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To Defer or Not to Defer? Uncertainty Ahead for USPTO Rules

October 16, 2017
Post by Caitlin M. Andersen

In an en banc decision on October 4, 2017, the Federal Circuit made it easier to amend patents during AIA proceedings. However, in reaching this decision, the Federal Circuit raised questions as to whether Chevron deference would apply to the USPTO’s rules made without following a formal rule-making process.

During an inter partes review proceeding, the PTAB denied the petitioner’s motion to amend its patent claims and in response, the petitioner challenged the USPTO rule which requires the patent owner to carry the burden of demonstrating patentability of any new claims. In reaching its decision, the Federal Circuit split in rejecting the USPTO’s argument, which centered on the idea that the PTAB has the authority to deny any motion at its discretion. The court ultimately had enough concurring judges to side with the petitioner on this issue, stating that such a position “would render the amendment process virtually meaningless, rather than make the possibility of amendment the central feature of IPR process it was intended to be.”

But more concerning for the USPTO, the judges splintered heavily – rendering five different opinions – on the matter of Chevron deference, which holds courts should defer to administrative agencies’ interpretations of statutes when the language of the statue is ambiguous. The opinions discussed at length when deference should be afforded to USPTO regulations, which regulations are included, and how the regulations should be approved. With such heavy disagreement between the judges, there is now the concern of whether rules made as a result of PTAB decisions or other informal processes, as opposed to some other formal rule-making process, will withstand an appeal to the Federal Circuit.

Seemingly, the USPTO may yet still be able to impose the burden of showing patentability, but the decision of the court seems to indicate that notice-and-comment rulemaking would need to conducted first. Regardless, this decision has left the door open for challenges to other USPTO rules which were not put in place via formal rulemaking and may certainly encourage a formal comment process before enacting new USPTO rules.

Caitlin Andersen is an Associate Attorney in the Chemical/Biotech Patent, Mechanical Patent and Trademark Practice Groups at McKee, Voorhees & Sease, PLC. For additional information please visit www.ipmvs.com or contact Caitlin directly via email at caitlin.andersen@ipmvs.com.


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