Earlier this month, the Federal Circuit issued an important order granting a motion to vacate and remand in In re Boloro Global Ltd., a case we have been following. In the order, the court extended the application of Arthrex to ex parte patent examination appeals, determining that the Patent Trial and Appeal Board’s Administrative Patent Judges were unconstitutionally appointed in this context (in addition to inter partes review as in Arthrex). Here is a summary of the case and the order.
This case involved a motion to vacate and remand a decision of the Patent Trial and Appeal Board in an ex parte appeal from a rejection of a patent application. In the motion, Boloro argued that the Board’s Administrative Patent Judges (APJs) were “principal officers” under the Appointments Clause, but that they were neither appointed by the President nor confirmed by the Senate. Given that the Federal Circuit had previously ruled in Arthrex that APJs presiding over an inter partes review proceedings were “principal officers,” Boloro contended that the same analysis and result should apply to ex parte appeals. The Director of the USPTO opposed the motion.
The court issued an order requiring supplemental briefing from the parties addressing (1) whether the director’s control over APJs renders them inferior officers and (2) whether an APJ’s appointment could be unconstitutional with regards to inter partes review and yet constitutional for reviewing an initial examination. In the Director’s supplemental response, he conceded that the “APJs were principal officers for purposes of all governmental functions of their office, even if they performed other functions that were subject to a greater degree of supervisory control.” Further, he conceded, “the Director’s ‘ability to refuse to issue a patent if the Patent Trial and Appeal Board approves an application’ would not ‘render [APJs] inferior officers’ for purposes of ex parte examination proceedings.”
Based on the Director’s supplemental response, the court determined that the Director had acknowledged that “the [APJs] were not constitutionally appointed at the time the Board’s final decision on appeal was issued.” Because the court determined in Arthrex and, as we previously highlighted, in VirnetX that the appropriate remedy for this constitutional violation was to vacate and remand, the court granted Boloro’s motion to vacate and remand the case. Despite the Director urging the court not to extend the same reasoning to ex parte proceedings, the court saw “no principled reason to depart here from the resulting remedy applied in Arthrex and VirnetX” in light of the “Director having conceded that the APJ’s appointments were unconstitutional.”