Today in United States v. Arthrex, the Supreme Court held that there is a serious constitutional flaw in the organization of the Patent and Trademark Office. Specifically, the case concerned the Patent Trial and Appeal Board (PTAB), which the Court described as an “executive adjudicatory body within the PTO.” Although the Court did not go as far as it could have, this case is still an important win for democratic accountability within the executive branch.

This case was about the “Appointments Clause” of the U.S. Constitution, which requires that all “officers of the United States” must be confirmed by the Senate. The Appointments Clause provides one potential exception to this rule, however: an exception for “inferior officers.” The clause allows Congress to decide that a particular inferior officer can be appointed by the president, a department head, or a court unilaterally, without Senate consent. But the Supreme Court explained in Edmond v. United States (1997) that inferior officers are limited to “officers whose work is directed and supervised at some level by others who were appointed by” the president.

A PTAB panel is tasked with reviewing a challenge to a patent when a party alleges that the patent should not have been issued in the first place and should be canceled. PTAB panels generally consist of three administrative patent judges (APJs), who are appointed by the secretary of commerce. If APJs are indeed inferior officers, then that appointment creates no constitutional problem. But if instead, APJs are not inferior (what the Court has taken to calling “principal” officers), then their appointment by the commerce secretary is insufficient.

The crux of this case came down to applying the test set out in Edmond: are APJs “directed and supervised at some level by others” when they sit on a PTAB panel and issue decisions? The Court (Chief Justice Roberts, writing for a 5‑justice majority) held that they are not sufficiently supervised for one key reason: when a PTAB panel issues a decision as to whether a challenged patent should be canceled, that panel decision “is the last stop for review within the Executive Branch.” Neither the director of the PTO, the secretary of commerce, nor the president can overrule such a decision. The PTAB panel itself can reconsider, but the panel’s decision can only be appealed to the federal court system. Although the federal government noted a potpourri of other ways in which superiors can nudge and cajole PTAB panels, none overcame this fundamental fact of finality.

Given this constitutional violation, what should be the remedy? The Court had at least three options: 1. Simply invalidate the challenged PTAB decision and allow Congress to rewrite the statute in a constitutional manner as it sees fit (the remedy Cato urged in its amicus brief); 2. Grant greater control to a superior by making the APJs removable at will (the remedy chosen by the Federal Circuit below); or 3. Grant greater control to a superior by making PTAB decisions reviewable by the PTO director.

Four of the five justices in the majority (all except Justice Gorsuch) opted for the third option. They reasoned that non-reviewability is the core problem and thus that adding reviewability fixes the problem with the lightest touch. (These justices expressly left open the question whether the second option, making the APJs removable at will, would have cured the constitutional violation). Three justices who would have found no constitutional violation at all (Breyer, Sotomayor, and Kagan) nonetheless opted to concur in this remedy so that it would command a majority of the Court.

Justice Gorsuch would have gone further and chosen the first option. Citing Cato’s amicus brief and others, he noted that it is impossible to divine what Congress would have chosen had it known that the scheme it created was unconstitutional and that Congress very well may have instead opted to have APJs appointed by the president and confirmed by the Senate so that their decisions could remain non-reviewable.

Justice Breyer, dissenting on the merits, described the Court’s approach as too much formalism and not enough functionalism. Given that the meaning of an “inferior officer” is not defined in the Constitution itself, he would have declined to impose any bright-line rules to its definition like finality of decision-making. He would have found that other methods of supervision, such as the director’s power to choose which APJs sit on which PTAB panels, provided sufficient control.

Justice Thomas, also dissenting on the merits, noted that from a historical perspective it is possible that the meaning of “inferior officer” is far broader than what the Court held in Edmond. Justice Thomas suggested that the original understanding of an inferior officer may well have encompassed nearly every federal official except the heads of departments, under which standard the APJs would clearly qualify as inferior.

Overall, Arthrex is a key win for democratic accountability, which is the fundamental value protected by the Appointments Clause. When a final decision of the executive branch is made by someone appointed by the president and confirmed by the Senate, the people can praise or blame those elected officials for that nomination and confirmation (depending on whether they like or don’t like the appointee’s decision). When instead a final decision is made by an appointee of an appointee of the president, the chain of democratic accountability becomes much more attenuated. Arthrex has clarified that final decision-making authority must nearly always be reserved for those appointed by the president and confirmed by the Senate (at least when that final decision “adjudicat[es] the public rights of private parties”).

Contra Justice Breyer’s concerns, Arthrex does not stand in the way of Congress choosing to create adjudicatory bodies whose decisions are insulated from politicized agency leadership. It simply requires that the members of such adjudicatory bodies must themselves have a share of democratic accountability by means of presidential appointment and Senate confirmation. Although the Court’s chosen remedy may well have gone against what Congress would have chosen, Congress still has the option to rewrite the statute and bring back PTAB finality in exchange for APJ Senate confirmation, it if wishes to do so.