Federal Circuit Holds That The Filing Of An IPR Petition Results In A Waiver Of Appointments Clause Challenges
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  • Federal Circuit Holds That The Filing Of An IPR Petition Results In A Waiver Of Appointments Clause Challenges

    On Friday, May 5, 2020, the United States Court of Appeals for the Federal Circuit (“CAFC”) re-designated as precedential its January 28, 2020 order in Cienna Corp. v. Oyster Optics, LLC and Andrei Iancu, __ F.3d __, (Fed. Cir. May 5, 2020).  The order affirmed the judgement of the Patent Trial and Appeal Board (“Board”) finding the challenged claims patentable. 
    Ciena Corp. (“Ciena”) petitioned the Board for inter partes review (“IPR”) of a patent asserted against it in district court.  In May 2018, the Board instituted the IPR, and the district court stayed the litigation pending the completion of the IPR and related appeals.  Upon the Board’s finding that the challenged claims were patentable, Ciena challenged the Board’s appointment as unconstitutional in light of Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019). 

    In Arthrex, the CAFC held that the appointment of Administrative Patent Judges (“APJs”) to the Board violates the Appointments Clause of the U.S. Constitution.  The CAFC’s holding was based in part on certain protections from removal afforded to APJs.  In Arthrex, the CAFC remedied the constitutional violation by stripping APJs of these protections such that any pending IPRs could proceed in compliance with the Appointments Clause. 
    The Board had issued its Final Written Decision (“FWD”) in Ciena’s IPR prior to the CAFC’s remedial action; thus, Ciena argued, on appeal, that the members of the Board panel that issued the decision were not appointed in compliance with the Appointments Clause.  The CAFC rejected Ciena’s argument and explained:
    The problem with Ciena’s request is that, unlike the patent owner in Arthrex, Ciena requested that the Board adjudicate its petition.  It, thus, affirmatively sought a ruling from the Board members, regardless of how they were appointed.  Ciena was content to have the assigned Board judges adjudicate its invalidity challenges until the Board ruled against it.  Under those circumstances, we find that Ciena has forfeited its Appointments Clause challenge.

    In other words, the act of filing an IPR petition results in a waiver of any Appointments Clause challenge.
    The CAFC’s decision in this case was originally released as a non-precedential order; however, the CAFC re-designated the decision on petition from the United States Patent and Trademark Office (“USPTO”).  The USPTO argued that petitioners continue to raise this argument on appeal.