Respondents Brief — Arthrex, Inc., Petitioner v. Smith & Nephew, Inc., et al.

No. 19-1204

IN THE

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ARTHREX, INC.,

Petitioner,

v.

SMITH & NEPHEW, INC.; ARTHROCARE CORP.;

AND UNITED STATES OF AMERICA,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

BRIEF IN OPPOSITION

NATHAN R. SPEED

CHARLES T. STEENBURG

RICHARD F. GIUNTA

WOLF, GREENFIELD & SACKS, P.C.

600 Atlantic Avenue

Boston, MA 02210

(617) 646-8000

MARK A. PERRY

Counsel of Record

KELLAM M. CONOVER

GIBSON, DUNN & CRUTCHER LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 955-8500

MPerry@gibsondunn.com

MARK J. GORMAN

SMITH & NEPHEW, INC.

7135 GOODLETT FARMS PARKWAY

CORDOVA, TN 38016

(901) 399-6903

Counsel for Respondents

Smith & Nephew, Inc. and ArthroCare Corp.

QUESTIONS PRESENTED

Inter partes review under the Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284

(2011) (AIA), allows the Patent and Trademark Office

“to reconsider and cancel patent claims that were

wrongly issued.” Oil States Energy Servs., LLC v.

Greene’s Energy Grp., LLC, 138 S. Ct. 1365, 1370

(2018).

The questions presented are:

1. Whether the court of appeals correctly held

that inter partes review of a patent that issued three

years after the AIA was enacted raises no retroactivity concerns under the Due Process Clause.

2. Whether petitioner forfeited any Appointments Clause challenge to the administrative adjudicators by not properly raising such a challenge in the

court of appeals.

ii

RULE 29.6 STATEMENT

Respondents Smith & Nephew, Inc. and

ArthroCare Corp. state that Smith & Nephew PLC is

respondents’ parent corporation and no other publicly

held corporation owns 10% or more of the stock of

either respondent.

iii

TABLE OF CONTENTS

Page

BRIEF IN OPPOSITION ............................................ 1

STATEMENT .............................................................. 1

REASONS FOR DENYING THE PETITION .......... 10

I.

THE RETROACTIVITY QUESTION DOES

NOT WARRANT REVIEW .................................. 11

A. This Case Does Not Involve The

“Retroactive” Application Of The

AIA .......................................................... 11

B. There Is No Reason To Consolidate

This Case With Celgene ......................... 16

II. THE FORFEITURE QUESTION DOES NOT

WARRANT REVIEW ......................................... 19

CONCLUSION .......................................................... 27

iv

TABLE OF AUTHORITIES

Page(s)

Cases

Arthrex, Inc. v. Smith & Nephew, Inc.,

880 F.3d 1345 (Fed. Cir. 2018) .............................. 6

Arthrex, Inc. v. Smith & Nephew, Inc.,

941 F.3d 1320 (Fed. Cir. 2019) ............ 6, 10, 19, 26

Arthrex, Inc. v. Smith & Nephew, Inc.,

953 F.3d 760 (Fed. Cir. 2020) (en banc) .............. 26

Arthrex, Inc. v. Smith & Nephew, Inc.,

No. 15-cv-1047

(E.D. Tex. filed June 17, 2015) .............................. 6

Block v. Tanenhaus,

815 F.3d 218 (5th Cir. 2016) ................................ 22

Celgene Corp. v. Peter,

931 F.3d 1342 (Fed. Cir. 2019) .............................. 8

Collabo Innovations, Inc. v. Sony Corp.,

778 F. App’x 954 (Fed. Cir. 2019) ........................ 12

Cuozzo Speed Techs., LLC v. Lee,

136 S. Ct. 2131 (2016) .................................... 1, 2, 3

In re DBC,

545 F.3d 1373 (Fed. Cir. 2008) ............................ 22

Desper Prods., Inc. v. QSound Labs, Inc.,

157 F.3d 1325 (Fed. Cir. 1998) ........................... 22

v

TABLE OF AUTHORITIES

(continued)

Page(s)

Eldred v. Ashcroft,

537 U.S. 186 (2003) .................................... 8, 12, 14

Enzo Life Scis., Inc. v. Becton, Dickinson & Co.,

780 F. App’x 903 (Fed. Cir. 2019) ........................ 12

Freytag v. Comm’r,

501 U.S. 868 (1991) ........................................ 21, 25

Genentech, Inc. v. Hospira, Inc.,

946 F.3d 1333 (Fed. Cir. 2020) ............................ 12

Glidden Co. v. Zdanok,

370 U.S. 530 (1962) .............................................. 25

Hill v. Kemp,

478 F.3d 1236 (10th Cir. 2007) ............................ 22

Island Creek Coal Co. v. Wilkerson,

910 F.3d 254 (6th Cir. 2018) ................................ 23

Jones Bros., Inc. v. Sec’y of Labor,

898 F.3d 669 (6th Cir. 2018) ................................ 21

Joseph v. United States,

135 S. Ct. 705 (2014) ............................................ 23

Joy Techs., Inc. v. Manbeck,

959 F.2d 226 (Fed. Cir. 1992) ................................ 2

Kabani & Co. v. SEC,

733 F. App’x 918 (9th Cir. 2018) ......................... 23

vi

TABLE OF AUTHORITIES

(continued)

Page(s)

Landgraf v. USI Film Prods.,

511 U.S. 244 (1994) ...................... 12, 13, 14, 15, 16

In re Lewis,

398 F.3d 735 (6th Cir. 2005) ................................ 22

Lucia v. SEC,

138 S. Ct. 2044 (2018) .......................................... 21

Martin v. Hadix,

527 U.S. 343 (1999) .............................................. 14

McClurg v. Kingsland,

42 U.S. (1 How.) 202 (1843) ................................. 12

McCormick Harvesting Mach. Co. v.

C. Aultman & Co.,

169 U.S. 606 (1898) .............................................. 13

Nguyen v. United States,

539 U.S. 69 (2003) ................................................ 25

Niemi v. Lasshofer,

728 F.3d 1252 (10th Cir. 2013) ............................ 21

NLRB v. RELCO Locomotives, Inc.,

734 F.3d 764 (8th Cir. 2013) ................................ 23

Oil States Energy Servs., LLC v.

Greene’s Energy Grp., LLC,

138 S. Ct. 1365 (2018) ...................... 1, 2, 11, 12, 13

vii

TABLE OF AUTHORITIES

(continued)

Page(s)

OSI Pharm., LLC v. Apotex Inc.,

939 F.3d 1375 (Fed. Cir. 2019) ............................ 12

Patlex Corp. v. Mossinghoff,

758 F.2d 594 (Fed. Cir. 1985) ............................ 2, 8

Republic of Argentina v. NML Capital, Ltd.,

573 U.S. 134 (2014) ........................................ 19, 20

Return Mail, Inc. v. U.S. Postal Serv.,

139 S. Ct. 1853 (2019) ........................................ 1, 2

SAS Inst., Inc. v. Iancu,

138 S. Ct. 1348 (2018) ............................................ 1

Smartflash LLC v. Samsung Elecs. Am., Inc.,

No. 18-189 (cert. denied Oct. 1, 2018) ................. 23

Sompo Japan Ins. Co. of Am. v.

Norfolk S. Ry. Co.,

762 F.3d 165 (2d Cir. 2014) ................................. 21

In re Swanson,

540 F.3d 1368 (Fed. Cir. 2008) ........................ 4, 16

Thryv, Inc. v. Click-to-Call Techs., LP,

140 S. Ct. 1367 (2020) .................................... 14, 15

Turner Bros., Inc. v. Conley,

757 F. App’x 697 (10th Cir. 2018) ....................... 23

United States v. Ashford,

718 F.3d 377 (4th Cir. 2013) ................................ 22

viii

TABLE OF AUTHORITIES

(continued)

Page(s)

United States v. Dyer,

892 F.3d 910 (7th Cir. 2018) ................................ 22

United States v. Khorozian,

333 F.3d 498 (3d Cir. 2003) ................................. 22

United States v. LaPierre,

998 F.2d 1460 (9th Cir. 1993) .............................. 21

United States v. Nason,

9 F.3d 155 (1st Cir. 1993) .................................... 21

United States v. Olano,

507 U.S. 725 (1993) .............................................. 20

United States v. Silvestri,

409 F.3d 1311 (11th Cir. 2005) ............................ 22

Valdez v. Mercy Hosp.,

961 F.2d 1401 (8th Cir. 1992) .............................. 22

Worldwide Moving & Storage, Inc. v.

District of Columbia,

445 F.3d 422 (D.C. Cir. 2006) .............................. 22

Statutes

35 U.S.C. § 301 ............................................................ 2

35 U.S.C. § 301 (2006 ed.) ..................................... 3, 16

35 U.S.C. § 302 ............................................................ 2

ix

TABLE OF AUTHORITIES

(continued)

Page(s)

35 U.S.C. § 303 ............................................................ 2

35 U.S.C. § 303 (2006 ed.) ......................................... 16

35 U.S.C. § 311 ...................................................... 3, 16

35 U.S.C. § 311 (2006 ed.) ..................................... 3, 16

35 U.S.C. § 314 ...................................................... 3, 16

35 U.S.C. § 314 (2006 ed.) ......................................... 16

35 U.S.C. § 316 ...................................................... 4, 16

35 U.S.C. § 318 ............................................................ 4

35 U.S.C. § 319 ............................................................ 4

35 U.S.C. § 325 .......................................................... 16

Act of Dec. 12, 1980,

Pub. L. No. 96-517,

94 Stat. 3015 ...................................................... 1, 2

American Inventors Protection Act,

Pub. L. No. 106-113,

113 Stat. 1501A-567 ............................................... 2

Leahy-Smith America Invents Act,

Pub. L. No. 112-29, 125 Stat. 284 (2011) ........ 4, 15

Rules

Fed. R. App. P. 28 ...................................................... 21

x

TABLE OF AUTHORITIES

(continued)

Page(s)

Other Authorities

Arthrex, Inc. v. ArthroCare Corp.,

IPR2016-01877 (PTAB filed Sept. 22, 2016) ......... 7

Arthrex, Inc. v. Bonutti Skeletal Innovations, LLC,

IPR2013-00631, IPR2013-00632, IPR201300633 (PTAB filed Sept. 27, 2013) ........................ 5

Br. for Appellant (Dkt. 18),

Arthrex, Inc. v. Smith & Nephew, Inc.,

No. 2018-2140 (Fed. Cir. filed Oct. 19, 2018) ........ 9

Br. for Appellant (Dkt. 22),

Polaris Innovations Ltd. v. Kingston Tech. Co.,

No. 2018-1768 (Fed. Cir. filed July 10, 2018) ..... 24

Constitutionality of PTAB Judge Appointments

Challenged in Polaris IPR Appeal,

Foley & Lardner LLP (Aug. 3, 2018),

https://www.foley.com/en/insights/publicatio

ns/2018/08/constitutionality-of-ptab-judgeappointments-chall; ............................................. 25

Ryan Davis,

Are PTAB Judges Unconstitutional? A

Closer Look, Law360 (Sept. 5, 2018)

https://www.law360.com/articles/1080125 .......... 25

H.R. Rep. No. 112-98,

U.S.C.C.A.N. 67 (2011) .......................................... 3

xi

TABLE OF AUTHORITIES

(continued)

Page(s)

Gary Lawson,

Appointments and Illegal Adjudication: The

AIA Through a Constitutional Lens,

Geo. Mason L. Rev. (forthcoming),

https://papers.ssrn.com/sol3/papers.cfm?abst

ract_id=3105511 ................................................... 24

Rebecca Lindhorst & Jason D. Eisenberg,

Do You Want an Inferior Judge?: Why PTAB

Judges May Be Unconstitutional,

Sterne Kessler Goldstein & Fox, PLLC (July

2018), https://www.sternekessler.com/newsinsights/publications/do-you-want-inferiorjudge-why-ptab-judges-may-beunconstitutional-and............................................ 25

Oral Argument,

Arthrex, Inc. v. Smith & Nephew, Inc.,

935 F.3d 1319 (Fed. Cir. 2019) (No. 2018-1584),

http://oralarguments.cafc.uscourts.gov/default.

aspx?fl=2018-1584.mp3 ......................................... 9

Order (Dkt. 118),

Arthrex, Inc. v. Smith & Nephew, Inc.,

No. 2018-2140 (Fed. Cir. Mar. 30, 2020) ............. 26

Pet. for Cert.,

Celgene Corp. v. Peter,

No. 19-1074 (U.S. filed Feb. 26, 2020) ................. 17

xii

TABLE OF AUTHORITIES

(continued)

Page(s)

Pet. for Cert.,

Smartflash LLC v. Samsung Elecs. Am., Inc.,

No. 18-189 (U.S. filed Aug. 9, 2018) .................... 24

S. Rep. No. 110-259 (2008) .......................................... 3

Smith & Nephew, Inc. v. Arthrex, Inc.,

IPR2016-00918 (PTAB filed Apr. 19, 2016) .......... 5

St. Jude Med., LLC v. Snyders Heart Valve LLC,

IPR2018-00107 (PTAB filed Feb. 6, 2018) .......... 24

Unified Patents Inc. v.

Sound View Innovations, LLC,

IPR2018-00096 (PTAB filed Feb. 1, 2018) .......... 24

Unopposed Mot. to Stay the Mandate (Dkt. 116),

Arthrex, Inc. v. Smith & Nephew, Inc.,

No. 2018-2140 (Fed. Cir. filed Mar. 26, 2020)..... 19

BRIEF IN OPPOSITION

Respondents Smith & Nephew, Inc., and ArthroCare Corp. respectfully submit that the petition for a

writ of certiorari should be denied.

STATEMENT

After petitioner initiated district court litigation

alleging infringement of claims 10 and 11 of U.S. Patent No. 8,821,541, respondents petitioned for inter

partes review (IPR) of those claims pursuant to the

America Invents Act of 2011 (AIA). The Patent Trial

and Appeal Board (PTAB or Board) ruled that the

claims are unpatentable over the prior art. The Federal Circuit affirmed, ruling (as pertinent here) that

“because the ’541 patent issued on September 2, 2014,

almost three years after passage of the AIA,” application of the AIA’s IPR procedures “cannot be characterized as retroactive.” Pet. App. 18a–19a.

1. “For several decades,” the United States Patent and Trademark Office (USPTO) has “possessed

the authority to reexamine—and perhaps cancel—a

patent claim that it had previously allowed.” Cuozzo

Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2137 (2016).

This Court has recounted the history of those review

mechanisms in several recent cases. See Return Mail,

Inc. v. U.S. Postal Serv., 139 S. Ct. 1853, 1859–61

(2019); Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365, 1370–71 (2018); SAS

Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1353–54 (2018);

Cuozzo, 136 S. Ct. at 2137–38.

In 1980, for example, Congress authorized ex

parte reexamination. See Act of Dec. 12, 1980 (1980

Act), Pub. L. No. 96-517, 94 Stat. 3015 (35 U.S.C.

2

§ 301 et seq.). Under that regime, the USPTO may inquire “whether a substantial new question of patentability” exists for any issued patent. 35 U.S.C.

§ 303(a). Such a patentability question must be based

on prior art patents or printed publications, and can

be raised by the USPTO itself or by a third party. Id.

§§ 301(a), 302, 303(a). If the USPTO decides there is

a substantial new question of patentability, it will

“reexamine the patent and, if warranted, cancel the

patent or some of its claims.” Return Mail, 139 S. Ct.

at 1859.

Congress authorized the USPTO to apply the ex

parte reexamination mechanism to any patent “in

force as of th[e] [effective] date or issued thereafter.”

1980 Act § 8(b), 94 Stat. at 3027 (effective date of July

1, 1981). Patent owners subsequently raised Due Process and Takings Clause challenges to the application

of ex parte reexamination to patents that issued before the 1980 Act was passed, but the Federal Circuit

rejected those challenges. See Joy Techs., Inc. v.

Manbeck, 959 F.2d 226, 228 (Fed. Cir.), cert. denied,

506 U.S. 829 (1992); Patlex Corp. v. Mossinghoff, 758

F.2d 594, 602–03 (Fed. Cir.), modified on rehearing,

771 F.2d 480 (Fed. Cir. 1985). Ex parte reexamination

still exists today. Oil States, 138 S. Ct. at 1370.

In 1999, Congress amended the Patent Act to add

a new procedure called “inter partes reexamination.”

See American Inventors Protection Act, Pub. L. No.

106-113, §§ 4601–4608, 113 Stat. 1501A-567 to

1501A-572. Inter partes reexamination also allowed

the USPTO to cancel claims of an issued patent, but it

provided “third parties greater opportunities to participate in the [USPTO]’s reexamination proceedings

as well as in any appeal of a [USPTO] decision.”

Cuozzo, 136 S. Ct. at 2137.

3

In 2011, Congressed enacted the AIA. Among

other provisions, the AIA “modifies ‘inter partes reexamination,’ which it now calls ‘inter partes review.’”

Cuozzo, 136 S. Ct. at 2137 (emphasis omitted). Congress understood the new inter partes review (IPR)

procedure to be part of the “administrative ‘reexamination’ process” it first created in the 1980s to “serve

as an effective and efficient alternative to often costly

and protracted district court litigation.” H.R. Rep. No.

112-98, at 45, 2011 U.S.C.C.A.N. 67, 75 (2011). Given

“problems and limitations” Congress perceived with

the then-existing ex parte and inter partes reexamination processes, it envisioned inter partes review as

“a quick, inexpensive, and reliable alternative to district court litigation to resolve questions of patent validity.” S. Rep. No. 110-259, at 20 (2008).

Any person may request that the USPTO reconsider claims of an issued patent through the inter

partes review process. 35 U.S.C. § 311(a). To do so,

the challenger must file with the USPTO a petition

that identifies the grounds on which the challenger

believes the issued claims are not novel or would have

been obvious under sections 102 or 103 of the Patent

Act in light of “prior art consisting of patents and

printed publications.” Id. § 311(b). These are the

same grounds of unpatentability that a challenger

could have raised in an ex parte or inter partes reexamination. See id. §§ 301, 311 (2006 ed.).

If the Director of the USPTO finds a “reasonable

likelihood” that the challenged claims are unpatentable, he may at his discretion institute a review proceeding. 35 U.S.C. § 314(a). The proceeding is conducted before the Board, which generally acts in panels comprised of three Administrative Patent Judges

(APJs). During such a proceeding, the challenger and

4

patent owner may conduct limited discovery, submit

briefs, introduce evidence, and attend an oral hearing.

Id. § 316(a)(5), (8), (10), (13). The patent owner may

file a motion to amend the patent to include new substitute claims. Id. § 316(a)(9). The party challenging

an issued claim has the burden to prove the claim is

unpatentable by a preponderance of the evidence, the

same standard applied during inter partes reexamination. Compare id. § 316(e), with In re Swanson, 540

F.3d 1368, 1377 (Fed. Cir. 2008).

“A[ny] party dissatisfied with the final written decision” of the Board “may appeal the decision” to the

Federal Circuit. 35 U.S.C. § 319. Once judicial review

concludes, the USPTO will “issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the

patent determined to be patentable, and incorporating

in the patent by operation of the certificate any new

or amended claim determined to be patentable.” Id.

§ 318(b).

Congress expressly authorized the USPTO to apply the AIA’s inter partes review procedures “to any

patent issued before, on, or after” the AIA’s September

16, 2012 effective date. See § 6(c)(2)(A), 125 Stat. at

304.

2. Petitioner filed a patent application in September 2006, and the USPTO issued the ’541 patent in

September 2014 (C.A. JA790)—three years after Congress enacted the AIA. At the time this patent issued,

inter partes review was available to challenge it and

all other issued patents; indeed, petitioner had

availed itself of the inter partes review mechanism

during prosecution of the ’541 patent, having filed

three petitions for inter partes review in September

2013 against patents that had issued before the AIA

5

was passed. Arthrex, Inc. v. Bonutti Skeletal Innovations,

LLC,

IPR2013-00631,

IPR2013-00632,

IPR2013-00633 (PTAB filed Sept. 27, 2013).

The eight years of patent prosecution were largely

attributable to petitioner’s consistent attempt to procure claims on “inventions” that were already known

or would have been obvious. See, e.g., C.A. JA872–81

(rejecting originally filed claims as anticipated and/or

obvious). During this period, petitioner re-wrote its

claims eight times, and each time the USPTO rejected

the claims in light of the prior art. See id. at 870, 902,

947, 1001, 1058, 1099, 1279.

In October 2013, the USPTO issued a final office

action finding all of the then-pending claims unpatentable. C.A. JA1099. Then, in January 2014, petitioner filed a request for continued examination to

re-open prosecution of its application. Ex. 1102 at

311, Smith & Nephew, Inc. v. Arthrex, Inc., IPR201600918 (PTAB filed Apr. 19, 2016). Petitioner also requested “prioritized examination” of the application

under new procedures the AIA made available to a

limited number of applicants. Id. at 468.

The USPTO granted petitioner’s request to use

the AIA’s new prioritized examination procedure, Ex.

1102 at 471, but again found the claims unpatentable,

id.; C.A. JA1279. It was not until May 2014—more

than two years after the AIA passed, five months after

petitioner availed itself of the AIA’s new prioritized

examination procedures, and nine months after it began using inter partes review for its own purposes—

that petitioner finally amended its claims in a manner

that resulted in allowance. C.A. JA1423–42, 1460–71,

1513–19, 1523, 1527–30.

6

The ’541 patent originally issued with 11 claims,

but petitioner statutorily disclaimed claims 1–9 after

respondents challenged those claims in a separate

IPR proceeding. See Arthrex, Inc. v. Smith & Nephew,

Inc., 880 F.3d 1345 (Fed. Cir. 2018). The two remaining claims—10 and 11—are directed to a suture anchor, which is a medical implant used to re-attach soft

tissue to bone. Pet. App. 2a–5a.

3. Petitioner sued respondents in the U.S. District Court for the Eastern District of Texas. See Arthrex, Inc. v. Smith & Nephew, Inc., No. 15-cv-1047

(E.D. Tex. filed June 17, 2015). The jury found that

respondents infringed claims 10 and 11 of the ’541 patent. C.A. JA4521. But before respondents could challenge the jury’s verdict in post-trial motions or on appeal, the parties reached a settlement with the express understanding that inter partes review of

claims 10 and 11 of the ’541 patent could be pursued.

Joint Appendix 532–33 at 52:20–53:3, Arthrex, Inc. v.

Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019)

(No. 2018-2140) (acknowledgment by Arthrex’s counsel).

Respondents filed a petition for inter partes review of those two claims in April 2016. C.A. JA183–

250. The Director instituted review against both

claims. Id. at 99. After conducting a trial in which

more than 100 exhibits were submitted, including

multiple expert declarations, and considering briefing

and argument from both parties, the Board issued a

final written decision finding both claims unpatentable. Specifically, the Board held (a) claim 10 would

have been obvious in light of two distinct combinations of prior art references, and (b) claim 11 was anticipated by a single reference and also would have

7

been obvious in view of the prior art. Petitioner subsequently requested rehearing of the Board’s decision,

but its request was denied. C.A. JA82–92.

At no point during the administrative proceeding

did petitioner argue that inter partes review violated

any constitutional provision, including the Fifth

Amendment or the Appointments Clause. In fact,

while the review was pending, petitioner sought to initiate inter partes review against a patent respondent

ArthroCare owned. Arthrex, Inc. v. ArthroCare Corp.,

IPR2016-01877 (PTAB filed Sept. 22, 2016).

4. On appeal, the Federal Circuit first affirmed

the Board’s determination that both claims are unpatentable, ruling that “the Board’s findings have

substantial evidence support” and “its claim constructions are correct.” Pet. App. 2a. Petitioner does not

challenge that ruling in this Court.

a. Petitioner argued for the first time in the Federal Circuit that subjecting the ’541 patent to inter

partes review violated constraints on “retroactive” legislation enforceable through the Due Process Clause.

C.A. Dkt. 20 at 3, 25, 62–65 (opening brief); C.A. Dkt.

50 at 23–29 (reply brief). Petitioner never mentioned

the Takings Clause (or, for that matter, any other constitutional provision) in its Federal Circuit briefing.

Although petitioner had not raised this constitutional

challenge before the Board, the Federal Circuit exercised its discretion to consider whether inter partes

review “is unconstitutional when applied retroactively

to pre-AIA patents.” Pet. App. 18a–19a.

The court of appeals concluded that it “need not

reach the merits of the [retroactivity] issue * * * because the ’541 patent issued on September 2, 2014, almost three years after passage of the AIA and almost

8

two years after the first IPR proceedings began.” Pet.

App. 18a–19a. “That [petitioner] filed its patent application[ ] prior to passage of the AIA is immaterial,”

the court explained, as “‘the legal regime governing a

particular patent depend[s] on the law as it stood at

the emanation of the patent, together with such

changes as have since been made.’” Id. at 19a (third

alteration in original) (quoting Eldred v. Ashcroft, 537

U.S. 186, 203 (2003)). Because the AIA was enacted

before the ’541 patent issued, “application of [inter

partes review] to [petitioner’s] patent cannot be characterized as retroactive.” Ibid.

The Federal Circuit went on to explain that even

if petitioner’s patent had hypothetically “issued prior

to the passage of the AIA,” application of inter partes

review to it would have been proper for “similar” reasons as in another case, Pet. App. 19a, in which the

Federal Circuit had held that inter partes review of

patents issued prior to the AIA’s passage did not violate the Takings Clause, see Celgene Corp. v. Peter,

931 F.3d 1342, 1358–62 (Fed. Cir. 2019). Although

the court recognized that petitioner’s objection was

based on the Due Process Clause, see Pet. App. 18a

n.2, it observed, as had Celgene, that the Federal Circuit’s Patlex decision—which had rejected a due process challenge to the ex parte reexamination procedure—“‘control[s] the outcome’ of similar challenges

to” inter partes review, id. at 19a (quoting Celgene,

931 F.3d at 1358 & n.13 (citing Patlex, 758 F.2d at

603, 605)).

In a petition for rehearing, petitioner argued that

the panel should not have rejected its argument that

application of inter partes review in this case “violate[d] Arthrex’s due process rights.” C.A. Dkt. 70 at

3–10. The petition also emphasized that “Celgene

9

does not address the issues raised by Arthrex.” Id. at

8. The Federal Circuit denied rehearing without comment. Pet. App. 102a.

b. Contemporaneously with this appeal involving

the ’541 patent, the Federal Circuit also had before it

another appeal involving the same parties but a different patent (U.S. Patent No. 9,179,907).

While briefing was ongoing in this appeal, petitioner argued in the ’907 patent appeal that APJs are

principal Officers under the Appointments Clause but

are not appointed in accordance with that Clause. See

Br. for Appellant (Dkt. 18) at 59–66, Arthrex, Inc. v.

Smith & Nephew, Inc., No. 2018-2140 (Fed. Cir. filed

Oct. 19, 2018). In this ’541 patent appeal, however,

petitioner never raised any issue under the Appointments Clause. Specifically, petitioner made no constitutional challenge to the appointment of APJs in its

opening brief (C.A. Dkt. 20), in its reply brief (C.A.

Dkt. 50), or at oral argument (http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2018-1584.

mp3 (all Internet sites last visited June 9, 2020)). Accordingly, when the Federal Circuit affirmed the

Board’s final written decision in this case, it did not

address the Appointments Clause because petitioner

had not raised any such challenge in this case. See

Pet. App. 1a–20a.

Although the Federal Circuit had focused intently

on the Appointments Clause issue at oral argument in

the ’907 patent appeal, the rehearing petition in this

’541 patent appeal—filed just one week later, and

signed by the same lawyer who had argued the ’907

patent appeal—did not raise any argument under the

Appointments Clause. See C.A. Dkt. 70.

10

On October 31, 2019, the Federal Circuit held in

the ’907 patent appeal that APJs were not properly

appointed under the Appointments Clause. Arthrex,

Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1325

(Fed. Cir. 2019). In this ’541 patent appeal, petitioner

then submitted a Rule 28(j) notice of supplemental authority regarding that decision. C.A. Dkt. 72. That

Rule 28(j) letter was petitioner’s first—and only—

mention of the Appointments Clause in this case from

its inception through the denial of rehearing a week

later. Pet. App. 102a.

REASONS FOR DENYING THE PETITION

The first question presented is whether “retroactive” application of the AIA’s inter partes review procedure is unconstitutional. But because petitioner’s

patent issued years after the AIA was enacted, there

is no issue of retroactivity in this case. Nor is there

any reason to consolidate this petition with, or hold

this petition for, Celgene Corp. v. Peter, No. 19-1074:

The challenge in that case concerns a patent that issued before the AIA passed and rests exclusively on

the Takings Clause, whereas here petitioner’s sole

constitutional objection was under the Due Process

Clause.

The second question presented is whether an Appointments Clause challenge can be forfeited by failure to timely preserve it. This Court has already answered that question in the affirmative, and the

courts of appeals unanimously agree that mentioning

an issue only in a Rule 28(j) letter (as petitioner did)

is not sufficient to preserve it.

11

I.

THE RETROACTIVITY QUESTION DOES NOT

WARRANT REVIEW.

This Court recently rejected two constitutional

challenges—under Article III and the Seventh

Amendment—to the AIA’s inter partes review procedures. Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365 (2018). At the conclusion of its opinion, the Court noted that the petitioner

in that case “d[id] not challenge the retroactive application of inter partes review, even though that procedure was not in place when its patent issued.” Id. at

1379.

A.

This Case Does Not Involve The

“Retroactive” Application Of The AIA.

Petitioner’s principal contention is that this case

presents the retroactivity question that this Court

“left open” in Oil States. Pet. 13. That is wrong: Because the AIA’s IPR procedure was effective long before the ’541 patent issued, there is no issue of statutory “retroactivity” presented here.

1. The pertinent chronology is both simple and

undisputed: The AIA was enacted in 2011, the inter

partes review procedures became effective (as to all

patents) in 2012, petitioner’s patent issued in 2014,

and inter partes review of that patent commenced in

2016 and concluded in 2017. As the court below correctly recognized, application of the AIA’s review procedures “cannot be characterized as retroactive” because the ’541 patent issued “almost three years after

passage of the AIA and almost two years after the first

IPR proceedings began.” Pet. App. 18a–19a.

The decision of the court of appeals is correct. It

has long been understood that the legal regime governing a patent “depend[s] on the law as it stood at

12

the emanation of the patent, together with such

changes as have been since made.” McClurg v. Kingsland, 42 U.S. (1 How.) 202, 206 (1843); accord Eldred

v. Ashcroft, 537 U.S. 186, 203 (2003). That is why this

Court in Oil States focused on the legal regime in place

“when [the] patent issued.” 138 S. Ct. at 1379.

Indeed, every case identified by petitioner as raising some variant of “[t]he retroactivity issue” (Pet. 15)

reserved in Oil States involved a patent that issued

before the AIA’s enactment in 2011. See Genentech,

Inc. v. Hospira, Inc., 946 F.3d 1333, 1343 (Fed. Cir.

2020) (“patent issued prior to passage of the AIA”);

OSI Pharm., LLC v. Apotex Inc., 939 F.3d 1375, 1378

(Fed. Cir. 2019) (“OSI’s ’221 patent issued on May 31,

2005”); Enzo Life Scis., Inc. v. Becton, Dickinson &

Co., 780 F. App’x 903, 911 (Fed. Cir. 2019) (unpublished) (patent “issued on June 20, 2006, which is

before the enactment of the AIA in 2011”); Collabo Innovations, Inc. v. Sony Corp., 778 F. App’x 954, 960–

61 (Fed. Cir. 2019) (unpublished) (addressing “challenge to IPR as applied to patents issued prior to passage of the America Invents Act”).

Whether or not such patentees have a valid “retroactivity” challenge—i.e., the question actually “left

open” in Oil States—is of no moment to petitioner,

since its own patent issued long after the AIA was enacted. As this Court has explained, a “statute does not

operate ‘retrospectively’ merely because it is applied

in a case arising from conduct antedating the statute’s

enactment, or upsets expectations based in prior law.

Rather, the court must ask whether the new provision

attaches new legal consequences to events completed

before its enactment.” Landgraf v. USI Film Prods.,

511 U.S. 244, 269–70 (1994) (emphasis added; citation

and footnote omitted). The events at issue here were

13

not “completed” until the ’541 patent issued, after the

AIA was enacted; thus there is no retroactivity.

2. Petitioner has no answer to the court of appeals’ commonsense conclusion that the application of

the AIA to a post-AIA patent presents no issue of retroactivity. See Pet. 23–24. Instead, petitioner argues

that application of inter partes review impairs

“‘rights’” it “‘possessed when [it] acted.’” Pet. 23 (quoting Landgraf, 511 U.S. at 280). But the “act” petitioner references—its decision to file a patent application in 2006—garnered no “rights” under the Patent

Act until the patent issued in 2014.

An issued patent is a property right. McCormick

Harvesting Mach. Co. v. C. Aultman & Co., 169 U.S.

606, 609 (1898) (“[A granted patent] has become the

property of the patentee”); see also Oil States, 138 S.

Ct. at 1375 (“Patents convey only a specific form of

property right—a public franchise”). A patent application, by contrast, confers no rights on the applicant

because the applicant’s asserted “invention” may not

be new and useful or may otherwise fail to satisfy the

requirements for patentability.

Petitioner asserts (with no support) that it “relied

on prior law when it chose to apply for a patent and

disclose how to make and use its invention.” Pet. 23.

But the claims at issue were added by amendment after the AIA was enacted—and at that time petitioner

could not have been “relying” on the pre-AIA regime.

In any event, petitioner is not complaining that the

AIA changed anything with respect to the disclosure

regime. Petitioner’s sole challenge is to the AIA’s inter partes review procedure, which applies only to issued patents. Because petitioner’s patent issued after

the AIA was enacted, its pre-AIA conduct is irrele-

14

vant. And there can be no due process objection to applying inter partes review to patents, like petitioner’s,

that issued after the AIA was enacted.

Petitioner faults the Federal Circuit for relying on

Eldred v. Ashcroft, 537 U.S. 186 (2003), for the proposition that the law in effect at the time of a patent’s

issuance governs the patent. Pet. 23–24. According

to petitioner, Eldred does not control because it dealt

with an expansion of patent rights, “not one that diminished patent rights.” Pet. 24. But expanded or

diminished, petitioner had no “patent rights” until the

patent issued, which was after the AIA’s enactment.

The property granted at that time was properly subject to potential review under the AIA procedures.

Petitioner also cites (at 23) Martin v. Hadix, 527

U.S. 343 (1999), but that case only points up the correctness of the decision below. In Martin, the Court

construed a section of the Prison Litigation Reform

Act of 1995 (PLRA) that imposed new fee limits on attorneys who litigate prisoner suits. Id. at 347. The

Court concluded the relevant section should not be

construed to apply retroactively to reduce the compensation of attorneys who already litigated suits prior to

the PLRA’s passage because “[t]o give effect to the

PLRA’s fee limitations, after the fact, would ‘attac[h]

new legal consequences’ to completed conduct.” Id. at

358 (second alteration in original) (quoting Landgraf,

511 at 270). Here, in contrast, the relevant conduct,

i.e., the prosecution of the ’541 patent, was not “complete” until the patent issued after the AIA’s enactment.

As this Court recently explained, “‘Congress authorized inter partes review to encourage further

scrutiny of already issued patents.’” Thryv, Inc. v.

Click-to-Call Techs., LP, 140 S. Ct. 1367, 1374 n.7

15

(2020) (emphasis added; citation omitted). While

“[p]atents are property,” the Court continued, “[t]he

second look Congress put in place is assigned to the

very same bureaucracy that granted the patent in the

first place.” Ibid. There is nothing retroactive, much

less unconstitutional, about such review in the circumstances of this case.

3. In order even to reach petitioner’s contention

that “retroactive” application of the AIA’s inter partes

review mechanism transgresses the Due Process

Clause, this Court would need to reconsider its longstanding precedent holding that the law governing a

patent is the law in place when the patent issued. But

even if the constitutional question were guided by the

application date rather than the issuance date, as petitioner urges, the outcome would be the same.

There is no question in this case of congressional

intent: By its terms, the inter partes review procedures apply “to any patent issued before, on, or after”

the AIA’s September 16, 2012 effective date. See

§ 6(c)(2)(A), 125 Stat. at 304. This legislative directive

must be given effect unless it violates a constitutional

prohibition. Landgraf, 511 U.S. at 267 (“Absent a violation of one of those specific provisions, the potential

unfairness of retroactive civil legislation is not a sufficient reason for a court to fail to give a statute its

intended scope”). As the court of appeals correctly explained, application of inter partes review even to preAIA patents does not violate the Due Process Clause.

Pet. App. 19a–20a.

Petitioner devotes just one paragraph to the Federal Circuit’s alternative holding, arguing only that

the differences between pre-AIA and post-AIA administrative review are sufficient to render the latter un-

16

constitutional. Pet. 24–25. In fact, the procedures under the AIA and the regime it replaced have much in

common. Both regimes (1) permit cancellation only on

the same substantive grounds, compare 35 U.S.C.

§ 311(b) (inter partes review), with id. §§ 301, 311

(2006 ed.) (inter partes reexamination); (2) permit the

institution of proceedings in similar circumstances,

compare id. § 314 (“reasonable likelihood” of success

on one claim), id. § 325 (but review based on “previous[ ] arguments” subject to discretionary denial),

with id. § 303 (2006 ed.) (“substantial new” question

of patentability); (3) permit responses to arguments

made by the patent owner, compare id. § 316(13), with

id. § 314(a)–(b) (2006 ed.); and (4) require the moving

party to prove unpatentability by a preponderance of

the evidence, compare id. § 316(e), with In re Swanson, 540 F.3d 1368, 1377 (Fed. Cir. 2008).

To be sure, the procedures are not identical. But

this Court has recognized that, due to “diminished reliance interests in matters of procedure,” “[c]hanges in

procedural rules may often be applied in suits arising

before their enactment without raising concerns about

retroactivity.” Landgraf, 511 U.S. at 275. Because

the AIA alters only the procedures—not any substantive standard—by which an issued patent is reconsidered, it does not run afoul of any due process constraints on retroactive legislation.

B.

There Is No Reason To Consolidate

This Case With Celgene.

Petitioner insists that this case and the pending

petition in Celgene present “the same question” and

therefore should be consolidated. Pet. 25. That is not

correct: Celgene in fact presents an entirely different

question.

17

1. The question presented in Celgene is whether

“retroactive application of inter partes review to patents issued before passage of the America Invents Act

violates the Takings Clause of the Fifth Amendment.”

Pet. for Cert. at i, Celgene Corp. v. Peter, No. 19-1074

(U.S. filed Feb. 26, 2020) (second emphasis added).

Petitioner’s patent, which issued after the AIA was

enacted, is not within the scope of that question.

Moreover, the Celgene petition focuses exclusively

on the Takings Clause, which is a challenge that petitioner here did not preserve. In the Federal Circuit,

petitioner narrowly focused its constitutional challenge on the “due process concerns raised by the Supreme Court [in] Oil States.” C.A. Dkt. 20 at 25 (opening brief); see also C.A. Dkt. 50 at 23–29 (reply brief)

(arguing why retroactive application of the AIA does

not “satisf[y] due process”); C.A. Dkt. 70 at 3 (rehearing petition) (“There are two parts to this challenge:

whether application of the America Invents Act (‘AIA’)

to the ’541 Patent is retroactive, and if so, whether the

retroactivity violates Arthrex’s due process rights”).

In fact, petitioner explicitly sought to distance itself

from Celgene in the Federal Circuit: “Celgene does not

address the issues raised by Arthrex.” C.A. Dkt. 70 at

8.

Petitioner suggests (at 26) that the Court may

wish to review “different permutations” of the same

legal issue. But this case involves a wholly distinct

legal question, not a factual permutation of the legal

question presented in Celgene. The category of patents like petitioner’s—which was applied for before

the AIA but received after its enactment—implicates

neither Oil States’ retroactivity reservation nor the

18

Celgene question presented. Under more than a century of this Court’s precedents, the category has no legal significance at all.

For this reason, petitioner’s speculation regarding

the number of post-AIA patents that issued from preAIA applications (Pet. 16 & n.1) is irrelevant. The relevant question is how many owners or licensees of

such patents have asserted that application of the

AIA’s inter partes review procedures to their post-AIA

patents is unconstitutionally “retroactive”; unsurprisingly, petitioner is unable to cite any other case in

which such a contention has been advanced. Moreover, this case does not involve merely a pre-AIA application; it also involves claims that were added by

amendment only after the AIA was enacted. This case

thus appears to be unique; and as such it provides a

poor vehicle for resolving any constitutional issue—

whether under the Due Process Clause or the Takings

Clause.

2. Nor should the Court hold this case for Celgene.

Of course, if the Celgene petition is denied, then this

petition should also be denied. Even if the Celgene petition were granted, however, a ruling in Celgene on

the constitutionality of applying inter partes review to

pre-AIA patents would not have any bearing on the

post-AIA patent at issue here. And regardless, because Celgene involves a challenge under the Takings

Clause and petitioner has waived any such challenge

here, petitioner would not be able to benefit from any

ruling in Celgene. Accordingly, this petition should be

denied regardless of the disposition of the petition in

Celgene.

19

II. THE FORFEITURE

WARRANT REVIEW.

QUESTION

DOES

NOT

In a different appeal involving these same parties,

the Federal Circuit ruled that APJs are principal Officers under the Appointments Clause. See Arthrex,

Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1325

(Fed. Cir. 2019). Both Arthrex and Smith & Nephew

intend to petition this Court to review that decision.

(The United States, as intervenor, has also publicly

indicated that the Solicitor General is considering

seeking this Court’s review. See Unopposed Mot. to

Stay the Mandate (Dkt. 116) at 1, Arthrex, Inc. v.

Smith & Nephew, Inc., No. 2018-2140 (Fed. Cir. filed

Mar. 26, 2020).)

But this petition need not be held for that case (or

any other presenting the Appointments Clause issue)

because—as every circuit would conclude—petitioner

forfeited any Appointments Clause challenge in this

case. Indeed, even though petitioner had both constructive and actual knowledge of the challenge (and

was simultaneously pursuing it in a separate appeal),

it waited until after this appeal had been decided to

mention it in this case, and then only in a Rule 28(j)

letter. The second question presented—“[w]hether a

court may refuse to consider a constitutional claim on

forfeiture grounds,” Pet. 29—does not remotely warrant this Court’s review.

1. Petitioner complains that the Federal Circuit

“refused to apply” its Appointments Clause ruling

here, “evidently because Arthrex had not argued the

issue in its opening brief.” Pet. 27 (emphasis added).

Of course, failure to raise the Appointments Clause in

its opening brief on appeal would alone have been sufficient to forfeit the issue. See Republic of Argentina

v. NML Capital, Ltd., 573 U.S. 134, 140 n.2 (2014)

20

(“We will not revive a forfeited argument simply because the petitioner gestures toward it in its reply

brief”).

Petitioner leaves out of its petition, however, that

it did not merely fail to raise the Appointments Clause

issue in its opening brief. It also failed to do so in its

reply brief, at oral argument, and even in its petition

for rehearing. Despite simultaneously pressing the issue in the ’907 patent appeal, petitioner deliberately

chose not to mention the Appointments Clause at all

in this appeal until it filed a Rule 28(j) letter while its

rehearing petition was pending. C.A. Dkt. 72.

In these circumstances, it is clear that petitioner

made a deliberate decision not to raise the Appointments Clause issue in this appeal until long after the

panel had rendered its decision, and the Federal Circuit clearly acted within its discretion in not reaching

the issue for the first time in denying a rehearing petition that, itself, did not even raise the issue.

a. “‘No procedural principle is more familiar to

this Court than that a constitutional right,’ or a right

of any other sort, ‘may be forfeited * * * by the failure

to make timely assertion of the right before a tribunal

having jurisdiction to determine it.’” United States v.

Olano, 507 U.S. 725, 731 (1993) (citation omitted). Petitioner, like all appellants, chose what issues to raise

(and which to forgo) in its briefs. Basic principles of

preservation and forfeiture require courts to both respect that choice—by deciding the issues presented—

and enforce it—by declining to decide “forfeited” issues, regardless of their merits. NML Capital, 573

U.S. at 140 n.2.

These established rules are fully applicable in the

context of challenges under the Appointments Clause.

21

“Appointments Clause claims * * * have no special entitlement to review.” Freytag v. Comm’r, 501 U.S. 868,

893 (1991) (Scalia, J., concurring in part and concurring in the judgment). A litigant may be “entitled to

relief” under the Clause only if it “makes a timely

challenge to the constitutional validity of the appointment.” Lucia v. SEC, 138 S. Ct. 2044, 2055 (2018) (citation omitted). And whether such a challenge is

timely turns on “ordinary principles of waiver and forfeiture.” Jones Bros., Inc. v. Sec’y of Labor, 898 F.3d

669, 678 (6th Cir. 2018).

Petitioner mentioned the Appointments Clause

issue only in a Rule 28(j) letter. See Pet. 13. That

alone is sufficient reason for the court of appeals (and

this Court) to conclude that the issue was forfeited.

“The proper function of Rule 28(j) letters, after all, is

to advise the court of ‘new authorities’ a party has

learned of after oral argument, not to interject a long

available but previously unmentioned issue for decision.” Niemi v. Lasshofer, 728 F.3d 1252, 1262 (10th

Cir. 2013) (Gorsuch, J.) (citing Fed. R. App. P. 28(j)).

Allowing parties to use Rule 28(j) letters “to introduce

any sort of new issue after briefing is complete” “risks

leaving opponents with no opportunity * * * for a

proper response,” “risks an improvident opinion from

th[e] court by tasking [it] with the job of issuing an

opinion without the full benefits of the adversarial

process,” and “invites an unsavory degree of tactical

sandbagging by litigants in future cases.” Ibid.

The courts of appeals uniformly agree that “a letter submitted pursuant to rule 28(j) cannot raise a

new issue.” United States v. LaPierre, 998 F.2d 1460,

1466 n.5 (9th Cir. 1993); see United States v. Nason, 9

F.3d 155, 163 (1st Cir. 1993), cert. denied, 510 U.S.

1207 (1994); Sompo Japan Ins. Co. of Am. v. Norfolk

22

S. Ry. Co., 762 F.3d 165, 175 n.18 (2d Cir. 2014);

United States v. Khorozian, 333 F.3d 498, 506 n.7 (3d

Cir.), cert. denied, 540 U.S. 968 (2003); United States

v. Ashford, 718 F.3d 377, 381 (4th Cir. 2013); Block v.

Tanenhaus, 815 F.3d 218, 221 n.3 (5th Cir. 2016); In

re Lewis, 398 F.3d 735, 748 n.9 (6th Cir. 2005); United

States v. Dyer, 892 F.3d 910, 913 n.1 (7th Cir. 2018);

Valdez v. Mercy Hosp., 961 F.2d 1401, 1404 (8th Cir.

1992); Hill v. Kemp, 478 F.3d 1236, 1250–51 (10th Cir.

2007), cert. denied, 552 U.S. 1096 (2008); United

States v. Silvestri, 409 F.3d 1311, 1338 n.18 (11th

Cir.), cert. denied, 546 U.S. 1048 (2005); Worldwide

Moving & Storage, Inc. v. District of Columbia, 445

F.3d 422, 427 n.7 (D.C. Cir. 2006); Desper Prods., Inc.

v. QSound Labs, Inc., 157 F.3d 1325, 1335 (Fed. Cir.

1998) (“Rule 28(j), however, permits a party to bring

supplemental authorities to the court’s attention, not

supplemental argument”).

b. Petitioner does not acknowledge the principle

that mentioning an issue only in a Rule 28(j) letter is

insufficient to raise it, nor does petitioner cite any authority for the contrary proposition. Instead, it asserts that ordinary forfeiture principles “do[ ] not apply where there is an intervening change of law while

the appeal is pending.” Pet. 30–31. Petitioner cites

no authority for that proposition, and all applicable

authority is to the contrary.

Before the Federal Circuit decided the ’907 patent

appeal, no precedential decision had ever previously

decided the propriety of APJ appointments; indeed,

the only precedential Federal Circuit decision to even

allude to the issue held that the challenger had “failed

to timely raise” its Appointments Clause challenge.

In re DBC, 545 F.3d 1373, 1378–80 (Fed. Cir. 2008).

In another such case, this Court denied certiorari

23

where (as here) the challenger had failed to present

an Appointments Clause challenge before the decision

was rendered. Smartflash LLC v. Samsung Elecs.

Am., Inc., No. 18-189 (cert. denied Oct. 1, 2018). The

same result is warranted here.

The courts of appeals that have considered the issue agree that ordinary preservation rules apply to

Appointments Clause challenges even when there is

an intervening Appointments Clause decision. See Island Creek Coal Co. v. Wilkerson, 910 F.3d 254, 256

(6th Cir. 2018) (despite intervening Lucia decision,

petitioner “forfeited its Appointments Clause challenge” by “not rais[ing] the issue * * * in its opening

brief”); NLRB v. RELCO Locomotives, Inc., 734 F.3d

764, 795 (8th Cir. 2013) (despite intervening Noel

Canning decision, petitioner forfeited “appointments

clause challenge” that “was not made in [its] opening

briefs and was raised only in a Rule 28(j) letter”);

Kabani & Co. v. SEC, 733 F. App’x 918, 919 (9th Cir.

2018) (unpublished) (despite intervening Lucia decision, “petitioners forfeited their Appointments Clause

claim by failing to raise it in their briefs”), cert. denied,

139 S. Ct. 2013 (2019); see also Turner Bros., Inc. v.

Conley, 757 F. App’x 697, 700 (10th Cir. 2018) (unpublished) (despite intervening Lucia decision, petitioner forfeited Appointments Clause challenge by

“not rais[ing] the issue until after it filed its brief with

th[e] court”).

c. Petitioner suggests that its “‘failure to raise

the claim in an opening brief reflects not a lack of diligence, but merely a want of clairvoyance.’” Pet. 31

(quoting Joseph v. United States, 135 S. Ct. 705, 706

(2014) (Kagan, J., dissenting from denial of certiorari)). The facts of this case, however, demonstrate

that petitioner lacked diligence, not clairvoyance.

24

At the same time as briefing was ongoing in this

appeal, petitioner itself chose to present the Appointments Clause challenge in a separate appeal from the

PTAB between the same parties and stemming from

the same underlying district court litigation. In other

words, petitioner was the appellant in two co-pending

Federal Circuit appeals with overlapping briefing

schedules—yet it strategically chose to present the

Appointments Clause challenge in the ’907 patent appeal but not in this ’541 patent appeal. Petitioner presumably had strategic and tactical reasons for presenting different constitutional arguments in the two

appeals; it must be held to the consequence of its own

decision.

Moreover, the Appointments Clause challenge

had been laid out in a publicly available academic article no later than January 2018—before petitioner

even noticed its appeal in this case. See Gary Lawson, Appointments and Illegal Adjudication: The AIA

Through a Constitutional Lens, Geo. Mason L. Rev.

(forthcoming),

https://papers.ssrn.com/sol3/papers.

cfm?abstract_id=3105511. Several litigants raised

Appointments Clause challenges in PTAB proceedings shortly thereafter. See, e.g., Ex. 67 at 44–45,

St. Jude Med., LLC v. Snyders Heart Valve LLC,

IPR2018-00107 (PTAB filed Feb. 6, 2018); Ex. 26 at

59–60, Unified Patents Inc. v. Sound View Innovations, LLC, IPR2018-00096 (PTAB filed Feb. 1, 2018).

Other litigants raised similar challenges in the Federal Circuit, see, e.g., Br. for Appellant (Dkt. 22), Polaris Innovations Ltd. v. Kingston Tech. Co., No. 20181768 (Fed. Cir. filed July 10, 2018), and in this Court,

see Pet. for Cert., Smartflash LLC v. Samsung Elecs.

Am., Inc., No. 18-189 (U.S. filed Aug. 9, 2018).

25

Commentators at the time noted these developments, all of which occurred before briefing in this

case was completed in December 2018. See Constitutionality of PTAB Judge Appointments Challenged in

Polaris IPR Appeal, Foley & Lardner LLP (Aug. 3,

2018),

https://www.foley.com/en/insights/publications/2018/08/constitutionality-of-ptab-judge-appointments-chall; Rebecca Lindhorst & Jason D. Eisenberg, Do You Want an Inferior Judge?: Why PTAB

Judges May Be Unconstitutional, Sterne Kessler

Goldstein & Fox, PLLC (July 2018), https://

www.sternekessler.com/news-insights/publications/

do-you-want-inferior-judge-why-ptab-judges-may-beunconstitutional-and; Ryan Davis, Are PTAB Judges

Unconstitutional? A Closer Look, Law360 (Sept. 5,

2018) https://www.law360.com/articles/1080125.

This is not, therefore, a case about “clairvoyance.”

This is a case about holding a litigant to its deliberate

decision not to make an argument in this appeal that

it was simultaneously pressing in a co-pending appeal, and that was well known in any event. Petitioner deliberately chose not to bring an Appointments Clause challenge in this appeal, even as it was

pursuing such a challenge in another appeal between

the same parties. This Court is unlikely to see a

clearer case of forfeiture.

2. Petitioner notes that “[t]his Court has reviewed structural constitutional challenges to an adjudicator’s authority despite a failure to preserve the

argument.” Pet. 31–32.

But the exceptional cases cited by petitioner hold

only that an appellate court may excuse a litigant’s

failure to preserve an Appointments Clause challenge.

Nguyen v. United States, 539 U.S. 69, 74, 78–79

(2003); Freytag, 501 U.S. at 879; Glidden Co. v.

26

Zdanok, 370 U.S. 530, 535–36 (1962). They say nothing about whether a court should excuse such a failure

where, as here, a litigant had both constructive and

actual knowledge of an available argument, yet consciously chose not to preserve it. There is no basis in

law, logic, or equity for relieving petitioner of the consequences of that decision.

This is not a case in which an important constitutional issue might escape review because of forfeiture

principles. The Federal Circuit, in the separate ’907

patent appeal, has issued multiple opinions on the Appointments Clause issue. See 941 F.3d 1320 (panel

decision); 953 F.3d 760 (Fed. Cir. 2020) (denial of rehearing en banc with five separate opinions); Order

(Dkt. 118), No. 2018-2140 (Fed. Cir. Mar. 30, 2020)

(order and decision denying stay of mandate pending

this Court’s review). Both Arthrex and Smith &

Nephew intend to petition for review of the panel decision in that appeal, and the United States may well

do so too. That case—not this one—is the appropriate

vehicle for deciding whether APJs are inferior or principal Officers. And there is no reason to hold this petition for that case because petitioner forfeited the issue here no matter how it may ultimately be resolved

there.

27

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

NATHAN R. SPEED

CHARLES T. STEENBURG

RICHARD F. GIUNTA

WOLF, GREENFIELD & SACKS, P.C.

600 Atlantic Avenue

Boston, MA 02210

(617) 646-8000

MARK A. PERRY

Counsel of Record

KELLAM M. CONOVER

GIBSON, DUNN & CRUTCHER LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 955-8500

MPerry@gibsondunn.com

MARK J. GORMAN

SMITH & NEPHEW, INC.

7135 GOODLETT FARMS PARKWAY

CORDOVA, TN 38016

(901) 399-6903

Counsel for Respondents

Smith & Nephew, Inc. and ArthroCare Corp.

June 9, 2020