Legal Alert: Federal Circuit Faults PTO's Approach to Claim Amendments During IPR, But Allows PTO to Try to Fix the Problem


The Federal Circuit yesterday issued a long-anticipated decision in Aqua Products v. Matal (No. 2015-1177, formerly In re Aqua Products), that addressed the “proper allocation of the burden of proof when amended claims are proffered during inter partes review proceedings.” The Federal Circuit vacated the Board’s decision that denied the patentee’s motion to amend, but did little to resolve the big questions surrounding the Board’s treatment of motions to amend. Five different judges weighed in on the question, without any opinion drawing a majority. Thus, the “holding” of the case is the narrowest reasoning necessary to support the judgment–namely, that “(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.” Slip. Op. at 66. So as things stand right now, the PTO may not place the burden on the patentee to prove the patentability of amended claims, but the PTO may engage in notice and comment rulemaking to do so, at which time “the court will be tasked with determining whether any practice so adopted is valid.” Id.

The order granting en banc review raised two specific issues. The first involved the intersection of two different AIA provisions. The first provision requires that “[i]n an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.” 35 U.S.C. § 316(e). The patent owner in Aqua contended that this provision unambiguously required the petitioner to prove the unpatentability of amended claims. The other provision provides that “[d]uring an inter partes review instituted under this chapter, the patent owner may file 1 motion to amend the patent…” 35 U.S.C. § 316(d)(1). The PTO contended that this provision unambiguously placed the burden of proving the patentability of proposed amended claims on the patent owner or, in the alternative, was sufficiently ambiguous so as to allow the PTO to promulgate a regulation requiring as much under its authority to “set[] forth standards and procedures for allowing the patent owner to move to amend the patent.” 35 U.S.C. § 316(a)(9). The majority of judges appear to agree that the statute is ambiguous, but that majority was unable to agree on an outcome, with some concurring in the result (vacating the Board’s decision) and others dissenting.

Most of the judges did not address the second issue from the en banc order, which asked whether the Board may sua sponte challenge the patentability of a proposed amended claim when the petitioner fails to do so. The court declined to answer this question and “reserved [it] for another day.” Slip Op. at 61.

In short, as Judge O’Malley’s opinion announcing the judgment noted, “very little said over the course of the many pages that form the five opinions in the case has precedential weight.” However, this does not mean that these pages have no value–the various opinions provide important insight into deep-seated disagreement on the Federal Circuit as to whether the PTO should receive deference on its interpretation of the AIA, and the relationship between the PTO’s use of a different claim construction standard during IPRs (BRI) and the ability to amend claims during IPR. (As readers will remember, the Federal Circuit and the PTO justified the use of BRI specifically because patentees were at least theoretically able to amend claims, but the Board had only granted eight motions to amend in post-issuance review proceedings as of a 2017 study cited in the opinions). The opinions in this case show frustration reminiscent of the Court’s last contentious en banc decision in Apple v. Samsung. Whether the Court will continue to remain fractured on en banc cases is an open question. But what is sure is that we will see these issues again on review of future decisions on post-grant orders, whether or not the PTO takes the Federal Circuit up on its invitation to issue new rules.