Supreme Court Says Patent Review Judges Are Unconstitutional, But It Can Be Fixed If USPTO Director Can Overrule Their Decisions

from the well-that-creates-some-other-problems dept

As you may recall, a few weeks ago I wrote about how Congress was asking the GAO to investigate whether the director of the US Patent & Trademark Office had been interfering in determinations made by the Patent Trial and Appeal Board (PTAB). I'm not going to go into all of the background again (please read the original for that), but under the America Invents Act, a process for reviewing patents after they were granted was set up, known as the Inter Partes Review (IPR) process. This was important, because the granting of patents is a non-adversarial process, where patent examiners are not given very much time to actually review everything. So the IPR process allowed those (especially those with prior art) to kick off a process by which the PTAB would recheck to see if the original examiner made a mistake in granting a 20 year monopoly to someone.

Unfortunately, because the members of the PTAB are designated as Administrative Patent Judges (APJs), there was the question of whether or not they needed to be appointed by the President with Senate confirmation to abide by the Appointments Clause of the Constitution. That question has been hanging out in the Supreme Court for many months -- with the decision finally coming down this week. In arguing against this notion, the USPTO itself had claimed that the APJs were "interior officers" that don't need Senate confirmation, and part of their "proof" was that the Director of the PTO could review their decisions. This raised some alarms in Congress, because it certainly wasn't their intention (from everything stated so far) to allow the Director of the PTO to put their finger on the scale of what is and what is not patentable.

The full opinion from the Supreme Court is a bit of a mess -- with different Justices signing onto different parts. But the key bits to pull out of this are that the Supreme Court found that the APJs are (or have been) "Principal Officers" meaning they should have been appointed by the President and confirmed by the Senate.

History reinforces the conclusion that the unreviewable executive power exercised by APJs is incompatible with their status as inferior officers. Since the founding, principal officers have directed the decisions of inferior officers on matters of law as well as policy. Hamilton articulated the principle of constitutional accountability underlying such supervision in a 1792 Treasury circular. Writing as Secretary of the Treasury to the customs officials under his charge, he warned that any deviations from his instructions “would be subversive of uniformity in the execution of the laws.” 3 Works of Alexander Hamilton 557 (J. Hamilton ed. 1850). “The power to superintend,” he explained, “must imply a right to judge and direct,” thereby ensuring that “the responsibility for a wrong construction rests with the head of the department, when it proceeds from him.”

However, in then immediately inserts its own remedy, saying that everything is fixable if the Patent Office Director actually can review the IPR decisions.

In sum, we hold that 35 U. S. C. §6(c) is unenforceable as applied to the Director insofar as it prevents the Director from reviewing the decisions of the PTAB on his own. The Director may engage in such review and reach his own decision. When reviewing such a decision by the Director, a court must decide the case “conformably to the constitution, disregarding the law” placing restrictions on his review authority in violation of Article II

So, the good news here is that the important PTAB/IPR process remains alive. But it does seem quite worrisome that the end result is that any Director of the Patent Office can now step in and overrule the PTAB. One would hope that the political ramifications of doing so would prevent it, but it does seem that it's now possible that a Director who just doesn't like the whole IPR/PTAB process (and there are many patent system fans who hate it) could just automatically deny every single IPR.

And that seems very worrisome. Of course, all of this could be solved by making the APJs Senate confirmable, but apparently no one wants to bother with doing that. Alternatively, we could rethink the entire patent approval process altogether, so that it doesn't need to go back and realize it granted 20 year monopolies for no good reasons... but, you know, that would take actual effort.

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Filed Under: appointments clause, oversight, patent appeals board, patent review, patentability, patents, ptab, supreme court, uspto

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  1. icon
    Bruce E (profile), 30 Jun 2021 @ 6:12pm

    Politics vs Law

    It seems to me that as/if politics seeps lower down into the structure of the executive branch, the corresponding legislative scrutiny following it down is a good thing. That is, one begets the other.

    Ideally, perhaps, these positions would be less political and this would not be necessary.

    Does anyone have a comment on how this compares to immigration judges(?) which are deemed executive (I think)?

    reply to this | link to this | view in thread ]

  2. icon
    That Anonymous Coward (profile), 30 Jun 2021 @ 7:22pm

    Who us worry?

    This has worked out so well in policing in this country, where decisions made by professionals can be overridden by a 3rd party who doesn't even need to hear the facts before putting them back on the job with back pay.

    reply to this | link to this | view in thread ]

  3. icon
    Rico R. (profile), 30 Jun 2021 @ 10:44pm

    As ironic as it is, this... messy patent ruling from SCOTUS has the potential to help overturn bad copyright law as well. The newly passed CASE Act would likely suffer the same fate with regards to members of the copyright claims board. This is even clearer than this case: This one panel in a non-judicial branch of government acts as judge, jury, and executioner of copyright claims in one fell swoop. Their decisions are final and virtually unappealable. What was stated before has been made clearer with this SCOTUS decision: This arrangement makes the CASE Act unconstitutional.

    Of course, there is the potential that this could backfire, given the logic of the majority that ANY presidential appointment confirmed by the senate could save the panel of pseudo-judges. There was a bill floated around a few years ago that would turn the registrar of copyrights into such an appointment. If this bill was re-introduced and passed, the registrar of copyright could be proposed to fill the same role as the patent office director here. Let's hope that won't happen, but given the copyright maximalists whispering in the ear of Congress, I don't exactly have high hopes that they could let this bad law go.

    But as it stands currently, this SCOTUS decision makes it all but certain that the CASE Act is unconstitutional. Of course, we'd need a live case or controversy to make that happen, which won't happen until someone decides to contest the judgment of the copyright claims board in an actual court of law. Until then, all we can do is speculate and hope.

    reply to this | link to this | view in thread ]

  4. icon
    Eldakka (profile), 1 Jul 2021 @ 12:53am

    Does this decision prohibit the President from appointing an APJ to be confirmed by the senate?

    Could we end up concurrently with 2 types of APJs, "inferior" judges appointed by the PTO Director, and, err, "superior"? judges appointed by the President and confirmed by the Senate?

    reply to this | link to this | view in thread ]

  5. icon
    TKnarr (profile), 1 Jul 2021 @ 10:16am

    Another option would be to simply exercise Congress's authority under USC Article 3 section 1 to establish courts other than the Supreme Court. Make APJ judges actual judges, their proceedings actual court proceedings, and just to mess with the Justices make those courts directly beneath the Supreme Court itself so any appeals of their judgements go straight to the Justices for consideration. I don't even see anything in the Constitution that requires Congress to require confirmation of judges when establishing the courts, since they wouldn't be officers of the executive branch but be part of the judicial branch even if appointed by the director of an executive agency.

    It seems like the Supremes are determined to eliminate any non-political or insulated-from-politics positions in the executive branch and return it completely to the spoils system.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, 1 Jul 2021 @ 4:03pm

    Re: Politics vs Law

    The immigration judges are inferior officers, answerable to the attorney general as principle officer.

    While the immigraiton judges can issue rulings and those rulings can be appealed to the board of immigration appeals, all such decisions are subject to review by the Attorney General as desired. That is, the Attorney General can refer any immigration case to himself and issue his own decision at any time, irrespective of what any immigration judges or the board of appeals have done.

    reply to this | link to this | view in thread ]

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