WASHINGTON – The Supreme Court on Monday scrutinized whether more than 250 administrative justices hearing patent disputes, some over billions of dollars, had been appointed in violation of the Constitution.
Several judges said during oral argument that they believe the judges, who sit on the Patent Trial and Appeal Board, an executive administrative tribunal established by a law of 2011, are doing work of ‘such importance and independence that they should have been appointed by the President and confirmed by the Senate.
“This structure is a real break with tradition,” said Judge Brett M. Kavanaugh. “These are decisions of several million, sometimes billions of dollars that are not made by someone who is responsible in the usual way.”
The constitutional separation of powers, he said, prohibits Congress from isolating executive officials of significant authority – even those whose job it is to settle disputes – from presidential control.
Malcolm L. Stewart, a federal government attorney, said patent judges, appointed by the Secretary of Commerce in consultation with the director of the US Patent and Trademark Office, were properly overseen by the director, who, like the secretary of commerce, is appointed by the president and subject to confirmation by the Senate. The director, he said, provided the judges with sufficient oversight so that they were not “senior officers” who themselves demanded a presidential appointment.
“The Director can issue binding guidelines regarding substantive patent law,” said Mr. Stewart. “He can designate specific advice from the board as precedent, thus making these opinions binding on future panels. It can also decide whether a specific examination will be instituted and which judges will sit on the committee. “
Chief Justice John G. Roberts Jr. responded that these methods “appear to be more or less a means of twisting the arms” of patent judges who do not meet the direct control required. The only thing the director cannot do, the chief justice said, is to change a decision made by a panel of patent judges.
The case of United States v. Arthrex, # 19-1434, arises from a challenge filed by Smith & Nephew, a medical technology company, against patents owned by a competitor, Arthrex, on a medical device. A panel of patent judges ruled that Arthrex’s patents were invalid.
Arthrex appealed to the United States Court of Appeals for the Federal Circuit, a specialized court in Washington, saying the patent judges’ decision should be overturned because they had not been properly appointed.
The appeals court agreed, ruling that judges performed important work without supervision and were therefore constitutionally “senior officers”, meaning they had to be appointed by the president and confirmed by the Senate.
On Monday, Judge Sonia Sotomayor asked how it was possible to reconcile judicial independence, even for administrative judges, and presidential control. “Isn’t that totally at odds with a judicial system of any kind?” she said.
Mark A. Perry, an attorney for Smith & Nephew, said the conflict warrants a flexible approach by Congress, an approach that should allow the current system. “There is an inherent tension in agency arbitration-type procedures between jurisdictional independence and presidential control,” he said, “and this balance can be achieved by Congress in so many ways and all over the place. long history has been achieved in many, many ways for so long. as the channels of authority are preserved.
But Jeffrey A. Lamken, an Arthrex lawyer, said more oversight was needed for executive officials who have the “final say in resolving billion-dollar disputes affecting the innovation landscape. “.
“For parties aggrieved by the loss of valuable rights,” he said, “there is no superior they can turn to asking them to overturn this bad decision.”
The appeals court’s solution to the constitutional problem was to strike down part of the law that protected patent judges from being dismissed without cause. This effectively demoted them from “senior officers,” the appeals court said.
The Supreme Court does not seem likely to adopt this particular solution and there does not appear to be a consensus on what should follow from a decision that patent judges were appointed in violation of the Constitution.
The Supreme Court’s ruling will affect more than 100 cases that were overturned by the appeals court, which originally ordered them to be repeated by juries of newly demoted patent judges. These hearings have been suspended while judges consider the case before them.