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Arthrex, Inc. v. Smith & Nephew, Inc.

United States Court of Appeals for the Federal Circuit · 2022 · Constitutional Law

Constitutional LawAppointments ClauseFederal Vacancies Reform ActSeparation of PowersPatent LawInter Partes ReviewWritten DescriptionAnticipation

Facts

The PTAB found claims 1, 4, 8, 10–12, 16, 18, and 25–28 of Arthrex's '907 patent anticipated. On Supreme Court remand, Arthrex sought Director rehearing, but because both the Director and Deputy Director positions were vacant, the Commissioner for Patents acted under Agency Organization Order 45-1 and denied rehearing, making the Board's decision final. On the merits, the anticipation dispute turned on whether the '907 patent could claim priority back through a chain of applications to the earlier '280 application; the Board found that an intervening application, the '707 application, lacked written description support for flexible eyelets encompassed by the later generic "eyelet" claims. That ruling made ElAttrache, the publication of the '280 application, prior art and anticipatory.

Issue

Whether the Commissioner for Patents, while temporarily performing the Director's duties during vacancies in the Director and Deputy Director offices, could deny Arthrex's rehearing request without violating the Appointments Clause, the Federal Vacancies Reform Act, or separation of powers. Also, whether the PTAB correctly held the challenged claims anticipated based on its determination that an intervening application in the priority chain lacked written description support, and whether the Board had authority in IPR to decide that priority question.

Rule

Under Eaton and the Supreme Court's Arthrex decision, an inferior officer may temporarily perform the functions of an absent principal officer on an acting basis under special and temporary conditions without violating the Appointments Clause. The FVRA applies only to non-delegable functions or duties that a statute or regulation requires the applicable officer, and only that officer, to perform; it does not restrict performance of delegable duties. To obtain the benefit of an earlier filing date under 35 U.S.C. § 120, each application in the chain must satisfy the written description requirement for the later-claimed subject matter, and in IPR the Board may resolve priority and written-description questions necessary to determine whether asserted prior art is in fact prior art for a properly raised § 102 ground.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Director of a federal intellectual-property bureau resigned, and the Deputy Director position was also vacant. Under a preexisting internal order, the bureau's Commissioner for Trademarks, an inferior officer appointed by the department secretary, temporarily denied a party's request for agency-head review of an adjudicatory board decision and stated that the board's ruling was final agency action.

Under the majority's reasoning, is the Commissioner's action most likely constitutional under the Appointments Clause?

Explanation. The majority relied on Eaton and the Supreme Court's prior decision to hold that an inferior officer may temporarily perform a principal officer's functions on an acting basis during a vacancy without violating the Appointments Clause. The key is that the service is limited and temporary, not that every final agency action must always be issued by a PAS officer. (Derived from Arthrex, Inc. v. Smith & Nephew, Inc. (n.d.).)