Monday, December 07, 2015

IPR amendments discussed in PROLITEC, INC v. Scentair

The majority noted:

In Proxyconn, we affirmed the Board’s denial of the
patentee’s motion to amend because it failed to show that
its proposed substitute claims were patentable over “prior
art of record”—namely, a reference that the Board used
as grounds for instituting review of claims other than
those sought to be amended. 789 F.3d at 1303–08. We
explained that the Board’s interpretation of its regulations
in denying the proposed amendment was reasonable
under the particular circumstances in Proxyconn and was
consistent with the United States Patent and Trademark
Office’s (“PTO’s”) position expressed in the Board’s informative
decision in Idle Free Systems, Inc. v. Bergstrom,
Inc., IPR2012–00027, 2013 WL 5947697 (PTAB June 11,
2013). Proxyconn, 789 F.3d at 1307. However, we expressly
declined to decide in Proxyconn whether the PTO’s
additional guidance about the patentee’s burden in Idle
Free also constituted a permissible interpretation of the
PTO’s regulations. Id. at 1307 n.4. Following our Proxyconn
decision, the Board issued a “representative decision”
providing further guidance on the patentee’s burden
on a motion to amend. See MasterImage 3D, Inc. v. RealD
Inc., IPR2015-00040 (PTAB July 15, 2015). In particular,
the Board stated, among other things, that “prior art of
record” includes “any material art in the prosecution
history of the patent.” Id. at 2.

We conclude that the PTO’s approach is a reasonable
one at least in a case, like this one, in which the Board’s
denial of the motion to amend rested on a merits assessment
of the entire record developed on the motion, not
just on the initial motion itself. The Board’s position—
that the patentee’s burden on a motion to amend includes
the burden to show patentability over prior art from the
patent’s original prosecution history—is not in conflict
with any statute or regulation. Moreover, it is not unreasonable
to require the patentee to meet this burden

Judge Newman, in dissent,

That statutory prescription applies whether the “proposition
of unpatentability” is for amended or unamended
claims. However, the PTAB disregards this statutory
requirement by placing on the patentee the burden of
proving patentability for a proposed amended claim. The
PTAB so held in Idle Free Systems, Inc. v. Bergstrom, Inc.,
109 U.S.P.Q.2d 1443, 1459 (PTAB Jan. 7, 2014) (“The
burden is not on the petitioner to show unpatentability [of
amended claims], but is on the patent owner to show
patentable distinction over the prior art of record and also
prior art known to the patent owner.”) (citing Idle Free,
Decision on Motion to Amend Claims, § 42.121 at 7,
IPR2012-00027 (PTAB June 11, 2013), Paper No. 26)
(emphasis omitted)).

The America Invents Act does not authorize or suggest
such a shift in the statutory burden. The PTO, in its
Intervenor’s brief, invokes the practice of district court
litigation and argues that if the patentee files a motion, it
bears the burden of establishing entitlement to grant of
the motion. However, this generalization is inapplicable
when there are explicit statutory burdens that set a
different standard.
The Act requires the PTAB to analyze the patentability
of “any new claim added under section 316(d),” 35
U.S.C. § 318(a), again reflecting the statutory directive
that the new claim should be added, provided that it
qualifies under the statute. The PTAB then determines
patentability of the added claim in accordance with the
statutory burdens. The statute places the burden of
proving invalidity (unpatentability) on the petitioner. As
explained by Senator Kyl, “inter partes reexamination is
converted into an adjudicative proceeding in which the
petitioner, rather than the Office, bears the burden of
showing unpatentability.” 137 Cong. Rec. S1360, S1375
(daily ed. Mar. 8, 2011). The Act makes no distinction
between original and amended claims in inter partes
My colleagues on this panel depart from the statute in
removing from the petitioner the burden of showing
unpatentability of amended claims.


However, the PTAB reviewed the claims
under the broadest reasonable construction standard, and
this court reviewed the PTAB decision under the highly
deferential substantial evidence standard. With deferential
review an incorrect PTAB decision is less likely to be
corrected on appeal, contrary to the purpose of the America
Invents Act to achieve correct determinations of patentability.

The substantial evidence standard is inappropriate in
this context. There is no requirement that every administrative
decision on every subject must receive deferential
review. The standard of review should be attuned to the
circumstances. When the America Invents Act assigned
to the PTAB the preponderance of the evidence standard
for these post-grant procedures, it became inappropriate
for the PTAB to give deference to the PTO’s prior ruling
granting the patent.


**UPDATE. Comment at PatentlyO

RE PM text — Thus claim amendments are usually NOT proposed in IPRs, as demonstrated by the paucity of prior Fed. Cir. appeals from IPRs on that issue before now among the numerous other IPR appeals.
Patent owners do not even usually have an incentive to propose amendments even to cure their claim ambiguities, since claim ambiguity can get the IPR proceeding terminated without any adverse 102 or 103 decision, to the advantage of the patent owner. —

Judge Newman in Cuozzo: There is no right of amendment in these new post-grant proceedings, and motions to amend are rarely granted.1
Note 1: See Andrew Williams, PTAB Update – The Board Grants Its Second Motion to Amend (At Least in Part), PATENT DOCS (Jan. 8, 2015), link to 2015/01/ptab-update-the-board-grants-its-second-motionto-amend-at-least-in-part.html; see also Jennifer E. Hoekel, PTAB Grants First Opposed Motion to Amend Claims-Patent Trial and Appeal Board, THE NATIONAL LAW REVIEW (January 14, 2015), link to

Is Judge Newman right, or wrong? Are patentees moving to amend? How frequently? What percentage of such motions are granted?


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