`
`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.
`
`
`
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
`APPEALS FOR THE FEDERAL CIRCUIT
`
`
`
`
`
`
`AMICUS CURIAE BRIEF OF ECOMP CONSULTANTS
`IN SUPPORT OF PETITIONER
`
`
`
`
`
`
`
`CHARLES R. MACEDO
`Counsel of Record
`DAVID P. GOLDBERG
`CHANDLER E. STURM
`AMSTER, ROTHSTEIN & EBENSTEIN LLP
`90 Park Avenue
`New York, NY 10016
`(212) 336-8000
`cmacedo@arelaw.com
`
`
`Counsel for Amicus Curiae
`eComp Consultants
`
`
`December 2, 2020
`________________________________________________ _
`
`
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`
` i
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`
`QUESTIONS PRESENTED
`
`1. Whether, for purposes of the Appointments
`Clause, U.S. CONST. art. II, § 2, cl. 2, administrative
`patent judges of the U.S. Patent and Trademark
`Office are principal officers who must be appointed by
`the President with the Senate’s advice and consent, or
`“inferior Officers” whose appointment Congress has
`permissibly vested in a department head.
`
`2. Whether, if administrative patent judges are
`principal officers, the court of appeals properly cured
`any Appointments Clause defect in the current
`statutory scheme prospectively by severing the
`application of 5 U.S.C. § 7513(a) to those judges.
`
`
`
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`
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`
`
`ii
`
`
`TABLE OF CONTENTS
`
`QUESTIONS PRESENTED ........................................ i
`
`TABLE OF CONTENTS ............................................. ii
`
`TABLE OF AUTHORITIES ...................................... iii
`
`INTEREST OF AMICUS CURIAE ............................ 1
`
`SUMMARY OF ARGUMENTS .................................. 2
`
`ARGUMENT ............................................................... 5
`
`I. This Court’s Precedents, Relied upon by the
`Federal Circuit Panel, Establish That APJs
`Are Inferior Officers ......................................... 7
`
`II. The Federal Circuit Panel Misapplied This
`Court’s Decision in Edmond v. United
`States ................................................................ 8
`
`III. The Secretary of Commerce and Director
`of the PTO Have Substantial Directorial
`and Supervisory Powers over APJs ................. 9
`
`IV. Congress Made the Deliberate Decision to
`Make APJs Inferior Officers .......................... 14
`
`CONCLUSION .......................................................... 15
`
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`iii
`
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`
`
`CASES
`
`In re Alappat,
`33 F.3d 1526 (Fed. Cir. 1994) .............................. 13
`
`Arthrex, Inc. v. Smith & Nephew, Inc.,
`No. 18-2140 (Fed. Cir. Oct. 31, 2019) ................... 2
`
`BioDelivery Scis. Int’l, Inc. v. Aquestive
`Therapeutics Inc.,
`935 F.3d 1362 (Fed. Cir. 2019), cert.
`denied, No. 19-1381, 2020 U.S.
`LEXIS 3907 (U.S. Oct. 5, 2020) .......................... 11
`
`Buckley v. Valeo,
`424 U.S. 1 (1976) ............................................... 3, 6
`
`Edmond v. United States,
`520 U.S. 651 (1997) ...................................... passim
`
`Free Enter. Fund v. Pub. Co.
`Accounting Oversight Bd.,
`561 U.S. 477 (2010) ......................................... 7, 13
`
`Freytag v. Commissioner,
`501 U.S. 868 (1991) ........................................... 7, 8
`
`Ex parte Hennen,
`38 U.S. 230 (1839) ................................................. 7
`
`
`
`
`
`
`
`
`
`
`
`iv
`
`
`
`Lucia v. SEC,
`138 S. Ct. 2044 (2018) ........................................... 7
`
`Morrison v. Olson,
`487 U.S. 654 (1988) ............................................... 7
`
`Myers v. United States,
`272 U.S. 52 (1926) ................................................. 7
`
`Nidec Motor Corp. v. Zhongshan Broad
`Ocean Motor Co. Ltd.,
`868 F.3d 1013 (Fed. Cir. 2017), cert.
`denied, 138 S. Ct. 1695 (2018) ............................ 13
`
`Oil States Energy Servs., LLC v.
`Greene’s Energy Grp. LLC,
`138 S. Ct. 1365 (2018) .......................... 9, 11, 12, 13
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) ............................ 10
`
`Seila Law LLC v. Consumer Fin. Prot.
`Bureau,
`140 S. Ct. 2183 (2020) ........................................... 8
`
`Thryv, Inc. v. Click-to-Call Techs., LP,
`140 S. Ct. 1367 (2020) ......................................... 11
`
`United States v. Arthrex, Inc.,
`No. 19-1434 (U.S. filed June 25,
`2020) ................................................................... 4, 9
`
`United States v. Arthrex, Inc.,
`No. 19-1434, 19-1452, 19-1458 (U.S.
`filed Nov. 25, 2020) ............................................ 4, 9
`
`
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`
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`
`
`
` v
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`STATUTES
`
`5 U.S.C. § 7513(a) ..................................................... 13
`
`15 U.S.C. § 1501 .......................................................... 9
`
`35 U.S.C. § 1(a) ..................................................... 9, 10
`
`35 U.S.C. § 2(a) ......................................................... 10
`
`35 U.S.C. § 3(a) ........................................................... 9
`
`35 U.S.C. § 3(a)(1) ..................................................... 10
`
`35 U.S.C. § 3(a)(2)(A) ................................................ 10
`
`35 U.S.C. § 3(a)(4) ..................................................... 10
`
`35 U.S.C. § 3(b)(6) ................................................. 9, 10
`
`35 U.S.C. § 3(c) .......................................................... 13
`
`35 U.S.C. § 314 .......................................................... 11
`
`35 U.S.C. § 316(a) ..................................................... 10
`
`35 U.S.C. § 6(a) .......................................... 9, 10, 13, 15
`
`35 U.S.C. § 6(c) ............................................... 11, 12, 13
`
`Patent and Trademark Administrative
`Judges Appointment Authority
`Revision, Pub. L. No. 110-313, sec. 1,
`§ 6, 122 Stat. 3014 (2008) ............................... 14-15
`
`Leahy-Smith America Invents Act, Pub.
`L. No. 112-29, 125 Stat. 284 (2011) ...................... 6
`
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`vi
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`RULES
`
`Sup. Ct. R. 37.3 ........................................................... 1
`
`Sup. Ct. R. 37.6 ........................................................... 1
`
`OTHER AUTHORITIES
`
`U.S. Const., Article III .............................................. 10
`
`Appointments Clause, U.S. CONST. art.
`II, § 2, cl. 2 ......................................................... 2, 6
`
`77 Fed. Reg. 48612 (Aug. 14, 2012) .......................... 11
`
`77 Fed. Reg. 48756 (Aug. 14, 2012) .......................... 11
`
`83 Fed. Reg. 51340 (Oct. 11, 2018) ........................... 10
`
`84 Fed. Reg. 9497 (Mar. 15, 2019)............................ 10
`
`2019 Revised Patent Subject Matter
`Eligibility Guidance, 84 Fed. Reg. 50
`(Jan. 7, 2019) ....................................................... 12
`
`Consolidated Trial Practice Guide (Nov.
`2019),
`https://www.uspto.gov/sites/default/fi
`les/documents/tpgnov.pdf?MURL=
`(last visited Nov. 30, 2020) .................................. 11
`
`John F. Duffy, Are Administrative
`Patent Judges Constitutional?, 2007
`PATENTLY-O PATENT L.J. 21 (2007) ..................... 14
`
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`vii
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`
`
`Patent Trial and Appeal Board
`Standard Operating Procedure 2
`(Revision 10) (SOP 2),
`https://www.uspto.gov/sites/default/fi
`les/documents/SOP2%20R10%20FIN
`AL.pdf (last visited Nov. 13, 2020) ..................... 12
`
`Request for Comments on Discretion To
`Institute Trials Before the Patent
`Trial and Appeal Board, 85 Fed. Reg.
`66502 (Oct. 20, 2020) ........................................... 11
`
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` 1
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`INTEREST OF AMICUS CURIAE
`
`Amicus Curiae eComp Consultants (“eComp”)
`respectfully submits this amicus curiae brief in
`support of petitioner.1
`
`firm
`technology consulting
`is a
`eComp
`providing professional services in the areas of
`internet,
`telecommunications, and
`information
`technology, as well as intellectual property (“IP”)
`consulting and litigation support. eComp consists of a
`collaborative staff of senior industry experts and
`executives who provide technology research, expert
`reports, deposition, and trial testimony, including in
`various proceedings before the Patent Trial and
`Appeal Board (“PTAB”) of the U.S. Patent and
`Trademark Office (“PTO”). eComp specializes in
`advising attorneys and their clients on the technical
`aspects of patent
`infringement and portfolio
`valuation. eComp therefore has a vested interest in
`protecting the value of intellectual property and
`
`
`1 Pursuant to Sup. Ct. R. 37.6, eComp states that no
`counsel for a party authored this brief in whole or in
`part, and no counsel or party made a monetary
`contribution intended to fund the preparation or
`submission of this brief. No person other than eComp,
`its members, or its counsel made a monetary
`contribution to
`its preparation or submission.
`Pursuant to Sup. Ct. R. 37.3(a), eComp states that all
`of the parties have consented in writing to the filing of
`the brief.
`
`
`
`
`
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` 2
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`
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`
`
`ensuring that patent law is forward looking and
`promotes innovation in all areas.
`
`eComp actively participates as an expert,
`serving
`both
`patent
`owners
`and
`accused
`infringers/petitioners, in inter partes review (“IPR”)
`and other post-issuance proceedings before PTAB, and
`other patent infringement litigations in other courts.
`For example, eComp has been retained to provide
`expert testimony in over 60 PTAB proceedings,
`including over 50 IPRs and 11 CBMs. eComp
`represented Patent Owners in 40 proceedings and
`Petitioners in 24 proceedings. eComp thus brings an
`informed perspective of various stakeholders to the
`issues presented. eComp, its staff, and its clients
`share a strong interest in the issues presented in this
`case.
`
`SUMMARY OF ARGUMENTS
`
`On October 31, 2019, a three-judge panel of the
`U.S. Court of Appeals for the Federal Circuit (“Federal
`Circuit”) in Arthrex, Inc. v. Smith & Nephew, Inc., No.
`18-2140 (Fed. Cir. Oct. 31, 2019) (Pet. App. A2,
`“Arthrex I”) declared that administrative patent
`judges (“APJs”) of the Patent Trial and Appeal Board
`are “principal” officers under the Patent Act (Title 35),
`as currently constituted. Therefore, the Federal
`Circuit held that APJs were appointed in violation of
`the Appointments Clause of the U.S. Constitution,
`U.S. CONST. art. II, § 2, cl. 2, since they were not
`appointed by the President, with the advice and
`
`
`2 Citations to Appendix A of the United States’
`Petition for a Writ of Certiorari are designated “Pet.
`App.”.
`
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` 3
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`consent of the Senate, but instead were appointed by
`the Secretary of Commerce in consultation with the
`Director of the PTO. See Pet. App. at 1a–2a.
`
`However, for at least the following reasons,
`eComp respectfully submits that this Court should
`reverse the decision of the Federal Circuit and confirm
`that APJs of the PTAB are merely inferior officers of
`the U.S. and were,
`therefore, constitutionally
`appointed.
`
`I. This Court’s precedent, relied upon by the
`Federal Circuit panel, has repeatedly held that the
`officers in question were inferior officers.
`
`This Court’s precedent makes clear, and there
`is no dispute, that PTAB APJs are “officers” of the U.S.
`because they “exercise[e] significant authority.”
`Buckley v. Valeo, 424 U.S. 1, 125-26 (1976). However,
`none of the decisions of this Court relied upon by the
`Federal Circuit panel
`in Arthrex I found an
`administrative judge to be a “principal” officer.
`Rather, each of the cases,
`in what could be
`characterized as analogous statutory frameworks,
`concluded that the official in question was an
`“inferior” officer.
`
`II. The Federal Circuit panel misapplied this
`Court’s decision in Edmond v. United States, 520 U.S.
`651 (1997).
`
`This Court has recognized that an “inferior”
`officer is characterized as an “officer[] 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. While
`
`
`
`
`
`
`
`
`
` 4
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`
`
`this Court has “not set forth an exclusive criterion for
`distinguishing between principal and inferior officers
`for Appointment Clause purposes,”id. at 661, Arthrex
`I distilled the facts from Edmond to evaluate three
`factors to be tallied and mechanically applied, Pet.
`App. at 9a, finding the remainder to be not applicable,
`id. at 20a. The Federal Circuit erred. An official’s
`status as a principal or inferior officer should turn on
`“whether, when all of the existing control mechanisms
`are considered together, the officer’s ‘work is directed
`and supervised’ by superiors to a sufficient degree.”
`Pet. for Cert. at 23, United States v. Arthrex, Inc., No.
`19-1434 (U.S. filed June 25, 2020) (quoting Edmond,
`520 U.S. at 663) (emphasis added); see also Brief for
`the United States at 33-35, United States v. Arthrex,
`Inc., No. 19-1434, 19-1452, 19-1458 (U.S. filed Nov. 25,
`2020); Opening Brief of Smith & Nephew, Inc. and
`Arthrocare Corp. at 30-33, United States v. Arthrex,
`Inc., No. 19-1434, 19-1452, 19-1458 (U.S. filed Nov. 25,
`2020).
`
`III. The Secretary of Commerce and Director of
`the PTO have substantial directorial and supervisory
`powers over APJs.
`
`Although the Federal Circuit panel properly
`noted that the Director of the PTO “exercises a broad
`policy-direction and supervisory authority over the
`APJs” (Pet. App. at 14a), the panel’s analysis failed to
`give due weight to the directorial and supervisory
`powers the Secretary and Director—both of whom are
`principal officers—have over the PTAB APJs.
`
`IV. Congress made the deliberate decision to
`make APJs inferior officers.
`
`
`
`
`
`
`
`
`
` 5
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`
`
`There is no dispute that Congress properly set
`forth a procedure under Section 6 of the Patent Act to
`have enumerated superior officers appoint PTAB
`APJs assuming that PTAB APJs are inferior officers.
`
`In view of the arguments presented, eComp
`respectfully submits that the Federal Circuit panel
`erred in characterizing APJs as “principal” officers, as
`it is clear, based on this Court’s precedent, the
`direction and supervision of the Secretary of
`Commerce and Director, and congressional intent,
`that APJs are, indeed, inferior officers. Thus, the
`appointment of APJs was not in violation of the
`Appointments Clause, and the second question
`presented does not need to be addressed by this Court.
`
`ARGUMENT
`
`On October 31, 2019, in Arthrex I, a three-judge
`panel of the U.S. Court of Appeals for the Federal
`Circuit declared that the Patent Act “as currently
`constructed makes the APJs principal officers” who
`were appointed in violation of the Appointments
`Clause of the U.S. Constitution, which states:
`
`[The President] shall have Power, by
`and with the Advice and Consent of the
`Senate, to make Treaties, provided two
`thirds of the Senators present concur;
`and he shall nominate, and by and with
`the Advice and Consent of the Senate,
`shall appoint Ambassadors, other
`public Ministers and Consuls, Judges
`of the supreme Court, and all other
`Officers of the United States, whose
`Appointments are not herein otherwise
`
`
`
`
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` 6
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`
`provided for, and which shall be
`established by Law: but the Congress
`may by Law vest the Appointment of
`such inferior Officers, as they think
`proper, in the President alone, in the
`Court of Law, or in the Heads of
`Departments.
`
`U.S. CONST. art. II, § 2, cl. 2; see also Pet. App.
`at 1a–2a.
`
`There is no dispute that PTAB APJs “exercise
`significant authority rendering them Officers of the
`United States.” Pet. App. at 8a; Buckley, 424 U.S. at
`125-26 (“We think it’s fair import is that any
`appointee exercising significant authority pursuant to
`the laws of the United States is an ‘Officer of the
`United States.’”); see also Edmond, 520 U.S. at 662
`(“The exercise of ‘significant authority pursuant to the
`laws of the United States’ marks, not the line between
`principal and inferior officer for Appointments Clause
`purposes, but rather, as we said in Buckley, the line
`between officer and non-officer.”).
`
`The issue is whether APJs are “principal”
`officers, requiring appointment by the President with
`the advice and consent of the Senate, or “inferior”
`officers, who may be appointed by the Secretary of
`Commerce in accordance with the America Invents
`Act (“AIA”), a law passed by Congress. Leahy-Smith
`America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
`(2011).
`
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` 7
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`
`
`This Court’s Precedents, Relied upon by the
`I.
`Federal Circuit Panel, Establish That APJs Are
`Inferior Officers
`
`This Court has addressed the characterization
`of “officers” on multiple occasions. Significantly, while
`each of this Court’s cases on which the Federal Circuit
`panel relied supported the proposition that APJs are
`“officers” of the United States, every single one of
`those cases, in what could be characterized as
`analogous statutory frameworks, concluded that the
`officers in question were inferior officers. See Lucia v.
`SEC, 138 S. Ct. 2044 (2018) (SEC Administrative Law
`Judges are inferior officers); Free Enter. Fund v. Pub.
`Co. Accounting Oversight Bd., 561 U.S. 477 (2010)
`(Public Company Accounting Oversight Board
`members are inferior officers); Edmond, 520 U.S. 651
`(judges of the Coast Guard Court of Criminal Appeal
`are inferior officers); Freytag v. Commissioner, 501
`U.S. 868 (1991) (Special Trial Judges for the Tax
`Court are inferior officers); Morrison v. Olson, 487
`U.S. 654 (1988) (independent counsel created by
`provisions of the Ethics in Government Act of 1978 are
`inferior officers); Myers v. United States, 272 U.S. 52
`(1926) (post-master first class is an inferior officer); Ex
`parte Hennen, 38 U.S. 230 (1839) (clerks of district
`courts are inferior officers).
`
`This Court has always recognized that first-line
`administrative adjudicators, even
`though
`they
`exercise significant federal authority, are inferior
`officers because they are under direction and
`supervision of a principal officer. See Lucia, 138 S. Ct.
`at 2054 (administrative law judges of the Securities
`and Exchange Commission are inferior officers,
`
`
`
`
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` 8
`
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`
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`despite their “last-word capacity”); Freytag, 501 U.S.
`at 881-82 (special trial judges of the U.S. Tax Court
`are inferior officers, even though they may render
`final decisions in certain cases).
`
`The Federal Circuit Panel Misapplied This
`II.
`Court’s Decision in Edmond v. United States
`
`This Court has recognized that there is no
`“exclusive criterion
`for distinguishing between
`principal and inferior officers for Appointment Clause
`purposes.” Edmond, 520 U.S. at 661.
`
`The panel’s analysis misses the key point of
`Edmond. This Court did not create a pre-determined
`list of factors that could simply be tallied and weighed
`in all future cases. Rather, this Court has made it
`clear that “whether one is an ‘inferior’ officer depends
`on whether he has a superior.” Edmond, 520 U.S. at
`662. Although this Court has “not set forth an
`exclusive
`criterion
`for distinguishing between
`principal and
`inferior officers,” the Court has
`examined factors “such as the nature, scope, and
`duration of an officer’s duties.” Seila Law LLC v.
`Consumer Fin. Prot. Bureau, 140 S. Ct. 2183, 2199 n.3
`(2020).
`
`While the Federal Circuit panel correctly
`acknowledged such precedent, it nevertheless plucked
`from Edmond three factors to evaluate that it found
`applicable: “(1) whether an appointed official has the
`power to review and reverse the officers’ decisions; (2)
`the level of supervision and oversight an appointed
`official has over the officers; and (3) the appointed
`official’s power to remove the officers.” Pet. App. at 9a.
`(citing Edmond, 520 U.S. at 664–65). In a quantitative
`
`
`
`
`
`
`
`
`
` 9
`
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`
`
`fashion, the panel ruled that APJs were principal
`officers after deciding that two of these factors
`weighed in favor of APJs being found principal
`officers, while only one factor weighed in favor of APJs
`being found inferior officers. Pet. App. at 22a.
`
`The Federal Circuit panel’s narrowing analysis
`of Edmond, and its rigid and mechanical application
`of a balancing test based on those factors selected, is
`incorrect. Instead, the determination of an “inferior”
`officer should turn on “whether, when all of the
`existing control mechanisms are considered together,
`the officer’s ‘work is directed and supervised’ by
`superiors to a sufficient degree.” Pet. for Cert. at 23,
`United States v. Arthrex, Inc., No. 19-1434 (U.S. filed
`June 25, 2020) (quoting Edmond, 520 U.S. at 663)
`(emphasis added); see also Brief for the United States
`at 33-35, United States v. Arthrex, Inc., No. 19-1434,
`19-1452, 19-1458 (U.S. filed Nov. 25, 2020); Opening
`Brief of Smith & Nephew, Inc. and Arthrocare Corp.
`at 30-33, United States v. Arthrex, Inc., No. 19-1434,
`19-1452, 19-1458 (U.S. filed Nov. 25, 2020).
`
`III. The Secretary of Commerce and Director of the
`PTO Have Substantial Directorial and Supervisory
`Powers over APJs
`
`The Secretary of Commerce and the Director of
`the PTO—both of whom are principal officers
`appointed by the President and confirmed by the
`Senate (see 15 U.S.C. § 1501; 35 U.S.C. § 3(a))—have
`substantial supervisory authority over PTAB APJs
`and their work. See 35 U.S.C. §§ 1(a), 3(b)(6), 6(a); Oil
`States Energy Servs., LLC v. Greene’s Energy Grp.
`LLC, 138 S. Ct. 1365, 1380–81 (2018) (Gorsuch, J.,
`
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`10
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`
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`dissenting) (“The Director of the Patent Office is a
`political appointee who serves at the pleasure of the
`President. 35 U.S.C. § 3(a)(1), (a)(4). He supervises
`and pays the Board members responsible for deciding
`patent disputes. §§ 1(a), 3(b)(6), 6(a).”).
`
`To begin with, the PTO, which includes the
`PTAB, is in general “subject to the policy direction of
`the Secretary of Commerce.” 35 U.S.C. § 2(a). In turn,
`the Director is “responsible for providing policy
`direction and management supervision for the [PTO]”
`(35 U.S.C. § 3(a)(2)(A)), which, again, includes the
`PTAB.
`
`In relation to IPR proceedings, the Director
`“shall prescribe regulations” governing substantive
`and procedural conduct of IPRs, by which the PTAB
`APJs must abide. 35 U.S.C. § 316(a). Indeed, the
`Director not only exercised the power to prescribe
`regulations when the PTAB was first established
`under the AIA, but has also since continued to exercise
`this power in changing those regulations by, for
`example:
`
`• Instituting a pilot program concerning motions
`to amend in PTAB proceedings and related trial
`procedure. 84 Fed. Reg. 9497 (Mar. 15, 2019);
`the
`broadest
`reasonable
`• Replacing
`interpretation claim construction standard
`with the standard used by Article III federal
`courts—the standard applied in Phillips v.
`AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005). 83
`Fed. Reg. 51340 (Oct. 11, 2018);
`• Updating trial practice guide with guidance on
`the timelines, procedures, and trial practice for
`
`
`
`
`
`
`
`
`
`11
`
`
`
`post-issuance patent challenges, originally
`issued as 77 Fed. Reg. 48612 (Aug. 14, 2012), 77
`Fed. Reg. 48756
`(Aug. 14, 2012). See
`Consolidated Trial Practice Guide (Nov. 2019)
`https://www.uspto.gov/sites/default/files/docum
`ents/tpgnov.pdf?MURL= (last visited Nov. 30,
`2020).
`for
`• Most recently, promulgating requests
`comments to codify in the Code of Federal
`Regulations
`its
`current
`policies
`on
`discretionary denials in parallel litigations and
`parallel serial proceedings. See Request for
`Comments on Discretion To Institute Trials
`Before the Patent Trial and Appeal Board, 85
`Fed. Reg. 66502 (Oct. 20, 2020).
`
`In addition, the Director (not the PTAB APJs,
`to whom he delegates his authority) has the
`unfettered authority to determine whether to institute
`an IPR proceeding. 35 U.S.C. § 314; see Thryv, Inc. v.
`Click-to-Call Techs., LP, 140 S. Ct. 1367 (2020). The
`Director’s complete authority extends beyond the
`institution decision and can be exercised to terminate
`a proceeding before a final written decision is reached,
`or on remand after a final written decision is reversed.
`See BioDelivery Scis. Int’l, Inc. v. Aquestive
`Therapeutics Inc., 935 F.3d 1362, 1366 (Fed. Cir.
`2019), cert. denied, No. 19-1381, 2020 U.S. LEXIS
`3907 (U.S. Oct. 5, 2020).
`
`“The Director is allowed to select which of these
`members, and how many of them, will hear any
`particular patent challenge. See § 6(c).” Oil States, 138
`S. Ct. at 1381 (Gorsuch, J., dissenting). If properly
`motivated, the Director could cease assigning cases to
`
`
`
`
`
`
`
`
`
`12
`
`
`
`a particular APJ, turning that APJ into a ghost judge.
`Except for their right to a salary, it would be the same
`as terminating their employment.
`
`Further, while PTAB APJs may participate in
`panels of three (which the Director controls and
`designates, see 35 U.S.C. § 6(c)) and issue orders in a
`particular proceeding that govern the parties to that
`proceeding, they have no ability to set policy for the
`PTO, or even designate a decision as precedential or
`informative “without the approval of the Director.”
`Patent Trial and Appeal Board Standard Operating
`Procedure 2 (Revision 10) (SOP 2) at 1, 10–11,
`https://www.uspto.gov/sites/default/files/documents/S
`OP2%20R10%20FINAL.pdf (last visited Nov. 13,
`2020). Therefore, without the approval of the Director,
`an APJ may not “render a final decision on behalf of
`the United States unless permitted to do so.” Edmond,
`520 U.S. at 665.
`
`The Director also has the authority to issue
`binding guidance on the Board, and has in fact done
`so, for example, in issuing subject matter eligibility
`guidance. Oil States, 138 S. Ct. at 1381 (Gorsuch, J.,
`dissenting) (“Nor has the Director proven bashful
`about asserting these statutory powers to secure the
`‘policy judgments’ he seeks.”); see also, e.g., 2019
`Revised Patent Subject Matter Eligibility Guidance,
`84 Fed. Reg. 50, 51 (Jan. 7, 2019) (stating that all PTO
`personnel “are, as a matter of internal agency
`management, expected to follow the guidance”).
`
`In addition to the authority to define agency
`policy and guidance which binds PTAB APJs, the
`Secretary and the Director are authorized to select,
`
`
`
`
`
`
`
`
`
`13
`
`
`
`appoint and remove the PTAB APJs. The Patent Act
`provides that PTAB APJs are “appointed by the
`Secretary, in consultation with the Director,” 35
`U.S.C. § 6(a), in a manner consistent with other
`“inferior officers.”3 The Secretary also has the
`authority to remove PTAB APJs from federal service
`“for such cause as will promote the efficiency of the
`service.” 5 U.S.C. § 7513(a); 35 U.S.C. § 3(c) (making
`USPTO “[o]fficers and employees … subject to the
`provisions of title 5, relating to Federal employees”);
`see also Free Enter. Fund, 561 U.S. at 509 (“Under the
`traditional default rule, removal is incident to the
`power of appointment.”). While this removal is
`generally considered “for cause,” as noted by the panel
`in Arthrex I, the failure or refusal to follow binding
`agency policy or guidance would be an example of such
`“cause.” Thus, in effect, the Director can set policy and
`guidance which, if not followed, can be a reason for the
`removal of a PTAB APJ, even without severing Title 5
`protection.
`
`Indeed, if the PTAB APJs sitting on a
`particular panel “reach a result he does not like, the
`Director can add more members to the panel—
`including himself—and order the case reheard.” Oil
`States, 138 S. Ct. at 1381 (Gorsuch, J., dissenting)
`(citing 35 U.S.C. § 6(a), (c); In re Alappat, 33 F.3d
`1526, 1535 (Fed. Cir. 1994) (en banc); Nidec Motor
`
`
`3 Section 6 was modified in 2011 as part of the AIA
`when the Board of Patent Appeals and Interferences
`was reconstituted into the PTAB. Thus, as is
`discussed infra in Section IV, the constitutional “fix”
`adopted in response to a 2007 article was again
`ratified by the amendments.
`
`
`
`
`
`
`
`
`
`14
`
`
`
`Corp. v. Zhongshan Broad Ocean Motor Co. Ltd., 868
`F.3d 1013, 1020 (Fed. Cir. 2017) (Dyk, J., concurring),
`cert. denied, 138 S. Ct. 1695 (Apr. 30, 2018)).
`
`Given the Director’s power to define and enforce
`such binding agency policy and guidance, and ability
`to out-vote any particular APJ, the Director’s power
`over an PTAB APJ is sufficiently substantial to meet
`this Court’s test. See, e.g., Edmond, 520 U.S. at 664-
`66 (intermediate appellate military judges are inferior
`officers “by reason of [their] supervision” as the Judge
`Advocate General has the power to “determine [the
`court’s] procedural rules, to remove any judge without
`cause, and to order any decision submitted for
`review.”).
`
`IV. Congress Made the Deliberate Decision to
`Make APJs Inferior Officers
`
`Congress properly established a procedure
`under Section 6 of the Patent Act to appoint PTAB
`APJs assuming, as Congress and everyone else did,
`that PTAB APJs are inferior officers.
`
`After the appointment issue was first raised in
`a 2007 article by Professor Duffy, with respect to APJs
`of the Board of Patent Appeals and Interferences
`(“BPAI”, the predecessor of the PTAB), Congress
`sought to resolve the issue by treating such APJs as
`inferior officers, as opposed to mere employees, and
`established an appropriate appointment procedure.
`See John F. Duffy, Are Administrative Patent Judges
`Constitutional?, 2007 PATENTLY-O PATENT L.J. 21
`(2007); see also Patent
`and
`Trademark
`Administrative Judges Appointment Authority
`
`
`
`
`
`
`
`
`
`15
`
`
`
`Revision, Pub. L. No. 110-313, sec. 1, § 6, 122 Stat.
`3014, 3014 (2008) (codified as amended at 35 U.S.C. §
`6(a) (2012) (providing for appointments of APJs by the
`“Secretary [of Commerce], in consultation with the
`Director” instead of solely by the Director).
`
`This choice made by Congress to treat APJs as
`inferior officers, and require their appointment by the
`Head of Department, was reaffirmed when Section 6
`was amended in 2011, to replace the BPAI with the
`newly constituted PTAB.
`
`Thus, the fact Congress expressly changed the
`method of appointment of PTAB APJs to be consistent
`with inferior officers in response to the objection
`raised by Professor Duffy, and then ratified that
`change three years later in the AIA, reflects a clear
`congressional intent that PTAB APJs should be
`considered inferior officers.
`
`CONCLUSION
`
`In short, eComp respectfully submits that the
`Federal Circuit panel below erred in rigidly applying
`the three factors it plucked from Edmond, in addition
`to improperly evaluating whether PTAB APJs’ work
`is sufficiently “directed and supervised” by principal
`officers. Instead, in view of Congress’s intent and
`when all of the existing control mechanisms are
`considered together, it is clear that the work of APJs
`is sufficiently directed and supervised by superior
`officers to characterize them as inferior officers.
`Moreover, the sum of its parts, rather than the
`Federal Circuit’s dissection of the parts of the sum
`total of supervision and authority over the APJs,
`properly informs the inferior/principal officer analysis
`
`
`
`
`
`
`
`
`
`16
`
`
`
`and yields the conclusion that PTAB APJs are inferior
`officers. Therefore, the appointment of such APJs was
`not
`in violation of
`the U.S. Constitution’s
`Appointments Clause, and the second question
`presented does not need to be addressed.
`
`In view of the foregoing, eComp respectfully
`submits that this Court should reverse the Court of
`Appeals for the Federal Circuit’s holding that
`administrative patent
`judges of the PTAB are
`“principal” officers.
`
`Respectfully submitted,
`
`CHARLES R. MACEDO
`Counsel of Record
`DAVID P. GOLDBERG
`CHANDLER E. STURM
` AMSTER, ROTHSTEIN &
`EBENSTEIN LLP
`90 Park Avenue
`New York, NY 10016
`(212) 336-8000
`cmacedo@arelaw.com
`
`Counsel for Amicus Curiae
`eComp Consultants
`
`
`
`
`
`
`
`
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