Tuesday, March 24, 2020

Arthrex stands

The CAFC denied the petition for re-hearing in Arthrex:

1) The petitions for panel rehearing are denied.
2) The petitions for rehearing en banc are denied.

from the dissent of Judge Dyk:

DYK, Circuit Judge, with whom NEWMAN and WALLACH,
Circuit Judges join, and with whom HUGHES, Circuit
Judge, joins as to Part I.A, dissenting from the denial of
rehearing en banc.

I respectfully dissent from the court’s decision not to
rehear this case en banc.

The panel here holds that the appointment of Administrative Patent Judges (“APJs”),
when conducted in accordance with the America Invents Act (“AIA”), would be
unconstitutional if those APJs were protected by the removal provisions of Title 5. The panel avoids this result
by severing the Title 5 removal provisions as applied to
APJs, and thereby “render[ing] the APJs inferior officers
and remedy[ing] the constitutional appointment problem.”
Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1325
(Fed. Cir. 2019).

As discussed in Part I, I conclude that even if the panel
were correct that the present structure of IPR proceedings
violates the Appointments Clause, the draconian remedy
chosen by the panel—invalidation of the Title 5 removal
protections for APJs—rewrites the statute contrary to Congressional intent.
That remedy should not be invoked
without giving Congress and the United States Patent and
Trademark Office (“PTO”) itself the opportunity to devise a
less disruptive remedy. In Part II, I conclude that even if
the Title 5 remedy were adopted, this would not require
invalidation of preexisting Board decisions. In Part III, I
address the question of whether APJs are principal officers.

The panel’s invalidation of Title 5 removal protections
and severance is not consistent with Supreme Court precedent. Severability analysis requires “looking to legislative
intent.” United States v. Booker, 543 U.S. 220, 246 (2005)
(collecting cases). In performing this analysis, the court
cannot sever portions of the statute that would be consistent with “Congress’ basic objectives in enacting the
statute.” Booker, 543 U.S. at 259. Severance is appropriate
if the remaining statute “will function in a manner consistent with the intent of Congress.” Alaska Airlines, Inc.
v. Brock, 480 U.S. 678, 685 (1987) (emphasis omitted). The
panel departs from these requirements. By eliminating Title 5 removal protections for APJs, the panel is performing
major surgery to the statute that Congress could not possibly have foreseen or intended


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