Loper Decision Impact on Patent Law | Venable LLP
Venable has offered general thoughts on the potential fallout from the Supreme Court’s reversal of the long-standing Chevron deference, as well as practice area-specific analysis. Here, the Intellectual Property Litigation Group offers some of its own reactions to this decision’s implications for patent law.
Previously, under the Supreme Court’s 1984 decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., an agency’s administrative interpretation of a statute would be given “Chevron deference” if the agency’s interpretation of the ambiguous statute was “rational” or “reasonable” and Congress had not spoken directly on that issue.
However, in Loper Bright Enterprises v. Raimondo and the companion case of Relentless, Inc. v. Department of Commerce, the Supreme Court overruled Chevron, holding that deference to an agency’s interpretation of a statute is contrary to the Administrative Procedure Act (APA) and violates the judiciary’s responsibility to interpret statutes and decide questions of law. The Court did not outright overrule existing precedent that relied on Chevron, but its decision decidedly impacted how litigants can challenge agency actions through district court litigation.
Now, courts must follow the APA’s command that “the reviewing court shall decide all relevant questions of law,” offering no deference to an agency’s interpretation. 5 U.S.C. § 706. The Court instructed that courts must determine the “best reading” of a statute, using traditional methods of statutory interpretation, and reasoned that “statutory ambiguity does not necessarily reflect a congressional intent that an agency, as opposed to a court, resolve the resulting interpretive question.” Loper Bright Enterprises v. Raimondo, No. 22-1219, 2024 WL 3208360, at *3 (U.S. June 28, 2024).
We anticipate that cases will question some of the rulemaking or decisions from the United States Patent and Trademark Office as well as the International Trade Commission and how those agencies have interpreted applicable statutes. Although the Federal Circuit previously struggled in Aqua Products v. Matal with determining whether deference was due to USPTO rules relating to provisions of the America Invents Act in 2017, the Federal Circuit has a clean slate under Loper to review both the USPTO’s and ITC’s statutory interpretations.
Under Loper, the Court has clarified that, contrary to the Federal Circuit’s musings in Aqua Products, no greater deference is due to agency interpretations, even when the agency has proceeded through a notice and comment period as part of the rulemaking process. The USPTO sought public comment recently on its revised Patent Trial and Appeal Board rules, receiving almost 4,000 comments, including on discretionary denials of inter partes review petitions. Given the wide range of comments on the contours of that discretion set forth in the USPTO’s rules, litigants will undoubtedly be emboldened to challenge the question of whether the PTAB’s rules comply with the AIA. Another recently proposed rule concerning terminal disclaimers with continuation patents has similarly raised concerns over whether the rule exceeds the USPTO’s authority by setting forth a substantive rule impacting the scope of patent rights in one application based on validity determinations made in the course of prosecution of another, as was suggested by former directors of the USPTO in a letter providing comments.
With respect to the ITC, the Federal Circuit previously upheld the ITC’s interpretation of the phrase “sale for importation” as reasonable under Chevron deference in Enercon GmbH v. Int’l Trade Comm’n, 151 F.3d 1376, 1383 (Fed. Cir. 1998). Similarly, in Suprema v. Int’l Trade Comm’n, the en banc Federal Circuit gave Chevron deference to the ITC’s interpretation of Section 337 of the Tariff Act relating to “articles that infringe,” which the ITC interpreted to not exclude inducement of post-importation infringement. This decision is already in jeopardy, as Google urged the full Federal Circuit to reconsider Suprema in June 2024 in seeking to overturn the ITC ban on Google Pixel smartphones and tablets and Nest Audio speakers that were found to infringe Sonos patents post-importation when users download apps on the smartphones and tablets or configure the speakers.
Time will tell how Loper’s undoing of Chevron deference will impact USPTO procedures and ITC regulations, and Venable will keep abreast of these developments and their impact on our clients.
