October 4, 2017

Aqua Products: Amendments in IPR Proceedings Come Roaring to the Forefront

By Matthew L. Cutler, Principal

Have you noticed the momentum of Federal Circuit decisions trending against the PTAB and petitioners?  If not, today’s long-anticipated decision in the Aqua Products case will change your thinking.  Albeit in a self-described “narrow” ruling, the rules for amending patent claims in post-grant review proceedings just took a sharp turn towards patent owners.  The Federal Circuit reversed the Board’s practice on motions to amend, finding that it is the petitioner — not the patent owner — who bears the burden of persuasion regarding the patentability of proposed substitute claims presented in a motion to amend.

The Court’s detailed, 66-page opinion (accompanied by 4 additional concurring and dissenting opinions) provides a detailed analysis of the history of motions to amend and the burden of persuasion that applies in IPR proceedings.  Further, the Court provides a detailed analysis of the deference (or lack thereof) that is required by Chevron.

Despite the dozens of pages of analysis, Judge O’Malley provides a concise summary of the Court’s holding:

As frustrating as it is for all who put so much thought and effort into this matter, very little said over the course of the many pages that form the five opinions in this case has precedential weight.  The only legal conclusions that support and define the judgment of the court are: (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. All the rest of our cogitations, whatever label we have placed on them, are just that — cogitations. Order at 65-66.

So where do we go from here?  Patent Owners will still be required to establish the basic requirements of 35 U.S.C. § 316(d); that is, that the amended claims are non-broadening, supported by the specification, and responsive to a ground already at issue in the IPR.  From there, petitioner must act fast to obtain expert testimony, new art, and/or persuasive arguments to meet its burden of proving that the substitute claims are not patentable.  In the end, the PTAB has the job of weighing the totality of the record before it to determine if the petitioner has met its burden of proving the substitute claims are unpatentable.

But, we may not have seen the end of the battle on motions to amend.  Judge O’Malley’s opinion also makes clear that a new rule, shifting the burden of persuasion to the patent owner, may be implemented, but only after engaging in a notice and comment rule-making.  “At that point, the court will be tasked with determining whether any practice so adopted is valid.”  Order at 66.

Stay tuned: the PTAB has issued other opinions that can be argued to be rule-making by a PTAB panel (like the motion to amend rules from Idle Free that were addressed in Aqua Products).  Practitioners will be on the lookout for ways to replicate the Aqua Products formula and require a more thorough notice and comment procedure for the finer details of IPR practice.