Welcome to Skilled in the Art—I'm Law.com IP reporter Scott Graham. I'm a day early this week because of the holiday. Here's what's on my radar:

• Arthrex cert petitions are starting to hit the Supreme Court.

• Patent filings are up as more investors may be seeking alternatives to stock and bond markets.

• Samsung case settles after attorney says jury trial in the Eastern District of Texas could be hazardous to his health.

As always you can email me your feedback and follow me on Twitter.

Gibson, Dunn & Crutcher partner Mark Perry

Arthrex: A 'Paradigmatic' Case for Certiorari

It's a short week that's already seen a lot of IP news, most notably the U.S. Supreme Court's decision in the trademark case PTO v. Booking.com. Congratulations are in order for Lisa Blatt, who argued the case for Booking.com, plus her colleagues at Williams & Connolly and at Foley & Lardner who provided counsel.

But today I'm going to focus on the next big IP case headed to the high court. The U.S. government asked the Supreme Court on Monday to review two Federal Circuit rulings issued last fall on the constitutionality of PTAB judge appointments. DOJ and the PTO are asking the court to review both Arthrex v. Smith & Nephew and Polaris Innovations v. Kingston Technology. The government wants to make the case that the APJs were properly appointed—and that even if not, patent owners who failed to raise the challenge directly to the board (i.e. virtually all of them) waived their right to new hearings.

Smith & Nephew has chipped in its own cert petition, arguing that Arthrex represents "a sea change in Appointments Clause jurisprudence." Gibson, Dunn & Crutcher partner Mark Perry is counsel of record.

And just to keep things interesting, the Supreme Court issued its latest Appointments Clause decision on Monday, with a 5-4 majority finding the director of the Consumer Financial Protection Bureau unconstitutionally appointed. A separate 7-2 lineup held that she can remain in place, so long as she's removable at will by the president. "We think it clear that Congress would prefer that we use a scalpel rather than a bulldozer in curing the constitutional defect we identify today," Chief Justice John Roberts wrote for the majority in Seila Law v. Consumer Financial Protection Bureau.

Weil Gotshal & Manges partner Zack Tripp, who litigated IP cases as an assistant to the solicitor general, said that with the Federal Circuit having invalidated an act of Congress, and the government now petitioning for review, U.S. v. Arthrex is a "paradigmatic case" for certiorari.

And Seila Law is a reminder that political accountability for executive agency decision-making remains one of the most hotly contested issues at the court, said Tripp. Though the decision isn't directly on point with Arthrex—it involves a single decision maker with broad powers over millions of private citizens and businesses—the severability holding might provide some reassurance that court won't deep-six the PTAB entirely, even if it finds the appointments problematic.

"I think Seila Law makes that a more difficult argument," Tripp said, while adding the caveat that every case gets decided in its own context.

To recap, the Federal Circuit ruled last fall that because of the power and autonomy exercised by APJs, they are principal officers who must be appointed by the president and confirmed by the Senate. But Judge Kimberly Moore held that by severing civil service protections for APJs from the Patent Act, the PTO director will have enough supervisory control to render them inferior officers, properly hired and fired by the Secretary of Commerce.

Patent owners Arthrex and Polaris argue that the Federal Circuit didn't go far enough: that the PTAB must be shut down until Congress can fix the America Invents Act by, for example, giving the PTO director authority to overrule any PTAB decision.

Meanwhile, the Federal Circuit has remanded about 100 cases that were pending appeal back to the PTAB for a new hearing before a different panel of judges. The PTAB has put those hearings on hold while awaiting word from the Supreme Court.

The government argues in its cert petition that the PTO director already has broad powers over APJs, including the power to exclude them from participating in "one case, from a category of cases, or from all cases." The director also has "substantial authority" over rehearings, and if still dissatisfied with an outcome, can de-institute proceedings. And even with civil service protections, the Secretary of Commerce can fire APJs who fail or refuse to follow agency policy or guidance.

"The work of a USPTO administrative patent judge thus is superintended by presidentially appointed, Senate-confirmed officers at virtually every step," the government argues.

The government has paired Arthrex and Polaris in its cert petition because Polaris preserved the appointments issue before the PTAB. Arthrex—like all but "a handful" of the 100 others—forfeited the issue by failing to raise it to the board, the government argues.

The government's brief features Deputy Solicitor General Malcolm Stewart, Assistants to the Solicitor General Jonathan Bond and Jonathan Ellis, and DOJ attorneys Scott McIntosh, Melissa Patterson and Courtney Dixon, plus PTO Solicitor Thomas Krause, Deputy Solicitor Farheena Rasheed and others from the PTO.

Smith & Nephew adds that the PTO has been down this road before, after professor John Duffy pointed out in 2007 that the director was not constitutionally authorized to appoint APJs. Congress then amended the law to vest appointments in the Secretary of Commerce. That left "no doubt that Congress and the President understand APJs to be inferior Officers. Yet the court of appeals gave no weight to the views of the political branches," Smith & Nephew argues.

Joining Perry on the brief are Gibson associate Kellam Conover, other attorneys from Gibson and from Wolf, Greenfield & Sacks, and Smith & Nephew Associate General Counsel Mark Gorman.

SPONSORED BY ALM

Announcing Two Incredible Keynote Speakers for the Women, Influence & Power in Law Conference

WIPL is known for having some of the most engaging and energizing keynote speakers attend to share their thoughts, experiences, war stories and tips on effective leadership. And this year is no exception. This year, we are grateful to welcome two remarkable women come and inspire us: Tina Tchen, the President and CEO of the "Times Up" Legal Defense Fund and Paula Boggs, Founder of Boggs Media LLC and Former Executive Vice President, General Counsel and Secretary, Law and Corporate Affairs at Starbucks from 2002-2012. READ MORE

Source: Unified Patents

Patent Litigation: Have We Seen the Bottom?

It took a pandemic, zero interest rates, a quivering stock market and a new rocket docket. But the patent pendulum may finally be swinging upward again.

District court patent filings rose to their highest level in nearly four years during the second quarter of 2020, according to Unified Patents' quarterly Patent Dispute Report. Unified is attributing some of the increase to "finance-backed entities," which I'm also hearing anecdotally.

What's crystal clear is that the Western District of Texas is now the most popular venue for patent litigation, at least based on filings.

U.S. District Judge Rodney Gilstrap (Photo: Diego Radzinschi/ALM)

Litigate Like Your Life Depends on It

There's nothing like an imminent trial date—and a deadly pandemic—to facilitate a settlement. NPE Image Processing Technologies and Samsung Electronics settled their patent dispute on Wednesday, five days before they were scheduled to go to trial in the Eastern District of Texas.

Yes, U.S. District Judge Rodney Gilstrap is bound and determined to conduct patent infringement jury trials notwithstanding the COVID-19 pandemic. Image Processing's lead counsel, Henry Bunsow of Silicon Valley's Bunsow De Mory, asked the judge last week for a continuance given the surge of COVID-19 cases in Texas. Bunsow noted his age (71); his co-counsel's health conditions; the danger of having to transfer through airports in Dallas or Houston on the way to Marshall; Gov. Greg Abbott's recent request that bars close and that people stay home; and orders issued in the previous week from the Northern, Southern and Western Districts of Texas suspending trials.

Gilstrap wasn't having any of that. "Marshall has so far been substantially spared from the current spike in cases of COVID-19 that Dallas and Houston have experienced," he wrote in a June 29 order. "While the Court strives to follow public health guidance from the CDC, the State of Texas, and the Administrative Office of the U. S. Courts, the circumstances in this division and district have not impacted the Court's operations, to date, as it has its sister Texas districts." Bunsow and his team could fly through Little Rock and drive to Marshall, Gilstrap added in a footnote.

Plus, most of Samsung's trial team was already in Marshall, and company witnesses and representatives had traveled to the U.S. and begun self-quarantining to meet CDC guidelines. "To tell Samsung—so close to the July 6 trial date—that all of its witnesses and representatives must go home and then return in a month or in a year would be unfair and a waste of resources," Gilstrap wrote.

In any event, the parties notified the court Wednesday of a settlement in principle, and requested the case be stayed 30 days while it's finalized.

That's all from Skilled in the Art today. I'll see you all again next Friday.