On June 28, 2024, the U.S. Supreme Court issued a 6-3 opinion in Loper Bright Enterprises v. Raimondo. In Loper, the court majority overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., a landmark administrative law case establishing that administrative agencies were entitled to deference in interpreting ambiguous statutes within their area of expertise. Many in the legal realm refer to this as Chevron deference. This deference applied to the U.S. Patent and Trademark Office (USPTO) and to decisions of the Trademark Trial and Appeal Board (TTAB), the Patent Trial and Appeal Board (PTAB), as well as the U.S. Copyright Office (USCO).
The intellectual property attorneys at TBillick Law regularly practice before the TTAB and the PTAB, relying on our decades of legal experience to guide our clients. If you need guidance on Loper’s potential impacts, we invite you to speak with one of our attorneys.
What Was the ChevronDeference Doctrine?
To fully understand the impact of Chevron’s overturning, we need to explore what the Chevron deference doctrine meant in practical terms. What does it mean for a court to apply deference—to defer—to an agency’s interpretation?
Questions of Law vs. Questions of Fact
Courts typically divide legal issues they must resolve into two categories:
- Questions of law—what the law means;
- Questions of fact—what happened; and
- Mixed questions of law and fact—how the law applies to the facts.
Determining what a law means is a matter of statutory interpretation. The court interprets a statute when resolving pure questions of law or mixed questions of law and fact.
Standards of Review
Whether something is a question of law, fact, or a mixed question of law and fact affects the level of deference a court applies. This level of deference is called the standard of review. Common standards of review include the following.
| Type of Review | The reviewing court considers… | Standard usually applies to… |
| De novo | …the decision as if no other court or agency has previously heard the case. | …questions of law. |
| Clearly erroneous | …whether the decision is clearly incorrect. | …questions of fact. |
| Substantial evidence or reasonability | …whether the decision could be supported by the evidence offered. | …jury verdicts and formal agency actions. |
| Arbitrary and capricious | …whether the decision was rational and predictable. | …informal agency action. |
| Abuse of discretion | …whether the decision was outside the bounds of the decision maker’s power. | …people or groups the law grants discretionary decision making power to. |
Courts generally apply more deferential standards to questions of fact than questions of law.
Chevron Deference
The Chevron deference doctrine involved something of a hybrid between the de novo and reasonability standards of review—as it applied to questions of an agency’s interpretation of a statute. It was a two-step process.
First, the reviewing court asked whether the statute in issue was ambiguous. A statute’s ambiguity depends on whether its language permits more than one reasonable interpretation. If the court found the statute unambiguous, it would resolve its meaning regardless of agency interpretation—like de novo review.
If the court found the statute ambiguous, it moved to step two and sought to determine whether the agency’s statutory interpretation was reasonable. If yes, the court applied Chevron deference and deferred to the agency’s interpretation. If not, the court decided what the statute meant—much like a reasonableness review.
What Will Loper Do?
Loper explicitly does away with Chevron deference based on Section 706 of the Administrative Procedure Act (APA). Like Chevron, Loper specifically affects an agency’s statutory interpretations. In overruling Chevron, Loper reinstated a rule from the 1944 case Skidmore v. Swift Co. Often called Skidmore deference, this doctrine allows a federal court to determine the level of deference on a case-by-case basis—using the agency’s ability to support its position as a barometer.
Regardless of whether you agree with the Loper majority or dissent, the case’s impact may be far-reaching. It takes agency-related statutory interpretations out of an agency’s hands and puts them into the court’s hands. The impact may be especially prominent when federal courts review agency-provided and agency-created guidance. This agency guidance typically explains how procedures work before the respective board and provides legal interpretation of certain statutes.
How Will Loper Affect the TTAB and the PTAB?
The USPTO resolves issues related to patents and trademarks through the TTAB and the PTAB, which are typically bound to follow agency guidance. Since the TTAB and PTAB are federal agencies, parties can appeal TTAB and PTAB cases to the Federal or D.C. Circuit Court of Appeals. Dissatisfied parties may also appeal to federal district courts in some circumstances.
Since Loper is so new, another procedural rule may draw out the timeline for resolving what it means for the USPTO: parties cannot raise claims for the first time on review. Because Chevron previously applied, parties have not presented arguments about whether the USPTO is improperly interpreting statutes before the PTAB or TTAB. So, those cases will need to start at the beginning.
Issues the PTAB Decides
Created by the America Invents Act (AIA), the PTAB hears several types of claims:
- Ex parte appeals—requests for review of rejected patent applications;
- Inter partes review (IPR) AIA proceedings—third-party challenges to patent validity made before issuance;
- Post-grant review (PGR) AIA proceedings—third-party challenges to the patent validity made after issuance; and
- Derivation claims—challenges to a patent’s validity, alleging someone named in an earlier application or patent stole an idea someone else invented.
How the PTAB resolves claims often depends on the core patent requirements that an invention must be all of the following to be patentable:
- Usable. If you invent or discover “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement,” you may patent it.
- New or novel. You cannot patent an invention if it has already been “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date.” Also, you cannot patent it if someone has applied to patent the same invention before the effective filing date.
- Not obvious. You cannot patent an invention when the differences between the new invention and previous inventions would make the new invention “obvious” as a whole “to a person having ordinary skill in the art to which the claimed invention pertains.”
Also, you must be able to describe how to make and use the invention. So, for example, when the PTAB decides whether an invention is obvious, it decides what facts are true about the patented invention, interprets what the statute says about what is or is not obvious, and applies that interpretation to the case.
Review of PTAB Decisions
Many issues the PTAB resolves depend on highly technical factual or legal matters to which the D.C. Circuit already did not apply Chevron deference. To that end, Loper may have little effect.
Windy City
For example, in Facebook, Inc. v. Windy City Innovations, LLC, the D.C. Circuit reviewed a PTAB case where the Board’s decision relied on the USPTO director’s interpretation of a statute. In that case, the court explains that issues related to obviousness in appeals from PTAB decisions are questions of law based on underlying factual determinations—i.e., mixed questions of law and fact. The court applies different standards to the portion of the issue that depends on the law and the portion that applies to facts.
Specifically, the D.C. Circuit reviews the PTAB’s factual findings related to obviousness for substantial evidence, applying relatively high deference. It reviews whether those facts make the patent legally nonobvious—applying the law of what obvious means to the facts—using the de novo standard of review.
So, even before Loper, the court interpreted the statute to decide what “obvious” meant, considering the PTAB’s statutory interpretation. In other words, the court did not apply Chevron deference.
In the same case, the D.C. Circuit also concluded that the PTAB’s application of the USPTO’s opinion on the meaning of a different statute was not entitled to Chevron deference. Specifically, it concluded the statute was unambiguous, and the PTAB decision (and the director’s opinion) was inconsistent with the statute. As a result, the court reversed the decision. Again, this result suggests Loper may have little effect in many circumstances.
Agency guidance
To the extent that Loper affects the PTAB, it will likely be related to the PTAB’s application of USPTO guidance, like the Manual of Patent Examining Procedure (MPEP), to cases. Patent attorneys and applicants are creative, so many will undoubtedly find ways to challenge the MPEP and similar guidance.
The issue in Windy City was that the director’s interpretation was inconsistent with the statute. Post-Loper, parties can argue that USPTO guidance is not the correct interpretation of relevant statutes, even if it is not inconsistent. How those claims might end up and how Skidmore’s due respect standard will apply is difficult to predict, but the D.C. Circuit has already proven itself willing to disregard USPTO opinions.
Unfortunately, these challenges may make PTAB case outcomes less predictable. They also risk limiting USPTO adaptability—the MPEP was last updated in 2022, a relatively simple task compared with overturning a D.C. Circuit precedent.
TTAB
The TTAB decides cases related to whether an individual has the right to register a trademark, but it cannot determine whether someone has the right to use a trademark or prevent others from using one.
Like the PTAB, the TTAB hears ex parte and IPR cases, which can be divided between:
- Appeals—requesting review of a denied registration;
- Oppositions—opposing someone else’s application; and
- Cancellations—requesting review of a trademark’s cancellation.
TTAB decisions similarly rely on guidance like the Trademark Trial and Appeal Board Manual of Procedure (TBMP) and face similar potential challenges.
USCO
The USCO has been making lots of guidance documents and decisions regarding the impact of the use of artificial intelligence (“AI”) on artistic works. This includes the use of tools like ChatGPT, Microsoft Copilot, Gemini, Dall-E, Adobe Firefly, Otter.ai, and many others. Back in the good old days of Chevron deference, U.S. district courts would have been required to defer to the USCO’s findings and interpretations of U.S. copyright law as applied to works created with AI. After Loper, this is no longer the case.
Thus, when the Copyright Office makes rulings such as, “In each case, what matters is the
extent to which the human had creative control over the work’s expression and ‘actually
Formed’ the traditional elements of authorship,” a district court is free to ascribe any weight it wants. Thankfully, the USCO bases many of its decisions on federal case law anyway, but this isn’t always the case. The USCO makes decisions on registering works partially built with AI tools every day, and every case is fact-intensive subject to different interpretations of the “human authorship” requirement for copyrighted works.
Post-Loper Fallout
If you have questions about the interaction between patents, trademarks, and Loper, contact TBillick Law. Although no one knows yet how Chevron being overturned will play out, we can help you understand the possibilities and ensure we are prepared for a post-Chevron world.