October 4, 2017
Earlier today, the Federal Circuit issued a major en banc decision in Aqua Products, Inc. v. Matal. The case concerns whether the Patent Trial and Appeal Board (PTAB) may require a patentee seeking to enter a claim amendment in a post-issuance review proceeding (such as an inter partes review proceeding) to prove that the amended claims are patentable. Although the AIA implementing statutes permit patentees to make amendments to the claims of a patent under review, in practice, patentees have found this very difficult because of the high burden of proof imposed by the PTAB.
Today, in a series of deeply divided opinions, the en banc court entered the following narrow holdings:
(1) The PTO has not adopted a rule placing the burden of persuasion with respect to the patentability of amended claims on the patent owner that is entitled to deference; and (2) in the absence of anything that might be entitled deference, the PTO may not place that burden on the patentee.
The PTAB must follow this guidance in “all pending IPRs” for the time being.
During the course of an IPR proceeding, the patentee, Aqua, moved to amend the claims of its patent. The PTAB denied Aqua’s motion to amend, concluding that Aqua had failed to prove that the substitute claims were patentable. Aqua appealed, arguing that it did not, in fact, bear the burden of proving the patentability of its proposed substitute claims. After an earlier panel decision adverse to Aqua, the Federal Circuit took up the case for en banc review.
The case addressed the seemingly simple question of whether the patentee bears the burden of proof, or whether the petitioner bears the burden of proving that the claim amendment should not be entered. Despite the apparent simplicity of this question, the court generated five opinions, spanning nearly 150 pages in total. It appears from the language of the opinions that the question at issue generated a substantial internal dispute at the Federal Circuit. The majority opinion stated that the process of resolving the case “has not been easy” and was “frustrating.”
Ultimately, the court concluded that the PTAB must assess the patentability of proposed substitute claims without placing the burden of persuasion on the patent owner, and must follow the same practice in “all pending IPRs” unless and until the USPTO director engages in rulemaking procedures under the Administrative Procedures Act. Should the USPTO adopt new rules, the Federal Circuit might then address whether such rules are valid.
We expect this decision to have a major impact on IPR proceedings going forward. Patentees ostensibly will have much more leeway to enter claim amendments and, perhaps, to salvage patents that might otherwise be lost completely upon post-issuance review.
For more information, please contact Fitch Even partner Allen E. Hoover, author of this alert, or any member of Fitch Even’s preeminent post-issuance team.
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