In June, the Supreme Court of the United States issued its highly anticipated decision in United States v. Arthrex, which decision had the potential to upend the patent litigation landscape in the United States. United States v. Arthrex, 594 U.S. ___ (2021). But the outcome was less sensational than that—rather than topple the Patent Trial and Appeals Board (PTAB) and its patent invalidation proceedings that have become a centerpiece of modern patent litigation, the Supreme Court preserved the PTAB and its administrative patent judges’ (APJs) decisions in inter partes review (IPR) proceedings, albeit by first finding the prior unreviewable authority of APJs unconstitutional, and then by modifying the regime with another layer of review vested in the Director of the U.S. Patent and Trademark Office (USPTO).
Background: APJs and the Structure of the PTAB
The USPTO is an executive agency within the Department of Commerce responsible “for the granting and issuing of patents.” 35 U.S.C. §§1-2. The USPTO’s “powers and duties” are vested in a sole Director. §3(a)(1). The Leahy-Smith America Invents Act (AIA), which President Obama signed into law in 2011, transformed the U.S. patent disputes framework and introduced a new administrative litigation regime for challenging the validity of issued patents, including the most popular variant known as inter partes review (IPR). To conduct these proceedings, Congress created the PTAB, consisting of the Director of the USPTO, the Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and a corps of administrative patent judges (APJs). 35 U.S.C. §6(a). Unlike the Director and Article III judges who are appointed by the president with the advice and consent of the Senate, APJs are appointed by the Secretary of Commerce in consultation with the Director of the USPTO. Id.