![handle is hein.crs/govedva0001 and id is 1 raw text is: - I Congressional_
*.Research Service
informing the qeislative debate since 1914___________________
Supreme Court Preserves Patent Trial and
Appeal Board, but with Greater Executive
Oversight
June 29, 2021
In 2011, Congress enacted a major patent reform bill, the Leahy-Smith America Invents Act (AIA).
Among other things, the AIA created new adversarial administrative proceedings within the Patent and
Trademark Office to review the validity of already-issued patents and cancel those that should not have
been issued. The Patent Trial and Appeal Board (PTAB) conducts these proceedings, which include inter
partes review (IPR) (as well as other procedures like post-grant review). PTAB consists primarily of
hundreds of administrative patent judges (APJs), who sit in panels of three to rule on the validity of
patents challenged through IPR. The Secretary of Commerce (the Secretary), in consultation with the
Director of the Patent and Trademark Office (the Director), appoints APJs to the PTAB. Because of the
economic importance of patent rights, millions or even billions of dollars may be at stake in these
proceedings.
The Supreme Court agreed to hear United States v. Arthrex to determine whether the authority exercised
by APJs was consistent with the Constitution's Appointments Clause. By a vote of 5 to 4, the Court held
that APJs exercised authority that was incompatible with their appointment by the Secretary to an
inferior office. In the majority's view, only principal officers nominated by the President and confirmed
by the Senate may issue final decision[s] binding the Executive Branch in administrative adjudications
like IPRs. APJs, however, were appointed as inferior executive officers by the Secretary, and no
presidentially appointed officer-such as the Director-had sufficient power to review PTAB decisions.
In short, the Court held that the structure of the PTAB violated the Constitution because inferior officers
may not exercise unreviewable executive power.
Despite this constitutional flaw, the Court did not invalidate the PTAB or the administrative processes
created by the AIA. Instead, a different majority of Justices concluded that the appropriate remedy in
Arthrex was to grant the Director unilateral power to review PTAB decisions. Although the AIA
specifically insulated PTAB decisions from further review within the executive branch-providing that
[o]nly the [PTAB] may grant rehearings-the Court severed this statutory provision, permitting the
Director discretion to rehear PTAB decisions. In this way, the Court remedied the constitutional
problem while preserving IPR and the PTAB.
Congressional Research Service
https://crsreports.congress.gov
LSB10615
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