Following the Supreme Court’s decision in U.S. v. Arthrex, the USPTO quickly established an interim Director review process by which the “[t]he Director  may review final PTAB decisions and, upon review, may issue decisions himself on behalf of the Board.” See our prior June 21, June 29, July 21, and November 22posts. The USPTO has made recent efforts to increase transparency as it works to finalize the Director review process, issuing a press release with seven specific issues that may warrant review by the Director. See our April 22 post.
Consistent with Director Vidal’s efforts to increase transparency and “promote consistent and clear PTAB decision-making,” on May 26, 2022, the USPTO also announced an interim processes for the review of PTAB decisions, modeled after the decision circulation process used by the Federal Circuit. Full details of the Office’s interim process for PTAB decision circulation and internal PTAB review can be found here.
The Office also updated its interim process for Director review to ensure that while the USPTO does not accept requests for Director review of institution decisions, the Director continues to retain the authority to review such decisions sua sponte after issuance.
Separately, and since Commissioner Hirshfeld was appointed interim Director of the USPTO, there has been curiosity (and potential concern) regarding whether the interim Director actually had the authority to conduct Director reviews (and potentially even issue patents). Perhaps adding fuel to the fire, on May 17, 2022, the USPTO asked the Federal Circuit not to rule on whether Commissioner Hirshfeld had authority to conduct interim Director reviews. Instead, the Office asked the Federal Circuit for a limited remand and to send the Arthrex case back to the agency in order to allow newly-confirmed Director Vidal to decide whether to review the 2018 PTAB decision that rendered unpatentable Arthrex’s medical implant device patent.
Based on the USPTO’s position, the Office arguably thought there was a chance Commissioner Hirshfeld lacked authority to conduct interim Director reviews (and that a number of cases currently on appeal may need to be remanded, including Arthrex); however, the Federal Circuit held today that it was appropriate for Commissioner Hirshfeld to temporarily fill the role of Director while the Office was without a presidentially-appointed nominee:
In sum, Arthrex’s Appointments Clause challenge runs headlong into Eaton and the Supreme Court’s prior decision in this case. We therefore conclude that the Commissioner’s exercise of the Director’s authority while that office was vacant did not violate the Appointments Clause.
We [also] hold that the Commissioner’s order denying Arthrex’s rehearing request on the Director’s behalf did not violate the FVRA [Federal Vacancies Reform Act]. The FVRA does not restrict who may perform the delegable functions and duties of an absent PAS [Presidentially appointed, Senate-confirmed] officer. And the Director’s authority to decide requests for rehearing Board decisions is delegable.
Absent additional en banc or Supreme Court activity in Arthrex, it appears the years-long saga between Arthrex and Smith & Nephew may be nearing its end:
Arthrex does not persuade us that the Commissioner violated the Appointments Clause, the FVRA, or the Constitution’s separation of powers in denying Arthrex’s rehearing request. Nor does it identify reversible error in the Board’s decision that ElAttrache anticipated the challenged claims of the ’907 patent. Accordingly, we affirm.
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