This blog previously reported[1] that on June 21, 2021, the Supreme Court issued its landmark decision in United States v. Arthrex, Inc., holding – in Chief Justice Roberts’ 5-4 opinion – that “the unreviewable authority wielded by [administrative patent judges, or APJs] during inter partes review [IPR] is incompatible with their appointment by the Secretary [of Commerce] to an inferior office.”[2] To resolve this constitutional defect in the IPR process, the Arthrex decision instructed that the director of the United States Patent and Trademark Office (USPTO) “may review final [Patent Trial and Appeal Board, or PTAB] decisions and, upon review, may issue decisions himself on behalf of the Board.”[3] The Court explained that this change in the director’s ability to supervise APJs (in adjudicating IPR petitions at the PTAB) was consistent with the rule that “the exercise of executive power by inferior officers must at some level be subject to the direction and supervision of an officer nominated by the President and confirmed by the Senate.”[4]

But what about the PTAB’s older sibling, the Trademark Trial and Appeal Board (TTAB)? Created through a Lanham Act amendment in 1958,[5] the TTAB is an administrative body at the USPTO that hears and decides various proceedings involving trademarks, such as oppositions and cancellations. Like the PTAB, which is composed of APJs, the TTAB is composed of administrative trademark judges, or ATJs. Like PTAB proceedings, TTAB proceedings are typically conducted before a panel of three ATJs, who preside over discovery, review briefing, hold hearings and issue final decisions. So, after Arthrex, are ATJs unconstitutionally appointed principal officers like their APJ cousins?

No. The Federal Circuit recently answered this question in Piano Factory Grp., Inc. v. Schiedmayer Celesta GmbH.[6] In Piano Factory, appellants Piano Factory Group Inc. and Sweet 16 Musical Properties Inc. (together, Sweet 16) appealed a TTAB decision ordering the cancellation of their “Schiedmayer” trademark registration for pianos. At the TTAB, appellee Schiedmayer Celesta GmbH (Schiedmayer) succeeded in its petition to cancel Sweet 16’s registration by showing that Sweet 16’s use of the mark in connection with its “no-name” imported pianos created a false suggestion of a connection between those pianos and the Schiedmayer name and brand of German-made pianos and celestas. On appeal, Sweet 16 argued that “in view of the Supreme Court’s decision in Arthrex, the ATJs must also be considered ‘principal officers’ of the United States,” and that “[b]ecause the ATJs are not appointed by the President and confirmed by the Senate, … they have been unconstitutionally appointed.”[7]

The Federal Circuit held that the ATJs are not unconstitutionally appointed. The court noted that although the USPTO director “has many of the same administrative oversight responsibilities concerning the [ATJs] as in the patent context,” the PTAB and TTAB systems “diverge” with respect to “the Director’s supervisory authority in deciding individual cases.”[8] The court found that “unlike in the pre-Arthrex context, the Director has for more than twenty years had the authority to direct that any Board case be decided by a single member of the TTAB, either initially or on rehearing.”[9] Thus, unlike the director’s supervision of PTAB APJs before Arthrex, the director’s supervision of TTAB ATJs includes the “authority to regulate not only the procedures employed by the TTAB, but also the substance of the TTAB’s decision-making process.”[10] Moreover, the court observed that the Trademark Modernization Act of 2020 (TMA) “confirmed, and did not alter, the Director’s authority.”[11] Specifically, in its codified form, the TMA explicitly provides that the USPTO director “may reconsider, and modify or set aside, a decision of the Trademark Trial and Appeal Board under this section.”[12]

Lest there be any doubt, this result was foretold by the Supreme Court’s Arthrex decision, which explained that “review [of PTAB IPR decisions] by the Director would follow the almost-universal model of adjudication in the Executive Branch … and aligns the PTAB with the other adjudicative body in the PTO, the Trademark Trial and Appeal Board.”[13] If anything, then, the two regimes are now playing in harmony.

What does this mean for practitioners and trademark owners? Business as usual, actually. The Piano Factory decision merely holds what the TMA already confirmed – that the USPTO director has constitutionally appropriate decision-making supervision over the TTAB’s ATJs. As Judge Bryson put it, “[i]f there were any doubt as to the status of ATJs as inferior officers prior to 2020, the 2020 legislation removed that doubt.”[14]