Over at The Regulatory Review, Melissa Wasserman and I have an essay about the Supreme Court’s decision last week in Oil States and our new paper The New World of Agency Adjudication, which is forthcoming in the California Law Review.
Here’s a snippet from our Regulatory Review essay:
Last week, the U.S. Supreme Court upheld the constitutionality of certain adjudications of patent rights at the U.S. Patent and Trademark Office. Justice Clarence Thomas, writing for the Court in in Oil States Energy Services v. Greene’s Energy Group, concluded that the grant of a patent is a matter involving public rights. Accordingly, the Court held that adjudication conducted by administrative patent judges can fall comfortably within the public-rights exception to the constitutional requirement that adjudication normally take place in an Article III court. For similar reasons, the Court rejected the argument that under the Seventh Amendment a jury must adjudicate these patent disputes.
The Court’s decision in Oil States has dramatic implications for the patent system in that agency adjudication remains a viable alternative to litigation in a federal court for anyone seeking to challenge the validity of an issued patent. But the decision also left open many important questions about patent adjudication at the Patent Office and the place of the Patent Office in the larger landscape of modern agency adjudication.
Failure to bring PTAB adjudication within the mainstream of new-world agency adjudication could prove problematic for the future of patent adjudication within the Patent Office. For instance, Gary Lawson argues that the Patent Office Director’s lack of final decision-making authority may raise a separate constitutional issue. Under the current statutory and regulatory scheme, the administrative patent judges, not the Senate-confirmed Patent Office Director, have final decision-making authority. Lawson understands this scheme to mean that administrative patent judges are principal officers under the Appointments Clause and must be appointed by the President with advice and consent of the Senate.
On the other hand, Justice Neil Gorsuch’s dissent in Oil States, joined by Chief Justice Roberts, argues that any type of agency-head influence over the outcomes in adjudication is constitutionally problematic, at least in the context of patent adjudication. He argues that, under Article III of the Constitution, it should not be the case that “a political appointee and his administrative agents, instead of an independent judge, resolve the dispute.” For Justice Gorsuch, the lack of judicial independence poses a problem because “when an independent Judiciary gives ground to bureaucrats in the adjudication of cases, the losers will often prove the unpopular and vulnerable.”
You can read the full essay here.