Replying On Arthrex, The Smith & Nephew Reply Brief

• Published date: 04 February 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Foley & Lardner
• Author: Mr Randy J. Pummill, Daniel R. Shelton and George E. Quillin

Smith & Nephew and the United States filed their reply briefs on January 22. Smith & Nephew's reply brief, which we review here, critiques the arguments Arthrex made in its initial merits brief, addresses some issues raised in amicus briefs, and shores up its own positions.

In the Arthrex cases (docketed as 19-1434), Arthrex has previously argued that the powers given to administrative patent judges (APJs) under the AIA were a serious departure from the traditional powers vested in these officers.¹ These increased powers, coupled with the lack of reviewability of APJ decisions, means that APJs must be principal officers and that they must appointed by the President with the advice and consent of the Senate. Additionally, Arthrex has argued that the remedy created by the lower court, which struck the removal protections from APJs, is insufficient and that a final remedy should be left to Congress to determine.

Was the AIA a Substantial Departure?

In its reply brief, Smith & Nephew takes issue with the version of history that Arthrex presented in its initial brief. Smith & Nephew states that the AIA "built on deep foundations from the history of administrative patentability determinations and continues an unbroken tradition of nearly 100 years."² It briefly recounts how "second look" proceedings (e.g., reexaminations) have been handled by Congress since their creation nearly 40 years ago, and concludes that the powers granted to APJs in the AIA are similar to those wielded by other inferior patent officers in the past.³

Regarding the analysis of an officer's status, Arthrex previously took the position that reviewability of an officer's decisions is the key consideration in determining whether the officer is inferior or principal.⁴ Smith & Nephew, however, criticizes this approach as being an inflexible bright-line rule that is not supported by precedent, and suggests that the Court instead follow its jurisprudence in Edmond, which focused on a balance of three criteria for determining officer status, but expressly rejected any "exclusive criterion for distinguishing between principal and inferior officers." Smith & Nephew urges the Court to favor this holistic approach, which it argues is in line with the Court's repeated refusal to adopt bright-line rules in the Appointments Clause context. A bright-line test, it argues, would impermissibly restrain the ability of Congress to structure administrative agencies and could lead to constant challenges to...