Ever since the Congress enacted the America Invents Act (AIA), its constitutionality has been rigorously debated. Most notably, the Inter Partes Review (IPR) provisions of the AIA drew fierce scrutiny from aggrieved patent owners and legal scholars. However, the initial constitutionality challenges to the IPR process fell flat. On April 24, 2018, the Supreme Court upheld constitutionality of the IPRs in Oil States Energy Services v. Greene’s Energy Group. Then, on October 31, 2019, in Arthrex v. Smith & Nephew, the Federal Circuit held that certain provisions of the AIA pertaining to the PTAB judges violate the Constitution. Last week, on October 13, 2020, the Supreme Court has granted Certiorari to hear this case. This upcoming Supreme Court decision will definitively answer whether IPRs violate the Constitution.

Constitutionality of the PTAB Judges

The key issue in Arthrex is whether, for the purposes of the Appointments Clause, U.S. Const. Art. II, § 2, Cl. 2, the PTAB judges are “principal officers” or “inferiors officers.” If the Supreme Court determines that the PTAB judges are principal officers, certain AIA provisions may become problematic. For example, unlike inferiors officers, which may be appointed by heads of departments, principle officers–like federal judges–must be appointed by the President and approved by the Senate. The AIA does not have such provisions. Thus, the Supreme Court might strike down certain portions of the AIA, possibly fundamentally changing the IPR process.

In the decision below, the Federal Circuit found that restoring constitutionality of the IPR process simply requires striking down the provision of the AIA shielding the PTAB judges from removal “without cause.” According to the Federal Circuity, this amendment to the AIA would render the PTAB judges “inferior officers” rather than “principal officers.” It is possible that the Supreme Court will uphold that decision, which would mean business as usual for the IPR process. However, it is also possible that the Supreme Court will take a more drastic approach. The IPR appeals will be on hold until the Supreme Court renders its decision. Our team will be watching this case closely and will provide immediate updates. For many patent stakeholders, the implications of the looming Supreme Court Arthrex decision could be monumental.

Frequently Asked Questions (FAQ)

What is the PTAB?

The Patent Trial and Appeal Board includes patent judges that decide IPRs, PRGs and ex parte appeals.

Are PTAB judges appointed for life?

No. The USPTO Director can remove a PTAB judge, but only for cause.

Is the IPR process constitutional?

Yes, but the Arthrex case may change that in 2021.

How can a PTAB judge be removed?

The USPTO Director can remove PTAB judges, but only for a cause.

Who appoints PTAB judges?

The PTAB judges are not appointed. Instead, the USPTO hires them through a hiring process similar to that used for other federal employees.