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...
