En banc Federal Circuit holds that Petitioner has the burden to prove unpatentability for amended claims added during IPR
In Aqua Products, Inc., v. Matal, 2015-1177, Oct. 4, 2017, the en banc Federal Circuit cut against the grain of current PTAB proceeding and held that the petitioner in an inter partes review proceeding has the burden to prove unpatentability for amended claims.
The patent owner in a patent office trial may file one motion to amend the patent. See 35 U.S.C. 316(d), 326(d). However, the Patent Trial and Appeals Board had previously required the patent owner to prove that an amended claim is patentable. Last year, a panel of the Federal Circuit found that the Board was justified in placing the burden to establish patentability of proposed substitute claims on the patent owner because substitute claims have never been examined. See Nike, Inc. v. Adidas AG, 812 F.3d 1326 (Fed. Cir. 2016).
The Board has rarely granted requests to amend the claims. The Federal Circuit in Aqua Products noted that the only six of the first 118 motions to amend were granted. See Aqua Products at p. 12. In view of these low odds, many patent owners have chosen not to file motions to amend.
Six of the eleven judges that participated in the Aqua Products decision agreed that the petitioner in an inter partes review proceeding has the burden to prove unpatentability for amended claims. See Aqua Products, at page 5, opinion of the court by O’Malley, in which Newman, Lourie, Moore, and Wallach join. Dyk and Reyna, concurred in the result only. The judges agreed on little else.
Five of the eleven judges, O’Malley, Newman, Lourie, Moore, and Wallach, found that the statute “unambiguously requires the petitioner to prove all propositions of unpatentability, including for amended claims.” See Aqua Products at page 5. 35 U.S.C. § 316(e) recites:
(e) EVIDENTIARY STANDARDS.—In an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.
The five judges pointed to, among several other reasons, the fact that the 316(e) evidentiary standard “immediately follows the subsection discussing the requirements for amended claims in IPRs” (i.e., 35 U.S.C. 316(d)) to support their view that the statute is unambiguous as to the petitioner having the burden of proving unpatentability of amended claims. See Aqua Products at page 28.
The six other judges disagreed, finding that the statute was ambiguous. Four of these judges, Taranto, Prost, Chen, and Hughes, disagreed with the holding and would have found that Chevron deference allows the Director to decide that the burden of persuasion falls on the patent owner.
The other two judges, Dyk and Reyna, found that the statute was ambiguous, but believed that Chevron deference does not apply because the Board has not promulgated a regulation consistent with the Administrative Procedures Act. See Aqua Products, opinion by Reyna, joined by Dyk (also joined by Prost, Taranto, Chen, and Hughes as to Part III. only) at pages 8-11. The Board had not established that the burden of persuasion any regulation. Instead, the Board specified that the burden of persuasion is on the patent owner in dicta found in the Board’s Idle Free decision.
After the Aqua Products decision, patent owners may be more willing to file a motion to amend.
John M. Bird is a partner in the Washington, DC Office of Sughrue Mion PLLC. His focus is on the protection and enforcement of designs and a wide range of electrical and mechanical technologies, including analytical/measurement systems, medical devices, HVAC systems, printers/copiers, telecommunications systems, data recording mediums, semiconductor fabrication, bearings, welding processes, sports equipment, footwear, and various automobile components, such as tires, transmissions, engines, fuel-injection systems, motors, lamps, steering systems, connectors/wiring, valves, and control/monitoring systems.
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The Patent Trial and Appeal Board (“the PTAB”) has a staunch reputation for rarely granting a patent owner’s motion to amend claims during inter partes review proceedings (to date, the Board has only granted six such motions to amend). However, in the matter of Shinn Fu Co. v. Tire Hanger Corp., IPR2015-00208 (decided on April 22, 2016), the PTAB granted The Tire Hanger Corporation’s (“Tire Hanger”) motion to amend the claims of its U.S. Patent No. 6,681,897 (“the ‘897 patent”). The PTAB’s decision allowed Tire Hanger to salvage invalid claims with narrowing claim amendments and provides encouragement to patent owners that more motions to amend may be granted by the PTAB in the future.
Federal Circuit Reverses PTAB due to Unreasonably Broad Claim construction and Upholds Idle Free Requirement that Patent Owner Must Show that Substitute Claims are Patentable Over All Prior Art of Record
In the first reversal of a Final Decision by the Patent Trial and Appeal Board (PTAB), the Federal Circuit reversed the PTAB’s construction of several claim limitations and remanded the PTAB’s determination of on patentability. Microsoft v. Proxconn, 2014-1542, -1543, Fed. Cir. decided June 16, 2015. This decision shows that the “broadest reasonable construction” adopted by the USPTO during patent office trails in 37 C.F.R. § 42.1000(b) must consider the context of the specification and previous file history.
The Patent Trial and Appeal Board (“PTAB”) allowed what appear to be the second and third amendments in an inter partes review (“IPR”) in Riverbed Technology, Inc. v. Silver Peak Sys, Inc., IPR Nos. 2013-00402 (Paper No. 35) and 2013-00403 (Paper No. 33); the first being in response to an unopposed Motion to Amend in International Flavors & Fragrances Inc. v. United States, 2013-00124 (Paper No. 12). The PTAB has not granted many Patent Owner’s request to amend claims based on a rigorous standard as set forth in PTAB’s previous decisions (see e.g., Idle Free Sys., Inc. v. Bergstrom, Inc. IPR2012-00027 (Paper No. 66)), but the PTAB’s pair of decisions on December 30, 2014, provides some insight on how to meet the PTAB’s high bar in amending claims.
In proceedings before the Patent Trials and Appeals Board (PTAB or Board), Patent Owners are allowed to propose substitute claims in the event that one or more claims is cancelled. 35 U.S.C. §§ 316(d)(1), 326(d)(1). As discussed in previous blog articles, the proposed claims are not entered automatically or subjected to examination. Respironics, Inc., v. Zoll Medical Corporation, p. 20 (IPR2013-00322, Paper No. 46, September 17, 2014). Rather, a Patent Owner has the burdens of proof to show that the proposed claims are both adequately supported by the specification and patentably distinct from prior art.
In International Flavors & Fragrances Inc. v. United States, Case 2013-00124 (Paper No. 12) the Board granted the first motion to amend by adding new substitute claims in an inter partes review. The Patent Owner only filed a Motion to Amend which was unopposed by the Petitioner.
A recent decision by the Patent Trial and Appeal Board (“Board”) in adidas v. Nike, IPR2013-00067, suggests stringent requirements to establish patentability over other known prior art when amending claims in an inter partes review. Paper No. 60 entered April 28, 2014. The Patent Owner, Nike, filed a motion to amend to add substitute claims and was successful in persuading the Board that its substitute claims did not enlarge the scope of the original claims and defined the metes and bounds of the invention under 35 U.S.C. §112, second paragraph. However, the motion was denied because the Patent Owner failed to demonstrate that the substitute claims are patentable over the “other known prior art.”
David A. Collins
Two recent Board final decisions denying the patent owner’s motion to amend claims provide further guidance regarding the strict and exacting requirements for filing a successful amendment during an Inter Partes Review (IPR) proceeding.
IPR Claim Amendment Limitations Apply to Covered Business Method Patent Review and Amendments for 35 U.S.C. §101 Purposes
As discussed previously, the Board has imposed significant limitations on a Patent Owner’s ability to amend a claim in inter partes review. See Idle Free Systems, Inc. v. Bergstrom (IPR2012-0027 Paper 26). These limitations include a requirement for a Patent Owner to show patentability of the proposed amendments over the prior art. Idle Free at 7-8. Recently, the Board has imposed these limitations to amendments made solely for 35 U.S.C. § 101 purposes in a CBM.
PTAB Relies on the Patent Owner’s Failure to Establish General Patentability in Denying Motion to Amend
In Idle Free, the Board relied on the stringent requirements for establishing “general patentability” and denied Bergstrom’s renewed motion to amend the claims. The Board’s decision exemplifies the strict nature of these proceedings by denying Bergstrom’s motion to amend despite agreeing that the proposed claims distinguish over the art of record.