The Inter Partes Review (IPR) practice of the USPTO’s Patent Trial and Appeal Board (the Board) has been largely viewed as one-side against patentees. Since the IPR practice began (after the new AIA law came into effect in 2011), the outcomes have primarily been in favor of the challengers invalidating patents.
One of the reasons for this skewed result has been the strict treatment the Board has taken on the ability of patentees to amend their claims. (The Court pointed out a February 2017 study showing that the Board has only granted six motions to amend in the history of IPR proceedings.) If patentees had more opportunity to amend their claims to negate the challenge against them, fewer patents would be invalidated. For example, claims could be narrowed to avoid the prior art cited in the challenge but still leave valuable claims. Many thought that this was how the law was going to be applied before it went into practice.
However, since the beginning, the Board adopted a very strict standard for patentees to meet in order to amend their claims. To allow amendment of the claims, the Board required the patentee to make a full showing of the patentability of the new claim. This required not only a showing that the amendment did not enlarge the scope of the claims and did not introduce new matter but also a showing that the claims were patentable over the universe of possible prior art. This was an almost impossible standard because it was very difficult to conclusively prove that the claims were patentable over the entire universe of potential prior art. The standard and its strict application had a chilling effect whereby patentees simply stopped moving to amend claims.
In this case (Aqua Products, Inc., v. Matal (USPTO), Appeal No. 2015-1177, decided Oct. 4, 2017), a majority of the all the Federal Circuit judges found that the plain language of the statute on IPRs requires that the challenger prove all propositions of unpatentability, including for amended claims. They found this result to also be dictated by the entirety of the statutory scheme and reaffirmed by reference to the relevant legislative history. Upon the IPR challenge, Aqua sought to amend its claims and showed that the new claims did not enlarge the scope of the previous claims and did not introduce new matter, showings which put them in accordance with 35 U.S.C. §316(d). They also argued that the new claims distinguished the prior art used to allege unpatentability by the challenger. However, the Board denied the motion to amend the claims, finding that Aqua had not otherwise proven the amended claims to be patentable.
The Court pointed out numerous places in the legislative history making clear that Congress deemed the patent owner’s right to amend during IPR very important By 35 U.S.C. §316(d), Congress mandated that the patent owner be permitted to amend the patent as matter of right at least once during the course of an IPR, provided that the certain specified statutory conditions (not enlarging scope of the previous claims and not introducing new matter) were met. The Court also pointed out that the statute makes clear that the challenger has the ultimate burden of proving unpatentability and the only requirement on the patentee for amending claims is that the amendments not enlarge the scope of the previous claims and not introduce new matter.
The USPTO had relied on their rules on motions which stated that the moving party has the burden of proof. The USPTO urged that, since the patentee is moving to amend the claims, they have the burden of proof for showing patentability of the amended claims. For a number of reasons, the Court in effect concluded that the USPTO’s application of these rules to impose the burden of showing patentability upon the patentee for amended claims was contrary to the express requirements of the statute.
This fight, however, may not be over. The Court stressed that the majority of judges (6 of the 11) found ambiguity in the statute. This holds out the possibility that the USPTO could promulgate new rules on this point which could ultimately lead to a Court finding that, with such new rules, the Court must defer to the USPTO on this issue. The Court, however, did stress that the statute was clear that, in IPR proceedings, the Board cannot impose the burden of persuasion on the patentee to show patentability of amended claims. This is a significant conclusion and should at least give some aid to patentees in IPR proceedings.