Opinion ID: 4551519
Heading Depth: 2
Heading Rank: 2

Heading: Fall Line’s Arthrex Challenge

Text: Fall Line separately argues that the Board’s final written decision is erroneous because, at the time of the Board’s final written decision, the structure of the Board violated 1 The fact that the Board’s real party-in-interest determinations are not reviewable makes it particularly important that the Board conduct a critical assessment of a party’s assertions regarding the real party-in-interest issue. Such a critical assessment is especially warranted in a case in which a petitioner’s entire business model is to challenge patents on behalf of others. See Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1352 (Fed. Cir. 2018). Case: 19-1956 Document: 92 Page: 9 Filed: 07/28/2020 FALL LINE PATENTS, LLC v. UNIFIED PATENTS, LLC 9 the Appointments Clause. Of course, we already addressed this issue in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019). There, we held that the Board’s Administrative Patent Judges (“APJs”) were principal of- ficers, appointed in violation of the Appointments Clause. Arthrex, 941 F.3d at 1335. Because the Secretary of Commerce and the Director did not have unfettered authority to remove APJs, we determined that there was insufficient executive control over APJs. To remedy this constitutional violation, we severed the problematic removal restrictions regarding APJs and concluded that impacted cases 2 must be vacated and remanded for rehearing before a new panel of APJs. Id. at 1355–40. Fall Line agrees that the APJs were unconstitutionally appointed, but disagrees with the severance we adopted to cure that constitutional defect. Appellant Opening Br. 17–18. Fall Line argues that the Arthrex severance is inadequate because (1) it does not provide for reviewability of final agency decisions; and (2) the severance was inconsistent with Congress’ intent. Id. Because “no properly appointed Board panel exists,” Fall Line contends that we must vacate and dismiss the Board’s written decision. Id. at 18. We will not. As a panel, we are bound by our holding in Arthrex that severance is “an appropriate cure for an Appointments Clause infirmity” and that Congress “would have preferred a Board whose members are removable at will rather than no Board at all.” 753 F.3d at 1337–38. That Fall Line disagrees with the sufficiency of the constitutional fix is of no moment. 2 That is, an Arthrex-based remand is available in cases in which the final decision was rendered by a panel of APJs who were not constitutionally appointed and where the parties presented an Appointments Clause challenge on appeal. Arthrex, 941 F.3d at 1340. Case: 19-1956 Document: 92 Page: 10 Filed: 07/28/2020 10 FALL LINE PATENTS, LLC v. UNIFIED PATENTS, LLC Having rejected Fall Line’s attempt to reargue the issues we addressed in Arthrex, however, we nevertheless find that it is entitled to a remand. Like the patent owner in Arthrex, Fall Line raised an Appointments Clause challenge in its opening brief before us. Arthrex, 941 F.3d at 1340. We have held that such litigants are entitled to an Arthrex-based remand. 3 See, e.g., Polaris Innovations Ltd. v. Kingston Tech. Co., 792 Fed. Appx. 819 (Fed. Cir. 2020); Bedgear, LLC v. Fredman Bros. Furniture Co., Inc., 783 Fed. Appx. 1029 (Fed. Cir. 2019). Accordingly, because Fall Line’s Appointments Clause challenge was timely and the Board’s final written decision was issued before our Arthrex decision, the Board’s decision in No. IPR2018-00043 is vacated and the case is remanded to the Board for proceedings consistent with this court’s decision in Arthrex. 3 Unified separately argues that Fall Line waived its right to an Arthrex-based remand because the appellant rejected Unified’s offer for a “consented remand” prior to its appeal. Unified Supp. Br. 5 (citing J.A. 5012). Unified insists that Fall Line cannot “reverse course and seek a remand at this late stage in the case.” Unified Supp. Br. 6. The record reveals, however, that Fall Line did not waive an Arthrex-based remand. Rather, Fall Line explained that, at the time of Unified’s offer, such a remand did not “make[] sense.” J.A. 5012. During this period of negotiation, Fall Line still believed that this court had appellate jurisdiction to review the Board’s § 312(a)(2) determination. Id. (“[T]he RPI issue if decided in our favor would moot the need for a remand altogether—if we were remanded, we would ultimately have to come back up again on the RPI issue.”). Thus, we conclude that Fall Line has not waived its Appointments Clause challenge and is entitled to a new IPR proceeding before a constitutionally appointed panel. Case: 19-1956 Document: 92 Page: 11 Filed: 07/28/2020 FALL LINE PATENTS, LLC v. UNIFIED PATENTS, LLC 11