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Thu, 01 Jul 2021

Supreme Court Says Patent Review Judges Are Unconstitutional, But It Can Be Fixed If USPTO Director Can Overrule Their Decisions
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As you may recall, a few weeks ago I wrote about how Congress was asking the GAO to investigate whether the director of the US Patent & Trademark Office had been interfering in determinations made by the Patent Trial and Appeal Board (PTAB). I'm not going to go into all of the background again (please read the original for that), but under the America Invents Act, a process for reviewing patents after they were granted was set up, known as the Inter Partes Review (IPR) process. This was important, because the granting of patents is a non-adversarial process, where patent examiners are not given very much time to actually review everything. So the IPR process allowed those (especially those with prior art) to kick off a process by which the PTAB would recheck to see if the original examiner made a mistake in granting a 20 year monopoly to someone.Unfortunately, because the members of the PTAB are designated as Administrative Patent Judges (APJs), there was the question of whether or not they needed to be appointed by the President with Senate confirmation to abide by the Appointments Clause of the Constitution. That question has been hanging out in the Supreme Court for many months -- with the decision finally coming down this week. In arguing against this notion, the USPTO itself had claimed that the APJs were "interior officers" that don't need Senate confirmation, and part of their "proof" was that the Director of the PTO could review their decisions. This raised some alarms in Congress, because it certainly wasn't their intention (from everything stated so far) to allow the Director of the PTO to put their finger on the scale of what is and what is not patentable.The full opinion from the Supreme Court is a bit of a mess -- with different Justices signing onto different parts. But the key bits to pull out of this are that the Supreme Court found that the APJs are (or have been) "Principal Officers" meaning they should have been appointed by the President and confirmed by the Senate.

History reinforces the conclusion that the unreviewableexecutive power exercised by APJs is incompatible withtheir status as inferior officers. Since the founding, principal officers have directed the decisions of inferior officers onmatters of law as well as policy. Hamilton articulated theprinciple of constitutional accountability underlying suchsupervision in a 1792 Treasury circular. Writing as Secretary of the Treasury to the customs officials under hischarge, he warned that any deviations from his instructionswould be subversive of uniformity in the execution of thelaws. 3 Works of Alexander Hamilton 557 (J. Hamilton ed.1850). The power to superintend, he explained, must imply a right to judge and direct, thereby ensuring that theresponsibility for a wrong construction rests with the headof the department, when it proceeds from him.
However, in then immediately inserts its own remedy, saying that everything is fixable if the Patent Office Director actually can review the IPR decisions.
In sum, we hold that 35 U. S. C. §6(c) is unenforceable asapplied to the Director insofar as it prevents the Directorfrom reviewing the decisions of the PTAB on his own. TheDirector may engage in such review and reach his own decision. When reviewing such a decision by the Director, acourt must decide the case conformably to the constitution,disregarding the law placing restrictions on his review authority in violation of Article II
So, the good news here is that the important PTAB/IPR process remains alive. But it does seem quite worrisome that the end result is that any Director of the Patent Office can now step in and overrule the PTAB. One would hope that the political ramifications of doing so would prevent it, but it does seem that it's now possible that a Director who just doesn't like the whole IPR/PTAB process (and there are many patent system fans who hate it) could just automatically deny every single IPR.And that seems very worrisome. Of course, all of this could be solved by making the APJs Senate confirmable, but apparently no one wants to bother with doing that. Alternatively, we could rethink the entire patent approval process altogether, so that it doesn't need to go back and realize it granted 20 year monopolies for no good reasons... but, you know, that would take actual effort.

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