United States v. Arthrex, Inc.
The Supreme Court ruled that the structure of the Patent Trial and Appeal Board was unconstitutional because its judges could issue final, unreviewable decisions despite being appointed only by the Secretary of Commerce — not the President with Senate confirmation.
To fix the problem without tearing down the patent review system, the Court gave the PTO Director new authority to review and override Board decisions himself, fundamentally changing how the federal government handles patent challenges.
“Today, we reaffirm and apply the rule from Edmond 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.”
The majority's core holding on what the Constitution requires for inferior executive officers who issue final decisions.
How it got here: Three APJs invalidated Arthrex's patent; Arthrex appealed to the Federal Circuit, which found an Appointments Clause violation and struck APJ tenure protections; all three parties sought Supreme Court review and the Court agreed to hear all three petitions.
The Case in Depth
What happened
Arthrex, a medical-device company, held a patent on a surgical tool for reattaching soft tissue to bone. Rival companies Smith & Nephew and ArthroCare challenged the patent's validity through inter partes review — a process where a panel of Administrative Patent Judges (APJs) at the Patent Trial and Appeal Board reconsiders whether an issued patent should stand. Three APJs found the Arthrex patent invalid. Their decision was final within the Executive Branch: no superior executive officer, including the PTO Director, could review or reverse it.
The question before the Court
Can Congress insulate the final patent-invalidity decisions of Patent Trial and Appeal Board judges from review by any presidentially appointed executive officer, when those judges are themselves appointed only by a cabinet secretary?
The Court's answer
No — Congress could not insulate Administrative Patent Judge decisions from executive review while simultaneously having those judges appointed only by a department head. The Constitution's Appointments Clause, as interpreted in *Edmond v. United States*, requires that inferior officers — those who may be appointed without Senate confirmation — must be subject to direction and supervision by a principal officer. APJs wielded final, unreviewable power to cancel or confirm patents binding the entire Executive Branch, which is incompatible with their status as officers appointed by the Secretary of Commerce alone.
To remedy this without dismantling the patent review system, the Court struck the statutory restriction preventing the PTO Director from reviewing PTAB decisions. The Director — who is nominated by the President and confirmed by the Senate — may now review and reverse final Board decisions himself. The case was remanded to the Acting Director to decide whether to rehear the Smith & Nephew petition that had invalidated Arthrex's patent.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Patent holders and companies challenging patents now face a system where the politically accountable PTO Director — rather than insulated judges — has the final say within the Executive Branch. Companies with pending or completed inter partes review proceedings may seek Director-level review, and Congress may need to revisit the America Invents Act's structure in response. Billions of dollars in patent rights can turn on PTAB decisions.
What changes now
The cases are sent back to the Acting PTO Director, who must decide whether to rehear the inter partes review that invalidated Arthrex's patent. If the Director declines, the original PTAB ruling stands. Going forward, the Director has new authority to review any final PTAB decision — a significant structural change to how patent challenges work. Congress may revisit the America Invents Act's design; the Court's ruling does not address the Director's supervision over other types of PTAB adjudications beyond inter partes review.
What this does not decide
The Court expressly limited its ruling to the Director's supervision of APJs in inter partes review. It did not address the Director's oversight over other PTAB adjudications (such as the patent examination process), nor did it establish a general rule about when all inferior-officer decisions must be reviewable by a principal officer outside the context of adjudication.
Concurrences and dissents
How the Justices voted
Majority (5). Justice Roberts (author), joined by Justice Alito, Justice Gorsuch, Justice Kavanaugh, and Justice Barrett.
Dissent (4). Justice Breyer (author), joined by Justice Sotomayor and Justice Kagan.
Concurrence in part — Justice Gorsuch
Justice Gorsuch joined the Court's constitutional holding (Parts I and II) that unreviewable APJ decisions violate the Appointments Clause, but refused to join the Court's remedy. He argued that the Court's 'severability' approach — rewriting the statute to give the Director a new power Congress deliberately withheld — amounts to a raw policy choice courts have no authority to make. He would instead have simply set aside the PTAB decision under traditional remedial principles, leaving Congress to redesign the system.
Dissent in part — Justice Breyer
Justice Breyer, joined by Justices Sotomayor and Kagan, disagreed with the Court's constitutional holding, arguing the Appointments Clause grants Congress substantial leeway to design federal offices and that a functional (rather than formalist) analysis should guide the Court. He viewed APJs as sufficiently supervised under existing law and warned the majority's approach pushes courts into policy territory where they lack expertise. However, once the majority reached a contrary conclusion, he agreed with its specific remedy of remanding to the Director, because that remedy was appropriately tailored to the constitutional problem identified.
Dissent — Justice Thomas
Justice Thomas, joined by Justices Breyer, Sotomayor, and Kagan as to Parts I and II, argued that APJs are plainly inferior officers under any historical understanding of the Appointments Clause — they sit at the bottom of an organizational chart under two levels of Senate-confirmed authority. He criticized the majority for inventing a new doctrine that elevates APJs to near-principal-officer status without ever saying so expressly, and for then judicially rewriting the statute to demote them back down, effectively making a legislative policy choice. He would leave the patent scheme intact. Read the full dissent →
How the Court got there
The legal reasoning, step by step
- The Court applied the Appointments Clause framework from *Edmond v. United States* (1997), which holds that 'inferior officers' — those who may be appointed by department heads rather than by the President with Senate confirmation — must be 'directed and supervised at some level' by a principal officer (one who was presidentially nominated and Senate-confirmed). The core inquiry is whether an inferior officer has 'no power to render a final decision on behalf of the United States unless permitted to do so by other Executive officers.'
- In *Edmond*, military court judges qualified as inferior officers because they were subject to administrative oversight by the Judge Advocate General (who could reassign them without cause) and appellate review by the Court of Appeals for the Armed Forces. The combination gave principal officers meaningful control over both the judges' work and the finality of their decisions.
- PTAB's structure supplies only half that supervision. The PTO Director has broad administrative authority over APJs — setting their pay, deciding whether to institute review, selecting panel members, issuing binding policy guidance — but cannot review, reverse, or rehear any final decision. Under 35 U.S.C. §6(c), 'only the [PTAB] may grant rehearings.' This means APJs have the very power *Edmond* found 'significant' to deny inferior-officer status: the unreviewable ability to render final decisions binding the entire Executive Branch.
- The Government's proposed workarounds — the Director stacking rehearing panels with favored judges, appointing himself to a special review panel, or vacating his institution decision mid-proceeding — were rejected as solutions. Such indirect maneuvering blurs the lines of accountability the Appointments Clause requires, leaving parties with neither an impartial expert decision nor a transparent one backed by a politically accountable officer.
- Rather than invalidate the entire inter partes review system, the Court applied severability doctrine — the judicial practice of cutting out only the unconstitutional piece while leaving the rest intact. It struck the portion of §6(c) that prevented the Director from reviewing final PTAB decisions, giving the Director authority to review those decisions and issue rulings himself on the Board's behalf. This aligns the PTAB with the nearly universal executive-agency model where the agency head can review subordinate adjudicative decisions.
- Because the constitutional flaw was the statutory restriction on the Director's review authority — not a defect in how APJs were appointed — the appropriate remedy was a remand to the Acting Director to decide whether to rehear the petition, not a new hearing before a fresh panel of APJs. The APJs' original proceedings were lawful; only the unreviewability of their final decision was not.
Doctrinal impact
Cases affected by this decision
Reaffirms Edmond v. United States (520 U.S. 651)
The Court reaffirmed Edmond's rule that inferior officers must be directed and supervised by a principal officer.
Reaffirms Free Enterprise Fund v. Public Company Accounting Oversight Bd. (561 U.S. 477)
The Court reaffirmed that diffusion of executive accountability violates constitutional design requiring presidential oversight.