Supreme Court’s Patent Judge Ruling May Bedevil Copyright Board

Sept. 7, 2021, 9:00 AM

The U.S. Supreme Court’s decision that administrative patent judges were unconstitutionally appointed is casting a legal shadow over a U.S. Copyright Office tribunal established to handle small-dollar disputes.

The justices ruled in United States v. Arthrex that Patent Trial and Appeal Board judges should have been presidentially nominated and Senate-confirmed—or their rulings should have been reversible by someone who is. The ruling adds to previously existing arguments that the Copyright Claims Board, which the Copyright Office is still setting up, will be unconstitutional.

Arthrex gives defendants “more avenues of attack” under the U.S. Constitution’s appointments clause, Jonathan Band, a copyright attorney at Jonathan Band PLLC, said.

Congress created the CCB as a low-cost alternative to federal court for copyright disputes. The possibility of constitutional challenges from defendants who end up before the tribunal could make it a less viable venue. The Copyright Office declined to comment.

Another potential wrinkle is that the Copyright Office itself is part of the Library of Congress, not an independent agency. That could complicate any effort by the office to work around Arthrex, attorneys say, and raises questions about who has the power to tackle the constitutional question or other issues.

Lack of Review

The Supreme Court mandated that PTAB decisions be reviewable by the U.S. Patent and Trademark Office director to overcome the constitutional issue. Unlike the PTAB, Copyright Claims Board decisions are subject to review by the Register of Copyrights, who isn’t a presidential appointee, and not a federal court.

Under Arthrex, Band said, the court might find that the lack of judicial review and narrow basis for appeal unconstitutional.

“There’s no judicial review of the decisions of this tribunal,” Band said. “Under the latest Supreme Court decision, that might not be permissible.”

Opinion is split, though, on whether Arthrex can be applied, said Meredith Rose, Public Knowledge senior policy counsel. Because the Copyright Office is housed in the legislative branch, rather than the executive branch like the patent office, and there are fundamental differences between the PTAB and the CCB, Arthrex might not be relevant.

Still, many of the questions about the constitutionality of the claims board boil down to reviewability, which was a core question in Arthrex, Rose said.

“At the end of the day it does have this interesting discussion of this chain of command question which really hasn’t been solved,” Rose said.

If the tribunal is found to be unconstitutional under the appointments clause, Arthrex makes the remedy “more confusing,” Andrew W. Coffman of Phelps Dunbar LLP said.

If courts held the CCB was unconstitutional, Coffman said under Arthrex the law could be remedied by making the Librarian of Congress, who’s presidentially nominated and Senate-confirmed, the reviewer of the claims board decisions.

But getting to that remedy, Coffman said, is “like a game of ‘choose your own adventure.’” If the claims board does violate the appointments clause, it’s unclear whether the Librarian or the board itself can unilaterally implement a plan to make the board Arthrex-compliant, or if a federal court must be the one to create the plan.

The appointments clause has become a “super popular thing” for the Supreme Court in the last decade, so lawyers for defendants in the tribunal should still bring up the concern, Coffman said.

“I would still raise this issue every time in case you got a decision that the defendant didn’t like,” Coffman said. “That really puts a lot of pressure on these plaintiffs because it’s almost like you have to win twice to prevail, in a way.”

‘Walkie Talkie’ Problem

Potential Arthrex issues, copyright attorneys said, stem from the 2020 law that created the CCB, and the structure of the Copyright Office. It’s just one of several issues that have been raised.

“To the extent that anyone’s going to try to litigate the existence of the CCB, Arthrex is probably in the arsenal but it would not be in the top two or three modes of attack,” Rose said.

Defendants receive a notice that they’ve been called in front of the tribunal and can opt out by saying they would rather go to federal court or discuss a settlement.

The tribunal’s opt-out of the system makes the appointments clause and lack of judicial review a greater problem, Band said. Defendants might, through accidental inaction, waive their right to to appeal to a federal court.

To address the opt-out concerns, the Copyright Office during rulemaking will issue rules on how it will notify defendants. But how to fix the possible Arthrex problem is unclear. Unlike the patent office director, the Librarian of Congress isn’t as closely involved in copyright issues, making it more natural that the Register review the claims board decisions.

Kali Murray, a law professor at Marquette University and the co-director of its intellectual property program, said review by the Register should be constitutional under the appointments clause and is more logical but the fact that it might not be permissible under Arthrex “speaks to the broader problematic nature” of the Copyright Office’s structure.

The office’s functions have shifted to be more complex and functions more as an executive agency, creating a “walkie talkie” problem, Murray said. The agency would be a better fit within the PTO rather than the Library of Congress, she said.

“The idea of having a small claims court is actually a really big responsibility,” Murray said, “and I think all the sorts of issues we’re pointing out that arise because of Arthrex arise from that the mismatch of vision. The actual mission of the Copyright Office is getting much broader, but actual statutes haven’t been amended to reflect those conditions.”

To contact the reporter on this story: Samantha Handler in Washington at shandler@bloombergindustry.com

To contact the editors responsible for this story: Keith Perine at kperine@bloombergindustry.com; Kibkabe Araya at karaya@bloombergindustry.com

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