If the Federal Circuit’s decision in Arthrex wasn’t sufficiently newsworthy, then look at what lurks in its wake. The day after the decision, the court issued precedential orders indicating that a timely Constitutional challenge apparently must be presented to the court in an opening brief. A few days after those orders, two of the court’s most senior active-service judges said that the court’s remedy in Arthrex (i) wasn’t required by Supreme Court precedent, (ii) imposed unnecessary burdens on all involved in AIA trials, (iii) requires hundreds of new proceedings, and (iv) involves decision-making that is itself unconstitutional. And a day later, another panel of the court issued an order soliciting briefing on those and other issues left in Arthrex’s wake, tacitly questioning the Arthrex panel’s decision.

In Arthrex, the court held that the Patent Office’s appointment of administrative patent judges (APJs) would be unconstitutional if the judges were not removable without cause. Arthrex, Inc. v. Smith & Nephew, Inc., Appeal 2018-2140 (Fed. Cir. Oct. 31, 2019). To remediate that constitutional violation, the court severed the statute’s provision that restricts the Patent Office Director’s authority to remove an APJ for cause. The APJs’ past actions in Arthrex were not valid, according to the court. So the court remanded for a new hearing before a new panel of APJs whose appointments were now valid in view of the court’s decision severing the statutory removal restriction.

“I respectfully suggest that Arthrex was wrongly decided on the issue of remedy.” Judge Dyk

The next day, in Customedia Technologies, LLC v. Dish Network Corporation, Appeal 2019-1001 (Fed. Cir. Nov. 1, 2019) (order), the court concluded that an aggrieved patent owner appealing a PTAB decision canceling its patent forfeited an Appointments Clause challenge where it did not raise the challenge in its opening brief. See also, Customedia Techs., LLC v. Dish Network Corp., Appeals 2018-2239, -2240, -2310, 2019-1000, -1002, -1003, -1027, -1029 (Fed. Cir. Nov. 1, 2019) (order) (same). As basis for that conclusion, the court cited an earlier decision for its proposition that “arguments not raised in the opening brief are waived.” SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006). But SmithKline did not concern waiver of a Constitutional challenge, much less one that the court had only a day earlier accepted in disposing of a materially similar case. And the court has previously recognized its own “[p]recedent holds that a party does not waive an argument that arises from a significant change in law during the pendency of an appeal.” Polaris Indus. Inc. v. Arctic Cat, Inc., 724 F. App’x 948, 949 (Fed. Cir. 2018) (collecting cases). In the Customedia appeals, the court nevertheless refused to vacate and remand nine PTAB decisions rendered by APJs whose appointments Arthrex determined were unconstitutional when the decisions were rendered. Perhaps the court generally considered this issue when it decided Arthrex. But if not, then how much time did the court spend deliberating this issue? The patent owner filed its motion on November 1, and the court issued its order on November 1.  A few days later, the court issued its judgment in one of the appeals (No. 2019-1001), affirming the PTAB’s decisions, without opinion.

In Bedgear, LLC v. Fredman Brothers Furniture Co., Appeals 2018-2082, -2083, -2084 (Fed. Cir. Nov. 7, 2019) (non-precedential), the patent owner-appellant timely argued in its opening brief the Appointments Clause challenge and, in view of Arthrex, the court vacated the PTAB’s decision canceling the appellant’s patent claims and remanded for a new hearing before a new panel. Judge Dyk concurred in an opinion joined by Judge Newman, but explained that the Arthrex panel “improperly declined to make its ruling retrospective” so that the APJs’ past actions complied with the Constitution. Concurring Slip Op. at 2. If, as the Arthrex court said, the statutory removal restriction was unconstitutional when it considered the issue, then, according to Judges Dyk and Newman, that restriction was always unconstitutional. These judges “respectfully suggest that Arthrex was wrongly decided on the issue of remedy,” id. at 10, which ought to apply retroactively—not just prospectively—such that the PTAB’s past decisions are not invalid and should not be vacated for a new hearing before a different panel.

A day after Bedgear, yet another panel of the court (consisting of two of the three judges that decided Customedia’s appeal No. 2019-1001) issued an order posing the following four questions:

(1) what level of supervision and review distinguish a principal from an inferior officer;

(2) whether severing the application of Title 5’s removal restrictions with respect to APJs under 35 U.S.C. § 3(c) sufficiently remedies the alleged unconstitutional appointment at issue in these appeals;

(3) whether, and how, the remedy for an Appointments Clause violation differs when it stems from an unconstitutional removal restriction, rather than an unconstitutional appointment itself; and

(4) whether severing the application of Title 5’s removal restrictions with respect to APJs under 35 U.S.C. § 3(c) obviates the need to vacate and remand for a new hearing, given the Supreme Court’s holdings on the retroactive application of constitutional rulings. E.g., Harper v. Virginia Dep’t of Taxation, 509 U.S. 86 (1993).

Polaris Innovations Ltd. v. Kingston Tech. Co., Appeals 2018-1768, -1831 (Fed. Cir. Nov. 8, 2019) (order). The parties’ and intervenor’s (government’s) briefs are due December 6, 2019. Resolution of these questions may benefit from amicus briefs, if not also en banc review.

On October 18, less than two weeks before the court issued its decision in Arthrex, the court ordered supplemental briefing on an appropriate remedy should it conclude the Patent Office violated the Appointments Clause. The court did not post the order on its website, but it was available in PACER. The parties and the government filed responsive briefs on October 29. Nobody—not even the Department of Justice or the Patent Office—suggested a (retroactive) remedy that wouldn’t burden the Office with new hearings before new panels. The court issued its decision two days later, on October 31. Given the court’s activities in Arthrex’s wake, perhaps the full court ought to decide the four questions posed in Polaris.