`
`Nos. 19-1434, 19-1452, and 19-1458
`In the Supreme Court of the United States
`UNITED STATES OF AMERICA,
`Petitioner,
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`
`v.
`ARTHREX, INC., ET AL.,
`Respondents.
`SMITH & NEPHEW, INC., ET AL.,
`Petitioners,
`
`v.
`ARTHREX, INC., ET AL.
` Respondents.
`ARTHREX, INC.,
`
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`
`
`Petitioner,
`
`v.
`SMITH & NEPHEW, INC., ET AL.
` Respondents.
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`
`
`On Writ of Certiorari
`to the United States Court of Appeals
`for the Federal Circuit
`BRIEF FOR THE CATO INSTITUTE AND
`PROF. GREGORY DOLIN AS AMICI CURIAE
`SUPPORTING RESPONDENTS
`GREGORY DOLIN
`ILYA SHAPIRO
`UNIVERSITY OF BALTIMORE
`Counsel of Record
`
`SCHOOL OF LAW
`CATO INSTITUTE
`1420 N. Charles St.
`1000 Mass. Ave. N.W.
`Baltimore, MD 21201
`Washington, D.C. 20001
`(202) 842-0200
`
`ishapiro@cato.org
`December 30, 2020
`
`
`
`
`i
`
`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 Of-
`fice 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 statu-
`tory scheme by prospectively severing for-cause re-
`moval protections for those judges.
`
`
`
`ii
`
`TABLE OF CONTENTS
`
`Page
`QUESTIONS PRESENTED ....................................... i
`INTEREST OF AMICI CURIAE ............................... 1
`INTRODUCTION AND SUMMARY OF
`ARGUMENT ......................................................... 1
`ARGUMENT .............................................................. 5
`I. ADMINISTRATIVE PATENT JUDGES
`ARE PRINCIPAL OFFICERS .............................. 5
`A. The Structure of the Patent Act
`Confirms that Congress Intended APJs
`to Be Independent ........................................... 6
`B. An APJ Decision Is “a Final Decision on
`Behalf of the United States” ........................... 9
`C. More Than Two Centuries of Practice
`Confirm That the Functions APJs Per-
`form Are Those of Principal Officers ............ 11
`II. THE DUE PROCESS CLAUSE
`PROTECTS THE PROPERTY RIGHT IN
`AN ISSUED PATENT ........................................ 13
`A. A Neutral Adjudicator Is a Fundamental
`Requirement of Due Process ......................... 14
`B. Political Control of Adjudicators Whose
`Decisions Affect Vested Property Rights
`Violates Due Process ..................................... 14
`III. ABROGATING APJS’ “FOR CAUSE”
`REMOVAL DOES NOT SOLVE THE
`APPOINTMENTS CLAUSE PROBLEM
`AND ALSO RAISES DUE PROCESS
`CONCERNS ........................................................ 18
`CONCLUSION ......................................................... 24
`
`
`
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`
`
`
`iii
`
`TABLE OF AUTHORITIES
`
`
` Page(s)
`
`Cases
`Arthrex, Inc. v. Smith & Nephew, Inc.,
`941 F.3d 1320 (Fed. Cir. 2019) .............................. 2
`Bennett Regulator Guards, Inc. v. Atlanta Gas
`Light Co., 905 F.3d 1311 (Fed. Cir. 2018) ........... 18
`Commodity Futures Trading Comm’n v. Schor,
`478 U.S. 833 (1986) .............................................. 24
`Concrete Pipe & Prods. v. Constr. Laborers
`Pension Trust, 508 U.S. 602 (1993) ........... 3, 18, 23
`De Ferranti v. Lyndmark,
`30 App. D.C. 417 (D.C. Cir. 1908) ....................... 23
`Edmond v. United States,
`520 U.S. 651 (1997) ...................................... passim
`Free Enter. Fund v. Pub. Co. Accounting Oversight
`Bd., 561 U.S. 477 (2010) ........................................ 5
`Gibson v. Berryhill, 411 U.S. 564 (1973) ............ 14, 15
`Horne v. Dep’t of Agric., 576 U.S. 351 (2015) ........... 13
`In re Alappat,
`33 F.3d 1526 (Fed. Cir. 1994) ................ 2, 8, 19, 20
`In re Murchison, 349 U.S. 133 (1955) ....................... 14
`James v. Campbell, 104 U.S. 356 (1882) .................. 13
`Khanh Phuong Nguyen v. United States,
`539 U.S. 69 (2003) .................................................. 7
`Mobil Cerro Negro, Ltd. v. Bolivarian Republic of
`Venezuela, 863 F.3d 96 (2d Cir. 2017) ................. 20
`
`
`
`
`
`iv
`
`
`Oil States Energy Servs., LLC v. Greene’s Energy
`Grp., LLC, 138 S. Ct. 1365 (2018) ............... passim
`Seila Law LLC v. CFPB, 140 S. Ct. 2183 (2020)...... 22
`Target Corp. v. Destination Maternity Corp.,
`No. IPR2014-00508 (P.T.A.B., Feb. 12, 2015) ..... 17
`Thomas v. Arn, 474 U.S. 140 (1985) ......................... 24
`Tumey v. State of Ohio, 273 U.S. 510 (1927) ............ 14
`Zhongshan Broad Ocean Motor Co. et al. v. Nidec
`Mo-tor Corp., No. IPR2015-00762
`(P.T.A.B. July 20, 2015) ....................................... 16
`
`Constitutional Provisions
`U.S. Const. art. II, § 2, cl. 2 ......................................... 3
`
`Statutes
`5 U.S.C. § 1202 .......................................................... 16
`5 U.S.C. § 134 ............................................................ 19
`5 U.S.C. § 7513(a) .................................................... 5, 9
`10 U.S.C. § 941 .......................................................... 10
`15 U.S.C. § 41 ............................................................ 16
`15 U.S.C. § 78d .......................................................... 16
`15 U.S.C. § 2053(a) .................................................... 16
`19 U.S.C. § 1330 ........................................................ 16
`28 U.S.C. § 1498 ........................................................ 17
`35 U.S.C. § 3(a)(2)(A) ................................................ 19
`35 U.S.C. § 3(c) ............................................................ 5
`35 U.S.C. § 6 ................................................................ 5
`
`
`
`
`
`v
`
`
`35 U.S.C. § 6(a) ........................................................ 5, 6
`35 U.S.C. § 6(c) ........................................................ 6, 7
`35 U.S.C. § 131 .......................................................... 19
`35 U.S.C. § 135(a) ...................................................... 19
`35 U.S.C. § 314 ............................................................ 6
`35 U.S.C. § 314(b) ........................................................ 6
`35 U.S.C. § 316(a) ........................................................ 6
`35 U.S.C. § 316(c) .......................................... 5, 6, 7, 20
`35 U.S.C. § 318(b) .................................................. 8, 20
`35 U.S.C. § 319 ............................................................ 7
`35 U.S.C. § 324 ............................................................ 6
`35 U.S.C. § 324(b) ........................................................ 6
`35 U.S.C. § 326(a) ........................................................ 6
`35 U.S.C. § 326(c) .......................................... 5, 6, 7, 20
`35 U.S.C. § 328(b) .................................................. 8, 20
`35 U.S.C. § 329 ............................................................ 7
`42 U.S.C. § 402(j)(2) .................................................. 15
`42 U.S.C. § 423(b) ...................................................... 15
`42 U.S.C. § 902(a)(1) ................................................. 15
`42 U.S.C. § 902(a)(3) ................................................. 15
`Act of Feb. 21, 1793, ch. 11, § 1, 1 Stat. 318 ............. 11
`Act of July 4, 1836, ch. 357, § 1, 5 Stat. 117 ....... 11, 22
`Act of July 4, 1836, ch. 357, § 2, 5 Stat. 117 ............. 12
`Act of July 4, 1836, ch. 357, § 5, 5 Stat. 117 ............. 12
`Act of July 4, 1836, ch. 357, § 7, 5 Stat. 117 ............. 12
`
`
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`vi
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`
`Patent Act of 1790, ch. 7, § 1, 1 Stat. 109 ................. 11
`Pub. L. 93-596 (Jan. 2, 1975) .................................... 12
`Pub. L. 97-366 (Oct. 25, 1982) ................................... 12
`
`Regulations
`37 C.F.R. § 41.3(b) ..................................................... 19
`37 C.F.R. § 41.35 ......................................................... 8
`37 C.F.R. § 42.72 ......................................................... 8
`
`Other Authorities
`Christopher J. Walker & Melissa F. Wasserman,
`The New World of Agency Adjudication,
`107 Cal. L. Rev. 141 (2019) .................................. 19
`Christopher J. Walker, Constitutional Tensions in
`Agency Adjudication,
`104 Iowa L. Rev. 2679 (2019) ................................ 6
`Gary Lawson, Appointments and Illegal
`Adjudication: The America Invents Act
`Through a Constitutional Lens,
`26 Geo. Mason L. Rev. 26 (2018) ..................... 8, 21
`John M. Golden, PTO Panel Stacking: Unblessed
`by the Federal Circuit and Likely Unlawful,
`104 Iowa L. Rev. 2447 (2019) .............................. 17
`Vivian S. Chu & Daniel T. Shedd, Cong. Res. Serv.,
`R 42720, Presidential Review of Independent
`Regulatory Commission Rulemaking:
`Legal Issues (Sept. 10, 2012) ............................... 16
`
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`
`1
`
`INTEREST OF AMICI CURIAE1
`The Cato Institute is a nonpartisan, public policy
`research foundation founded in 1977 and dedicated to
`advancing the principles of individual liberty, free
`markets, and limited government. Cato’s Robert A.
`Levy Center for Constitutional Studies helps restore
`the principles of constitutional government that are
`the foundation of liberty. To those ends, Cato holds
`conferences; publishes books, studies, and the annual
`Cato Supreme Court Review; and files amicus briefs.
`Prof. Gregory Dolin teaches at the University of
`Baltimore School of Law, where his academic work
`lies at the nexus of intellectual property and constitu-
`tional law, with particular focus on maximizing the
`incentives to innovate while preserving and expand-
`ing access to the fruits of innovations. He is also an
`adjunct scholar at Cato and is currently serving as an
`associate justice of the Supreme Court of Palau.
`Amici are interested in preserving the separation
`of powers and, relatedly, ensuring fairness in patent-
`review proceedings. The government’s position here
`jeopardizes these interests.
`
`INTRODUCTION AND
`SUMMARY OF ARGUMENT
`Arthrex’s opening brief provides all the justifica-
`tion this Court needs for affirming that portion of the
`Federal Circuit’s judgment which held Administrative
`Patent Judges (“APJs”) to be “principal officers,” but
`
`1 Rule 37 Statement: All parties have filed letters granting
`blanket consent to the filing of amicus briefs. No counsel for a
`party authored any part of this, the preparation and submission
`of which was funded by amici alone.
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`2
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`reversing it insofar as it held that “invalidation of the
`statutory limitations on the removal of APJs,” Arthrex,
`Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1338
`(Fed. Cir. 2019), is sufficient to cure the constitutional
`defect. Amici provide an additional reason.
`Several arguments support the conclusion that
`APJs are constitutional “principal” officers. First, in
`structuring the America Invents Act, Congress explic-
`itly conferred the power to invalidate issued patents
`on the Patent Trial and Appeals Board (PTAB), of
`which the director of the Patent Office is just one
`member. This stands in contradistinction to reposing
`the power to grant patents in the director alone. It also
`contrasts with pre-AIA setup of the Board of Patent
`Appeals and Interferences, which served “merely [as]
`the highest level of the Examining Corps, and like all
`other members of the Examining Corps . . . operate[d]
`subject to the Commissioner’s overall ultimate au-
`thority and responsibility.” In re Alappat, 33 F.3d
`1526, 1535 (Fed. Cir. 1994), abrogated on other
`grounds by In re Bilski, 545 F.3d 943 (Fed. Cir. 2008).
`This conscious change makes clear that Congress did
`not intend PTAB decisions to be supervised and coun-
`termanded by any other executive branch official.
`Second, although the director, both by virtue of his
`membership on PTAB and his ability to prescribe the
`board’s rules of operation, does maintain some ability
`to control PTAB’s operation, once a process of post-is-
`suance review has begun, he would need the vote of at
`least one other individual sitting on his panel to effect
`his will in any particular challenge. The director alone
`cannot reverse, vacate, or even order a rehearing of a
`panel decision. It is the board itself that speaks for the
`entire executive branch. If APJs are indeed inferior
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`3
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`officers, as the government argues, that would mean
`that these inferior officers have the power to overrule
`the decision of a superior officer in granting the patent
`in the first place. Such an arrangement would be par-
`adoxical to say the least. The Constitution vests the
`entirety of the executive power in the president. That
`means that the executive branch must speak with one
`voice. Furthermore, because the Appointments
`Clause requires that only a properly appointed official
`be permitted to speak for the entire executive branch,
`U.S. Const. Art. II, § 2, cl. 2, even where the executive
`branch changes its mind, such changes must be made
`by a constitutionally authorized officer.
`Third, even if the government’s argument that
`APJs are “inferior officers” were correct, such a struc-
`ture would present its own constitutional problems.
`As this Court has previously held, patents are “prop-
`erty for purposes of the Due Process Clause.” Oil
`States Energy Servs., LLC v. Greene’s Energy Grp.,
`LLC, 138 S. Ct. 1365, 1379 (2018). Accordingly, any
`adjudication of vested patent rights must, to satisfy
`due process, take place before a neutral hearing officer.
`See, e.g., Concrete Pipe & Prods. v. Constr. Laborers
`Pension Trust, 508 U.S. 602, 617–18 (1993) (“Before
`one may be deprived of a protected interest, whether
`in a criminal or civil setting, one is entitled as a mat-
`ter of due process of law to an adjudicator who is not
`in a situation which would offer a possible temptation
`to the average man as a judge which might lead him
`not to hold the balance nice, clear and true.”) (cleaned
`up). The government’s argument that APJs are infe-
`rior officers because the Patent Office director can
`choose which APJs serve on which panels suggests
`that if such authority were consistently exercised, it
`would raise significant due process concerns because
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`4
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`APJs would be tempted to make decisions based on
`the director’s preferences rather than the require-
`ments of the Patent Act. To put it differently, to com-
`ply with due process, individuals who adjudicate
`vested patent rights must be free from political pres-
`sure so as to be able to render judgments based solely
`on the law. This means that APJs must be protected
`from termination or reassignment solely because their
`decisions have displeased their political superiors.
`The Federal Circuit has rightly concluded that the
`protections currently afforded to APJs and the fact
`that “the final written decision” issued by such judges
`in inter partes or post-grant review proceedings is “a
`final decision on behalf of the United States,” Edmond
`v. United States, 520 U.S. 651, 665 (1997), unreview-
`able by any superior officer, make these judges “prin-
`cipal officers.” The Federal Circuit’s remedy, however,
`is both insufficient to solve the constitutional problem
`and is itself constitutionally problematic.
`Instead of requiring that the APJs be appointed in
`a constitutionally acceptable manner, the court below
`attempted to convert APJs into “inferior officers” by
`abrogating the “for cause” removal protections they
`currently enjoy. But the Federal Circuit’s remedy does
`not solve the problem, instead exacerbating the due
`process concerns. Permitting vested patent rights to
`be adjudicated by individuals who can be terminated
`at the director’s—and ultimately the president’s—
`pleasure forces patentees to defend the validity of
`their issued patents not before a neutral adjudicator,
`but before officials susceptible and responsive to polit-
`ical considerations. Such a setup would allow the ex-
`ecutive branch to manipulate the outcome of the pro-
`ceedings. To avoid these results, the Court should hold
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`5
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`that (1) vested patent rights can be adjudicated only
`by independent hearing officers, and (2) because such
`officers’ determinations are the expression of final
`view of the executive branch, they must be appointed
`as are other principal federal officers.
`
`ARGUMENT
`The America Invents Act allows has created a sys-
`tem for administrative review of issued patents before
`a board housed within the Patent Office. 35 U.S.C. §§
`6, 316(c), 326(c); see also Oil States, 138 S. Ct. at 1370.
`The adjudication of these disputes is handled by Ad-
`ministrative Patent Judges (APJs) who are appointed
`by the secretary of commerce, 35 U.S.C. § 6(a), and are
`removable only for cause. 35 U.S.C. § 3(c); 5 U.S.C. §
`7513(a). This arrangement is constitutionally dubious
`because it threatens not only the separation of powers,
`but also the due process rights of patent holders.
`I. ADMINISTRATIVE PATENT JUDGES ARE
`PRINCIPAL OFFICERS
`Distinguishing between “principal” and “inferior”
`officers is not always an easy task, but several guide-
`posts emerge from this Court’s jurisprudence. As the
`Court explained in Free Enter. Fund v. Pub. Co. Ac-
`counting Oversight Bd. “[w]hether one is an ‘inferior’
`officer depends on whether he has a superior,” and
`that “‘inferior officers’ are officers whose work is di-
`rected and supervised at some level” by other officers
`appointed by the President with the Senate’s con-
`sent.” 561 U.S. 477, 510 (2010) (quoting Edmond, 520
`U.S. at 662–63). Notwithstanding the government’s
`arguments, the work of APJs is not “directed and su-
`pervised at some level” by anyone.
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`6
`
`A. The Structure of the Patent Act Con-
`firms that Congress Intended APJs to Be
`Independent
`The Patent Act, as amended by the Leahy-Smith
`America Invents Act, creates the Patent Trial and Ap-
`peals Board (PTAB) and empowers it to hear certain
`post-issuance patentability challenges. 35 U.S.C. §§
`316(c), 326(c). Although under the statute the director
`of the Patent Office is ex officio a member of the PTAB,
`id. § 6(a), he is merely a single vote on a panel that
`must include at least two other members. Id. § 6(c). To
`put it simply, “in the America Invents Act, Congress
`did not grant the Patent Office Director final decision-
`making authority over PTAB adjudication.” Christo-
`pher J. Walker, Constitutional Tensions in Agency Ad-
`judication, 104 Iowa L. Rev. 2679, 2696 (2019).
`When it enacted the AIA, Congress consciously
`separated the director’s powers from those of the
`PTAB, as staffed by the APJs. For example, it is the
`director who is empowered to decide whether to insti-
`tute post-issuance review in the first place. Id. §§ 314,
`324. The director is also empowered to prescribe gen-
`eral regulations that govern such reviews. Id. §§
`316(a), 326(a). The director is also the official respon-
`sible for staffing the hearing panels, determining the
`number of APJs per panel, and generally administer-
`ing the post-issuance review process. See Pet. Br. at
`25-32. Once the petition for an inter partes or post-
`grant review is granted, however, the director has no
`control over the adjudicatory process. The statute is
`clear that “[t]he Director shall determine whether to
`institute an inter partes [or post-grant] review,” 35
`U.S.C. §§ 314(b), 324(b), but it is the PTAB that “con-
`duct[s] each inter partes [or post grant] review
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`7
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`
`instituted under this chapter. Id. §§ 316(c), 326(c).
`Furthermore, it is “[o]nly the Patent Trial and Appeal
`Board [that] may grant rehearings.” Id. § 6(c).
`While it is true that the director has authority to
`assign specific APJs to serve as hearing officers for
`specific cases, once assigned, such APJs make all rel-
`evant decisions and the appeal from them lies not to
`the director or the secretary of commerce, but to the
`federal judiciary. See id. §§ 319, 329. This is so even if
`the director himself chooses to exercise his right to sit
`as a member of a panel. Because each panel must have
`at least three members, the director could be outvoted
`by the other two APJs. Furthermore, director may not,
`on his own, order any case to be reheard. That power
`belongs to the PTAB itself. Id. § 6(c). Although a di-
`rector who is dissatisfied with a particular panel deci-
`sion can appoint a new panel to consider a petition for
`rehearing, even the new panel members would be ex-
`ercising their own judgment.2 Thus, the Director has
`no real ability to control a post-issuance proceeding
`once it has begun.3 See Gary Lawson, Appointments
`
`2 Petitioners argue that when the director wishes to have a
`case reheard, the panel he selects “typically includes the Director
`himself and two other Executive officials.” Pet. Br. at 32. But that
`argument is a non sequitur. Because only the director himself is
`a principal officer, a decision that needs the concurrence of at
`least one of “two other Executive officials” neither of whom is a
`properly appointed “principal officer,” is not a decision by the di-
`rector. Cf. Khanh Phuong Nguyen v. United States, 539 U.S. 69,
`82 (2003) (holding that a decision by a court that improperly in-
`cluded an Article IV judge cannot be viewed as a legitimate deci-
`sion of an Article III court, even if there was a quorum of Article
`III judges who agreed on the outcome).
`3 The government asserts, citing BioDelivery Sciences Int’l,
`Inc. v. Aquestive Therapeutics, Inc., 935 F.3d 1362, 1366 (Fed.
`
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`8
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`
`and Illegal Adjudication: The America Invents Act
`Through A Constitutional Lens, 26 Geo. Mason L. Rev.
`26, 59 (2018) (“The Director’s ability to select the pan-
`els may give him or her some kind of practical influ-
`ence over outcomes, but the Appointments Clause is
`not concerned about practical influence. It is a pur-
`posely formal provision.”). Indeed, the statute makes
`clear that the director’s role in patent cancellation
`(once review proceedings have been initiated) is
`purely ministerial. See 35 U.S.C. §§ 318(b), 328(b)
`(“[T]he Director shall issue and publish a certificate”
`confirming the board’s findings.) (emphasis added).
`These limitations on the director’s powers stand
`in sharp contrast to the supervisory power the direc-
`tor exercises when the PTAB sits as an appellate body
`reviewing pending patent applications. In those cir-
`cumstances, the director for essentially any reason—
`including conceivably his dissatisfaction of how a par-
`ticular panel is handling a specific case—and at any
`point “[p]rior to the entry of a decision on the appeal
`by the Board . . . may sua sponte order the [ex parte
`examination] proceeding remanded to the examiner.”
`37 C.F.R. § 41.35; see also Alappat, 33 F.3d at 1534-
`35. In contrast, when the PTAB sits as a trial tribunal
`adjudicating inter partes or post-grant petitions, only
`the Board itself “may terminate a trial without ren-
`dering a final written decision.” Id. § 42.72.
`
`
`Cir. 2019), that the director can unilaterally vacate any institu-
`tion decision prior to the final written decision having been en-
`tered by the PTAB. That assertion runs contrary to the rules
`promulgated by the PTO itself, which reserve the right to “a trial
`without rendering a final written decision” to the board and not
`to the director. 37 C.F.R. § 42.72.
`
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`9
`
`To be sure, whether sitting as an appellate or trial
`body the PTAB is required to apply regulations that
`have been promulgated and prescribed by the direc-
`tor. Board members who obstinately refuse to do so
`may have their employment terminated. See 5 U.S.C.
`§ 7513(a) (permitting termination of, inter alia, APJs
`when doing so “promote[s] the efficiency of the”
`agency). But that is hardly sufficient level of “control”
`of these officers by a superior. It is more akin to the
`requirement that Article III judges faithfully apply
`the Constitution and federal laws when adjudicating
`cases. Although such requirements exist and judges
`could be impeached and removed if they consistently
`flout their obligation to adhere to the law, it doesn’t
`follow that Congress “supervises” Article III judges.
`Nor does the fact that a chief judge of any court, in the
`exercise of his administrative responsibilities, may
`decline to assign certain cases to another judge mean
`that the chief judge is a “superior officer” to his col-
`leagues. So too with the APJs. Wayward APJs may be
`“punished” by having judicial responsibilities cur-
`tailed, see Pet. Br. at 27-28, but such level of “control”
`is insufficient to turn APJs into “inferior officers.”
`B. An APJ Decision Is “a Final Decision on
`Behalf of the United States”
`In trying to prove that APJs are inferior officers,
`the government analogizes the PTAB structure to
`that of the military courts of criminal appeals, which
`were upheld in Edmond, 520 U.S. 651. Although there
`are some similarities between APJs and the judges on
`those military courts, there a key distinction that ul-
`timately makes all the difference. The key to the
`Court’s conclusion in Edmond was the fact that deci-
`sions of the military courts of appeal were reviewable
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`10
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`
`by the U.S. Court of Appeals for the Armed Forces—a
`tribunal “established under article I of the Constitu-
`tion.” 10 U.S.C. § 941. In light of the possibility of re-
`view of the military courts of criminal appeals in “an-
`other Executive Branch entity,” this Court concluded
`that “the judges of the Court of Criminal Appeals have
`no power to render a final decision on behalf of the
`United States unless permitted to do so by other Ex-
`ecutive officers.” Edmond, 520 U.S. at 664, 665.
`In reality, PTAB judges resemble tax court judges,
`which this Court has implied are “principal officers.”
`Edmond distinguished judges of military courts of
`criminal appeals from tax court judges, noting that
`“there is no Executive Branch tribunal comparable to
`the Court of Appeals for the Armed Forces that re-
`views the work of the Tax Court; its decisions are ap-
`pealable only to courts of the Third Branch.” Id. at 666.
`As discussed above, the determinations of each PTAB
`panel is appealable only to “the Third Branch”; alt-
`hough the director can attempt to influence the out-
`come of each case by assigning new judges to a panel
`and attempting to have those judges vote to grant re-
`hearing, ultimately the decision belongs to the APJs
`appointed to hear the case, and not the director. It is
`the decision of the panel (however constituted) that is
`the “final decision on behalf of the United States.”4
`In truth, the authority of APJs doesn’t quite mir-
`ror either the very broad authority of tax court judges,
`or the much more circumscribed authority of judges
`
`4 As this Court held in Oil States, “the grant of a patent in-
`volves a matter ‘arising between the government and others,’”
`138 S. Ct. at 1373 and the post-issuance review procedures “in-
`volve[] the same basic matter as the grant of a patent.” Id. at
`1374. Thus, PTAB’s decision is “on behalf of the United States.”
`
`
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`
`
`
`
`
`
`
`
`11
`
`
`on the military courts of criminal appeals. It falls
`somewhere in between these two extremes. On one
`hand, like with military courts, PTAB’s rules are pre-
`scribed by another official (the PTO director), and
`APJs may be removed from their judicial assignments
`without cause. On the other hand, as with the tax
`court, no other executive branch official or agency has
`the authority to reverse or modify PTAB decisions.
`While the director may attempt to influence and in-
`deed participate in such decisions, ultimately he is but
`one vote on any given PTAB panel. It is the absence of
`the authority to make “a final decision on behalf of the
`United States” that should be determinative.
`C. More Than Two Centuries of Practice
`Confirm That the Functions APJs Per-
`form Are Those of Principal Officers
`Assigning the determinative weight to this “final
`decision” factor would also be consistent with the two
`centuries worth of practice before the Patent Office.
`When the Patent Office was first created, the determi-
`nation whether or not to grant a patent was vested in
`the Board consisting of the attorney general, secretary
`of state, and secretary of war—all unquestionably
`principal officers of the United States. See Patent Act
`of 1790, ch. 7, § 1, 1 Stat. 109, 109. In 1793, Congress
`vested the authority to grant patents in a single prin-
`cipal officer: the secretary of state. Act of Feb. 21, 1793,
`ch. 11, § 1, 1 Stat. 318, 318. In 1836, when Congress
`created the Patent Office, it also created the position
`of a Commissioner of Patents who was to “superintend,
`execute, and perform, all such acts and things touch-
`ing and respecting the granting and issuing of pa-
`tents.” Act of July 4, 1836, ch. 357, § 1, 5 Stat. 117,
`117–18. Although the 1836 Act authorized the hiring
`
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`12
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`
`of inferior officers who would examine patent applica-
`tions and prepare patents for issuance, see id. § 2, 5
`Stat. 117, 118, it nonetheless required that “all pa-
`tents issued from [the Patent] office shall be issued in
`the name of the United States and under the seal of
`said office, and be signed by the Secretary of State,
`and countersigned by the Commissioner.” Id. § 5, 5
`Stat. 117, 118–19. In other words, although inferior
`officers were authorized to conduct the initial review
`of patent applications, the decision whether to grant a
`patent rested solely in the commissioner. See id. § 7, 5
`Stat. 117, 119 (“the Commissioner, on due proceedings
`had, may grant a patent” for “any new and useful art,
`machine, manufacture, or composition of matter.”).
`Over the years, the mandate of the Patent Office
`and the person heading it broadened, and the title of
`the office being held has undergone corresponding
`changes. See Pub. L. 93-596 (Jan. 2, 1975); Pub. L. 97-
`366 (Oct. 25, 1982); Pub. L. 106-113 (Nov. 29, 1999).
`But the vesting of the authority to issue patents re-
`mained consistently reposed in the head of the Patent
`Office—a principal officer nominated by the president
`and confirmed by the senate. This history shows that
`Congress has always understood that the ability to
`make “a final decision on behalf of the United States”
`with respect to the grant of a patent can only be vested
`in a principal officer. And because this Court’s prece-
`dent treats post-issuance review as involving the
`same basic matter as the grant of a patent,” Oil States,
`138 S. Ct. at 1374, it follows that the decision to re-
`voke a patent should also be made by a principal of-
`ficer. Adopting the government’s position that APJs
`are “inferior officers” despite the power of the Board
`to make “a final decision on behalf of the United
`States” would undermine more than two centuries of
`
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`13
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`understandings and essentially permit inferior offic-
`ers to overrule decisions made by principal officers.
`*
`*
`*
`The history and structure of the Patent Act, as
`well as this Court’s precedents, point in one direction:
`the grant or termination of patent rights must be
`vested in a principal officer. As explained in more de-
`tail below, however, because the director of the Patent
`Office serves at the president’s pleasure and is remov-
`able at will, accepting the government’s argument
`that it is the director who makes the ultimate deter-
`minations with respect to the outcome of post-issu-
`ance review proceedings raises significant due process
`problems. Although the ultimate determination of pa-
`tent validity in post-issuance proceedings must be
`vested in a principal officer, due process requirements
`make it unlikely that the director can be that officer.
`II. THE DUE PROCESS CLAUSE PROTECTS
`THE PROPERTY RIGHT IN AN ISSUED
`PATENT
`From the early days of the republic, there has
`been an unbroken line of cases reaffirming, time and
`again, that patents for inventions are private prop-
`erty. See Horne v. Dep’t of Agric., 576 U.S. 351, 360
`(2015) (quoting James v. Campbell, 104 U.S. 356, 358
`(1882)). In Oil States, this Court, while rejecting the
`argument that patents are a private right and must
`be adjudicated in an Article III tribunal, nonetheless
`warned that its decision “should not be misconstrued
`as suggesting that patents are not property for pur-
`
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