Federal Circuit: Section 101 Is Fair Game for Amended Claims in Inter Partes Review

July 30, 2020

The US Court of Appeals for the Federal Circuit recently ruled that the Patent Trial and Appeal Board correctly refused to substitute proposed amended claims for being directed to ineligible subject matter under 35 USC § 101.

In Uniloc 2017 LLC v. Hulu, LLC, the US Court of Appeals for the Federal Circuit upheld a precedential decision issued by the US Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB), which held that when a patent owner proposes amended or substitute claims during an inter partes review (IPR), the PTAB may consider grounds of unpatentability that could not have been raised in the initial IPR petition—namely, patent eligibility under 35 USC § 101.[1]

“During an [IPR] . . . , the patent owner may file [one] motion to amend the patent,” and by that motion “[c]ancel any challenged patent claim,” and “[f]or each challenged claim, propose

a reasonable number of substitute claims.”[2] The statute provides that any proposed substitute claim “may not enlarge the scope of the claims of the patent or introduce new matter.”[3] In the decision below, patent owner Uniloc attempted to amend challenged claims of its US Patent No. 8,566,960 (the ’960 patent) by substituting new independent claims that it argued were patentable in spite of the grounds of unpatentability proposed by Hulu, the petitioner, in its IPR petition.

The challenged claims of the ’960 patent relate to technology that allows a software owner to install its software and use it on multiple devices at the same time.[4] The ’960 patent discloses that this can be accomplished using components such as a “processor module” and a “memory module.”[5] In response to Uniloc’s motion to amend the challenged claims, Hulu argued that the challenged claims—as amended—were directed to ineligible subject matter under Section 101. Rather than challenge this argument, Uniloc argued in its reply only that Hulu should not be permitted to make the argument.

In light of this record—and the fact that Uniloc had not substantively responded to Hulu’s Section 101 arguments—the PTAB concluded that Hulu had shown by a preponderance of the evidence that Uniloc’s proposed substitute claims were directed to ineligible subject matter and denied the motion to amend. Uniloc requested a rehearing of that decision, but by that time the Federal Circuit had already affirmed the invalidity of the original claims through an appeal of a related district court decision—leaving the motion to amend as Uniloc’s only avenue to defend the validity of the ’960 patent.

The PTAB denied Uniloc’s request for rehearing, holding that Section 101 may properly be considered when considering the patentability of proposed substitute claims, even though the underlying IPR petition could not legally raise such grounds of unpatentability. That decision was then designated by the PTAB as precedential. Uniloc then appealed that denial of rehearing to the Federal Circuit.

On appeal, and after invitation by the Federal Circuit to address the issue, Hulu raised a new argument: because the original claims of the ’960 patent had already been invalidated through district court proceedings, neither the PTAB nor the Federal Circuit had jurisdiction and the case was moot. Hulu argued that because Uniloc’s motion to amend was “contingent” on the PTAB finding the claims unpatentable, it could not be classified as being raised “during” the pendency of the IPR. Thus, when the original claims were invalidated and that decision was affirmed by the Federal Circuit, Hulu argued that the PTAB was divested of any authority to issue a certificate of correction or otherwise allow Uniloc to substitute amended claims.

The majority of the Federal Circuit panel disagreed with this new argument. First, it noted that because Hulu did not raise these arguments in response to Uniloc’s request for rehearing or in a cross-appeal to the Federal Circuit, these arguments had been waived. It also noted that the PTAB’s statutory authority is not the type of jurisdictional question—like subject matter jurisdiction—that can never be waived and may be raised at any time.[6] Second, on the merits, the majority found no authority for treating a contingent motion to amend as any different from other forms of alternative pleading. Judge O’Malley’s dissenting opinion disagreed, focusing on the word “substitute” in the statute.[7] The dissent would have found the appeal moot because—given that the original claims had been invalidated—there was nothing to “substitute.”

Turning to the merits of Uniloc’s appeal, whether Section 101 arguments may be raised in opposing motions to amend, the Federal Circuit focused on the text, structure, and legislative history of the IPR statutes. Section 318, for example, directs that the PTAB “issue a final written decision with respect to the patentability of . . . any new claim added under [Section] 316(d).”[8] The panel cited previous Federal Circuit decisions as establishing that Section 101 qualifies as a question of “patentability.”[9]

The Federal Circuit’s opinion also notes that the legislative history indicated that reexamination proceedings allow the USPTO to reconsider issued claims in light of new information not available at the time of initial examination. Proposed substitute claims, on the other hand, have not gone through any previous examination—including for patentability under Section 101. The opinion notes USPTO’s intervenor brief, which explains that “if a patent owner seeking amendments in an IPR were not bound by § 101 and § 112, then in virtually any case, it could overcome prior art and obtain new claims simply by going outside the boundaries of patent eligibility and the invention described in the specification.”[10]


With this opinion, the Federal Circuit has further contributed to a complex set of interplays between the IPR statutes. Although not addressed in the opinion, this decision significantly raises the stakes with respect to the estoppel effects of an IPR final written decision. The statute provides that, following a final written decision, an IPR petitioner may not assert as a defense in district court “any ground that the petitioner raised or reasonably could have raised during that inter partes review.”[11] Future patent owners who successfully obtain substitute claims may use this decision to argue that estoppel should apply to all grounds of unpatentability with respect to any amended claims—as the Federal Circuit has now held that all grounds of unpatentability, including challenges under Section 101, “could” be raised in response to a motion to amend.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the author Dion M. Bregman (Silicon Valley), or any of the following lawyers from Morgan Lewis’s post-grant proceedings team:

Joshua M. Dalton

Century City
Andrew V. Devkar

Jason C. White

C. Erik Hawes
Rick L. Rambo 

Louis W. Beardell, Jr.

San Francisco 
Brent A. Hawkins

Silicon Valley 
Andrew J. Gray IV
Ahren C. Hsu-Hoffman
Michael J. Lyons

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

[1] See 35 U.S.C. § 311(b) (providing that an IPR petition may “request to cancel as unpatentable [one] or more claims of a patent only on a ground that could be raised under [Section] 102 or 103”).

[2] 35 U.S.C. § 316.

[3] Id. at § 316(d)(3).

[4] See ’960 patent at 1:331-34, 40-41.

[5] Id. at 7:46-47, 7:36-47.

[6] See PGS Geophysical AS v. Iancu, 891 F.3d 1354, 1362 (Fed. Cir. 2018); see also Acoustic Tech., Inc. v. Itron Networked Solutions, Inc., 949 F.3d 1360, 1365 (Fed. Cir. 2020); Jalbert v. SEC, 945 F.3d 587, 593-94 (1st Cir. 2019).

[7] See 35 U.S.C. § 316.

[8] See 35 U.S.C. § 318(a).

[9] See Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1330 (Fed. Cir. 2015) (“[B]oth our opinions and the Supreme Court’s opinions over the years have established that § 101 challenges [are] . . . patentability challenges.”); Aristocrat Techs. Austl. Ltd. v. Int’l Game Tech., 543 F.3d 657, 661 (Fed. Cir. 2008) (“It has long been understood that the Patent Act sets out the conditions for patentability in three sections: [Sections] 101, 102, and 103.”).

[10] Intervenor Br. at 25.

[11] 35 U.S.C. § 315(e)(2).