Many questions are looming with the recent passing of the bill in the United States House of Representatives (“House”) aimed at ending agencies’ judicial deference in promulgating rules. The Regulatory Accountability Act was passed by the House on January 11, 2017. If passed by the Senate, the bill would legislatively repeal the Chevron deference doctrine that gives deference to federal agencies interpretations when evaluating federal rules and regulations. A principle that has been the foundation of judicial review of statutory interpretation by administrative proceedings since 1984. The name comes from a Supreme Court case, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., in which the Court held that deference would be given to agency interpretations, unless the interpretation was found unreasonable.
If enacted, the issue is how this bill will impact current agency rules, such as the U.S. Patent and Trademark Office’s (“USPTO”) inter partes review (“IPR”) standards. IPR is a trial proceeding to review the patentability of one or more claims in a patent that are challenged based on prior art. Under the current standard, the USPTO decided that patent claims subject to IPR should be construed to their broadest reasonable interpretation, rather than the narrower claim construction standard previously used. A broader claim construction makes it easier to invalidate the patent’s claims based on the prior art by expanding the scope of the applicable prior art. The Patent Trial and Appeal Board’s (“PTAB”) decision on the claim construction standard could become a test upon the repeal of the Chevron deference precedent.
Although Chevron deference has not been applied to patent cases often, in 2011 the America Invents Act (“AIA”) gave the patent office authority to interpret the statute when creating new proceedings to challenge patents, such the IPR. Currently, courts would likely defer to the USPTO’s interpretations, so long as they are reasonable. For instance, the AIA does not specify how the PTAB should construe patent claims, so the USPTO used the broadest reasonable claim interpretation. In IPR proceedings, the petitioner has the burden of showing that the challenged claims are invalid by a preponderance of the evidence, rather than the district court burden of clear and convincing evidence. Under the current standard the Supreme Court held that the USPTO had discretion to construe the standard for IPR as a reasonable exercise of its rulemaking authority delegated by Congress. In the absence of Chevron deference, litigators could use this to argue that the broadest reasonable claim interpretation is no longer valid, making it more vulnerable to legal challenges. With the potential legislation eliminating deference to the USPTO, challenges to the claim construction standard are inevitable. If this bill is passed one thing is certain, it will provide an avenue for proponents of changing the existing IPR standard.
Katherine Escalante is a second-year law student at Wake Forest University School of Law. She holds a Bachelors of Arts in International Relations and Global Studies. Upon graduation, she will be eligible for the U.S. Patent Bar and intends to pursue a career in Intellectual Property Law.