Supreme Court Corner

Smith & Nephew, Inc v. Arthrex, Inc.

Patent – Certiorari Granted October 13, 2020

Issue: (1) Whether administrative patent judges (APJs) of the US Patent and Trademark Office (USPTO) are principal officers who must be appointed consistent with the Appointments Clause of U.S. Const. Art. II, § 2, Cl. 2; and (2) whether the Federal Circuit cured any Appointments Clause defect in the America Invents Act (AIA) by severing the application of “good cause” removal requirements to APJs appointed under the AIA.

The AIA created the Patent Trial and Appeal Board in 2012 as an adjudicative body for expeditiously resolving the validity of patents through a few types of post-grant reviews, including inter partes review.  While the PTAB procedures have become popular among litigants, it has also been met by challenges, including to procedure and constitutionality.  For instance, in 2018, the Supreme Court decided (7-2) that the PTAB’s post grant review did not violate Article III of the Seventh Amendment of the Constitution in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, which DLA Piper reported on here.

In its recent groundbreaking decision in Arthrex v. Smith & Nephew, the Federal Circuit found that the statute authorizing the PTAB’s Administrative Patent Judges (APJs) violates the Appointments Clause (Article II, § 2, cl. 2).  In short, the Federal Circuit explained that APJs are ordinarily insulated from significant oversight by the Director of the USPTO because, among other reasons, they could only be fired for good cause. Thus, the APJs were “principal officers” – whose appointment must comply with the Appointments Clause.  To remedy the Appointments Clause problem, the Federal Circuit severed the “good cause” limitations on firing APJs, rendering them removable at the discretion of the USPTO Director.

The Supreme Court granted cross-petitions for a writ of certiorari from the patent holder, the patent challenger, and the United States, limited to two questions: whether the appointment of APJs violates Article II, and if so, what remedy is proper.  Specifically, petitioner Arthrex argues that the Appointments Clause defect dooms the entire system of post-grant review created by the AIA, and the Federal Circuit should have left the solution of remedying the statute to Congress.  Smith & Nephew argues that the Federal Circuit was correct in severing the “good cause” limitations in light of the Court’s strong preference for severing unconstitutional provisions over invalidating statutes wholesale.  For its part, the United States argues the APJs are not “principal officers,” and thus not subject to the Appointments Clause, as their work is subject to sufficient direction and supervision by the Secretary of Commerce and the Director of the USPTO, both Senate-confirmed officers.

Should the Supreme Court agree that the appointment of APJs  is unconstitutional, two recent Supreme Court cases suggest the Court may favor severing the “good cause” limitations on firing over invalidating the statute completely.  In oral argument on California v. Texas, Case No. 19-840, which addresses constitutionality of the insurance mandate provisions of the Affordable Care Act (ACA), several members appeared to favor a robust approach to severability.¹ Similarly, in Seila Law v. Consumer Financial Protection Bureau (CFPB), the Court found a separation-of-powers violation in the single-director structure of the CFPB, but cured the violation by severing the statutory “for cause” restrictions on the president’s ability to remove the CFPB director.  Seila Law thus emphasizes the presumption in favor of severability in a context analogous to Arthrex.  These cases suggest that severability could play a prominent role in a decision, and at least some members of the Court have shown a willingness to sever in similar circumstances.  Given the implications to all patent practitioners and patent holders, this case is worth watching this term.

Georgia v. Public.Resource.Org, Inc.

Copyright – Decided, April 27, 2020

Holding: The Official Code of Georgia Annotated (OCGA) is ineligible for protection under the Copyright Act because, under the so-called government edicts doctrine, officials empowered to speak with the force of law cannot be the authors of the works they create in the course of their official duties.

“[N]o one can own the law,” at least under the Copyright Act.

The Official Code of Georgia Annotated (OGCA) is the official code of laws of the State of Georgia and prepared by the Code Revision Commission.  Each year, the Commission compiles the proposed statutory text and accompanying annotations and publishes the OGCA.  Public.Resource.Org (PRO) is a nonprofit that, without permission, posted a digital version of the OGCA on various websites available to the public free of charge and distributed copies to various organizations and officials.

The Commission sued PRO for copyright infringement on behalf of the State of Georgia.  The district court concluded that the OGCA was eligible for copyright because it “lacked the force of law.”  The Eleventh Circuit reversed, finding Supreme Court precedent articulated a “government edicts doctrine” that “works created by courts in the performance of their official duties did not belong to the judges” but instead fell “in the public domain.”  The authors of the OGCA, the circuit court reasoned, were the people of Georgia, not the Commission.

In a 5-4 decision authored by Chief Justice John G. Roberts, the Court held that the annotations in the OGCA are ineligible for copyright protection.  Applying its government edicts precedent, the Court found “a straightforward rule based on the identity of the author”: judges and legislators, the Court said, “may not be considered the ‘authors’ of the works they produce in the course of their official duties as judges and legislators.”  Even though the annotations do not carry the force of law, they are authored by the Commission, an arm of the legislature, in the course of its official duties.  In dissent, Justice Clarence Thomas reasoned that Congress, not the courts, should determine whether the OGCA’s annotations should fall within the definition of “original works of authorship,” reasoning that the text of the Copyright Act and precedent do not squarely address the question.   In a separate dissent, Justice Ruth Bader Ginsburg reasoned that, applying the government edicts doctrine, the OGCA was not created in a legislative capacity, and thus is copyrightable.  The annotations lack legal effect because they comment on statutes already enacted, are descriptive rather than prescriptive, and are “given for the purpose of convenient reference.” 

Legislatures and practitioners should keep an eye on whether Congress takes up the issue.  As Justice Thomas’s dissent notes, there may be practical ramifications to practitioners and the general public.  Twenty-five jurisdictions prepare similar annotated codes, usually working with private parties and legal researchers. Without copyright protection, Justice Thomas suggests “many States will stop producing annotated codes altogether,” or the annotations will be prepared by private parties at a cost too great for general consumption.

_{[1] 11/10/20 Tr. at 46:16–21 (Sotomayor, J.) (expressing skepticism that Congress would “want the rest of the Act to fall”); id. at 49:1 –16 (Kagan, J.) (suggesting that legislative findings that the mandate was “essential” to the ACA were inadequate to “constrain” the Court from imposing severance); id. at 56:1–5 (Kavanaugh, J.) (“[T]his is a very straightforward case for severability under our precedents…”); id. at 62:19–20 (Roberts, C.J.) (characterizing the severability inquiry as whether “Congress intended the entire Act to fall” along with the unconstitutional provision).}