The Patent Trial and Appeal Board got a Halloween scare when a federal appeals court found its judge appointment framework unconstitutional. But to the relief of the PTAB, and the companies that rely on PTAB judges and proceedings to litigate patent issues, the fallout might be minimal.
In a decision published Oct. 31, a panel at the Federal Circuit Court of Appeals determined that the way the PTAB appointed its administrative patent judges violated the U.S. Constitution’s Appointments Clause. But instead of striking down the entire statute that established the PTAB, the court severed a portion of it to make the judges easier to remove.
The case stemmed from Arthrex, Inc., a Florida-based medical device company, and its appeal of an inter partes review decision. Siding with Arthrex’s unconstitutionality argument, the Federal Circuit vacated the IPR decision and remanded the case to be heard again, but in front of a different panel of PTAB judges. Similar cases are already being remanded as a result of Arthrex, Inc. v. Smith & Nephew, Inc.
Parties can use IPR and other proceedings before the PTAB to litigate patent issues outside of federal district court. Arthrex’s opponent sought to invalidate the company’s patent for a knotless suture assembly, and a panel of judges in IPR found Arthrex’s claims unpatentable.
IPR has been a useful venue for litigants to get patent claims invalidated, and the process itself has drawn ire — as well as legal challenges — from some patent owners. But few constitutional challenges against the PTAB or its proceedings have produced a legitimate threat.
“These sorts of constitutional challenges come and go,” said Justin Krieger, a partner in Kilpatrick Townsend & Stockton’s offices in Denver and Washington, D.C., who litigates in IPR and post-grant review. “A lot of people make them kind of superficially.”