The Federal Circuit’s recent decision in Odyssey Logistics & Technology Corp. v. Stewart (No. 23-2077) highlights the ongoing implications of the Supreme Court’s Arthrex decision on the United States Patent and Trademark Office (USPTO) and its review processes. This case revolves around a long-disputed patent application, constitutional challenges under the Appointments Clause, and the procedural limitations of post-judgment review in intellectual property cases.

Case Background

Odyssey Logistics & Technology Corporation filed U.S. Patent Application No. 11/678,021 in 2007 for a “Web Service Interface for Transit Time Calculation,” which proposed an online logistics system for real-time freight shipment tracking. The patent examiner rejected claims 3–21 of the application in 2015, concluding that they were directed to an abstract idea—simply looking up transit times using conventional computer functions. The Patent Trial and Appeal Board (PTAB) affirmed this rejection in 2018, and the Federal Circuit upheld that decision in In re Tarasenko (2020).

However, after the Supreme Court’s 2021 decision in United States v. Arthrex, Inc., which found that the unreviewable authority of PTAB administrative patent judges violated the Appointments Clause, Odyssey attempted to invoke Arthrex to request post-judgment Director review of its rejected claims. When the USPTO denied this request, Odyssey turned to the courts, arguing that it was entitled to such a review. The Eastern District of Virginia dismissed Odyssey’s claim, and the Federal Circuit has now affirmed that dismissal.

Key Legal Issues

1. Appointments Clause Challenges in Patent Law

The primary issue in this case was whether the Arthrex decision retroactively entitled Odyssey to Director review of a final PTAB decision. The Supreme Court’s Arthrex ruling established that PTAB administrative judges must operate under the oversight of the USPTO Director, but it did not automatically reopen previously decided cases. The Federal Circuit ruled that Odyssey forfeited its Appointments Clause challenge by failing to raise it during its direct appeal in Tarasenko, despite having ample notice of the Arthrex argument while its appeal was still pending.

This decision underscores the importance of preserving constitutional arguments at the earliest opportunity. The Federal Circuit has consistently held that failure to raise an Appointments Clause challenge in a timely manner constitutes forfeiture. Odyssey’s delay of more than a year after the Federal Circuit’s mandate in Tarasenko led the court to deny its request.

2. Limits on Agency Reconsideration of Final Decisions

Odyssey argued that the USPTO should have reopened its case based on Arthrex, but the court rejected this claim. The Federal Circuit reiterated that administrative agencies possess inherent authority to reconsider their decisions within a reasonable timeframe but are not required to do so. In this case, the USPTO reasonably declined to revisit a case that had been fully adjudicated and closed.

The court drew analogies to Rule 60(b) of the Federal Rules of Civil Procedure, which allows reconsideration of judgments under extraordinary circumstances. However, it noted that an intervening change in law (such as Arthrex) does not automatically justify reopening a final decision—especially when a party had the opportunity to raise the issue earlier but failed to do so.

3. Finality in Patent Proceedings

A key takeaway from this case is the court’s emphasis on finality in patent proceedings. Once the Federal Circuit has affirmed a PTAB decision and issued its mandate, the case is considered terminated. The Manual of Patent Examining Procedure (MPEP) § 1216.01 makes it clear that a rejected application cannot be reopened merely because of a subsequent change in law unless explicitly authorized. Odyssey’s attempt to revive its case was therefore seen as an improper collateral challenge.

Implications for Patent Applicants and Practitioners

This decision has significant implications for patent applicants navigating post-Arthrex challenges:

• Timeliness is crucial: Constitutional challenges, including Appointments Clause objections, must be raised during direct review, not as an afterthought.
• Finality in PTAB decisions remains strong: The Federal Circuit has reaffirmed that once an appeal has been decided, reopening proceedings is rare and requires compelling justification.
• Limited scope of Director review: While Arthrex expanded the USPTO Director’s oversight, it did not create a blanket right to retroactive review of prior PTAB decisions.

Conclusion

The Federal Circuit’s ruling in Odyssey Logistics v. Stewart reinforces the principle that litigants must be diligent in preserving constitutional arguments and underscores the limited avenues for post-judgment reconsideration in patent law. Patent applicants seeking to challenge PTAB decisions must ensure they raise all possible claims during the appellate process or risk losing them permanently. As Arthrex continues to reshape aspects of patent litigation, this case serves as a cautionary tale about procedural timing and the doctrine of finality in administrative law.

By Charles Gideon Korrell