Patent Puzzles after the Supreme Court’s 2024 Administrative Law Cases: Stare Decisis, Rulemaking, and Discretion

Recent decisions by the Supreme Court have showcased an increasing skepticism toward administrative agencies, which has significant implications across various fields, including patent law. These rulings bring forth complex issues related to stare decisis, agency rulemaking, and the discretionary powers of administrative bodies. As the legal landscape evolves, practitioners in patent law and beyond must navigate these changes and anticipate the potential for increased litigation.

Stare Decisis and Overruling Chevron Deference

A pivotal shift occurred with the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, where the Court overruled the Chevron deference doctrine. Chevron deference allowed courts to defer to reasonable agency interpretations of ambiguous statutes. The Loper Bright decision emphasized "statutory stare decisis," indicating that it did not challenge existing cases that applied Chevron to validate specific agency actions. However, the Court did not clarify what constitutes "specific agency action," leaving room for interpretation and potential litigation.

A noteworthy case in patent law is Cuozzo Speed Technologies, LLC v. Lee (2016), where the Court upheld the Patent Trial and Appeal Board's (PTAB) use of the "broadest reasonable interpretation" (BRI) standard for claim construction under Chevron. Since then, the USPTO has shifted from the BRI standard to the claim construction approach used in Article III courts, as outlined in Phillips v. AWH Corp. This change was well-received, as it aimed to unify claim construction standards across different tribunals, reducing inefficiencies and inconsistencies.

Potential Challenges and the Role of Agency Discretion

The question arises whether the current claim construction rule, differing from the one in Cuozzo, could now face challenges as an incorrect interpretation of the America Invents Act (AIA). The Supreme Court's decision in Corner Post v. Board of Governors of the Federal Reserve System suggests that new firms, formed after the USPTO's rule change, may challenge the rule even beyond the typical statute of limitations. This possibility creates an opening for litigation, as the AIA's text does not explicitly address claim construction standards, leaving it to potential agency discretion.

The Supreme Court's approach in SAS Institute Inc. v. Iancu (2018) highlighted a reluctance to grant agencies broad discretion, particularly concerning PTAB procedures. This decision, coupled with Justice Gorsuch's opinion in Ohio v. EPA (2024), signals heightened scrutiny of agency rulemaking. The emphasis is on ensuring that agency rules comprehensively address all arguments from commenters, or risk being deemed "arbitrary or capricious."

Implications for the International Trade Commission (ITC)

The ITC's authority has also been affirmed under Chevron deference in cases like Suprema v. ITC (2015), where the Federal Circuit supported the ITC's interpretation of its jurisdiction to include post-importation infringement. However, with Chevron overruled, there's speculation whether the Federal Circuit might reconsider such precedents, potentially re-evaluating the scope of ITC authority without Chevron's protective framework.

Conclusion: A Path Forward in a Post-Chevron Era

The Supreme Court's recent administrative law decisions introduce new challenges and uncertainties, even in areas like patent law that might seem insulated from broader administrative law shifts. Legal practitioners must closely monitor these developments, understanding that agency interpretations are now more vulnerable to challenge. This landscape demands careful navigation of both existing and emerging regulations, as well as a readiness to engage in litigation over these evolving issues.

As the courts continue to define the boundaries of agency discretion and statutory interpretation, the patent law community must remain vigilant, prepared to adapt strategies and arguments in response to the shifting judicial stance. The era of Chevron deference has ended, but the journey of understanding and applying administrative law principles in patent cases is only beginning.