By Andrew Williams --
On Friday, December 9, 2016, the Federal Circuit will hear oral arguments en banc in the In re Aqua Products, Inc. case to consider two questions related to the PTAB's treatment of Motions to Amend in IPR proceedings. Specifically, the Court will be considering 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?
The briefing of the parties, Appellant (Aqua Products, Inc.) and Intervenor (the Director of the United States Patent and Trademark Office), was completed this past week. Amicus Curiae briefs were submitted by the Intellectual Property Owners Association; the Case Western Reserve University School of Law Intellectual Property Venture Clinic and The Ohio Venture Association; the Houston Intellectual Property Law Association; the American Intellectual Property Law Association; the Pharmaceutical Research and Manufacturers of America; the Biotechnology Innovation Organization (BIO); Askeladden, L.L.C.; the Internet Association, and the Computer & Communications Industry Association, Dell, Garmin, Intel, Red Hat, Samsung, SAP America, SAS Institute, the Software & Information Industry Association, Symmetry, and Vizio. In this post, we will review the amicus brief filed by BIO in support of Aqua Products.
With regard to the first question, BIO asserted that the PTO is not permitted to require a patentee to bear the burden of proving the patentability of a proposed substitute claim. Whereas the PTO can require the patentee to come forward with information related to determining whether the amendment enlarges the scope of the claims, introduces new matter, and is responsive to an instituted ground of purported invalidity, it may not require the patentee to bear the burden of proving patentability of the proposed claims. After the patentee has produced such evidence, it is the petitioner that must establish the unpatentability of the substitute claims. According to BIO, there should be no affirmative duty on the patentee to prove the patentability of a substitute claim.
With regard to the second question, BIO asserted that the PTAB's role as impartial adjudicator would be threatened if it were to begin inquiring about the "adequacy" of any petitioner opposition to substitute claims. Nevertheless, in cases where the petitioner does not oppose the substitute claims, the Board is still required to ensure that the substitute claims meet the requirements of 35 U.S.C. § 316(d) and related regulations. However, this inquiry should be limited to determining whether the proposed substitute claims is broader in scope than the originals, whether they present new matter, whether they do not respond to a ground of unpatentability, and whether written description support is lacking in the originally filed disclosure and priority documents. If the claims fail any of these inquiries, the PTAB should have the authority to deny the motion. Finally, with regard to the second element of the Court's question, BIO asserted that if the claims met the above detailed requirements, the narrowed claims should be presumptively patentable. Therefore, if there is no challenge from the petitioner, the Board's role should not extend beyond making these determinations.
The BIO amicus brief supported its argument by citing to the legislative history. In fact, BIO pointed out that the ability to amend claims was included in the statute with little debate or controversy, which suggests that the ability of the patent owner to amend its claims was "a common and otherwise unremarkable procedure that would unfold as a matter of course if not of right." Moreover, BIO pointed the Patent Office's own rulemaking to implement the new AIA post-grant proceedings, in which it used the ability to amend claims as a justification for the use of the broadest reasonable interpretation standard for claim construction.
BIO continued to argue in its amicus brief that the burden allocation utilized by the Patent Office is inconsistent with the statute. 35 U.S.C. § 316(d) allows a patentee to propose substitute claims that do not enlarge the scope and that do not introduce new matter. BIO pointed out that the next subsection, 316(e), specifies that a proposition of unpatentability in an instituted IPR must be proved by the petitioner. Of course, this subsection establishes the evidentiary standard for IPR proceedings as a whole, but it does not specifically establish a different standard for claim amendments. In fact, BIO points out that under the PTO's interpretation of this subsection, the burden will fall on the petitioner for only some propositions of unpatentability, but not for others.
BIO concluded its amicus brief by asserting that the facilitation of more amendments would advance the intended policy outcomes of the AIA. The goal of the AIA was to improve patent quality. However, the binary outcome of IPR proceedings (claims survive or are struck down) has frustrated this objective. In fact, BIO has pointed out that several proposals have been proposed to address improvements in the amendment process. Nevertheless, for the time being, BIO urged the Federal Circuit to provide guidance to establish an IPR amendment process that fulfills the intended objectives: "a facile and robust means to improve patent quality, while maintaining the integrity of the post-grant system."
Patent Docs will continue to monitor this case.
For additional information regarding this topic, please see:
• "In re Aqua Products, Inc. -- CAFC Grants Rehearing En Banc to Consider PTAB Motions to Amend," August 15, 2016