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

No Rehearing for Arthrex IPR Constitutionality Decision

Arthrex, Inc. v. Smith & Nephew, Inc., __ F.3d __, 2020 WL ___ (Fed. Cir Mar. 23, 2020) (Per curiam; concurrence by Moore (with O’Malley, Reyna, Chen); concurrence by O’Malley (with Moore, Reyna); dissent by Dyk (with Newman, Wallach, Hughes (in part); dissent by Hughes (with Wallach); dissent by Wallach) (PTAB) (3 of 5 stars)

Fed Cir denies petitions for panel rehearing and rehearing en banc. The court’s mandate will issue March 30, 2020, as described in the panel opinion (941 F.3d 1320 (MOORE, Reyna, Chen)).

Concurrence (Moore): Judge Moore’s opinion discusses how rehearing would only create unnecessary disruption, and endorses the panel opinion’s application of Supreme Court precedent. It criticizes the proposal in Judge Dyk’s dissent of staying consideration of the issue, citing separation of powers issues and noting that the “proposed fix” in the dissent should not be presumed to pass constitutional muster.

Concurrence (O’Malley): Judge O’Malley’s opinion endorses Judge Moore’s. It also criticizes a suggestion Judge Dyk’s dissent that the judicial severance of Title 5 protections from the remainder of the AIA made all prior APJ decisions constitutional, so no rehearings are required. “Respectfully, that suggestion confuses the remedy the panel deemend appropriate in this case with the constitutional fix it deemed necessary to allow APJs to render future decisions in proceedings under the AIA.” O’Malley Concur. at 2. It discusses how Arthrex requires a remedy (rehearing) regardless of the fix applied by the panel. “Our decision that the statute can be rendered constitutional by severance does not remedy any past harm—it only avoids continuing harm in the future.” Id. at 4.

Dissent (Dyk): Judge Dyk would have reheard the appeal en banc. His opinion reasons that the panel’s “draconian remedy” of invalidating Title 5 removal protections for APJs “rewrites the statute contrary to Congressional intent.” Dyk Dissent at 2. It urges that such a remedy should not be invoked unless and until Congress and the PTO have had a chance to form an alternate remedy. The opinion also urges that even Title 5 protections were struck, such would not require invalidating previous Board decisions. And the opinion questions the panel’s conclusion that PTAB judges are principal officers under the Constitution.

Dissent (Hughes): Judge Hughes would have reheard the appeal en banc. He takes the view that PTAB judges are inferior officers “already properly appointed by the Secretary of Commerce.” Hughes Dissent at 1. His opinion also criticizes the panel’s invalidation of Title 5 APJ protections as inconsistent with Congressional intent.

Dissent (Wallach): Judge Wallach would have reheard the appeal en banc. In his view PTAB judges are inferior officers, and his opinion emphasizes panel selection and precedential determinations as central to that view.

KEYWORDS: INTER PARTES REVIEW; APPOINTMENTS CLAUSE; CONSTITUTIONAL LAW; ADMINISTRATIVE LAW