Legislative Fix Enacted for Trademarks

On March 1st, the Supreme Court will hear its fifth PTAB related case in United States v. Arthrex Inc.  At issue in this latest dispute is whether, for purposes of the Constitution’s appointments clause, administrative patent judges of the U.S. Patent and Trademark Office are principal officers who must be appointed by the president with the Senate’s advice and consent, or “inferior Officers” whose appointment Congress has permissibly vested in a department head. While this may sound like a boring legal debate for administrative law nerds (and it kinda is), there are some real world consequences for us super cool PTAB practitioners.

But, as made clear by a recent change to the Trademark statutes in the Trademark Monetization Act (TMA), it all may end in a fizzle for PTAB practitioners.

Of the two questions presented to the SCOTUS, the definitional one being outlined above, it is the second that is of the most interest to PTAB practitioners.  That is:

Whether, if administrative patent judges are principal officers, the court of appeals properly cured any appointments clause defect in the current statutory scheme prospectively by severing the application of 5 U.S.C. § 7513(a) to those judges.

In other words, should the court decide that the PTAB judges are operating as principal officers, now what?  Was the Federal Circuit’s remedy, enough…too much?  Should the entire PTAB system collapse in a heap? The answer of course may depend on whom you ask.

The gov’t seems to be most interested in pursuing the case based upon the potential impact of the Federal Circuit’s decision on other agencies (at least with respect to forfeiture of arguments not made before the agency). Many patent owners are hoping that the entire system is deemed unconstitutional, while others are just wondering if they are going to get a new PTAB trial before different judges. My view is that the Court is unlikely to strike down the entire system, it is more of just a question of how many new trials will be required — a handful, or 100+.

But, let us assume that the Court holds that the only solution is to find the entire system unconstitutional, now what?  Well, for one it would make for quite a mess, but, it would be a temporary mess.  This is because Congress has already enacted a fix to the Trademark side (Trademark Trial & Appeal Board) by giving the Director (i.e., the political appointee) the power to revisit any decision of the TTAB. So, the final decision from the TTAB is vested in the Director, not the judges (who therefore would be operating in an “inferior” capacity, and thus constitutionally)

The fix is a single line of the TMA (enacted into law in December of 2020) as follows:

The Director may reconsider, and modify or set aside, a decision of the Trademark Trial and Appeal Board under this section.

The fix is that simple, and could be easily added to the AIA by appending that very amendment to any legislation headed to the President’s desk for signature.

So, while the debate at the SCOTUS on March 1st is sure to be interesting to the pocket-protected masses (I’m looking at you Admin Law Professors), the cool patent kids will go on about their business.