Processing All Things Federal Circuit
July 30, 2021 - Federal Circuit Insights

Arthrex Looks to Be Going Out With a Whimper

Arthrex Looks to Be Going Out With a Whimper

Now that it’s been roughly a month since the Federal Circuit issued mass sua sponte Arthrex orders (which we discussed in Early Hints About What Happens Next After Arthrex), we thought it was worth checking in on what’s happening post-Arthrex.

As many readers probably saw, the PTO quickly issued guidance for parties who wish to seek Director (or right now, Acting Director) review under Arthrex.

But since we’re focused on all things Federal Circuit, we wanted to report on what’s happening at the Court. Last week we saw filings from the PTO solicitor’s office giving its view of what Arthrex requires. The PTO took the position that, in cases where the issue is preserved, the Supreme Court’s decision warrants only a limited remand to give a party the opportunity to seek Director review. The limited remand would not require vacating the original PTAB panel’s decision, which would be a reversal from what the Federal Circuit did under its original Arthrex decision. And during the limited remand, the Federal Circuit would retain jurisdiction over the appeal so that the appeal could proceed promptly if the Director denies review.

This week, the Federal Circuit began issuing orders that largely track the PTO’s suggested approach. In a per curiam order by the original Federal Circuit Arthrex panel (Chief Judge Moore and Judges Reyna and Chen), the Federal Circuit recalled its mandate from its original Arthex decision. That recall undoes the Federal Circuit’s earlier vacatur and remand of the PTAB’s decision for a new hearing before a new PTAB panel. The Court instead ordered a remand “for the limited purpose of allowing appellant the opportunity to request Director rehearing of the final written decision.” The Court gave the appellant 30 days to file a request for Director rehearing. But as suggested by the PTO, the original PTAB decision remains in effect pending any action by the Acting Director. And the Federal Circuit has otherwise retained jurisdiction over the appeal. It ordered the parties to inform the Court within 14 days of any action on the rehearing request, with the Federal Circuit Clerk to automatically reactivate the appeal upon notice that the Acting Director denied the rehearing request.

In light of this order (and as many expected), the Supreme Court’s Arthrex decision is shaping up to be much less favorable to parties who preserved an Appointments Clause challenge than the Federal Circuit’s original decision. Because it appears that the Acting Director is unlikely to grant rehearing in the vast majority of cases, a remand under the Supreme Court’s Arthrex decision seems likely to lead only to delay rather than any real chance of a different outcome. Indeed, it appears several parties that had raised Arthrex earlier are coming to the same conclusion—we’ve seen multiple instances now where patent owners that previously raised an Arthrex challenge have now told the Federal Circuit they are no longer pursuing that challenge and instead wish their appeals to go forward.