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Congress Should Weigh Arthrex ‘Fix,’ House Democrat Says (1)

Nov. 19, 2019, 7:56 PMUpdated: Nov. 19, 2019, 11:17 PM

Congress should consider responding to a Federal Circuit ruling that administrative patent judges were unconstitutionally appointed, the chairman of the House Judiciary IP subcommittee said.

The U.S. Court of Appeals for the Federal Circuit said in Arthrex v. Smith & Nephew that judges on the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board should have been nominated by the president and confirmed by the Senate. The panel remedied the situation by severing part of a 2011 law that prevented the judges, appointed by the Secretary of Commerce, from being fired without cause.

“It goes against the idea of providing independent and impartial justice for judges thinking about his or her livelihood while also weighing the facts of a case,” Rep. Hank Johnson (D-Ga.), said at a Nov. 19 panel hearing on the impact of Arthrex. on the U.S. Patent and Trademark Office.

“I believe it’s our responsibility to consider a legislative fix,” Johnson added.

The Oct. 31 ruling has led to a spate of appeals for new hearings in front of new panels of administrative patent judges. The Trump administration has also indicated in court filings that it intends to seek a full-bench Federal Circuit review of the decision.

Johnson said Congress also must learn more about the impact of any changes that could come during a potential full-bench rehearing of the ruling, or if the Supreme Court takes the case.

Johnson wasn’t alone on the panel in taking issue with Arthrex‘s removal of civil service protections for PTAB judges.

“I do have concerns with the current so-called remedy,” Rep. Jerrold Nadler (D-NY.), the full House Judiciary Committee chairman, said. “I question whether this is the right way to achieve the apparent objective.”

‘Second Look’

Some of the witnesses who testified at the hearing also voiced concerns.

John Whealan, the dean for IP law studies at George Washington University Law School, said lawmakers may want to consider whether PTAB proceedings, known as inter partes reviews, are functioning as Congress had intended. Those proceedings weigh whether prior inventions or published materials make an invention too obvious to have been patented.

“Eight years have passed, over 10,000 IPRs have been filed, so this might be a good time for Congress to take a second look,” Whealan said.

Arti Rai, a professor at Duke Law, said she believes “the PTAB is largely functioning as Congress envisioned in the America Invents Act.”

Johnson asked those testifying whether all PTAB judges should be appointed by the President and confirmed by Senate; whether PTAB decisions should be subject to discretionary review by the PTO director; whether decisions should be reviewed by a panel of Senate-confirmed PTAB judges; and whether the PTAB’s chief judge should be nominated by the president and confirmed by the Senate.

John Duffy, a professor at the University of Virginia School of Law, said all of those options were constitutional, so it was up to lawmakers to decide.

To contact the reporter on this story: Ian Lopez in Washington at ilopez@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com