Federal Circuit Gives Life to Patent Claim Amendment Strategies in Inter Partes Review

Robert M. Asher

By Robert Asher. Chair of our Patent Office Litigation Group

October 2017 IP Update

Inter partes review (“IPR”) has become the forum of choice for challenging the validity of patent claims. Introduced in 2012 as part of the America Invents Act, this proceeding is conducted by a panel of judges from the Patent Trial and Appeal Board (PTAB), which in turn is an administrative law body of the U.S. Patent and Trademark Office (PTO).

A petitioner presents prior art patents or publications that anticipate or make obvious a patent claim as issued. If the patent owner is unable to adequately distinguish the invention as defined by the language of the patent claim, that owner may move to amend the claim. If the amended claim language satisfies the judges, the patent can survive with newly issued but narrowed coverage defined by the amended claim.

As of April 30, 2016, the PTAB had completely denied 112 of 118 motions to amend in IPRs. Patent owners seeking to amend have clearly faced significant burdens and limitations imposed by the PTAB. Despite this history, we can expect to see an increase in motions to amend claims during inter partes review proceedings as a result of a recent en banc Federal Circuit decision. (The same is true for the less frequently filed post-grant reviews and covered business method reviews).

In Aqua Products v. Matal, the court struck down the PTAB practice of imposing on the patent owner the burden of proving the patentability of amended claims. Instead, the court has placed on the petitioner the burden of proving unpatentability by a preponderance of the evidence.

While a heavy weight has been lifted from its shoulders, the patent owner must still, as the one seeking to amend, meet certain responsibilities, the precise scope of which is not entirely clear.  At a minimum, the court requires in compliance with 35 USC §316(d)(3), the patent owner to show that the claim amendment does not enlarge the scope of any claims or add new matter. While they did not explicit say so, a majority of judges on the court seem open to the PTAB’s requiring a patent owner who seeks to amend a claim to demonstrate a patentable distinction over the unpatentability grounds set forth in the petition.

Bringing a motion to amend will be much easier than in the past because the patent owner is now free in its motion from having to show patentable distinctions over a wide variety of prior art, including any material art in the patent’s prosecution history, or of record in other proceedings before the PTO involving the patent, or that the patent owner makes of record in the current proceeding pursuant to its duty of candor and good faith.

The amendment process will be further eased if the patent owner is able to rely on arguments set forth in its Patent Owner Response (“POR”). Judge O’Malley and the four judges who signed on to her opinion believe it is fairly uncontroversial that a motion to amend must be decided on consideration of the entirety of the IPR record. Assuming this becomes PTAB practice, the patent owner may not need to cram all its supporting evidence into the 25 pages allotted for a motion to amend.

Relieved from distinguishing over countless pieces of prior art and authorized to rely on the arguments and evidence presented in the POR, patent owners will be much better able to adequately argue for  amended claims within the 25 pages. This may enable them to propose additional amended claims which they previously could not present because of lack of space in the pages permitted for their motion.

Petitioners are well advised to consider the potential for amendments to the claims of a patent before filing an IPR petition. Given that the time to respond to a motion to amend will likely be less than three months, it will be useful to get a jump on searching out prior art and excerpts from the art for use against such an amendment should it be presented.

If a patent owner succeeds in amending its claim, it may later urge in court or in the PTO that the petitioner should be estopped from raising challenges it reasonably could have raised during the IPR. The estoppel provisions state “[t]he petitioner in an inter partes review of a claim in a patent…may not assert…that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during the inter partes review.” 35 USC §315(e).

Since the amended claim is not “in a patent” at any time during the IPR, it does not appear to fall within the language of the estoppel section. This statute has not been judicially interpreted, however, so a petitioner should be prepared for the possibility that estoppel will be asserted against its later court or PTO challenge to the amended claim.  To ward off such an assertion, the petitioner should seek to make clear the limitations that were imposed on its opportunity to be heard on the unpatentability of the amended claim during the inter partes review proceeding.

For example, the petitioner should be sure to ask the PTAB for enough time and enough pages to respond to the amended claim, and an opportunity to obtain expert analysis, testing, testimony and cross-examination. To the extent the PTAB limits one’s ability to make out its full case for unpatentability of an amended claim; a court will be more readily persuaded not to apply estoppel.

As for patent owners, the first priority in an IPR is to overcome the asserted grounds and maintain the original claims. The original claims may be effective against past infringement, but amended claims will not be enforceable until issued. The petitioner will oppose the amended claims during the IPR and may also file an appeal, further complicating and delaying issuance of amended claims.

To avoid this quagmire, a patent owner can artfully make use of a continuation application. A continuation application seeks patent claims additional to those in the parent patent while benefiting from the earlier patent’s priority date. A patent owner will generally prefer to seek new and amended claims in continuation patent applications when such an application is pending. A continuation application is prosecuted without the involvement of the patent challenger. Instead, it is prosecuted and negotiated with a patent examiner.

The new and amended claims in a continuation application can be effective shortly after approval by the examiner. But patent owners don’t always take the precaution of having a continuation application ready at hand, in which case amending claims during the IPR may be the best available course of action.

Without a pending continuation application, patent owners, post-Aqua Products, should consider filing contingent motions to amend during an inter partes review. This type of motion is generally contingent upon the original claim being invalidated. The amendment process is relatively short, giving the petitioner a limited opportunity to respond with prior art and argument. If the amended claim issues, even if estoppel is not available to ward off later challenges, the success against petitioner before the expert patent agency can be expected to have a positive influence in court.

A motion to amend can seek to provide a substitute claim for any of the challenged claims in the patent. With the burden of proving patentability over countless prior art references lifted from the patent owner’s shoulders, the patent owner can adopt a strategy that takes advantage of several different approaches to amending a number of the claims.

Aqua Products thus opens up a world of opportunity for the patent owner, but the opportunity does not come without its own share of hardships. The patent owner will need to demonstrate support for the amended claims in the original patent application, show that the scope of the claims has not been enlarged in any way, adequately distinguish the amended claims over the prior art asserted in the IPR, and disclose any prior art known to the patent owner that is material to any features appearing in the new or amended claims. While there is no free ride, the added flexibility for responding to an IPR is a welcome development for patent owners.

Given the hurdles that still confront the patent owner seeking to amend its claims, the PTAB is not likely to become flooded with motions to amend. Nevertheless, we will see patent owners filing the motion more frequently and more effectively than in the past. Such motions will be burdensome for the petitioner, especially considering the abbreviated time period for making out its opposition.

Within the normally allotted three-month period, the petitioner may need to search for prior art and develop and write up its case for unpatentability of the amended claims, while in the same interval preparing and filing its reply to the Patent Owner Response regarding the original claims.

Post-grant proceedings are about to become both more complex and more expensive.