Arthrex Argument Being Added to Briefs

As detailed back in December, the government has sought en banc rehearing in Arthrex. In its petition, the government revisited the bases for the Court’s October decision and encouraged the Court to also grant rehearing in the Polaris dispute so that the court might address forfeiture in Arthrex and reach the remaining issues in Polaris (which is distinguished in the petition as having seasonably argued the issue before the agency).

In its Reply of last week, the government once again focuses on forfeiture, arguing that raising an Appointments Clause issue on appeal is too late. To emphasize the issue, the Reply lists all of the newly filed appeals raising the issue for the first time.

The Reply (here) warns the Court that by excusing the forfeiture (i.e., failure to timely raise the Appointments Clause before the agency) in Arthrex that parties are interpreting that exception to apply to all who are similarly situated, explaining that “this court has issued dozens of orders notifying the United States that a party has raised or intends to raise an Appointments Clause challenge for the first time on appeal, seemingly on the assumption that Arthrex’s forfeiture ruling has a broader reach.” The Reply identifies 42 such cases in footnote (1).

The Reply continues,

"So understood, Arthrex could require USPTO to rehear “potentially hundreds of new proceedings” in cases where the issue was never preserved before the agency and the opposing party had no reason to anticipate a remand on constitutional grounds. Bedgear, LLC v. Fredman Bros. Furniture Co., Inc., 783 F. App’x 1029, 1030 (Fed. Cir. 2019) (Dyk, J., concurring). This Court should accordingly address the forfeiture issue en banc, and should grant initial en banc in Polaris so that the Court can address the underlying constitutional issue in the context of a preserved challenge—the type of challenge that, unlike Arthrex’s, should be encouraged."

That is, the government is angling for Arthrex and all similarly situated parties to be denied relief on the grounds of forfeiture, and the potential for a remand to be limited to Polaris (because it raised the issue before the agency). For its part, Polaris hopes to convince the Court that no remedy is possible absent a ruling that the PTAB is without power to issue final decisions— but, that’s not happening. The real question here is whether the remands will be limited to Polaris (and the case or two that were remanded within 24 hours of Arthrex) or the “hundreds” pointed out in the government Reply.

My expectation is that the window will be limited to the Polaris handful. While the issue will certainly be pursued to the SCOTUS, perhaps Congress will step in and provide a technical fix to the statute (which would seem inevitable at some point)