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Authority of patent judges may allow new legal attack

Once a patent is approved by the U.S. Patent and Trademark Office, the patent holder’s main worry may be defending the patent against unscrupulous people who want to profit from the invention.

Questions on the constitutional authority of agency judges probably don’t darken the inventor’s brow. That is, not until a law professor posted a short article in an online patent law journal last July. His argument may open a path to attack the validity of some patents granted over the past eight years.

George Washington University law professor John F. Duffy argues that a 1999 transfer of authority to appoint patent appeals judges – from the U.S. Secretary of Commerce to the director of the U.S. PTO – means some of the judges on patent review panels should not be there.

The validity of thousands of appeals decided by panels with at least one judge appointed by the director could be in jeopardy, although a brief in the U.S. Supreme Court contends that a much smaller number of cases are at issue.

The patent bar in Virginia has begun to take note of the potential threat to patents granted after the 1999 shift in appointing authority.

Congress wanted to increase the power, prestige and status of the head of the U.S. PTO, in part by giving the director of the office the authority to appoint judges to the Board of Patent Appeals and Interferences (BPAI).

Previously, the appointment power rested with the U.S. Secretary of Commerce, and Congress didn’t want to take the politically more difficult step of creating a separate department to supervise intellectual property matters.

That half step created what is increasingly being viewed as the unconstitutional appointment of 46 of the 74 judges on the BPAI, even though no one seriously contested the appointing authority of the director until Duffy’s article appeared in the patent law blog, Patently-O.

Duffy pointed to the Appointments Clause of the U.S. Constitution (Article II, § 2) and argued that only a cabinet secretary has the authority to appoint officials as powerful as a patent judge. Those judges sit in three-judge panels and review the determinations of patent examiners on the validity of patents.

Matthew R. Osenga, a patent attorney in Richmond, said two actions by the PTO have validated Duffy’s position in the view of the patent bar.

One was the PTO’s response in the first case to raise Duffy’s argument, In Re Translogic Technology Inc., in the U.S. Court of Appeals for the Federal Circuit. Translogic did not make the argument until it filed a petition for a rehearing, in which it contended the court should consider the issue because it involves a structural constitutional issue the BPAI could not have considered.

Although the PTO said the constitutional argument came too late, it did not respond directly to Duffy’s contention about the validity of the appointment of the judges. Instead, it pointed to the chaos that would be created by invalidating thousands of cases. “That’s a concession, not a response,” Osenga said.

The second PTO action is an amendment proposed by the office to a comprehensive patent reform bill before the Senate. The amendment would restore the appointing authority to the Secretary of Commerce and would allow him to “deem” the appointment of a judge by the director as effective on the date the director made the appointment.

It also would provide a defense to a legal challenge to the appointment of a judge by the director: The judge was acting as “a de facto officer.”

Again, the proposed legislative remedy implies that Duffy’s position is correct, Osenga said.

In its petition for a writ of certiorari in Translogic Technology Inc. v. Dudas, Translogic rejects PTO’s floodgates argument. The only cases that would be affected by a ruling in its favor are the ones pending before the Federal Circuit or on appeal to the Supreme Court, Translogic contended.

Osenga and Susan M. Dadio, a patent attorney in Alexandria, said the constitutional controversy reinforces a broader frustration of the patent bar over the operation of the PTO. They object to the office’s attempts through regulation and legislation to shift some of the burden of researching the novelty of a patent application from examiners to applicants.

The regulatory effort was blocked earlier this year in Tafas v. Dudas (VLW 008-3-315) when U.S. District Judge James C. Cacheris ruled that the PTO lacked the authority to impose it.

The legislative effort has been stalled by the opposition of corporations and much of the patent bar to provisions aimed at limiting repetitive and unduly complex applications for patents.

“Most of us in the patent bar are hoping for some new leadership next year from the new administration,” Osenga said.

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