In IPRs, Petitioner Must Show Claim Amendments Unpatentable

October 06, 2017

A recent Federal Circuit ruling shifts the burden to petitioners, which will likely lead to patent owners filing more motions to amend.

The US Court of Appeals for the Federal Circuit, sitting en banc, ruled on October 4 that the petitioner challenging the validity of a patent in a Leahy-Smith American Invents Act (AIA) inter partes review (IPR) bears the burden of showing that proposed claim amendments are unpatentable. (In re: Aqua Products, Inc., Case No. 15-1177). This decision overturned the US Patent and Trademark Office’s (PTO’s) rule placing the burden on the patent owner to show that proposed amended claims are patentable.

This case came before the en banc Federal Circuit after the Patent Trial and Appeals Board (Board) denied Aqua Products, Inc.’s (Aqua’s) motion to amend its swimming pool cleaner patent, concluding that Aqua failed to prove that the substitute claims were patentable. Aqua timely appealed and argued that it did not bear the burden of proving patentability of its substitute claims. Thereafter, the Federal Circuit panel affirmed the Board’s decision based on its precedent that patent owner bears the burden. Aqua requested an en banc rehearing of that decision, which the Federal Circuit granted.

Judge Kathleen M. O’Malley, writing for the majority, held that the AIA’s statutory language in 35 U.S.C. § 316(e) “unambiguously requires the petitioner to prove all propositions of unpatentability, including for amended claims.” She based her conclusion on a detailed analysis of the statutory language, the statutory scheme, and the relevant legislative history.

In particular, Judge O’Malley noted that both the PTO and the US Congress acknowledged that a patent owner’s right to propose amended claims in post-grant proceedings was an important tool. In fact, she stated that “Congress deemed the patent owner’s right to amend so important that, in § 316(d), it mandated that the patent owner be permitted to amend the patent as of right at least once during the course of an IPR, provided certain specified statutory conditions were met.” (emphasis in original). Additionally, the PTO relied on patent owners’ ability to amend as a basis to apply the broadest reasonable interpretation standard when interpreting the claims during AIA post-grant proceedings. Yet, as of April 30, 2016, the Board denied 112 of 118 motions to amend the claims in IPRs and partially denied motions to amend in four of the remaining six trials.

The PTO argued that the Board has the authority to grant or deny any motion, including any motion to amend, at its discretion based on Congress’s use of the words “may” and “propose” in reference to a patent owner’s ability to amend claims. Judge O’Malley stated that this reasoning “would render the amendment process virtually meaningless, rather than make the possibility of amendment the central feature of the IPR process it was intended to be.”

Further, the parties did not dispute that § 316(e) places the burden of persuasion for proving the unpatentability of issued, challenged claims on the petitioner. Judge O’Malley concluded that “[b]ased on the plain and unambiguous language of this provision, we believe that § 316(e) applies equally to proposed substitute claims.”

However, six judges believed that the statutory scheme was ambiguous, which required additional analysis as to whether deference to the PTO’s contrary interpretation of the relevant statutory provisions was appropriate. The court concluded that it was not required to defer to the PTO. In reaching this conclusion, Judge O’Malley noted that the PTO did not adopt a rule or regulation governing the burden of proof or persuasion regarding the patentability of proposed amended claims. Instead, the PTO adopted rules regarding procedures for motion practice in IPRs (Rule 42.20) and requires that a patent owner show that its proposed claim amendments are responsive to at least one ground of unpatentability at issue in the IPR (Rule 42.121). These regulations “do not address the ultimate relief sought by the petitioner in the IPR: a determination of unpatentability.” Thus, the court was free to decide what the law was without any deference to the PTO.

The majority also held that the Board “must consider the entirety of the record before it when assessing the patentability of amended claims under § 318(a) and must justify any conclusions of unpatentability with respect to amended claims based on that record.” This conclusion was supported by the language of § 318(a), which provides that where it proceeds to a final written decision, the Board must issue a decision on the patentability of originally issued, challenged claims as well as any amended claims. Further, “an agency’s refusal to consider evidence bearing on the issue before it is, by definition, arbitrary and capricious within the meaning of 5 U.S.C. § 706, which governs review of agency adjudications.”

Despite the length and detail of the majority opinion, Judge O’Malley cautioned that “today’s judgment is narrow.” She further stated that “very little said over the course of the many pages that form the five opinions in this case has precedential weight.” This reflects the fact that this decision was rendered by a highly fractured court, which issued five separate opinions. Only five of the eleven participating judges joined in the majority opinion, which garnered the majority’s support with the concurrence of Judges Timothy B. Dyk and Jimmie V. Reyna in the result.

This decision will likely lead to patent owners filing more motions to amend to overcome petitioners’ cited prior art and could possibly permit more amended claims.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Joshua M. Dalton

Century City
Andrew V. Devkar

Jason C. White

C. Erik Hawes
Rick L. Rambo

Louis W. Beardell, Jr.

Silicon Valley
Andrew J. Gray IV
Michael J. Lyons

Washington, DC
Jeffrey G. Killian, Ph.D.
Robert Smyth, Ph.D.