`
`Nos. 19-1434, 19-1452, 19-1458
`================================================================================================================
`
`In The
`Supreme Court of the United States
`--------------------------------- ♦ ---------------------------------
`
`UNITED STATES OF AMERICA,
`Petitioner,
`
`v.
`
`ARTHREX, INC., ET AL.,
`Respondents.
`
`--------------------------------- ♦ ---------------------------------
`
`On Writs Of Certiorari To The
`United States Court Of Appeals
`For The Federal Circuit
`
`--------------------------------- ♦ ---------------------------------
`
`BRIEF FOR US INVENTOR INC. AS AMICUS
`CURIAE IN SUPPORT OF ARTHREX, INC.
`
`--------------------------------- ♦ ---------------------------------
`
`ROBERT GREENSPOON
`Counsel of Record
`FLACHSBART & GREENSPOON, LLC
`333 N. Michigan Avenue, Suite 2700
`Chicago, Illinois 60601
`(312) 551-9500
`rpg@fg-law.com
`Counsel for Amicus Curiae
`
`[Additional Captions On Inside Cover]
`
`================================================================================================================
`COCKLE LEGAL BRIEFS (800) 225-6964
`WWW.COCKLELEGALBRIEFS.COM
`
`
`
`
`
`
`
`--------------------------------- ♦ ---------------------------------
`
`SMITH & NEPHEW, INC., ET AL.,
`Petitioners,
`
`v.
`
`ARTHREX, INC., ET AL.,
`Respondents.
`
`--------------------------------- ♦ ---------------------------------
`
`ARTHREX, INC.,
`
`v.
`
`Petitioner,
`
`SMITH & NEPHEW, INC., ET AL.,
`Respondents.
`
`--------------------------------- ♦ ---------------------------------
`
`
`
`
`
`
`
`i
`
`QUESTIONS PRESENTED
`
`
`1. Whether, for purposes of the Appointments
`
`Clause, U.S. Const. Art. II, § 2, Cl. 2, administrative pa-
`tent 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 “in-
`ferior Officers” whose appointment Congress has per-
`missibly vested in a department head.
`2. Whether, if administrative patent judges are
`
`principal officers, the court of appeals properly cured
`any Appointments Clause defect in the current statu-
`tory scheme prospectively by severing the application
`of 5 U.S.C. § 7513(a) to those judges.
`
`
`
`
`
`ii
`
`TABLE OF CONTENTS
`
`3
`
`Page
`QUESTIONS PRESENTED ................................
`i
`TABLE OF CONTENTS ......................................
`ii
`TABLE OF AUTHORITIES .................................
`iii
`INTEREST OF AMICUS CURIAE ......................
`1
`SUMMARY OF ARGUMENT ..............................
`2
`CONSTITUTIONAL AND PROCEDURAL BACK-
`GROUND ..........................................................
` A. Disposition of a Previous Constitutional
`Challenge Sets Up the Problem ................
` B. Due Process Impartiality Problems at the
`PTAB Magnify the Importance of Proper
`APJ Hiring .................................................
` C. APJ Hiring Currently Lacks Transpar-
`9
`ency, Leading to Unjust Outcomes ............
`ARGUMENT ........................................................ 14
`
`I. Removing APJ Tenure Protection to Make
`Their Jobs More Political Does Not Validly
`Remedy the Appointments Clause Viola-
`tion ............................................................. 14
` II. This Court Can Devise a Better-Targeted
`Remedy ...................................................... 19
` III. The Panel Misread Constitutional Case
`Law ............................................................ 24
`CONCLUSION ..................................................... 27
`
`
`3
`
`6
`
`
`
`iii
`
`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`Alaska Airlines, Inc. v. Brock, 480 U.S. 678 (1987) ........ 21
`Arthrex, Inc. v. Smith & Nephew, Inc., 953 F.3d
`760 (Fed. Cir. 2020) ............................... 15, 17, 22, 27
`Edmond v. United States, 520 U.S. 651 (1997) .... 18, 19
`Free Enterprise Fund v. Public Company Ac-
`counting Oversight Board, 561 U.S. 477
`(2010) ............................................................. 24, 25, 26
`Hyosung TNS Inc. v. Int’l Trade Comm’n, 926
`F.3d 1353 (Fed. Cir. 2019) ....................................... 21
`Intercollegiate Broadcasting System, Inc. v. Copy-
`right Royalty Board, 684 F.3d 1332 (D.C. Cir.
`2012) ............................................................ 24, 25, 26
`Lucia v. SEC, 138 S. Ct. 2044 (2018) ................... 19, 20
`New Vision Gaming & Development, Inc. v. SG
`Gaming, Inc., No. 20-1399 (Fed. Cir.) ................ 6, 8, 9
`Oil States Energy Services, LLC v. Greene’s En-
`ergy Group, LLC, 138 S. Ct. 1365 (2018) .... 3, 4, 5, 18
`United States v. Stevens, 559 U.S. 460 (2010) .............. 4
`
`CONSTITUTIONAL PROVISIONS
`U.S. Const. art. I, § 8, cl. 8 ............................................. 2
`
`
`
`
`iv
`
`TABLE OF AUTHORITIES—Continued
`
`Page
`
`STATUTES
`35 U.S.C. § 6(a) ............................................................ 10
`35 U.S.C. § 285 ............................................................ 23
`35 U.S.C. § 318(b) ........................................................ 20
`35 U.S.C. § 328(b) ........................................................ 20
`
`OTHER AUTHORITIES
`Dani Kass, Fed. Cir. Told PTAB’s Fee Model Un-
`dercuts Due Process, Law360 (July 2, 2020) ............ 8
`
`
`
`1
`
`INTEREST OF AMICUS CURIAE1
`
`US Inventor, Inc. is an inventor-led and inventor-
`
`funded non-profit advocacy organization. We represent
`more than 10,000 independent inventors along with
`the small businesses they founded, own, and operate.
`We seek to educate lawmakers, agencies, and courts on
`matters that affect our members, and participate as
`permitted in shaping and reforming those policies.
`
` We are neither lawyers nor lobbyists, merely in-
`ventors who were shocked and harmed by unintended
`consequences of policies from the past and desire a bet-
`ter environment so that the next generation of inven-
`tors can flourish and help society. Our directors and
`volunteers would prefer to be tinkering in our garages
`or launching new products, but we have come to recog-
`nize that policymakers and courts benefit from our ex-
`periences and viewpoints as they make and apply
`patent law.
`
`US Inventor was founded to support the innova-
`
`tion efforts of the “little guy” inventors, seeking relia-
`ble patent rights for developing our inventions,
`bringing those inventions to a point where they can be
`commercialized, creating jobs and industries, and pro-
`moting continued innovation. In short, we are propo-
`nents of “securing for limited times to . . . inventors the
`
`
`1 No counsel for a party authored this brief in whole or in
`
`part. No person or entity other than Amicus or its counsel made
`a monetary contribution to the preparation or submission of this
`brief. Consent for filing this Amicus Brief has been obtained from
`all parties, via docket-filed blanket consents.
`
`
`
`2
`
`exclusive right to their . . . discoveries” in order to “pro-
`mote the progress of Science and Useful arts.” U.S.
`Const. art. I, § 8, cl. 8. Our broad experience with the
`patent system, new technologies, and creating compa-
`nies, gives us a unique perspective on the important
`issues presented in this appeal.
`
`US Inventor’s membership includes litigants in-
`
`voluntarily drawn into proceedings before the Admin-
`istrative Patent Judges (APJs) identified as having
`been appointed in violation of the Appointments
`Clause. As a friend of the Court, US Inventor has per-
`spective to supply additional information beyond that
`shown by Arthrex for assessing the soundness of the
`Federal Circuit remedy (or “fix”) for the adjudged un-
`constitutionality.
`--------------------------------- ♦ ---------------------------------
`
`SUMMARY OF ARGUMENT
`
`The court of appeals’ remedy for the Appointments
`
`Clause violation would not have been preferred by
`Congress, and overlooks a constitutionally sound and
`non-disruptive way to downgrade APJs to inferior or
`non-officer status.
`--------------------------------- ♦ ---------------------------------
`
`
`
`
`
`
`
`
`3
`
`CONSTITUTIONAL AND
`PROCEDURAL BACKGROUND
`
`This Court knows that passing one constitutional
`
`test does not preordain passing another. On the facts
`here, just because the Patent Trial and Appeal Board
`(PTAB) passes Article III does not mean that the man-
`ner in which its Administrative Patent Judges get
`their jobs passes the Appointments Clause.
`
`
`A. Disposition of a Previous Constitutional
`Challenge Sets Up the Problem
`A divided Court in Oil States Energy Services, LLC
`
`v. Greene’s Energy Group, LLC ruled that when cancel-
`ing vested patent rights based on a challenger’s inva-
`lidity assertions, the PTAB of the United States Patent
`and Trademark Office (USPTO) does not assert the “ju-
`dicial power.” 138 S. Ct. 1365 (2018). Congress’s crea-
`tion of invalidity trials at the PTAB in 2011 did not
`violate Article III Separation of Powers. In dissent,
`Justice Gorsuch (joined by the Chief Justice) chan-
`neled the thinking of Amicus US Inventor and its
`membership.
`
`Justice Gorsuch wrote poignantly about the di-
`
`lemma the Oil States majority ruling made for individ-
`ual inventors, and access to justice:
`
`After much hard work and no little invest-
`ment you devise something you think truly
`novel. Then you endure the further cost and
`effort of applying for a patent, devoting maybe
`$30,000 and two years to that process alone.
`
`
`
`4
`
`At the end of it all, the Patent Office agrees
`your invention is novel and issues a patent.
`The patent affords you exclusive rights to the
`fruits of your labor for two decades. But what
`happens if someone later emerges from the
`woodwork, arguing that it was all a mistake
`and your patent should be canceled? Can a po-
`litical appointee and his administrative
`agents, instead of an independent judge, re-
`solve the dispute? The Court says yes. Re-
`spectfully, I disagree.
`Oil States, 138 S. Ct. at 1380 (Gorsuch, J., dissenting)
`(emphasis added). At issue today are those “adminis-
`trative agents” who hold so much power over the life’s
`work of so many. Are they hired properly under the
`Constitution?
`
`Justice Gorsuch went on presciently to state the
`
`problem before the Court today. His dissent reviewed
`PTAB boosters’ assertion that it is a “good thing” that
`the USPTO reviews its “too many low quality patents”
`to “clean up problems after the fact,” and the PTAB’s
`invalidity trials are an “efficient solution” compared to
`federal court trials. Id. Justice Gorsuch retorted that
`“it is not our place to replace [ ] with our own” the con-
`sidered judgment of the American people that the
`“ ‘benefits of [the Constitution’s] restrictions on the
`Government outweigh the costs.’ ” Id., quoting United
`States v. Stevens, 559 U.S. 460, 470 (2010). He then
`closed with the point that brings us to the current
`question.
`
`
`
`5
`
`No doubt this efficient scheme is well in-
`tended. But can there be any doubt that it also
`represents a retreat from the promise of
`judicial independence? Or that when an in-
`dependent Judiciary gives ground to bureau-
`crats in the adjudication of cases, the losers
`will often prove the unpopular and vulnera-
`ble? Powerful interests are capable of amass-
`ing armies of lobbyists and lawyers to
`influence (and even capture) politically ac-
`countable bureaucracies. But what about eve-
`ryone else?
`Id. at 1381 (emphasis added).
`
`Among the “everyone else” mentioned by Justice
`
`Gorsuch are the independent inventors whom Amicus
`represents. The title “inventor” is society’s only honor-
`ific that any person can earn based solely on personal
`achievement. No educational milestone is required.
`Many of the most successful American inventors never
`attended college, or dropped out: Dean Kamen, Bill
`Gates, Steve Jobs, the Wright Brothers, Samuel Morse,
`the list goes on. Inventorship is one of the only remain-
`ing paths to upward social mobility that remains avail-
`able to all. Inventors can succeed regardless of
`background or educational attainment.
`
` We know that inventors without formal education
`will bring us the next breakthrough. But we don’t
`know when or from whom. As long as we allow se-
`cretly-hired and easily-captured bureaucrats to sit in
`judgment of their accomplishments, faith in the sys-
`tem will remain at a nadir. This disincentivizes the
`
`
`
`6
`
`innovation society needs. If we must tolerate a patent
`system with invalidity trials that are so vulnerable to
`lobbyist influence and agency capture, we deserve that
`its agents get hired under the brightest possible light
`of disinfecting sunshine: under the Appointments
`Clause.
`
`
`B. Due Process Impartiality Problems at the
`PTAB Magnify the Importance of Proper
`APJ Hiring
`
`The only remaining way to eke out any “promise
`
`of judicial independence” in the context of PTAB “bu-
`reaucrats” is the manner of their hiring. The Appoint-
`ments Clause exists to advance this and several other
`policies: (1) that intensive vetting in Congress of im-
`portant appointments attracts only the finest talent to
`high positions; (2) that the identity, skills and work his-
`tory of the individuals entrusted with the lives and lib-
`erties of the public is transparent to the American
`people; and (3) that accountability for such hiring de-
`cisions gets shared at the top of the political ladder:
`among the President and the Senate.
`
` Meanwhile, concern is growing about APJ “judicial
`independence.” As this case wound its way up to this
`Court, a parallel case has been percolating at the Fed-
`eral Circuit. In New Vision Gaming & Development,
`Inc. v. SG Gaming, Inc., No. 20-1399 (Fed. Cir.), the
`appellant asserts that the financial structure of the
`PTAB leads to improper judicial bias in favor of insti-
`tution of trials, and consequent invalidation of patents.
`
`
`
`7
`
`That appeal points to the inner workings of agency
`
`budgeting, APJ compensation and bonuses, and APJ
`performance evaluations. It asserts that the combined
`effect violates Due Process. As appellant New Vision
`Gaming ably explains in that proceeding (No. 2020-
`1399 (Fed. Cir.), ECF#29), APJs receive bonuses based
`on their performance evaluations that are outsized for
`administrative judges (potentially up to about $40,000
`per year). Those bonuses depend on factors that in-
`clude how frequently they institute proceedings to
`begin an administrative trial. APJs have an incentive
`to institute IPRs because they effectively get twice the
`credit usable to (a) meet minimum performance evalu-
`ation standards (to keep their jobs) and (b) potentially
`rake in huge bonuses when exceeding their metrics.
`This financial incentive raises serious issues under Su-
`preme Court cases finding due process violations
`where adjudicators get paid more for reaching partic-
`ular results. Augmenting these problems, New Vision
`Gaming points out that the personnel who evaluate
`APJ performance in the first place are also responsible
`for the PTAB’s budget. About 40% of the PTAB’s rele-
`vant budget depends on PTAB trial petition and insti-
`tution receipts. APJs who want to please their bosses
`are incentivized to act in a manner that increases
`PTAB revenues—a one-way ratchet that only leads to
`more frequent inventor-unfriendly trials that carry an
`84% chance of an adverse outcome.
`
`The appellant there, New Vision Gaming, recently
`
`stated the problem this way in its final brief:
`
`
`
`8
`
`If a district court charged $20,000 to file a
`summary judgment motion, and then, after
`denying the motion, charged another $27,500
`to proceed to the merits—and those fees
`funded court operations and the judges’ sala-
`ries and bonuses—that scheme would be
`deemed unconstitutional. That funding ar-
`rangement would create the appearance of
`improper pecuniary interests, even without
`any actual bias on the part of the judges. Nu-
`merous cases have so held. The PTAB process
`is little different.
`
`(No. 20-1399 (Fed. Cir.), ECF#77, at 1).
`
`New Vision Gaming’s appeal has been highlighted
`
`in the legal press, with several law professors remark-
`ing that the due process challenge is “plausible” and
`“might actually have legs.” See Dani Kass, Fed. Cir.
`Told PTAB’s Fee Model Undercuts Due Process,
`Law360 (July 2, 2020) (quoting the three law profes-
`sors).
`Amicus US Inventor also filed as an amicus there.
`
`In US Inventor’s brief, Amicus revealed statistical evi-
`dence showing not just an inference and probability of
`bias (as appellant New Vision Gaming argues), but ac-
`tual bias in judicial outcomes based solely on factors
`related to APJ compensation. (See No. 20-1399 (Fed.
`Cir.), ECF#62). US Inventor showed with statistical
`rigor that there is an “October Effect,” in which the
`mere restarting of the federal budget fiscal year (when
`APJ decisional counts reset to zero), by itself, creates a
`change in how APJs judge their cases. (Id. at 2-7).
`
`
`
`9
`
`Since APJ salary and bonuses depend on the quantita-
`tive output of APJ decisions, US Inventor explained
`this non-random anomaly as APJs “stuffing the pipe-
`line” with patent invalidity cases that normally should
`not have to go through the trial process. (Id.). This ac-
`tual judicial bias against inventors arises because of
`extraneous factors of APJ self-interest, whether per-
`ceived or invisible, and whether intentional or acci-
`dental.
`
`Awareness is growing about the problem of “judi-
`
`cial independence” among APJ “bureaucrats” at the
`PTAB. Under the current system, no APJ (with the ex-
`ception of the USPTO Director, who by statute may sit
`as an APJ) gets hired under the Appointments Clause.
`The result: (1) the best talent does not gravitate to
`those jobs, (2) the American people know very little
`about who fills them, and (3) political accountability
`for APJ failures remains illusory. Inappropriate hiring
`inflames problems already intrinsic to a system biased
`against inventors.
`
`
`C. APJ Hiring Currently Lacks Transparency,
`Leading to Unjust Outcomes
`
`The Appointments Clause benefits the American
`
`people by making information about our government
`transparent. The governed get notice in advance who
`will be governing them. That knowledge disseminates,
`giving affected individuals the power to know the back-
`ground, history and qualifications of high government
`hires. Because APJs do not presently go through the
`
`
`
`10
`
`Appointments Clause process (nomination and confir-
`mation), America is in the dark. This hurts democracy
`and the rule of law.
`
`Astonishingly, the parties cannot agree on a basic
`
`fact of this case. How many APJs are there? This is a
`fact that would be readily known had there been pres-
`idential appointment and Senate confirmation. The
`Government’s November 25, 2020 merits brief (page 4)
`states that there are “more than 250” APJs. Smith &
`Nephew’s brief filed that day (page 4) states more cau-
`tiously that the number is “more than 200.” The Ar-
`threx brief filed December 23, 2020 cites a fiscal year
`2020 “Accountability Report” published by the USPTO
`on its website to report that the number (as of Septem-
`ber 30, 2020) is exactly 221. Circumvention of the
`Appointments Clause directly causes material disa-
`greement and uncertainty over the most basic fact of
`this litigation. (Without further comment, we will use
`the “250” number in this brief.)
`
`Unlike many government positions, APJs by stat-
`
`ute must possess baseline qualifications or else they
`may not properly become APJs. They must be “persons
`of competent legal knowledge and scientific ability.” 35
`U.S.C. § 6(a). Yet generally, how the Secretary of Com-
`merce hires them, and what qualifications they bring
`to their employment, remain opaque. No one can easily
`answer, based on public information, if all 250 APJs
`meet their minimum statutory qualifications. CSPAN
`did not film their job interviews.
`
`
`
`11
`
`This contrasts with properly-appointed officials.
`
`Any member of the public can learn all relevant infor-
`mation about a political appointee, with just a few
`clicks. Wikipedia has a page devoted to “Political Ap-
`pointments by Donald Trump” that leads to additional
`pages on a department-by-department basis. Wikipe-
`dia also has a page devoted to a “List of federal judges
`appointed by Donald Trump.” In fact, through Wikipe-
`dia alone, any member of the public can learn all about
`the background, history and qualifications of each and
`every high-ranking government official who was
`properly nominated and confirmed under the Appoint-
`ments Clause. This is precisely the category of infor-
`mation that inventors cannot learn about the APJs
`who sit in judgment over their rights.
`
`Nor can one just waltz into the agency and ask.
`
`Amicus US Inventor has tried without success (e.g.,
`through Freedom of Information Act requests). US In-
`ventor cannot receive basic information about the ap-
`proximately 250 currently-serving APJs. US Inventor
`has likewise tried without success to receive financial
`disclosures that such APJs must file with their
`agency—disclosures much like those that federal
`judges submit on a regular basis to the Administrative
`Office of the U.S. Courts. APJ financial disclosures are
`kept secret, whereas federal judicial disclosures are
`made public.
`
`This void of information has led directly to unjust
`
`results at the agency, or at least to results that justify
`a perception of agency capture and corporate self-
`dealing. Apple, Inc.
`is the most prolific PTAB
`
`
`
`12
`
`petitioner. In 2013, the Secretary of Commerce hired a
`junior attorney as a new APJ whose job had, until then,
`been to defend Apple against patent infringement as-
`sertions. Investigations ultimately revealed that this
`attorney-turned-APJ now “proceeded to preside over
`several dozen post grant challenges brought by Apple.
`Not surprisingly, Apple did extraordinarily well in
`those challenges [(a 96% kill rate)], leading [the inves-
`tigative reporter] to conclude that having [this APJ] on
`the panel for an Apple petition was a lethal cocktail for
`patent owners.” https://www.ipwatchdog.com/2019/04/17/
`story-ethics-optics-former-ptab-judge-matt-clements-
`now-works-apple/id=108354/.
`
`Could anyone really be surprised that, in 2019,
`
`this APJ landed a job at Apple upon resigning his
`judgeship? Id. Had the Appointments Clause governed
`this APJ appointment, would he have gotten the job in
`the first place? At minimum, nomination and confirma-
`tion would have allowed inventors adverse to Apple
`who found this APJ assigned to their panels to have
`sought timely recusal. More likely, transparency about
`this APJ’s previous defense of Apple would have led the
`USPTO to bar him from Apple panels entirely, to fore-
`stall public outcry. And perhaps if the Appointments
`Clause had been applied, notions of professional honor
`would have prevented this individual from even seek-
`ing a post-APJ revolving-door job at Apple.
`*
`
` *
`
` *
`
`
`
`
`
`
`13
`
`The Appointments Clause violation before this
`
`Court magnifies, exacerbates and inflames other struc-
`tural defects of the PTAB that lead to a lack of confi-
`dence from the independent inventor community in its
`“judicial independence.” If the PTAB were fair, unbi-
`ased and uniformly correct in its decisions, inventors
`would embrace its use as an aid to resolving validity
`disputes. But as it exists today, it appears to independ-
`ent inventors as a group of biased bureaucrats who
`make a living (and score bonus dollars) off of destroy-
`ing the American dream. APJs seem unusually prone
`to defend incumbent business interests, sometimes in
`service of revolving-door job prospects. Requiring com-
`pliance with the Appointments Clause will be a neces-
`sary step toward restoring inventors’ faith in the
`patent system. This will advance the cause of innova-
`tion, and help heal the wound in the economy that Con-
`gress imposed on the American people with the 2011
`creation of PTAB invalidity trials.
`
` With these concerns in mind, US Inventor turns to
`its legal argument. US Inventor makes two main
`points. First, this Court may correct the erroneous sev-
`erance remedy imposed by the Federal Circuit. If their
`decisions were deemed recommendatory in infringe-
`ment proceedings instead of mandatory, APJs would
`then qualify as “inferior” officers, retroactively curing
`their unconstitutional appointments. Second, the two
`precedents that the Federal Circuit cited as support for
`concocting its “no-tenure” severance remedy do not
`plausibly suggest that result.
`--------------------------------- ♦ ---------------------------------
`
`
`
`14
`
`ARGUMENT
`I. Removing APJ Tenure Protection to Make
`Their Jobs More Political Does Not Validly
`Remedy the Appointments Clause Violation
`
`In the decision under review, the court of appeals
`
`correctly concluded that APJs are unconstitutionally
`appointed. That decision nevertheless devised a rem-
`edy that is no remedy at all. The remedy does not re-
`quire the re-appointment of a single APJ. The remedy
`does not alter future appointments to require nomina-
`tion by the President and confirmation by the Senate
`(the required mode for principal officers). The remedy
`does not change anything about the character of APJ
`validity decisions that might downgrade APJ employ-
`ment status from principal officer to that of inferior or
`non-officer.
`
`Instead, the Federal Circuit remedy simply de-
`
`clares abolition of APJ tenure protection. The panel
`deemed that, for all future PTAB decisions, APJs are
`inferior officers, thus making their decisions constitu-
`tionally sound from that day forward. The result of this
`non-remedial “remedy” has been a wave of seemingly
`meaningless remands. Hundreds of parties are now
`forced to repeat proceedings before a new panel assem-
`bled from the same roster of APJs who were unconsti-
`tutionally appointed in the first place. Only now, APJs
`have no protection from termination if their decisions
`do not please their political bosses.
`
`Two Federal Circuit Judges later commented on
`
`the haste and carelessness of their colleagues’ remedy
`
`
`
`15
`
`analysis. They observed that “Arthrex disposed of
`the [remedy] question in a few sentences,” without a
`“fulsome severance analysis.” Arthrex, Inc. v. Smith &
`Nephew, Inc., 953 F.3d 760, 787 (Fed. Cir. 2020)
`(Hughes, J., and Wallach, J., dissenting from denial of
`reh’g en banc). Converting APJs to at-will employees
`conflicts with the goals and policy behind the Framers’
`placement of the Appointments Clause into our Con-
`stitution. It throws to the political winds what should
`be technological determinations. APJs who step
`wrongly (i.e., rule contrary to a department head’s de-
`sired adjudication outcome) risk their jobs. Billions of
`dollars of adjudicated outcomes are, because of the de-
`cision, more politically accountable to the President
`and his appointees. This exacerbates the problem of a
`tribunal whose outcomes have appeared biased and di-
`vorced from facts in the inventor community.
`
`These are all patent validity adjudications, ren-
`
`dered under standards that are intrinsically subjective,
`lending camouflage to a decision-maker motivated to
`choose one outcome over another for reasons outside of
`the record. Whether a patent claim is anticipated de-
`pends on interpretation of the scope of the claim, which
`depends on findings about what a person of ordinary
`skill in the art at the time of the invention would have
`perceived. Whether a patent claim would have been ob-
`vious depends on weighing numerous factors, includ-
`ing the difference between the scope of the claim and
`the level of ordinary skill in the art. The court of ap-
`peals’ remedy is incorrect because it makes determina-
`tions concerning technology more political, not less so.
`
`
`
`16
`
`Subjective elements within those determinations
`make political motives for specific decisions at the ad-
`judication phase nearly impossible to detect after the
`fact.
`
`Arthrex correctly describes in its merits brief why
`
`this is so large a problem. Arthrex notes that the PTAB
`model differs from the “traditional model” of Appoint-
`ments Clause-compliant agency adjudication. Brief for
`Arthrex, Inc. in No. 19-1434, at 51-52. “Under the tra-
`ditional model, administrative judges issue initial de-
`cisions. Those decisions are then subject to transparent
`review by accountable agency heads responsible for
`their actions in accepting or rejecting a decision.” Id. at
`51. Application of policy at the agency level should
`never occur through “a skewing of evidentiary factfind-
`ing for policy reasons,” since this undermines the pub-
`lic’s confidence in “visibly independent determination
`of the evidentiary facts” during initial adjudication. Id.
`at 51-52; see also id. at 27-32.
`
`Put another way, the “traditional model” of agency
`
`adjudication does permit a political thumb on the
`scale. But this occurs only through actions of a trans-
`parent and accountable agency head. The adjudication
`itself should happen solely on the evidentiary record,
`without the “skew” that happens when policy consider-
`ations distort fact finding.
`
`
`
`
`
`
`17
`
`Removing tenure protection encourages political
`
`(not
`factual) decision-making by administrative
`judges. As Judge Dyk observed (with concurrence from
`three other Federal Circuit judges): “By eliminating Ti-
`tle 5 removal protections for APJs, the panel is per-
`forming major surgery to the statute that Congress
`could not possibly have foreseen or intended.” Arthrex,
`953 F.3d 769 (Dyk, J., dissenting from denial of reh’g
`en banc). Making APJs politically accountable by dint
`of removing their Title 5 tenure protection conflicts
`with Congressional purpose concerning job security, as
`first established in the 1946 Administrative Proce-
`dures Act for ALJs, and 1975 Patent Act amendments
`for APJs. Id. at 769-71. Since 1975, despite numerous
`modifications of the Patent Act both big and small,
`Congress preserved APJ tenure protection for the pre-
`cise reason that personnel who conduct adjudication
`within Executive agencies should not be “mere tools of
`the agency and subservient to the agency heads in
`making their proposed findings of fact and recommen-
`dations.” Id. at 770. Judge Dyk (with three other
`Judges) pointed out, without rebuttal from their fellow
`Judges, that “ALJs in general and APJs in particular
`have been afforded longstanding and continuous pro-
`tection from removal” by Congress. Id. at 771. And they
`additionally noted that after the Arthrex panel deci-
`sion, Congress convened a subcommittee hearing at
`which one Member stated that eliminating tenure pro-
`tection was “inconsistent with the idea of creating an
`adjudicatory body [capable of ] providing independent
`impartial justice.” Id. at 772.
`
`
`
`18
`
`In short, the court of appeals remedy conflicts di-
`
`rectly with the norms of “judicial independence” ex-
`tolled in Justice Gorsuch’s Oil States dissent. And it
`conflicts with the “traditional model” of constitution-
`ally compliant agency adjudication. Making adjudica-
`tors more politically accountable diverts policy making
`from where it belongs (in the agency head) to where it
`easily evades detection (in the “impartial” adjudica-
`tors).
`
`Nor can the tenure-removal remedy advance the
`
`Appointments Clause policy of structuring the most
`important governmental hires “to curb Executive
`abuses of the appointment power” and “to assure a
`higher quality of appointments.” Edmond v. United
`States, 520 U.S. 651, 659 (1997). For instance, the Fed-
`eral Circuit never explains how taking away job secu-
`rity for a class of federal employees can possibly curb,
`as opposed to enable, abuse of Executive appointment
`and removal power by political appointees. And the
`panel decision never explains how emplacing a struc-
`ture that promotes kowtowing to the President’s ap-
`pointees, as opposed to independence from them, will
`lead to higher quality personnel filling APJ jobs, or do-
`ing those jobs more accurately. The court of appeals’
`remedy is facially irrational, in the context of an adju-
`dicatory body whose job is to reach the right answer on
`a single issue based only on the record before it, and in
`the context of the policy behind the Appointments
`Clause.
`
`
`
`
`
`
`19
`
`II. This Court Can Devise a Better-Targeted
`Remedy
`1. US Inventor submits that the correct remedy
`
`is not that which the Federal Circuit chose. Either Ar-
`threx is correct that severance is not appropriate and
`Congress must take responsibility through legislation,
`or the correct remedy is something else. Amicus as-
`serts that the cor
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