The Federal Circuit Holds That The Structure Of The PTAB Is Constitutional

• Published date: 15 November 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Haug Partners
• Author: Mr Jason Kanter and Anna Lukacher

Is the Patent Trial and Appeal Board ("Board") constitutional? This was a question asked by Mobility Workx in Mobility Workx, LLC v. Unified Patents, LLC, 2021-1441, 2021 WL 4762265 (Fed. Cir. 2021). Mobility Workx raised this challenge on appeal from a decision by the Board finding that Mobility Workx's patents were unpatentable as obvious. On appeal Mobility Workx argued, among other things, that the Board's structure violated due process and the Appointments Clause. The Federal Circuit held that Mobility Workx's constitutional arguments were without merit and remanded to the Director to determine whether to grant a rehearing. Id. at *1. Judge Newman, however, filed a dissenting opinion arguing that Mobility Workx's due process arguments and challenge under the Appointments Clause deserved further review.

I. FACTS

Mobility Workx owns U.S. Patent No. 8,213,417 ("the '417 patent"). In 2018, Unified Patents filed a petition seeking an inter partes review ("IPR") of claims to the '417 patent as obvious over alleged prior art. Mobility Workx, LLC, 2021 WL 4762265, at *2. In 2019, the Board determined that the challenged claims were unpatentable. Id.; Unified Patents Inc. v. Mobility Workx, LLC, IPR2018-01150, 2019 WL 6481774 (P.T.A.B. Dec. 2, 2019). Mobility Workx appealed the decision of the Board, requested a remand under United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021),¹ and made several constitutional challenges. Mobility Workx, LLC, 2021 WL 4762265, at *1. Mobility Workx's arguments included challenging: (i) the structure of the Board; (ii) the Director's delegation of his authority to institute AIA proceedings; (iii) reviewing a pre-AIA patent in an AIA review proceedings; and (iv) the authority of the PTAB-rather than the Director of the USPTO-to institute IPR's under the Appointments Clause following the Supreme Court's decision in Arthrex. Id. at *2, *8.

II. DISCUSSION

Mobility Workx raised two constitutional challenges to the structure of the Board. First, that the "Board members have an interest in instituting AIA proceedings to generate fees to fund the agency and ensure future job stability." Id. at *2. Second, that "individual [APJs] have a personal financial interest in instituting AIA proceedings in order to earn better performance reviews and bonuses." Id. Each are discussed below in turn.

Mobility Workx argued that the structure and funding of the Board violates due process because the "the fee-generating structure of AIA review[]...