Recent Chevron overturning means stretching USPTO thin – costs an extra billion in regulatory costs

[Eileen, 6-28-2024, IP Watchdog, “Chevron is Out: SCOTUS Says Doctrine Flouts APA, Dissent Accuses Colleagues of ‘Judicial Hubris’,” https://ipwatchdog.com/2024/06/28/chevron-scotus-says-doctrine-flouts-apa-dissent-accuses-colleagues-judicial-hubris/id=178371/, accessed 7-7-2024, CM ]

The brief argued that the U.S. Patent and Trademark Office (USPTO) often “promulgates regulations without the public participation and vetting required by the Administrative Procedure Act, Paperwork Reduction Act, 44 U.S.C. § 3501 et seq., and Regulatory Flexibility Act, 5 U.S.C. § 601 et seq.” Furthermore, when the Office has been challenged in the past on such moves, the agency uses Chevron as a cover, it said. “The USPTO’s neglect of rulemaking procedure leads to regulatory costs that exceed $ 1 billion per year,” added the brief, citing an article by the brief’s author, David Boundy of Potomac Law Group.

Today’s opinion said that Chevron has not been the kind of stable rule required for courts to say what the law is but instead called it an “impediment” and “a judicial invention that required judges to disregard their statutory duties.” The Court said that the doctrine cannot be squared with the Administrative Procedures Act (APA), which “specifies that courts, not agencies, will decide ‘all relevant questions of law’ arising on review of agency action, §706 (emphasis added)—even those involving ambiguous laws—and set aside any such action inconsistent with the law as they interpret it.”

In a concurring opinion written “to address why the proper application of the doctrine of stare decisis supports that course,” Justice Gorsuch said “[t]oday, the Court places a tombstone on Chevron no one can miss.”

In her dissent, Justice Kagan said the majority’s opinion “flips the script,” and that now a “rule of judicial humility gives way to a rule of judicial hubris.”

IPWatchdog Founder and CEO said that Chevron was a “recipe for disaster” and that overruling it was the right move, but it is far from a sure thing that anything will change going forward. He explained:

“As reasonable as the premise behind Chevron once was— namely to give front line agencies latitude to carry forward their mission— experience has demonstrated that agencies often abuse authority and seek to claim every opportunity to do whatever they wanted to do regardless of what Congress, the Judiciary, and basic concepts of checks and balances. In a nutshell, Chevron allowed agencies to fill the void abdicated by Congress and a Judiciary all too willing to refuse to engage in oversight. This was a recipe for disaster because too many agencies are controlled by political operatives and believers who are willing to allow the ends to justify the means, and willing to take every opportunity to expand their own power. Ultimately, Chevron provided cover for truly arbitrary and capricious decisions. The Administrative State will likely not go quietly into the night, so as important as this decision can be, the real question will be whether anything changes at all. If things do change as envisioned by this decision, much more will be required of Congress and the courts, and the petty political in-fighting and refusal to accomplish anything out of a fear of a primary challenger will need to be curtailed.”

In terms of how the decision might affect IP owners in the near term, Will Milliken of Sterne Kessler said it could impact the USPTO’s decision to pursue the recently-issues Notice of Proposed Rulemaking (NPRM) on terminal disclaimer practice: ”

“One concrete implication is that the PTO will not be able to rely on Chevron to justify the proposed rulemaking regarding terminal disclaimer practice,” Milliken said. “That rule has generated some controversy and may well be challenged if and when it is put into place. So, Loper does change the landscape of that potential dispute in a significant way.”