Introduction
In August of 2016, the Federal Circuit granted Aqua Products, Inc.’s (“Aqua Products”) petition for rehearing en banc on the issue of whether the patent owner bears the burden of persuasion of patentability when amending claims during inter partes review (“IPR”). The en banc opinion issued October 4, 2017, and includes five opinions totaling 148 pages. The differing views of the judges led to a narrowly tailored ruling. [1] The en banc panel reversed the prior decision, making clear that the burden of persuasion of patentability of proposed amended claims in IPR does not rest with the patent owner. Rather, the petitioner must establish that any proposed amended claims are not patentable. [2] Now, the pertinent question has shifted from who bears the burden to whether the Federal Circuit’s decision will result in an increased entrance of these proposed claim amendments.
The PTAB Decision
Zodiac Pool Systems, Inc. filed a petition to institute IPR of Aqua Product’s U.S. Patent No. 8,273,183 after a dispute arose among the parties in district court. [3] After concluding that the claims were unpatentable, the Patent Trial and Appeal Board (“PTAB”) considered Aqua Product’s motion to amend the claims under 37 C.F.R. § 42.121. [4] According to § 42.121(a)(2), the PTAB may deny the motion if the amendments: (1) seek to enlarge the scope of the claims; (2) introduce new subject matter; or (3) do not respond to a ground of unpatentability, upon which the trial was instituted. [5] Ultimately, the PTAB held that the patent owner carries the burden of establishing patentability of the amended claims over the prior art of record and of other prior art known to the patent owner. [6]
According to the PTAB, the requirement of any movant was two-fold: first, the patent owner must have demonstrated that the amendments narrow the scope of the original claims in a manner supported by the specification; and second, the patent owner must have actively demonstrated patentability over the “prior art of record and also other prior art known to the [p]atent [o]wner.” [7]
Aqua Products accomplished the first requirement by adding limitations that, inter alia, “control” the movement of the device rather than “enable” it and narrow the array of acute angles in which the controlling force is directed. [8] In addition to proposing these narrower amendments, [9] the PTAB suggested that Aqua Products was required to undergo a patentability analysis against the asserted prior art or any prior art known by the patent owner. [10] Aqua Products provided amended claims with multiple new limitations, yet when arguing for the patentability of the new claims, Aqua Products only provided arguments for one limitation — the “vector limitation.” According to the PTAB, Aqua Products failed to prove patentability when it merely asserted that the prior art does not “suggest or otherwise provide a person with ordinary skill in the art with any reason” to direct the vector forces in such in a way as claimed by the proposed amendments — namely “to direct the resultant force vector proximate to and rearwardly displaced from a line passing through the transverse axial mountings of the front rotationally-mounted supports.” [11] Aqua Products did not make any other arguments regarding any of the other limitations. The PTAB repeatedly chastised Aqua Products for failing to provide a claim construction for the amended claims. [12] In the final written decision, the PTAB found that the combination of prior art rendered the new “vector limitation” obvious. [13] The PTAB dismissed the other new limitations, without analysis or evidence, as being within the ordinary skill in the art. Aqua Products sought an appeal of the decision to the Federal Circuit.
The Federal Circuit Panel Decision
On appeal, Aqua Products argued that the PTAB standard requiring the patentee to demonstrate that an amended claim is patentable over the art of record is unsupported by statute. Further, Aqua Products argued that the PTAB abused its discretion by denying the motion to amend without considering all of the new limitations and the objective indicia of non-obviousness. [14] The Federal Circuit observed that according to the America Invents Act, a patent holder may file a motion to amend during IPR under 35 U.S.C. § 316 provided the amendments do not enlarge the scope of the claims or introduce new subject matter. However, § 318 states that a final written decision must address any new claim “determined to be patentable.” [15] This gave rise to the framework of 37 C.F.R. § 42.121, stating that a motion to amend may be denied if it does not “respond to a ground of patentability involved in the trial.” [16]
According to the Federal Circuit, the PTAB requires the movant to carry the burden of any motion. [17] Thus, because of the posture of a motion to amend the claims during IPR, the patent owner will inherently carry this burden. The Federal Circuit cited previous Federal Circuit cases on this same issue to uphold this requirement, while also noting that it is generally the petitioner’s burden to prove unpatentability during IPR. [18] Next, the Federal Circuit considered whether the PTAB abused its discretion by failing to take into account indicia of non-obviousness and various new limitations in the proposed claims, even though Aqua Products only presented arguments concerning the vector limitation. [19] Aqua Products argued that the PTAB was “on notice” of its arguments with respect to all the limitations added to the amended claims. [20] Aqua Products also pointed to the arguments made during the main proceedings, contending that these arguments should also be considered in the context of the amended claims. However, because Aqua Products failed to raise these arguments in the four corners of the motion to amend, the Federal Circuit agreed that the PTAB was under no obligation to consider them. On these bases, the Federal circuit found no abuse of discretion.
The Federal Circuit En Banc Reversal
The Federal Circuit decided in an en banc rehearing of the anticipated Aqua Products case that the proper interpretation of 35 U.S.C. § 316(d) and (e) requires the petitioner to prove all propositions of unpatentability, including for amended claims. [21] Further, the en banc panel determined that the PTAB must consider the entirety of the record when assessing the patentability of amended claims under 318(a), not merely the face of a motion to amend. [22]
In a 6–5 vote, the en banc panel decided that § 316(e) is ambiguous and undertook an analysis of what deference, if any, should be afforded to any proposed PTAB rules regarding the standard to amend. The Federal Circuit determined that no proposed rule had been adopted by the PTAB regarding the burden of persuasion of proposed amended claims; accordingly, there was no deference to be given. [23]
During the Federal Circuit appeal, Aqua...
