On June 21, 2021, the Supreme Court held that “35 U.S.C. § 6(c) is unenforceable as applied to the Director insofar as it prevents the Director from reviewing the decisions of the [Patent Trial and Appeal Board] PTAB on his own.” United States v. Arthrex, Inc., No. 19-1434 slip op. at 22 (U.S. June 21, 2021). The Court therefore stated that “[t]he Director may engage in such review and reach his own decision.” Id. The Court rejected Arthrex’s argument that the entire inter partes review proceeding was unconstitutional because it disagreed with Arthrex that the “good cannot be separated from the bad.” Id. at 20. Instead, the Court found that the constitutional violation was the lack of review by the Director. By providing the Director authority to take control, the Administrative Patent Judges (APJs) properly function as “inferior officers” who are not appointed by the President. Id. at 21.
Also of note, the Court limited its holding to the Director’s supervision of APJs in the inter partes review context, and specified that its holding did not look at other adjudications by the PTAB. Id. at 22.
As applied to the facts in Arthrex, the Court stated that “appropriate remedy is remand to the Acting Director for him to decide whether to rehear the petition filed by Smith & Nephew.” Id. at 22. The Court stated that this “provides an adequate opportunity for review by a principal officer.” Id. at 22-23.