CAFC OKs Interim Director Actions

The first Arthrex battle at the SCOTUS was an attempt to pull down the PTAB system based upon a violation of the Appointments Clause. That effort failed, and instead, the Court simply allowed for a principal officer, the Director, to review Final Written Decisions (FWDs). Then, when Director Iancu stepped down, the interim Director took over the Director Review functions. Arthrex II argued that this was substitution was improper as the interim Director was not a political appointee (i.e., Senate confirmed).

Neither of these disputes were of much interest to to me. In my view the first challenge was always going to end in some kind of remedy that would have little impact on PTAB practice, and the second, at best, was just going to end up with a new signature on the same Director Review decision.

So, it was not surprising when Arthrex II fizzled out last week.

IPWatchdog has a nice overview of the actual basis for the Federal Circuit’s decision, but, the long and short of it is that the CAFC sided with the government, finding that while an inferior officer generally cannot issue a final agency decision such as a Director Review, such persons may perform the functions and duties in the absence of a political appointee, on a temporary, acting basis.

This is another decision, that practically speaking, had to be resolved this way. To decide otherwise would throw the entire administrative state into chaos. Agencies can’t simply stop working until Congress gets around to appointing leaders some 18 months after a change in presidential administrations.

From all of this litigation, a Director Review process was gained for Final Written Decisions. But, the goal was always to disrupt the PTAB’s ability to function, and in that respect, both challenges fizzled.