Commissioner’s Exercise of Vacant Director’s Duties Does Not Violate Appointments Clause
Arthrex, Inc. v. Smith & Nephew, Inc., Appeal No. 18-2140
Before Moore, Reyna, and Chen. Appeal from the Patent Trial and Appeal Board.
Summary: During vacancies of the Director and Deputy Director of the U.S. Patent and Trademark Office, the Commissioner of Patents may exercise the Director’s authority to decide rehearing of inter partes review decisions without violating the Appointments Clause of the Constitution.
Smith & Nephew, Inc. and ArthroCare Corp. petitioned for inter partes review of Arthrex, Inc.’s patent, arguing that certain claims of the patent are anticipated by prior art. The Board instituted inter partes review and ultimately found in favor of the petitioners. Arthrex appealed, arguing in part that the Board lacked constitutional authority to issue final decisions. Specifically, Arthrex contended that Administrative Patent Judges (“APJs”) are not nominated by the President and confirmed by the Senate as the Appointments Clause of the Constitution requires for principal officers. The Federal Circuit agreed, holding that the appropriate remedy was to (1) sever the statutory limitations on the removal of APJs and (2) remand for rehearing by a new panel of APJs. Though the Supreme Court agreed that APJs could not issue a final decision binding the executive branch, it vacated and remanded the matter. In doing so, the court ordered an alternative remedy: to (1) exempt the Director of the U.S. Patent and Trademark Office from 35 U.S.C. § 6(c), which precludes anyone but the Board from granting rehearing of a Board decision, and (2) remand the case to the Acting Director to determine whether to rehear the case. On remand, Arthrex sought rehearing by the Director. However, as both the offices of the Director and Deputy Director were vacant, the Commissioner for Patents was charged with addressing Arthrex’s request, pursuant to an agency order. The Commissioner denied rehearing and ruled that the Board’s decision was final. Arthrex appealed.
In the instant appeal, Arthrex asserted it did not receive the remedy that the Supreme Court ordered and that the Commissioner’s exercise of the Director’s authority violated the Appointments Clause. The Federal Circuit acknowledged that, because the Commissioner is not a presidentially appointed, Senate-confirmed (“PAS”) officer, the Commissioner ordinarily may not issue a final decision binding the executive branch. However, the court proceeded to explain that, per United States v. Eaton, 169 U.S. 331 (1898), an inferior officer may temporarily perform the duties of an absent PAS officer on an acting basis. In upholding the applicability of Eaton, the Court further explained that, as was the case in Eaton, the Commissioner’s time performing the Director’s duties was limited even though the agency order did not specify the Commissioner’s tenure; for the Commissioner would hold the role only so long as the offices of the Director and Deputy Director remained vacant. In light of the foregoing, the Federal Circuit concluded that the Commissioner’s exercise of the Director’s authority did not violate the Appointments Clause.
Arthrex also averred that the Federal Vacancies Reform Act (“FVRA”) prevented the Commissioner from ruling on the rehearing request. The Federal Circuit rejected this argument as well, as the FVRA only limits who may temporarily perform the non-delegable duties of a PAS officer; the Director’s authority to decide rehearing requests is a delegable one.
Sounding Off: Prosecution Disclaimer Requires Unambiguous Intrinsic Evidence
Genuine Enabling Technology LLC v. Nintendo Co., Ltd., Appeal No. 20-2167, the Federal Circuit held that a finding of prosecution disclaimer must be supported by an unambiguous disavowal within the intrinsic record.
Genuine sued Nintendo, alleging infringement of U.S. Patent No. 6,219,730 (’730 patent). ’730 patent claim 1 was generally directed to an apparatus coupled to a computer that uses an “input signal.” During prosecution, the patentee distinguished prior art on the basis that the art did not disclose “signals containing audio or higher frequencies.” The parties agreed that these arguments resulted in a prosecution disclaimer, but disagreed as to the scope of the disclaimer. Genuine argued the disclaimer only applied to signals lower than a minimum audio frequency of about 20 Hz. Nintendo, however, submitted an expert declaration interpreting the prior art and argued the disclaimer should extend to signals up to 500 Hz. The court agreed with Nintendo and construed the term “input signal” as limited to signals with a frequency above 500 Hz, and granted Nintendo’s motion for summary judgment of non-infringement.
Genuine appealed the grant of summary judgment, and the Federal Circuit reversed. The Federal Circuit explained that the district court erred by using the extrinsic expert declaration to contradict the prosecution history’s intrinsic evidence when constructing the claim. The Federal Circuit found that the only unambiguous disclaimer in the intrinsic record was to signals below 20 Hz, the minimum audio frequency, stemming from the patentee’s consistent distinction of the prior art’s “slow-varying signals” from the patent’s “audio or higher frequency” input signals. In contrast, the intrinsic record did not support the district court’s finding of disclaimer of input signals of up to 500 Hz. Because prosecution disclaimer does not apply to statements that are “ambiguous or amenable to multiple reasonable interpretations,” and the only unambiguous statement disclaimed signals below the audio spectrum, the Federal Circuit held the district court erred in its construction of “input signal.” In view of this incorrect claim construction, the Federal Circuit reversed the grant of summary judgment and remanded for further proceedings.
A Construction That Eliminates the Entire Scope of Dependent Claims Should Be Avoided
Littelfuse, Inc. v. Mersen USA Ep Corp., Appeal No. 21-2013, the Federal Circuit vacated a claim construction that violated the doctrine of claim differentiation by depriving several dependent claims of independent scope.
Littelfuse sued Mersen for patent infringement. At Mersen’s behest, the district court construed two independent claims to require a multi-piece apparatus. Littlefuse stipulated to noninfringement under this claim construction and appealed.
The Federal Circuit held that the district court’s multi-piece construction of the independent claims was erroneous because four dependent claims required a single-piece apparatus. Under the district court’s construction, these dependent claims were improperly rendered meaningless because they were left with no distinct scope. Thus, the Federal Circuit vacated the district court’s claim construction and judgment of noninfringement.