The Unmentioned Issue in Bilski

The Supreme Court this morning granted certiorari in Bilski v. Doll (No. 08-964). The case presents an opportunity for the Court to consider issues of patentable subject matter, particularly whether business methods and financial patents should be patentable. I’ll probably have more to say about this issue soon, because I am currently working on an article tentatively entitled “Reconceptualizing Business Method Patents,” which argues that business method patents have a theoretically sound place in patent law.

But for now I thought I’d address an issue that to my knowledge has not received attention in the Bilski briefing, and that the Supreme Court did not mention in the question presented: whether the Board of Patent Appeals, whose decision the Federal Circuit was reviewing below, properly had jurisdiction. Two years ago, my frequent coauthor John Duffy (writing solo) argued that panels of the Board including judges appointed after March 29, 2000, were unconstitutionally constituted. These judges were appointed by the Director of the Patent and Trademark Office, who serves under the Secretary of Commerce. Under the Appointments Clause, the authority to appoint inferior officers may be vested “in the President alone, in the Courts of Law, or in the Heads of Departments.” Arguing that the PTO director is not a head of a department and that the administrative patent judges are inferior officers, Duffy concluded that these judges are unconstitutional.

The arguments were sufficiently persuasive that Congress amended the statute, so that the Secretary of Commerce can appoint patent judges. The problem that this leaves is the question of retroactivity. The statute addresses this issue by allowing the Secretary to make retroactive appointments (which he did), and as a fallback, by providing, “It shall be a defense to a challenge to the appointment of an administrative patent judge on the basis of the judge’s having been originally appointed by the Director that the administrative patent judge so appointed was acting as a de facto officer.” Meanwhile, the Federal Circuit has so far managed to sidestep the issue, by holding that the issue is forfeited if not raised before the Board of Patent Appeals itself.

There seems to me a strong argument for the Court to vacate the decision on the basis of this problem. Even though the issue does not appear to have been raised in Bilski, the Board panel appears to have been unconstitutionally constituted, and it is of course the duty of the Court to inquire into its subject matter jurisdiction. It seems doubtful that the Court would approve of retroactive appointments, and the applicability of the de facto officer doctrine is questionable. In Ryder v. United States, the Court refused to apply the de facto officer doctrine, reasoning that there was not merely a misapplication of an appointments statute, but an unconstitutional appointments statute.

Conceivably, the Court might agree with the Federal Circuit’s view that the issue has been procedurally defaulted. As the Federal Circuit has noted, when the Supreme Court has agreed to hear appointments challenges despite waiver issues, it has indicated that it was doing so in its discretion, and it has never held that waiver is generally excused. But I do not know of any case (though I have not researched this fully) in which the Supreme Court has granted certiorari on other issues, confirmed that it really does have discretion to ignore a known issue whether judicial decisionmakers were unconstitutionally appointed, and indicated that it was exercising its discretion to ignore the potential infirmity. The Supreme Court’s past characterization (possibly in dicta) of the procedural default issue as nonjurisdictional seems in some tension with the venerable Capron v. Van Noorden, which held that defects of a lower court’s subject matter jurisdiction could be raised for the first time at the Supreme Court.

It seems to me that in any event, the Court has an obligation at least to inquire into its subject matter jurisdiction, for example by holding definitively that it can exercise jurisdiction over a case in which Board members may have been unconstitutionally appointed if the issue was defaulted. It might have been more prudent to wait for another case in which to grant certiorari. (A separate reason for this is that there is a strong argument that the patent at issue in Bilski was obvious, but this is not relevant to the subject matter jurisdiction issue.)

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