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ACI’s 3rd Annual Post-Grant PTO Proceedings
A Deep Dive Analysis into Amending
Claims in IPRs post-Aqua Products
Jason M. Dorsky
Associate
Fitzpatrick, Cella, Harper & Scinto
May 10-11, 2017
Tweeting about this conference?
Jason Murata
Counsel
Axinn, Veltrop & Harkrider LLP
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In re Aqua Products: Background
• ’183 Patent, owned by Aqua Products, Inc., relates to a self-propelled robotic pool cleaner.
• IPR Petition filed by Zodiac Pool Systems, Inc. in response to infringement lawsuit.
• Review instituted for all except two challenged claims.
• Aqua Products moved to amend, requesting that three original claims be replaced by three substitute claims.
• Substitute claims included new limitations relating to creating propulsion vector forces.
• Petitioner opposed based on various grounds (including grounds based on prior art).
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In re Aqua Products: IPR Decision
Final Written Decision (issued Aug. 22, 2014):
• All challenged claims were held unpatentable, and the motion to amend was denied.
• Board first held that the substitute claims satisfied the formal requirements of 35 U.S.C. § 316(d) regarding claim scope, and rejected Zodiac’s indefiniteness and written description arguments.
- Thus, burden of production for bringing motion was satisfied.
• The Board further held that Aqua Products failed to show that the substitute claims were patentable over the prior art of record (specifically, the combination of Henkin and Myers).
- Patent Owner failed to meet PTAB’s imposed burden of proof for proving unpatentability.
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Relevant Statutes and Regulations
35 U.S.C. § 316:
(a) Regulations. —The Director shall prescribe regulations —...
(9) setting forth standards and procedures for allowing the patent owner to move to amend …...
(e) Standards.—In an inter partes review …, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.
37 C.F.R. § 42.121(a):
(a) Motion to amend. A patent owner may file one motion to amend a patent, but only after conferring with the Board. ...
(2) Scope. A motion to amend may be denied where:
(i) The amendment does not respond to a ground of unpatentability involved in the trial; or
(ii) The amendment seeks to enlarge the scope of the claims of the patent or introduce new subject matter.
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Relevant Statutes and Regulations
35 U.S.C. § 318:
(a) FINAL WRITTEN DECISION.—If an inter partes review is instituted and not dismissed
under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with
respect to the patentability of any patent claim challenged by the petitioner and any new claim
added under section 316(d).
37 C.F.R. § 42.20 - Generally:
(c) Burden of proof. The moving party has the burden of proof to establish that it is entitled to
the requested relief.
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Relevant PTAB Authority
Idle Free Systems, Inc. v. Bergstrom, Inc.,IPR2012-00027, Paper 26:
• “For a patent owner’s motion to amend, 37 C.F.R. § 42.20(c) places the burden on the patent owner to show a patentable distinction of each proposed substitute claim over the prior art.”
• “The burden is not on the petitioner to show unpatentability, but on the patent owner to show patentable distinction over the prior art of record and also prior art known to the patent owner.”
• Requires “technical facts and reasoning … sufficient to persuade the Board that the proposed substitute claim is patentable over the prior art …”
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In re Aqua Products: Appeal
Aqua Products presented two issues on appeal:
• First issue related to the PTAB’s substantive basis for denying the motion (not the subject en banc review).
• Second issue:
“Whether the PTAB erred in interpreting 37 C.F.R. § 42.121(a)(2)(i) as placing the burden of proof on the patentee to show amended claims are not invalid, whereas the governing statute, 35 U.S.C. § 316(e), clearly places the burden of proving invalidity on the petitioner, regardless of the type of claim at issue (i.e., original or substitute).”
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In re Aqua Products: Appeal
Federal Circuit Panel Decision (issued May 25, 2016):
• Before Chief Judge Prost, Circuit Judge Reyna and Chief District Judge Stark (opinion authored by J. Reyna).
• The Panel affirmed, and held that Court precedent precludes revisiting the issue of whether the Board may require a patentee to demonstrate patentability of substitute claims over the art of record.
(citing Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (Fed. Cir. 2015), and Nike, Inc. v. Adidas AG, 812 F.3d 1326 (Fed. Cir. 2016))
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In re Aqua Products: En Banc Petition
Petition for Rehearing En Banc (filed June 6, 2016):
• Aqua Products requested rehearing en banc to address whether the Panel correctly adopted the PTAB’s burden of proof standard placing the burden on the patentee to prove patentability of substitute claims.
• Aqua Products argued that the burden cannot be placed on the patentee, because 35 USC § 316(e) already places the burden on the petitioner.
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In re Aqua Products: En Banc Petition
Order Granting Petition for En Banc Rehearing (issued August 12, 2016):
The Court limited briefing to the following questions:
(a) When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them? Which burdens are permitted under 35 U.S.C. § 316(e)?
(b) When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim? If so, where would the burden of persuasion, or a burden of production, lie?
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In re Aqua Products: Oral Argument
Oral Argument Held on December 9, 2016:
• Aqua Products argued that patent owners need only satisfy a burden of production, which simply requires meeting the formality requirements of § 316(d).
- Several judges noted issues that may arise under this interpretation (e.g., if petitioner withdraws or does not oppose)
- J. Moore noted that § 318 requires the Board to address the patentability of any new claims proposed during the proceeding.
• The USPTO argued that the petitioner’s burden of proof under § 316(e) is not applicable to motions to amend, and thus there is no conflict.
- J. Reyna seemed to find the USPTO’s position dubious, particularly regarding whether the general burden of a movant is applicable to motions to amend.
- J. O’Malley noted that a motion to amend simply adds claims to an IPR proceeding, which is akin to a burden of production (not persuasion).
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Various Issues in Play
• Does the USPTO have the authority to place the burden of proof on the Patent Owner?
- Or should Board judges only decide whether Petitioner hasproved unpatentability?
• What if Petitioner does not challenge the amended claims?
- Does the Patent Owner get a free pass?
- Does the Board have a duty to the public to become an examining body under 35 U.S.C. § 318?
• If the Board has an obligation to determine patentability, separate and apart from the burden on Petitioner, how can that be done without violating the “notice” provision of the Administrative Procedure Act (APA)?
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Other Relevant Decisions
Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016)
• Issued June 20, 2016 (submitted in a notice of supplemental authority)
• Involved dispute over proper claim construction standard in IPR proceedings
• The Supreme Court also held that a decision to institute is not appealable under 35 U.S.C. § 314(d), despite “strong presumption” favoring judicial review
SAS Institute, Inc. v. Complementsoft, LLC, 825 F.3d 1341 (Fed. Cir. 2016)
• Before JJ. Newman, Chen and Stoll; Issued June 10, 2016
• Vacated-in-part PTAB decision where the Board “change[d] theories in midstream” and applied a claim interpretation neither party advanced, in violation of the APA.
In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364 (Fed. Cir. 2016)
• Before JJ. Newman, O’Malley and Chen; Issued July 25, 2016
• Reversing PTAB decision and finding “no support” for the USPTO’s position that “the Board is free to adopt arguments on behalf of petitioners that could have been, but were not, raised by the petitioner during an IPR.”
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Motions to Amend By The Numbers –April 2016 PTAB Motion to Amend Study
DISPOSITION NUMBER PERCENT
Granted 2 1.7 %
Granted in
Part4 3.4 %
Denied 112 94.9 %
Motion to
Substitute
Claims
Total Completed Trials: 1,539
USPTO April 30, 2016 Patent Trial and Appeal Board Motion to Amend Study
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Since the April 2016 Study?
• Google Inc. v. ContentGuard Holdings, Inc.,CBM2015-00040 (Jun. 21, 2016)
• Global Tel*Link Corp. v. Securus Technologies, Inc., IPR2015-01225 (Dec. 14, 2016)
• Amerigen Pharmaceuticals Ltd. v. Shire LLC, IPR2015-02009 (Mar. 31, 2017) ?
• Cancelled instituted claims in IPR
• Amended multiply dependent claims to delete dependence on instituted claims
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Motions to Amend Are Infrequent
USPTO April 30, 2016 Patent Trial and Appeal Board Motion to Amend Study
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Motions to Amend – Pros and Cons
• Two bites at preserving patent:
• Respond to instituted grounds
• Contingent motion to amend
• Supported by expert declarations
• Rare opportunity for Patent Owner to surprise Petitioner
• Preserve appeal issue
• Intervening rights
• Petitioner can oppose amendment
• Expose claims to attacks under 35 U.S.C. §§ 101 and 112 in opposition to motion
• Impact on litigation
• Claim construction can be a moving target
PROS CONS
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Motion to Amend Exposes Claims to Other Reasons for Unpatentability
USPTO April 30, 2016 Patent Trial and Appeal Board Motion to Amend Study
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Some Alternative Strategies
• Reissue Application
• Ex Parte Reexamination
• Supplemental Examination
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Possible Outcomes and Impacts of Aqua Products
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Questions?
Jason Dorsky
FITZPATRICK, CELLA, HARPER & SCINTO
Jason Murata
AXINN, VELTROP & HARKRIDER LLP
