PTAB Issues Guidelines for Motions to Amend

By Reza Mollaaghababa
An en banc panel of the Court of Appeals for the Federal Circuit (CAFC) in the case of Aqua Products, Inc. v. Matal recently held that in an inter-partes (IPR) proceeding, the burden of persuasion rests with the challenger to persuade the PATB that substitute claims proposed by a patent owner in a motion to amend are unpatentable.  This is a significant shift from the Board’s practice that had required the patent owner to demonstrate that proposed substitute claims are patentable over the art cited by the challenger and the art known to the patent owner.

The PTAB has issued guidelines regarding motions to amend in light of the Aqua Products decision. The guidelines indicate that consistent with the Aqua Products decision, the Board will not place the burden of persuasion on the patent owner with regard to the patentability of substitute claims presented in a motion to amend.  If the patent owner presents a reasonable number of substitute claims that do not enlarge the scope of the original claims and do not introduce new matter, “the Board will proceed to determine whether the substitute claims are unpatentable by a preponderance of the evidence based on the entirety of the record, including any opposition made by the petitioner.”  In particular, “if the entirety of the evidence of record before the Board is in equipoise as to the unpatentability of one or more substitute claims, the Board will grant the motion to amend with respect to such claims, and the Office will issue a certificate incorporating those claims into the patent at issue.”

The guidelines, however, indicate that a motion to amend must still set forth “written description” support and support for the benefit of a filing date in relation to each substitute claim, and respond to grounds of unpatentability involved in the trial.” The guidelines further emphasize that all parties have a duty of candor and in particular the patent owner has a duty “to disclose to the Board information that the patent owner is aware of that is material to the patentability of substitute claims, if such information is not already of record in the case.”  The rules regarding the types, timing and page limits of briefs remain unchanged.  Further, the patent owner must still confer with the Board before filing a motion to amend.

The recognition that the burden for proving unpatentability rests with the challenger even when the patent owner presents substitute claims can potentially result in more motions to amend to be granted. Nonetheless, a patent owner seeking to amend challenged claims may still consider other venues for presenting such amendments. For example, such a patent owner can present amended claims in an ex-parte reexamination or a reissue proceeding. One advantage of such alternative venues for presenting claims amendments is that, unlike in an IPR proceeding, a third party cannot argue against amendments presented in an ex-parte reexamination or a reissue proceeding initiated by a patent owner.

Estoppel Does Not Attach When Petitioner’s Grounds Are Denied As Redundant

By Reza Mollaaghababa
Under 35 U.S.C. 315(e)(1), a petitioner in an inter partes review of a claim in a patent that has resulted in a final written decision by the Board may not request or maintain a proceeding before the Patent Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review. Nor can such a petitioner raise that ground against that claim in a civil action or in a proceeding before the International Trade Commission. 35 U.S.C. 315(e)(2). In Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., the Court of Appeals for the Federal Circuit (CAFC) recently held that the estoppel provisions of 315(e) do not apply to any ground in an IPR petition that the Board deems as redundant to other ground(s) and thus for which no trial is instituted.

In February 2012, ACS sued Shaw for the infringement of its U.S. Patent No. 7,806,360. Within one year of the service of the complaint, Shaw filed an IPR petition challenging claims 1-20 of the ‘360 patent in which it raised multiple grounds of invalidity. The Board instituted a trial on all challenged claims except for claim 4. With respect to the claims on which a trial was instituted, the Board found certain grounds as redundant relative to others and hence refused to consider those grounds. Subsequently, Shaw filed another IPR petition to challenge claim 4 of the patent based on six new obviousness grounds. The Board instituted a trial based on two of the six grounds and denied the other grounds as redundant. The Board consolidated the two IPRs and issued one final written decision.

In appealing the Board’s decision, Shaw requested that CAFC review the Board’s decision to deny certain grounds as redundant and argued that CAFC had jurisdiction to do so. In particular, Shaw argued that Section 314(d), which indicates that the Board lacks jurisdiction to review the Board’s institution or denial decisions, is not applicable because Shaw was not seeking review of the Board’s institution decision. Rather, it was asking the court “to review the Board’s authority, and correctness in exercising the same, in deeming a subset of asserted grounds redundant of instituted grounds.”

The CAFC disagreed and emphasized that the PTO had the right to exercise its authority in instituting IPR on only some of the grounds. The court explained that there is benefit in the “PTO having the ability to institute IPR on only some of the claims and only some of the proposed grounds, particularly given the Board’s statutory obligation to complete proceedings in a timely and efficient manner.”

The CAFC next addressed Shaw’s request that it issue a writ of mandamus instructing the PTO to reevaluate its redundancy decision and to institute IPR on the redundant grounds. In support of its request for the writ of mandamus, Shaw argued that it may be estopped from raising the redundant grounds in future proceedings.

The CAFC was not persuaded and held that Shaw was not estopped from raising the redundant grounds either in the USPTO or in the courts. The CAFC explained that an “IPR does not begin until it is instituted.” As such, the arguments regarding the redundant claims were not raised during the IPR proceeding and hence are not subject to the estoppel provisions of Section 315 (e).

New Final Rules for Post-Grant Proceedings Published by USPTO on April Fools Day

By Tom Engellenner
The USPTO has gone ahead and finalized new rules for post-grant proceedings under the America Invents Act (AIA) – despite heavy criticism that the rules do little to alter the lopsided nature of these proceedings. The new rules were published at 81 FR 18750 on April 1, 2016 and go into effect on May 2, 2016.

Technically this “final rulemaking” amends various portions of 37 C.F.R. 42, the rules that govern post-grant proceedings under the AIA, including inter partes review (IPR), covered business method review (CBM), and post-grant review (PGR).

Perhaps the most significant change is that under the new rules the patent owner will be able to submit testimonial evidence, such as an expert declaration, as part of a patent owner’s preliminary response to a patent challenge before the Patent Trial and Appeal Board (PTAB) decides to institute an IPR, CBM, or PGR trial. (Under the existing rules, the Patent Owner usually cannot present testimonial evidence until after the institution decision and the PTAB makes its decision to institute trial after hearing only one side of the story, e.g., from the petitioner’s expert.)

However, 37 CFR 42.108(c) has been revised such that if the patent owner presents testimonial evidence as part of a preliminary response, any “genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute an inter partes review.” An analogous new rule in 37 CFR 42.208(c) for a post grant review has also been finalized. Under the new rules petitioners may also seek leave to file a reply to any preliminary response filed by the patent owner.

These changes beg the questions: what do the patent owners have left to say after institution if their experts’ opinions have already been considered and found unpersuasive, and will the PTAB judges ever change their minds during trials when the petitioner’s evidence is not viewed in its most favorable light? Continue reading “New Final Rules for Post-Grant Proceedings Published by USPTO on April Fools Day”