Arthrex seeks second Supreme Court intervention in patent clash

petitions of the week

The Petitions of the Week column highlights a selection of cert petitions recently filed in the Supreme Court. A list of all petitions we’re watching is available here.

Two years ago, the court ruled that medical device maker Arthrex, Inc., was wronged when the government made a final decision on a dispute over one of its patents by a panel of internally appointed officials. The justices held that the Constitution requires reviewability by a more senior patent officer appointed by the president and confirmed by the Senate. This week, we highlight cert petitions that ask the court to consider, among other things, whether Arthrex was injured a second time, in violation of the court’s decision, when an internally appointed patent officer temporarily filling in as the agency’s top official denied the company’s renewed claim.

Litigation between Arthrex and rival manufacturer Smith & Nephew, Inc., over the challenged invention – an orthopedic device for reconnecting soft tissue to bone – began more than seven years ago. The court’s ruling in June 2021 sent the dispute back to the U.S. Patent & Trademark Office so that Arthrex could request review from the PTO’s director, a Senate-confirmed officer.

At the time, however, the director’s seat was unfilled. The PTO’s director and deputy director had resigned when President Donald Trump left office that January. Following an internal policy, Commissioner for Patents Andrew Hirshfeld was temporarily carrying out the director’s duties until the Senate could confirm a new presidential nominee.

Under the Federal Vacancies Reform Act of 1998, there are only three ways for an acting officer to fill a vacancy awaiting Senate confirmation. The first is delegation within an agency to the officer’s “first assistant,” while the second and third require the president to personally select a temporary replacement.

Hirshfeld denied Arthrex’s request for review. In response, the company returned to court, arguing that the PTO’s vacancy plan violates the FRVA.

The U.S. Court of Appeals for the Federal Circuit ruled against Arthrex. It held that the FVRA governs only the duties of a Senate-confirmed officer that cannot be delegated under law. The Supreme Court’s decision merely requires that the PTO’s director have “discretion” to review decisions on patents, the Federal Circuit reasoned, and the director’s broad powers under law include the ability to delegate that review to a subordinate in the wake of a vacancy.

In Arthrex, Inc. v. Smith & Nephew, Inc., Arthrex asks the justices to step in once again. The company emphasizes the government’s position in the Federal Circuit that the FVRA imposes no restrictions whatsoever on the PTO, because all of the director’s duties are delegable under law. That position, Arthrex argues, disregards not only Congress’ intent in passing the FVRA, but also the justices’ first decision in this case, which was issued precisely to provide Arthrex the opportunity for review of its claim by a Senate-confirmed officer.

A list of this week’s featured petitions is below:

Chrisman v. Estate of Seth Michael Zakora
22-614
Issue: Whether a prisoner’s criminal act of voluntarily ingesting an illegal drug banned within the prison can give rise to that prisoner’s federal constitutional claim that under the Eighth Amendment state corrections officials failed to protect him by not preventing the influx of illegal drugs into the prison or failed to supervise other employees to protect him.

Highland Capital Management, L.P. v. NexPoint Advisors, L.P.
22-631
Issue: Whether Section 524(e) of the Bankruptcy Code, as its text suggests, states only the effect of a discharge on third parties’ liability for a debtor’s own debts or instead constrains the power of a court when confirming a plan of reorganization.

Carson v. Hyland
22-634
Issue: Whether Federal Rule of Civil Procedure 23 abrogates the Supreme Court’s holdings that payments in common-fund class actions to compensate representative plaintiffs for their personal services are inequitable, “illegal” and “decidedly objectionable.”

Arthrex, Inc. v. Smith & Nephew, Inc.
22-639
Issue: Whether the Commissioner for Patents’ exercise of the Patent and Trademark Office Director’s authority pursuant to an internal agency delegation violated the Federal Vacancies Reform Act.