent the final decision of
`the agency, the Director’s already extensive authority to
`provide substantive input on legal and factual issues
`presented by PTAB proceedings, see pp. 12-17, infra,
`“coupled with the threat of removal,” ensures that PTAB
`decisions “will be constrained to a significant degree by
`a principal officer.” Intercollegiate Broad. Sys., Inc. v.
`Copyright Royalty Bd., 684 F.3d 1332, 1341 (D.C. Cir.
`2012).
`b. This Court and the courts of appeals have repeat-
`edly concluded that severing removal protections is a
`minimally disruptive means of curing the constitutional
`violation in question. In Free Enterprise Fund, for in-
`stance, after holding that the adjudicators at issue were
`inferior officers whose removal protections unconstitu-
`tionally insulated them from presidential control, the
`Court concluded that severing the relevant removal pro-
`
`
`
`
`
`11
`
`tections would be far less disruptive than “blue-pen-
`cil[ing]” the adjudicators’ various powers in order to turn
`them into employees rather than officers. 561 U.S. at
`509; see also Seila Law, 140 S. Ct. at 2210. And, in In-
`tercollegiate Broadcast System, the D.C. Circuit con-
`cluded that severing copyright royalty judges’ removal
`protections would cure their invalid appointments “with
`as little disruption as possible.” 684 F.3d at 1336-1337.
`Here, severing the administrative patent judges’ re-
`moval protections is consistent with the fundamental
`purpose of the America Invents Act, which is to “protect
`the public’s ‘paramount interest in seeing that patent
`monopolies * * * are kept within their legitimate scope.’”
`Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2144
`(2016) (quoting Precision Instrument Mfg. Co. v. Automo-
`tive Maintenance Machinery Co., 324 U.S. 806, 816
`(1945)). Congress effected this purpose not via a perfect
`simulacrum of “district court litigation,” but via a “hy-
`brid proceeding” designed to efficiently “reexamine an
`earlier agency decision.” Id.; see also H.R. Rep. No. 112-
`98, pt. 1, at 48 (2011), as reprinted in 2011 U.S.C.C.A.N.
`67 (stating that inter partes review provides “quick and
`cost effective alternatives to litigation” to “make the pa-
`tent system more efficient and improve the quality of
`patents and the patent system”). There is little reason
`to think the core statutory objective of providing an
`agency mechanism to resolve patent validity will be un-
`dermined if administrative patent judges are removable
`at will.
`Severance of the removal protections is also mini-
`mally disruptive to the orderly operation of the PTAB in
`the near term, at a time when hundreds of active inter
`partes review proceedings are pending before the
`
`
`
`
`
`12
`
`agency.2 The court of appeals’ remedy does not require
`reappointment of administrative patent judges before
`they can continue their work going forward. It does not
`require modifying the process for recruiting and ap-
`pointing administrative patent judges. And, in the
`event Congress decides to implement a different remedy
`for any constitutional infirmity that exists in the Amer-
`ica Invents Act, the narrow severance remedy allows the
`agency to continue functioning in the ordinary course
`until Congress enacts that alternative remedy.
`B.
`Eliminating tenure protections will not
`undermine congressional intent because
`Congress has already elected to cabin the
`independence of administrative patent
`judges.
`Arthrex’s primary argument against the court of ap-
`peals’ remedy is that Congress must have considered
`tenure protections “essential” to Congress’s “overarch-
`ing purpose” in creating inter partes review, which Ar-
`threx defines as providing for “independent and impar-
`tial adjudication” in inter partes review proceedings. Ar-
`threx Pet. 20, 24. That argument is belied by the fact
`that—by statutory design—administrative patent
`judges are already subject to substantial control by the
`Executive Branch and (before any remedy in this case)
`enjoy only limited protections against removal, even
`compared to other Article I adjudicators. Given the con-
`straints on independence that Congress has already im-
`posed on administrative patent judges, there is little
`
`2 See PTO, Trial Statistics: IPR, PGR, CBM (Sept. 2020) at 10,
`https://www.uspto.gov/sites/default/files/docu-
`available
`at
`ments/trial_statistics_20200930.pdf (last visited Nov. 23, 2020)
`(“PTO Trial Statistics”).
`
`
`
`
`13
`
`reason to think, as Arthrex argues, that Congress would
`have favored abandoning the inter partes review system
`wholesale over abrogating administrative patent
`judges’ removal protections. See Ayotte, 546 U.S. at 330
`(in remedying an unconstitutional statute the Court
`must ask whether “the legislature [would] have pre-
`ferred what is left of its statute to no statute at all”).
`1. Existing law gives the Director and the Secretary
`substantial control over administrative patent judges’
`performance of their duties and their conditions of em-
`ployment.
`First, the Secretary of Commerce currently may re-
`move administrative patent judges from government
`service “for such cause as will promote the efficiency of
`the service.” 5 U.S.C. 7513(a). That is the default Title
`5 provision that governs the removal of federal employ-
`ees generally. Under that generic standard, administra-
`tive patent judges may be disciplined or removed for
`“misconduct [that] is likely to have an adverse impact
`on the agency’s performance of its functions.” Brown v.
`Dep’t of the Navy, 229 F.3d 1356, 1358 (Fed. Cir. 2000).
`That would include failure to follow legitimate policy di-
`rectives and other reasons that have a nexus to the
`PTO’s mission. See Pet. for Cert., United States v. Ar-
`threx, Inc., No. 19-1434 (U.S. filed June 25, 2020) 19
`(“U.S. Pet.”). Administrative law judges, by contrast, are
`removable only under a more stringent “good cause”
`standard. 5 U.S.C. 7521. The Merit Systems Protection
`Board has consistently recognized that administrative
`law judges are substantively different from, and more
`insulated from removal than, federal employees subject
`to the efficiency-of-the-service standard. See, e.g., Social
`Sec. Admin. v. Long, 113 M.S.P.R. 190, 196 (2010), aff’d,
`635 F.3d 526 (Fed. Cir. 2011).
`
`
`
`
`14
`
`Second, the Director has plenary authority to desig-
`nate the members of the Board that compose any given
`three-member inter partes review panel. See 35 U.S.C.
`6(c). The Director may exclude a judge from any panel
`for any reason, including for reasons that could be char-
`acterized as encroaching on the independence of the ad-
`ministrative patent judges, such as the Director’s as-
`sessment of how a particular judge might adjudicate a
`case or issue. Indeed, the Director could exercise her
`discretion to accomplish the de facto removal of an ad-
`ministrative patent judge by refusing ever to assign her
`to any panel. See generally U.S. Pet.
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