Hirshfeld defends IPR review authority under Arthrex
The acting director of the US Patent and Trademark Office (USPTO) Andrew Hirshfeld has defended his right to review final Patent Trial and Appeal Board (PTAB) decisions under Arthrex.
In a brief submitted to the US Court of Appeals for the Federal Circuit on Wednesday, February 2, Hirshfeld fired back at an internet security software company that had challenged his authority to act on requests for director review of PTAB decisions.
The company, VirnetX, had questioned the acting director after a patent suit it was embroiled in was remanded in the wake of the US Supreme Court’s decision in United States v Arthrex (2020).
The Arthrex decision held that the powers wielded by judges appointed to the PTAB were incompatible with the appointments clause of the US Constitution and that any party that has their patents invalidated in an inter partes decision should be able to request a review of the decision from the acting USPTO director.
According to VirnetX, Arthrex states that there are “no circumstances” in which an executive branch agency can make final decisions without a “Senate-confirmed principal officer” overseeing that decision-making process.
The company argued that Hirshfeld, who has not been appointed as a principal officer, cannot provide a final review of the PTAB’s rulings.
In his brief, Hirshfeld countered that this interpretation of Arthrex was “wrong” and “conflicts with centuries of precedent regarding the temporary performance of the duties of a principal office by an inferior officer when the principal office is vacant”.
Hirshfeld said that this analysis of the Arthrex decision would give it a “paralysing effect” and render the PTAB unable to complete their functions when the role of principal officers are vacant.
As a result, Hirshfeld argues that the Federal Circuit should reject VirnetX’s challenges to the order and deny its requests for director review.
VirnetX background
VirnetX’s patents were challenged by Apple in a pair of inter partes review cases (numbers 2020-2271 2020-2272) at the PTAB. The board eventually found all challenged claims of VirnetX’s patents unpatentable.
VirnetX appealed to the US Court of Appeals for the Federal Circuit, which vacated the board's decision on the grounds that it was “not relevant” to the issues addressed in the brief.
On remand, the board found again that VirnetX’s patent claims were invalid, leading the company to appeal again, arguing that APJs were principal officers who were not properly appointed.
After the decision in Arthrex, the Federal Circuit allowed VirnetX to request a director rehearing of the final written decisions on a “limited remand”.
VirnetX requested director review but also argued that “no action” should be taken until the confirmation of a new USPTO director was made as Arthrex precludes review by anyone other than a principal officer from reviewing PTAB decisions.
Hirshfeld then denied VirnetX’s review, leading VirnetX to file an amended notice of appeal adding a challenge to Hirshfed’s order denying director review.
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