The Overturning of Chevron and its Effect on IP Law

By Jack Passero

What is Chevron deference?

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., decided in 1984, zoned in on the level of authority that government agencies had to regulate themselves without congressional approval. Agencies are not technically able to pass statutory reform or regulate without statutory authority, but their interpretations of statutes outside of congressional authority is more of a gray area. Chevron deference consisted of a two-part test that was deferential to government agencies: first, whether Congress has spoken directly to the precise issue at question, and second, "whether the agency's answer is based on a permissible construction of the statute".

Chevron deference gave an increased level of statutory interpretation to government agencies. For example, in Chevron, the NRDC lost the case in the Supreme Court, where the Court decided that the EPA’s statutory interpretation of a “source” of air pollution was a permissible interpretation of the statute.

What has happened to Chevron deference?

In June of 2024, Chevron was overruled in Loper Bright Enterprises v. Raimondo, and statutory ambiguity is now decided by judicial measures and procedures with executive agency expertise still considered, though no case that previously relied on Chevron was overturned.

This likely results in an increase of agency litigation to determine the meaning of statutory ambiguity, increasing cases brought to courts, causing large inefficiencies in our judicial systems. Agencies will no longer be able to interpret statutes as they see fit, which some view as a plus; however, the increase in litigation is seen as an incredible inefficiency by some that will slow progress, according to others.

What does this mean for IP regulation?

The overturning of Chevron likely affects the ITC more than it does the USPTO, even though it may apply to both.

The USPTO has not been granted substantive rulemaking authority by Congress, and the USPTO’s interpretation of substantive patent law have never received deference.

The Federal Circuit has repeatedly noted that while the USPTO produces guidance and information regarding statutory interpretation on substantive patent law, courts are not required to defer to USPTO guidance on any matters and can instead take matters of statutory interpretation into their own hands.

The only presumed issue to face the USPTO is likely to be procedural rule creation and ambiguity in such, but this is likely to be very specific and with cases few and far between.

The ITC, however, is likely to see more litigation for statutory interpretation with its granted authority under 19 U.S.C. § 1337. Section 1337 authorizes the ITC to pursue investigation of infringement on intellectual property protections because of importation of goods.

The ITC has a history of challenges to its authority to prevent importation of goods. In Suprema v. ITC, the Federal Circuit Court of Appeals considered whether the ITC could ban the importation of articles that do not infringe as imported but would later infringe post-importation.  The Federal Circuit concluded that the statutory language was ambiguous, and relying on Chevron, determined that the ITC’s broader interpretation of Section 1337 to allow for jurisdiction of post-importation infringement was reasonable.

Since Chevron was overturned, companies are already seeking to overturn previous cases under this interpretation by the ITC. Google has petitioned for an en banc rehearing of Sonos v. ITC to consider whether ITC authority 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 when additional steps are performed after importation.

While this is only the beginning of petitions for rehearing, it is likely that the ITC will see an increase in petitions of this kind that offer challenges to its statutory interpretation.

-          The ITC will still be given some consideration as a matter of ambiguity for being an agency with expertise in the matter, but the judiciary will not be required to defer to the ITC on a reasonable interpretation of the statutory language and will instead be able to decide for themselves what § 1337 means.