Justice Dept. Defends Challenge to APJ Appointments

The latest constitutional challenge to the Patent Trial & Appeal Board (PTAB) involves the Appointments Clause.

The Appointments Clause of the U.S. Constitution has been interpreted to require that only “Principal Officers” of the United States — appointed by the President and confirmed by the Senate — can exercise “significant authority” pursuant to the laws of the United States. What is significant authority, you ask?  In a nutshell, the final word of the U.S. government.

So the debate in the now pending petition for certiorari in Polaris Innovations Ltd. v. Kingston Tech. (and in other petitions for cert raising the same issue) has become whether the APJs of the PTAB are superior officers rendering the final word of the government in PTAB trial proceedings, or whether they are instead functioning as “inferior officers” subject to the control of the Director (a political appointee, confirmed by the Senate).

The Government weighed in earlier this week on these petitions for certiorari.

In its briefs (here) the government explains several characteristics of PTAB APJs that render them mere employees, and explains the Director maintains extensive overview, as well as veto power of their decisions.

The Supreme Court has never “set forth an exclusive criterion for distinguishing between principal and inferior officers for Appointments Clause purposes,” but has explained that in general, “‘inferior officers’ are officers whose work is directed and supervised at some level by others who were appointed by Presidential nomination with the “advice and consent of the Senate.” Edmond v., 520 U.S. 651, 661–63 (1997). Here, administrative patent judges’ work is directed and supervised by the Director of the USPTO and the Secretary of Commerce, both Presidentially-nominated and Senate-confirmed officials. Polaris’s assertions to the contrary rest on a profound misunderstanding of the Board and the relevant statutes.

The brief then goes on to note the Director’s power and supervision over the APJs, and ability to control the process and substance of APJ work, explaining that:

  • PTAB APJs can be removed from a panel as the Director desires, or can be fired altogether (subject to standard civil servant protections)
  • The Director issues regulations governing the conduct of PTAB proceedings
  • The Director issues binding policy directions
  • The Director may designate himself as panel member on a rehearing to drive policy
  • Decisions of the PTAB have no real world effect until appeal, in which the Director has a right to intervene

The brief generously cites to SOP2 for evidence of the Director’s ability to control policy and PTAB decisions. (As I pointed out previously, the content of SOP2 in this regard was purposeful). While SOP2 is relatively new, the government argues that it serves as evidence that the Director always possessed this control and management power over APJ decisions.

It remains to be seen whether the High Court will take the case up for further consideration. Seems to me there is enough here to thwart further interest.