The recent U.S. Supreme Court ruling on June 28, which overturned the Chevron doctrine, has significant implications for federal agencies like the U.S. Patent and Trademark Office (USPTO). The Chevron doctrine allowed courts to defer to a federal agency’s reasonable interpretation of ambiguous statutes. By rejecting this precedent, the Court has shifted the balance of power, requiring judges to independently interpret laws without defaulting to agency perspectives. This change is poised to challenge the USPTO’s authority on controversial issues, such as terminal disclaimers, which dictate that a patent linked to a parent patent must also be invalidated if the parent’s claims are later canceled.

Sterne Kessler Director Will Milliken commented “Loper imposes more constraints on what the agency can do. On the question of whether a particular rule is consistent with the applicable statutes, we have effectively moved from a ‘tie-goes-to-the-agency’ regime to a regime where the court simply interprets the statute de novo, with no thumb on the scale in the agency’s favour.” He continued that the PTO’s proposed rule concerning terminal disclaimer practice “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.”

Milliken added, “As Chevron has fallen out of favour in recent years, and exceptions to its application have cropped up and become more robust, many courts have already significantly lessened the deference (if any) that they afford to agency interpretations of statutes.”