A few initial thoughts on Loper Bright and the end of Chevron Deference

by Dennis Crouch

This is just a first look at how overturning Chevron may impact patent practice. 

In the past, both the USPTO and patent attorneys have largely ignored the larger scope of administrative law, but in recent years USPTO operations have been under tighter control from the White House, and courts have increasingly asked whether the agency is following the rules.  Administrative patent law was truly launched with  the American Invents Act of 2011 and the resulting administrative patent trials by the PTAB — resulting in hundreds of appeals arguing that the USPTO’s procedural approach is an abuse of administrative power.  Importantly, the Supreme Court in Cuozzo Speed Techs. v. Com. for Intell. Prop., 579 U.S. 261 (2016) provided the patent office with Chevron deference for its determinations regarding AIA trials, including issues such as its approach to claim construction.  But Chevron has now been overruled, and many are wanting the Federal Circuit to revisit the USPTO approach.

Although I expect that the outcome will be relatively minor in the patent area, it is still a big deal.  When reason why it is so big is that Chevron deference is premised on ambiguity in the statute. In other words, any case where Chevron deference has been provided includes a ruling that the statute in question has an ambiguous gap, and the new Loper Bright decision indicates that courts have an obligation to ensure that gap was properly filled by agency action.

The Loper Bright decision: In Loper Bright Enterprises v. Raimondo, 603 U.S. ___ (2024), the Supreme Court overruled the Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The 6-3 decision authored by Chief Justice Roberts explained that the Chevron doctrine, which required courts to defer to “permissible” agency interpretations of ambiguous statutes, is inconsistent with the Administrative Procedure Act (APA). The Court emphasized that under the APA, “courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.”

The majority opinion traced the history of judicial review of agency action, noting that prior to Chevron, courts exercised independent judgment in construing statutes while according “respect” to executive branch interpretations.  The Court found that Chevron represented a sharp break from this tradition and could not be reconciled with the APA’s command that “the reviewing court shall decide all relevant questions of law.” 5 U.S.C. § 706. The Court also rejected arguments that Chevron deference rested on a presumption of congressional intent, stating that “a statutory ambiguity does not necessarily reflect a congressional intent that an agency, as opposed to a court, resolve the resulting interpretive question.”

Justice Thomas authored a concurring opinion arguing that Chevron deference also violates the Constitution’s separation of powers. He contended that by requiring judges to defer to agency interpretations, Chevron “prevents judges from exercising their independent judgment to resolve ambiguities” and “allows the Executive . . . to dictate the outcome of cases.”  Justice Gorsuch filed a lengthy concurrence, portions of which were joined by no other Justice, in which he argued that stare decisis principles supported overruling Chevron because the decision was inconsistent with “the laws adopted by the Nation’s elected representatives,” the APA, and the Constitution. Justice Gorsuch also argued that Chevron had proved unworkable in practice and that reliance interests did not justify retaining the doctrine, as Chevron‘s “whole point” was to “upset” such interests by allowing agency interpretations to change over time.

A dissenting opinion by Justice Kagan was joined by the other two liberal justices, Justices Sotomayor and Jackson. Justice Kagan argued that the majority’s decision was not based on the APA or any other law, but rather on a “bald assertion of judicial authority.” Justice Kagan contended that Chevron deference rested on a presumption about congressional intent that was justified by agencies’ expertise, experience, and political accountability. She also argued that the majority’s decision subverted stare decisis principles, as Chevron was a “cornerstone of administrative law” that had engendered significant reliance interests.

Chevron and the USPTO: The Federal Circuit has long been stingy on providing deference to USPTO decisions.  In particular, the court has never given deference to USPTO for its interpretation of the substantive patent laws, such as the requirements for proving obviousness under Section 103 or ineligibility under Section 101.  However, the court has granted deference in traditional areas involving “interpretative” rather than “substantive” rulemaking.  See, Cooper Techs. Co. v. Dudas, 536 F.3d 1330 (Fed. Cir. 2008) (giving Chevron deference to PTO’s interpretation of “original application” under the reexamination statute).  But, as noted in Cuozzo, Congress expanded PTO authority with respect to AIA trials.  Although this obviously does not permit the agency to rule contrary to the statute. SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018) (holding that the court owned no deference to USPTO interpretation allowing partial institution because the statute was not ambiguous and the PTO’s interpretation was not supported by the statute).

Sonos v. Google: Bloomberg’s Michael Shapiro reported on one case where Google filed an en banc petition relying upon this likely outcome – arguing that the USITC is not deserving deference for its interpretation of section 337 of the Tariff Act.  In Suprema v. ITC (Fed. Cir. 2015), the en banc Federal Circuit affirmed an ITC final determination of an exclusion order to block importation based upon an inducement theory of infringement. The key here is that the hardware being imported is infringing at the moment of importation, but once it arrives in the US it is loaded with software that leads to infringement.  There is a similar setup in Sonos v. Google, and Google is arguing that the Suprema decision must be revisited by the Federal Circuit, asking “whether the ITC’s authority under 19 U.S.C. § 1337(a)(1)(B)(i) is limited to articles that infringe a patent as imported, or instead extends to cases where infringement can occur only when additional features are added or additional steps are per-formed after importation.”

Another pending case on point is United Therapeutics v. Liquidia that is pending on petition for certiorari before the Supreme Court.  Petitioner in that case argues that the Federal Circuit improperly deferred to the USPTO’s decision to permit additional arguments beyond those made in the IPR petition itself.

PTA Calculations: One of the Federal Circuit’s most recent Chevron decisions was Eurica Califorrniaa v. Vidal (Fed. Cir. Nov. 7, 2022). In that case, the court gave Chevron deference to the PTO’s interpretation of the PTA statute barring PTA for applicant actions that constitute “a failure to engage in reasonable efforts to conclude prosecution.”  In the particular case, the USPTO had created a rule that an “applicant’s amendment of a patent application after receiving a notice of allowance  [constitutes] one such failure.”  In the appeal, the Federal Circuit provided substantial deference to this rule and sided with the PTO — writing that under Chevron, “we accept an agency’s construction of the statute even if the agency’s reading differs from what a court believes is the best statutory interpretation.”

75 thoughts on “A few initial thoughts on Loper Bright and the end of Chevron Deference

  1. 12

    PTAB and District Court “Claim Construction”

    Will PTAB have to follow the District Court “Claim Construction” going forward or PTAB (Agency/Executive) can do its own claim construction for the same specification / patents ?

    Will Loper have any impact on PTAB not using District Court Claim Construction?

  2. 11

    A respected law firm does not think any PTO regulations have been upheld based on Chevron, and thus the PTO is less vulnerable:
    link to mofo.com

    1. 11.1

      You read it here first, though, eh?

  3. 10

    Didn’t the majority opinion state that the decision was not retroactive? Why all the questions about revisiting various agency decisions. Those aren’t going to be challengeable based only on Chevron going away. Is there something I’m missing?

    1. 10.1

      As has been repeatedly demonstrated lately, all one has to do to challenge a federal regulation is to find someone newly impacted by that regulation and bring suit agains it before a particularly selected Texas federal judge. No matter how old the regulation is. [That is not a retroactive suit for those Previously impacted by that regulation.]

      1. 10.1.1

        OTOH, the Court specifically wrote:
        “By doing so, however, we do not call into question prior cases that relied on the Chevron framework. The holdings of those cases that specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis despite our change in interpretive methodology….Mere reliance on Chevron cannot constitute a ‘special justification’ for overruling such a holding, because to say a precedent relied on Chevron is, at best, ‘just an argument that the precedent was wrongly decided.’”

        IMHO, that seems like a pretty clear instruction from the Court that this case should mostly be forward looking.

        1. 10.1.1.1

          Of course, Chevron (as an interpretation of the APA) was also entitled to statutory stare decisis, and the “special justification” provided for overruling it was “precedent was wrong”.

          So theres a bit of tension there

    2. 10.2

      On the last day of the term, the Court decided Corner Post v. Federal Reserve. The APA sets a 6 year statute of limitations to challenge an agency action. You might think that the 6 years runs from the day that agency makes its decision, but Corner Post argued that the clock starts running from the day that the challenger suffers harm from the decision, not from the decision itself, and the Court agreed with Corner Post. That means that all sorts of agency decisions that you might have thought to be settled are still open for challenge.

      1. 10.2.1

        Which means there’s never really a time limit.

        1. 10.2.1.1

          Yup. Although I think it’s even worse than that because the clock only starts when the harmed entity realizes or “knows” that it’s been harmed. Another strong contender for the growing list of most spectacularly wrong Supreme Court decisions (Diamond v Diehr being near the very top, of course).

          1. 10.2.1.1.1

            “Wah” – your view of “worst” is notoriously unhinged from the law (and the Rule of Law).

  4. 9

    Since everything is irony, many GOP pols are gonna wish they had Chevron & Loper Bright back.

    Big regulatory disputes often don’t just involve the government and an industry; adjacent industries and parties can have strong interests in how others are regulated. That means that -sometimes- big money is on both sides of an issue.

    So what?

    So…firms have limited resources. Their additional spend with biglaw is that much less spend for lobbying and that much more cause for annoyance with their bought pols due to constant, unending litigation and shifting regulation.

    Forum shopping will persist. Circuit splits will be more common and more expensive as coalitions form against the 5th, and none of it is really the Supreme Court’s problem, because they hear only blockbuster cases they wanna hear.

    The easily foreseeable mess, on the other hand, will be blamed on the Supreme Court by just about everyone involved.

    This court is already notorious, and the chips have barely started falling.

    1. 9.1

      Or…..

      The Court will simply kick things back to Congress.

      This really is a call for Congress to get its act together.

      1. 9.1.1

        Correct.

  5. 8

    The possibly more consequential SCOTUS case this term for the USPTO is the SEC/Jarkesy case. I’d love to see someone try to square that decision with Oil States.

    1. 8.1

      I accept the challenge. Hope springs eternal here for elimination of IPRs by legal ingenuity, but the Supremes in Oil States in 2018 voted 7-2 that the AIA statutory inter partes review process did not violate Article III or the Seventh Amendment, with the majority decision written by Justice Thomas [no less] joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Samuel Alito [no less], Sonia Sotomayor and Elena Kagan. Thomas asserted that the granting of a patent was a public franchise the government can authorize and deauthorize, and an IPR “is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration”. It followed reexaminations, interferences and reissue-rejections of issued patent claims.
      Whereas the recent SEC/Jarkesy case was, as I recall, a large cash fine for fraudulent financial activity [much like something any District Court could impose] but being imposed by administrative judges for the SEC.
      Not to mention that the Justices have far more personal interests in the stock market than in patent invalidity only by prior patents and publications.

    2. 8.2

      A defense of patent invalidity is not an action at common law under the 7th amendment. Securities fraud is apparently close enough to common law fraud to fall under the 7th amendment and entitle the defendant to a jury.

      1. 8.2.1

        Re: “A defense of patent invalidity is not an action at common law under the 7th amendment. Securities fraud is apparently close enough to common law fraud to fall under the 7th amendment and entitle the defendant to a jury.”
        A much more concise and clear distinguishing of those two decisions.

        1. 8.2.1.1

          Even more concise:

          The Supremes H A T E patents.

        2. 8.2.1.2

          An odd stance and conclusion given that jury trials regarding the validity of a patent are pretty common and predate the SEC. I’m sure all the jurists who have contested validity over the years would be surprised to find out that they were not entitled to a jury.

  6. 7

    A “not,” a “not,” my kingdom for a “not”!

  7. 6

    The main consequence of overruling the Chevron doctrine and the statute of limitations for challenging federal regulations is to create a new lucrative business for litigation attorneys to potentially challenge thousands of regulations. Some of which should deservedly end up in the lap of Supreme Court Justices having to play fake doctors, engineers and scientists in order to overrule real ones or not.]

    1. 6.1

      Hopeful that your “main” is only a temporary by product on the way to what should be the proper consequence of our Legislative Branch actually writing better laws.

      1. 6.1.1

        Reflecting this thought, a new article at IPWatchdog states:

        The SCOTUS ruling must usher in an era of predictable and precision regulation. Chevron created an era of big, lazy and vague government. Those days are over.

        1. 6.1.1.1

          Re: ““The SCOTUS ruling must usher in an era of predictable and precision regulation”
          Besides the unlikelyhood of rational Congessional action with excessive voting control by irrational extremists on both sides, there is also no way to anticipate in advance what new and different technologies and events an administrative agency will have to deal with years after their statutes are enacted.

          1. 6.1.1.1.1

            And yet — and especially given patent law — it IS possible.

            Go figure.

      2. 6.1.2

        If you think this Supreme Court is going to stop seizing power from (or denying power to) a Democratic Congress or a Democratic Executive, then you truly were born two minutes ago.

        1. 6.1.2.1

          Your focus is myopic.

          Not surprising, given your one-bucket proclivities.

          ¯\_(ツ)_/¯

    2. 6.2

      On point, what really significant-impact PTO regulations based on allegedly ambiguous statute terms are likely to be successfully overruled or changed on appeal at the Federal Circuit solely due to elimination of Chevron? I did not see situations that commonly occuring among those Chevron-citing cases helpfully noted by Dennis above?

      1. 6.2.1

        Chevron appears — at most — to be constrained to only those items of the AIA-PTAB trial phase.

        If that….

        1. 6.2.1.1

          is the rest of cheap Chinese AI shamed by your latest (“sci fi”) debacle, Snowflake?

          1. 6.2.1.1.1

            Maybe try something that is not B$.

            If you could…

      2. 6.2.2

        Based on speculaltive comments elsewhere, Loper Bright Enterprises killing Chevron might rope in the ITCs self-expansion of its jurisdiction interpretatoins of “domestic industry” for import exclusion orders, and its jurisdiction over products that are not fully patent infringing until after they are imported and have something else added to them, like software?

        1. 6.2.2.1

          “Self-expansion” is not a reasonable read – nonetheless, determining what is a domestic industry may well be captured by your point.

          1. 6.2.2.1.1

            Lincoln Your comment is awaiting moderation.
            July 9, 2024 at 9:06 pm
            Cheap Chinese AI is dense.

            And the experts say incredibly sloppy readers, writers, and thinkers.

            link to cdn.patentlyo.com

            1. 6.2.2.1.1.1

              Well, that was certainly ‘worth’ your effort.

                1. Don’t bother Snowflake. He’s still wondering where he went wrong on his latest (i.e, “sci fi” ) debacle.

              1. 6.2.2.1.1.1.2

                Not trying here as well…

                Your latest ploy?

                1. Perhaps if you either defined what you meant – or better yet, figured out how to provide an emoticon directly (as opposed to merely link to one), you would grasp why your assertions simply do not hold water.

                  As usual.

                2. Projecting again I see.

                  “How it is done” – your way – is clearly inferior.

                  I told you how to actually embed instead of merely linking. Why is it that such is too much for you?

  8. 5

    ‘Portions of which were joined by no other justice…’ – very poor use of the English language, Dennis.

  9. 4

    “Loper Bright” is the proper terminology. Loper is for patent attorneys from the hood.

  10. 3

    Actually, it would be “the corrupt a h o l e Justices”. Members of the SCOTUS are referred to as “Justices”, not “Judges”.

    1. 3.1

      This is pedantry I can get behind.

  11. 2

    Its curious that you did not refer to the justices in the majority as conservative justices but felt free to label the dissenting justices as liberal.

    1. 2.1

      Thanks Poppy – Not intending a particular implication. Does it have meaning to you?

      1. 2.1.1

        Well, the correct term for the majority would be “the corrupt a h o l e judges” but, hey, Dennis doesn’t want to lose tenure so give him a break.

        1. 2.1.1.1

          Since when does any viewpoint except the Sprint Left control tenure decisions?

          Or do you think that Academia is controlled by “The Far Right?”

          (you just might, given your one-bucket proclivities)

          1. 2.1.1.1.1

            OK, but the “far right” aren’t taking plane rides, taking trips, having someone buy their mother’s house, flying flags upside down, etc.

            As someone with no proclivities one way or the other, what some of the judges are doing is stunning. Shocking.

            1. 2.1.1.1.1.1

              Certainly, corruption knows both sides of the aisle.

              1. 2.1.1.1.1.1.1

                Snowflake: Admit or Deny.

                You are cheap Chinese AI.

                1. ? This ‘tactic’ of yours was old the first time you used it.

                  At this point my friends volunteered to add it to the choices of yours that earn me coin.

                2. That’s an admission. Do you think you are a fair representative of cheap Chinese AI, Snowflake?

              2. 2.1.1.1.1.1.2

                Cheap Chinese AI has been determined to be an incredibly sloppy reader, writer, and thinker. Has it not, Snowflake?

                Still deflecting from your latest debacle? And what was that imaginary number again?

                How would cheap Chinese AI respond?

                Go!!

                1. And that ladies and gentleman, is how cheap Chinese AI responds.

                  And cannot generate even an imaginary number.

                  Not the sharpest tool in the cheap Chinese AI

                2. The only “ladies and gentlemen” at this point are me and you (that royally fractured many ‘you’ that you are).

            2. 2.1.1.1.1.2

              Unfortunately, justices from both sides (Sotomayor and Gorsuch) took large payments from book publishers (in the millions) and neither felt it necessary to recuse from cases involving said publishers.

              Were the people paying for the trips and buying the house in front of the Court?

              Justice Sotomayor bragged she would be bringing her wise Latina viewpoint to the Court. I don’t think that is what was intended.

              And Justice Kagan did not recuse on a Obama healthcare case even though she sat in on at least one meeting while she was President Obama’s SG.

  12. 1

    I’d love to see you try to reconcile the Jarkesy opinion with the Oil States opinion. Other than the author of the dissent in Oil States is now the author of the majority opinion in Jarkesy.

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