35 F.4th 1328
Fed. Cir.2022Background
- Arthrex sued Smith & Nephew alleging infringement of U.S. Patent No. 9,179,907; S&N petitioned the PTAB for inter partes review (IPR), and the Board found several claims anticipated.
- On prior appeal the Federal Circuit held APJs were unconstitutionally insulated and remanded; the Supreme Court vacated and remanded, directing a remand to the Acting Director to decide whether to rehear.
- At remand the Director and Deputy Director offices were vacant; under Agency Organization Order 45-1 the Commissioner for Patents acted for the Director and denied rehearing, calling the Board’s decision the agency’s final decision.
- Arthrex appealed, arguing the Commissioner’s action violated the Appointments Clause, the Federal Vacancies Reform Act (FVRA), and the Constitution’s separation of powers; Arthrex also challenged the Board’s anticipation/written‑description/priority rulings on the merits.
- The Federal Circuit affirmed: it held the Commissioner permissibly exercised the Director’s authority in the temporary acting context, the FVRA did not bar his action because rehearing review is delegable, separation‑of‑powers concerns were not implicated, and substantial evidence supported the PTAB’s anticipation and priority rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Commissioner’s denial of rehearing violated the Appointments Clause | Commissioner not a Presidentially‑appointed, Senate‑confirmed (PAS) officer and thus could not issue a final agency decision | An inferior officer may temporarily perform a principal officer’s duties (Eaton); the Supreme Court’s remand contemplated an Acting Director decision | Commissioner acting temporarily did not violate the Appointments Clause |
| Whether the FVRA precluded the Commissioner from deciding rehearing (making his action void) | FVRA requires vacancies to be filled under its scheme; otherwise actions have no force | FVRA applies only to non‑delegable duties; rehearing review is delegable and the Patent Act grants delegation authority | FVRA does not apply; rehearing review is delegable and Commissioner’s decision stands |
| Whether separation of powers was violated by a for‑cause‑protected Commissioner exercising Director authority | For‑cause removal protection of Commissioner means President’s removal power and Take Care Clause are infringed | President could at any time appoint an Acting Director under the FVRA and thereby remove the Commissioner’s acting authority | No separation‑of‑powers violation identified |
| Whether PTAB correctly found claims anticipated and had authority to decide priority/written‑description | ElAttrache is not prior art because the patent claims an earlier priority date via a chain of applications incorporating the earlier disclosure | The intervening application (’707) criticizes flexible eyelets and discloses only fixed apertures, lacking written description support for the generic eyelet that would cover flexible loops; PTAB can adjudicate priority in IPR | Affirmed: substantial evidence supports PTAB’s finding that ’707 lacks written description for flexible eyelet (priority cut off); ElAttrache anticipates; PTAB had authority to resolve the issue |
Key Cases Cited
- United States v. Arthrex, 141 S. Ct. 1970 (2021) (Supreme Court held APJs could not issue final decisions binding the Executive Branch and remanded for Acting Director review)
- United States v. Eaton, 169 U.S. 331 (1898) (inferior officer may temporarily perform principal officer’s duties under special, temporary conditions)
- Seila Law LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct. 2183 (2020) (removal‑power principles and limits on Congress’s ability to restrict presidential removal authority)
- Myers v. United States, 272 U.S. 52 (1926) (presidential removal power and Take Care Clause foundations)
- Lockwood v. Am. Airlines, 107 F.3d 1565 (Fed. Cir. 1997) (each application in a chain must satisfy written‑description for §120 priority)
- Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336 (Fed. Cir. 2010) (written‑description standard: inventor must show possession of claimed subject matter)
- Tronzo v. Biomet, 156 F.3d 1154 (Fed. Cir. 1998) (species‑to‑genus written‑description limits where specification touts a particular species and distinguishes prior art)
- In re NTP, Inc., 654 F.3d 1268 (Fed. Cir. 2011) (priority and related issues may be considered in PTO proceedings)
- Schaghticoke Tribal Nation v. Kempthorne, 587 F.3d 132 (2d Cir. 2009) (FVRA does not bar an inferior officer from performing delegable duties where regulations permit delegation)
- Stand Up for Cal.! v. U.S. Dep’t of Interior, 994 F.3d 616 (D.C. Cir. 2021) (observing FVRA applies to exclusive/nondelegable duties)