April 16, 2020Client Alert

Arthrex Files Petition to the U.S. Supreme Court

Arthrex, Inc. (Arthrex) filed a petition for a writ of certiorari challenging the constitutionality of applying inter partes review (IPR) retroactively to patents for which applications were filed before but granted after the AIA was enacted and challenging the constitutionality of the appointment of administrative patent judges (APJs) who adjudicate IPRs.   

In 2006, Arthrex sought a patent for a new suture anchor that allows surgeons to reattach soft tissue to bones more securely. In 2011, Congress enacted the Leahy-America Invents Act (AIA), which created IPRs for invalidating patents. Arthrex’s patent issued in September 2014 as U.S. Patent No. 8,821,541 (“the ‘541 Patent”). In June 2015, Arthrex sued Smith & Nephew, Inc. and its subsidiary ArthroCare for patent infringement. The jury found that the defendants willfully infringed and awarded Arthrex over $12 million in damages. While the litigation was pending, the defendants sought IPR for the claims of Arthrex’s patent. After the litigation had concluded, the Patent Trial and Appeal Board (PTAB) found the challenged claims unpatentable.  

Arthrex appealed the PTAB’s decision to the Federal Circuit. The Federal Circuit rejected Arthrex’s challenges to the PTAB’s finding of unpatentability and rejected Arthrex’s constitutional challenge. The PTAB held that the application of IPR to Arthrex’s patent cannot be characterized as retroactive. In response, Arthrex filed a petition for rehearing and rehearing en banc.

While the rehearing petition was pending, the Federal Circuit held in another case between the same parties that the APJs who oversee IPRs hold office in violation of the Appointments Clause. Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1335 (Fed. Cir. 2019). As a remedy, the Arthrex court severed the removal restrictions and remanded the case for a new hearing before a different panel of APJs.

Arthrex filed a supplemental authority letter in the case concerning the ‘541 Patent requesting a new hearing before a different panel of judges. The court denied the rehearing, despite the intervening change of law, because Arthrex had not raised the issue in its opening brief.

Arthrex’s petition to the Supreme Court challenges the constitutionality of applying IPR retroactively to patents for which applications were filed before but granted after the AIA was enacted, and further asked that the petition be considered with a similar petition that raises a similar issue. See Celgene Corp. v. Peter, No. 19-1074 (filed Feb. 26, 2020). Arthrex also presented a constitutional challenge to the appointment of APJs who adjudicate IPRs.

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