PTAB / Constitutional Challenges / Federal Circuit

Appointments of PTAB judges violate constitution

By Brandon J. Johnson Published December 26, 2019

In Arthrex v. Smith & Nephew, a three-judge panel of the Federal Circuit found that the appointment of PTAB judges violates the Appointments Clause of the Constitution because they are principal officers that were not appointed by the President with the advice and consent of the Senate.

The Appointments Clause of Article II provides:

[The President] . . . 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 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 Courts of Law, or in the Heads of Departments.

Since both parties agreed that Administrative Patent Judges (APJs) are “officers” (as opposed to mere employees), the primary issue at hand was whether APJs are “principal” or “inferior” officers. The Federal Circuit found that the APJs are “principal” officers because they are not subject to review or removal. The Director of the USPTO is the only presidentially-appointed member of the Board, and he lack power to independently review or reverse decisions. In addition, the Secretary of commerce and the Director of the USPTO lacked unfettered removal power over APJs. APJs are also not inferior officers because they don’t have limited tenure, limited duties, or limited jurisdiction, and pre-1975 “Examiners-in-Chief” (similar to today’s APJs) were subject to nomination by the President and confirmation by the Senate.

To remedy the constitutional flaw, the Court severed the APJs’ removal protection of Title 5 from 35 U.S.C. § 3(c), which required that Officers and employees of the Office shall be subject to the provisions of Title 5 limiting removal to cases where “such cause will promote the efficiency of the service,” meaning for “misconduct [that] is likely to have an adverse impact on the agency’s performance of its functions.” In addition, since the final written decision issued while there was an Appointments Clause violation, the Federal Circuit vacated and remanded the case for a new hearing before a new PTAB panel.