Patents

United States v. Arthrex: The Director's Last Word Over the PTAB

The Supreme Court held that administrative patent judges wielded unconstitutional power and fixed the defect by giving the USPTO Director authority to review their decisions.

September 15, 2025
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The remedy made the politically accountable Director, not the administrative patent judges, the final voice in inter partes review. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

United States v. Arthrex, Inc., No. 19-1434 (U.S. June 21, 2021), reorganized the chain of command at the Patent Trial and Appeal Board. The question was whether the administrative patent judges (APJs) who decide inter partes reviews — appointed by the Secretary of Commerce rather than nominated by the President and confirmed by the Senate — exercise so much unsupervised power that their appointments violate the Appointments Clause. A divided Court answered yes as to the constitutional problem, and then, in a controlling opinion by Chief Justice Roberts, prescribed a tailored remedy: the Director of the U.S. Patent and Trademark Office must have the discretion to review and, if he chooses, override the final decisions of the APJs. With that fix, the politically accountable Director — not the unconfirmed judges — holds the final word.

At a glance

  • Case: United States v. Arthrex, Inc., No. 19-1434
  • Court: Supreme Court of the United States
  • Decided: June 21, 2021
  • Decision: Fractured; controlling opinion by Chief Justice Roberts; a majority found an Appointments Clause violation, and a controlling bloc adopted the severance remedy; separate opinions by Justices Gorsuch, Breyer, and Thomas concurring in part and dissenting in part
  • Constitutional provision: The Appointments Clause, Art. II, § 2, cl. 2
  • Officials at issue: Administrative patent judges of the PTAB, appointed by the Secretary of Commerce
  • Patent: U.S. Patent No. 9,179,907, on a knotless device for reattaching soft tissue to bone
  • Holding: APJs’ unreviewable authority to issue final IPR decisions made them principal officers who were not appointed accordingly; the cure is to let the Director review their decisions
  • Disposition: Vacated and remanded to the Acting Director for a decision on whether to rehear the case

The facts: an invalidated medical-device patent

Arthrex owned a patent on a surgical device that reattaches soft tissue to bone without tying a knot. A competitor petitioned for inter partes review, and a three-judge panel of APJs concluded that the challenged claims were unpatentable. Arthrex appealed to the Federal Circuit and raised a structural argument it had not pressed below: the APJs who invalidated its patent had been appointed in a manner the Constitution forbids.

The Federal Circuit agreed that there was a problem and attempted its own remedy — severing the statutory tenure protections that shielded APJs from at-will removal, on the theory that making them easier to fire would render them inferior officers. The case then went to the Supreme Court, which agreed there was a constitutional defect but disagreed about why, and about how to fix it.

The Appointments Clause problem: principal officers in disguise

The Appointments Clause divides federal officers into two tiers. Principal officers must be nominated by the President and confirmed by the Senate. Inferior officers may be appointed by the President alone, by courts, or by department heads — here, the Secretary of Commerce. The constitutional line between the two turns, in large part, on supervision: an inferior officer is one whose work is “directed and supervised at some level” by a principal officer who is presidentially appointed and Senate-confirmed.

The Court’s controlling analysis held that APJs flunked that test as the statute then stood. In inter partes review, an APJ panel issued the final decision of the Executive Branch on the validity of a patent, and no presidentially appointed, Senate-confirmed officer — not even the Director — could review or reverse that decision on the merits. The Director could influence APJs in various indirect ways: setting policy, choosing which judges sat on which panels, and the like. But he could not simply revisit a panel’s decision and substitute his own judgment. Because the APJs wielded that kind of unreviewable, final authority while holding only an inferior-officer appointment, their exercise of power was “incompatible with their appointment by the Secretary of Commerce to an inferior office.” In short, they acted like principal officers without being appointed as such.

The Court framed the defect in terms of political accountability. The Appointments Clause ensures that significant executive authority traces back to officials the President selects and the Senate vets, so that the public can hold someone answerable. Letting unconfirmed APJs render the last word in a high-stakes adjudication broke that chain.

The remedy: sever the insulation, empower the Director

Having identified the violation, the Court split over the cure, and the Chief Justice’s opinion supplied the controlling answer. Rather than strike down the IPR regime or unwind the appointments, the Court severed the statutory limits that insulated APJ decisions from the Director’s review. As reworked by the decision, 35 U.S.C. § 6(c) could no longer be enforced to prevent the Director from reviewing a final written decision and, where he saw fit, replacing the panel’s conclusion with his own. The Director “need not review every decision,” the Court emphasized; what the Constitution requires is that he have the discretion to do so. That single change converted the APJs into properly supervised inferior officers, because their decisions were no longer the final, unreviewable act of the Executive Branch.

The Court declined the Federal Circuit’s removal-based fix and rejected the broader remedies the parties urged — Arthrex wanted its IPR result thrown out and the proceeding dismissed; the government wanted the violation deemed harmless. Instead, the Court vacated the Federal Circuit’s judgment and remanded with instructions that the Acting Director decide whether to grant rehearing of the APJ panel’s decision, giving Arthrex the benefit of the very review the Constitution now guaranteed.

Open questions

Arthrex answered the structural question but generated a wave of administrative follow-on issues. The decision required the USPTO to create a Director-review procedure essentially from scratch, raising questions about timing, standards, and the scope of what the Director may reconsider — questions the agency has since addressed through interim guidance and rulemaking rather than statute. The opinion also left uncertain how Director review interacts with judicial review at the Federal Circuit, including the degree of deference owed to a Director who overrides a panel. More broadly, the case sharpened a recurring tension: the same Director-control logic that cured the Appointments Clause defect also concentrates enormous power over individual patent adjudications in a single political appointee, intensifying debate over discretionary denials and Director intervention in particular cases. And because the remedy was a judicial severance rather than a legislative fix, the durability of the arrangement depends on whether Congress later codifies or alters it.

Implications

  • The Director can now override the Board. APJ panels no longer have the final say; the Director may review and reverse IPR decisions, making the office the true decisionmaker in contested cases.
  • A new layer of review exists. Parties unhappy with a final written decision can seek Director review before heading to the Federal Circuit, adding a step — and a strategic opportunity — to IPR practice.
  • Accountability is centralized. By design, significant patent-adjudication authority now traces to a presidentially appointed, Senate-confirmed officer, which is the constitutional point but also concentrates discretion.
  • Minimal disruption to existing decisions. The Court chose a narrow, forward-looking remedy rather than invalidating IPR or vacating past results wholesale, limiting the decision’s destabilizing effect on settled proceedings.
  • The agency, not Congress, built the fix. Because the cure came through severance, the operational details live in USPTO procedure and are subject to revision, leaving the framework somewhat provisional.

Frequently asked questions

Did Arthrex invalidate inter partes review or the PTAB itself? No. The Court left IPR and the Board intact. It found a defect only in how much unreviewable authority APJs held, and it fixed that by empowering the Director to review their decisions rather than by dismantling the system.

What does Director review actually look like now? The Director has discretion to review a panel’s final written decision and may affirm, modify, or reverse it. He is not required to review every decision; the constitutional requirement is satisfied by his having the authority to do so. The USPTO has implemented this through an interim Director-review process and subsequent rulemaking.

Why didn’t the Court just throw out Arthrex’s adverse IPR result? The Court chose a tailored remedy. It vacated the Federal Circuit’s judgment and remanded so that the Acting Director could decide whether to rehear the APJ panel’s decision — giving Arthrex access to the constitutionally required review without nullifying the proceeding or the broader IPR regime.

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