• Emil J. Ali

The Constitutionality of USPTO Hearing Officers After The Supreme Court's Decision in Lucia.

Updated: Aug 1


Today, the Supreme Court issued an Opinion that held that Administrative Law Judges (“ALJs”) of the Securities and Exchange Commission (“SEC”) qualify as “Officers” under the appointments clause of Article II Section 2 of the U.S. Constitution (“Appointments clause”). Of interest to patent practitioners is whether or not the appointment of a hearing officer for United States Patent and Trademark Office (“USPTO”) Office of Enrollment and Discipline (“OED”) cases under 37 CFR § 11.39(a) violates the Appointments Clause.


Briefly, the SEC, as a commission, has direct authority to hear cases involving violations of the laws and regulations that the SEC is charged with enforcing; however, the SEC also permits ALJs to hear and decide such cases. See 17 CFR § 201.110. SEC ALJs are appointed by SEC staff, not the commission. The SEC ALJs decide cases that involve licensed financial services professionals, and the SEC ALJs have the authority to impose monetary fines, suspension, and license revocation. See generally, 17 CFR Part 201 Subpart D.

Similar to the SEC, the USPTO’s OED disciplinary matters are also heard by hearing officers who are ALJs, and should be appointed by the USPTO Director, according to the regulation. See 37 CFR § 11.39(a). The USPTO’s ALJs have similar authority to suspend or exclude a practitioner from practice before the USPTO.

The Supreme Court’s decision in Lucia v. SEC is an important one because of its finding that the SEC’s deference to the initial decision of the ALJ in a “last-word capacity” means that SEC ALJs are, indeed, functioning as Officers under the Appointments Clause. The Supreme Court further held that the only remedy to address the constitutional violation of the Appointments Clause is a new hearing before a properly-appointed ALJ—who is not the same ALJ that originally heard the case. Notably, the SEC previously “ratified” the staff appointment of the five SEC ALJs by an Order dated November 30, 2017.


According to records obtained by the Freedom of Information Act, it appears that the Director of OED, William R. Covey, signed certain contracts on behalf of the USPTO Director, including most recently on April 23, 2018, approving an amendment to the contract for ALJs of the Environmental Protection Agency to hear such cases. Even if the USPTO Director, or his designee, signed the subject documents, under the recent Lucia decision, the Appointments Clause arguably would require the Department head (i.e., the Secretary of the Department of Commerce) to appoint the ALJs.

When asked for a comment regarding the Lucia case, the OED Director did not respond by the time of publication. Based on Lucia and the cases cited therein, it remains undetermined whether the USPTO has properly appointed its ALJs, and/or that appropriate remedies are in place to address the constitutional violations, if the USPTO ALJs were not in fact properly appointed.

For additional information, please contact McCabe & Ali, LLP at 877-OED-4097.

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#SEC #alj #appointmentsclause #constitution #OED #USPTORulesofProfessionalConduct

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