En Banc CAFC to Debate PTAB Appointments Clause Issue

Gov’t Questions Fundamental Aspects of Court Decision

As promised, the government has now sought en banc rehearing in Arthrex. In its petition, the government revisits the bases for the Court’s October decision and encourages the Court to also grant rehearing in the Polaris dispute so that the court might address forfeiture in Arthrex and reach the remaining issues in Polaris (which is distinguished in the petition as having seasonably argued the issue before the agency)

I think it is safe to predict the CAFC takes this one up.

Presumably seeking to limit potential remands to cases where the dispute was raised before the PTAB (i.e., almost none), the petition explains (here):

" [Arthrex] failed to present its Appointments Clause challenge to the Board, forfeiting that challenge. The panel excused that forfeiture, reasoning that the constitutional issue required prompt resolution. But an identical Appointments Clause challenge that had been properly preserved was due to be argued in Polaris Innovations Ltd. v. Kingston Technology Co., No. 18-1831 (Fed. Cir.), just days after the panel’s decision. There was no reason to excuse forfeiture in these circumstances. To ensure that the Court can address both forfeiture and the constitutional question, it should set Polaris for hearing en banc in tandem with rehearing in this case.

The petition goes on to point out that the Court did not find the Director’s ability to appoint APJs to panels enough to pass constitutional muster. But then provided an arguably similar removability remedy by stripping Title V employment protections.

" The Director has that authority under 35 U.S.C. § 6(c), which gives him unlimited authority to designate APJs to a PTAB panel—and thus carries the incidental power to remove APJs from panels. See Myers v. United States, 272 U.S. 52 (1926). Beyond removal from a specific panel in a given case, Section 6(c)’s plain language gives the Director authority to, “at his discretion, choose to never assign a particular judge to any panel, effectively removing that judge from Board service” entirely.   .    .    . ¶The panel was wrong to suggest that recognizing the Director’s unfettered authority to remove APJs from panel service might pose an unspecified, categorical “Due Process problem.” Parties can undoubtedly receive full and fair hearings even where Senate-confirmed officers may remove adjudicators at will during the proceedings.

Given the public outcry on “panel stacking” (even by the SCOTUS during the Oil States argument) not sure this is a viable, long-term fix anyone wants regardless of how the Director arrives at this manner of control.

This mess will continue until the legislature comes to the rescue to provide the Director with a review right for all FWDs, which is my expectation for 2020….assuming the impeachment show ends anytime soon.

Scott A. McKeown is an author of the Patents Post Grant