We previously reported the May 9, 2016, Patent Office’s study that the PTAB rarely grants motions to amend. There, we explained that patent owners rarely file motions to amend and, even when such motions are filed, the PTAB rarely grants such motions. Last week, in Google Inc. and Apple Inc., v. ContentGuard Holdings, Inc., Case CBM2015-00040, Paper 8 (PTAB June 21, 2016), the PTAB granted a Patent Owner’s motion to amend. This case is thus a rare example of the PTAB’s willingness to grant a motion to amend when the Patent Owner provides detailed arguments evidencing why a proposed, substitute claim is patentable over the “prior art known to the patent owner.”

In this case, the Patent Owner filed a Response to the PTAB’s decision instituting CBM review of claims 1, 5, and 11 of its U.S. Patent No. 7,774,280 as being anticipated by or obvious over a prior art patent to Stefik. The Patent Owner also filed a Motion to Amend, contingent upon the PTAB’s final determination that claim 1 is unpatentable, proposing to replace claim 1 with substitute claim 37:

37. (Proposed substitute for original independent claim 1) A computer-implemented method for transferring rights adapted to be associated with items from a rights supplier to a rights consumer, the method comprising:

obtaining a set of rights associated with an item of content, the set of rights including a meta-right specifying a usage right or another meta-right that can be created when the meta-right is exercised, wherein the meta-right is provided in digital form and is enforceable by a repository;

determining, by a repository, whether the rights consumer is entitled to the right specified by the meta-right; and

exercising the meta-right to create the right specified by the meta-right if the rights consumer is entitled to the right specified by the meta-right, wherein the created right includes at least one state variable based on the set of rights and used for determining a state of the created right, and wherein the meta-right is not itself a usage right because exercising the meta-right does not result in action to the content.

The Patent Owner and Petitioners’ arguments centered around the distinction between “usage rights” and “meta rights.” “Usage rights” are rights that, when exercised, result in action to the content, such as copying, playing, or transferring the content. “Meta-rights” are rights used to create, destroy, or modify usage rights but do not by themselves result in action to the content. Id. at 64-67.

The Patent Owner’s motion explained that Stefik does not disclose the amended feature (relative to claim 1) shown in underlining above because Stefik’s “Next-Set of Rights” (“NSOR”) “only appears within grammar defining a usage right and is not itself a right separate from the usage right that can be exercised without resulting in action to content.” Id. at 64. The Patent Owner’s motion next explained that a person of ordinary skill in the art would not have modified Stefik to reach proposed, substitute independent claim 37 because that person “would not have been led by the teachings of Stefik toward a system that uses meta-rights that are distinct from usage rights and are exercisable to create new rights without resulting in action to content.” Id. at 65.

In opposition, the Petitioners argued that Stefik’s NSOR is not a usage right but, nevertheless, is part of the data defining the usage right. Continuing, the Petitioners argued that exercise of Stefik’s NSOR does not itself result in action to the content, but rather “creates, destroys, or modifies usage rights,” whereas exercising the usage rights themselves does result in action to the content. Id. at 64. With respect to the Patent Owner’s argument regarding nonobviousness, a number of examples in Stefik, according to the Petitioners, suggest to one of ordinary skill in the art that “it would be desirable to manage rights at one level of a distribution scheme for the stated goal of controlling rights granted at a subsequent, downstream level of the distribution scheme”. Id. at 66.

While the USPTO’s own study has confirmed that Motions to Amend are very rarely granted during AIA proceedings, the Final written decision in Google provides evidence that such Motions are not useless. Indeed, Google, like Shinn Fu Company of America, Inc. v. The Tire Hanger Corp., IPR2015-00208, Paper 24 (April 22, 2016) which we reported on previously, demonstrates that when the Patent Owner provides detailed arguments evidencing why the proposed, substitute claim(s) is (are) patentable over the “prior art known to the patent owner,” the PTAB is willing to grant a Motion to Amend.

In its final written decision, the PTAB concluded that claims 1, 5, and 11 are unpatentable based on Stefik. The PTAB also concluded, however, that proposed claim 37 was patentable. Specifically, the PTAB concluded that the Patent Owner’s motion to amend: (1) responded to a ground involved in the Trial, (2) did not “enlarge the scope of the claims of the patent”, and (3) set forth written description support for the proposed, substitute claim, consistent with the requirements set out in 37 C.F.R. § 42.221. Further, PTAB concluded the Patent Owner satisfied its burden of demonstrating that the proposed substitute claim is patentable over the prior art—Stefik and other prior art identified by the Petitioners. Decision at 60. Specifically, the PTAB first explained that the Patent Owner had met its burden of establishing why proposed, Stefik does not anticipate proposed claim 37 :

because “the evidence of record reflects that exercising [Stefik’s] NSOR by adding, e.g., Copy and Play usage rights, to a digital work results in action to content because the content of this work is copied from one repository to another with a right to play the content … we are persuaded that ContentGuard has demonstrated sufficiently that [Stefik] does not describe ‘the meta- right is not itself a usage right because exercising the meta-right does not result in action to the content,’ which is the newly added feature in proposed, substitute independent claim 37.’’’

Id. at 65. The PTAB then explained that the Patent Owner had similarly met its burden of establishing that Stefik did not render obvious proposed claim 37:

“even if we were to assume that Stefik’s embedded transaction fee constitutes the claimed ‘meta-right’, we still do not agree … that exercising this embedded transaction fee does not result in action to content, as required by proposed, substitute independent claim 37, [because] … Stefik discloses that, if a NSOR has been provided, those rights are transferred as the rights for the new digital work. … For instance, if a distributor adds an embedded transaction fee to a digital work that provides a NSOR, exercising the NSOR by adding, e.g., Copy and Play usage rights, to a digital work still results in action to content because, once the fee is paid, the content of this new work is copied from one repository to another with a right to play the content.”

Id. at 68-69.

While the Patent Office’s study confirmed that motions to amend are rarely presented and, even when presented, rarely granted, the final written decision in this case is evidence that such motions should still be considered as part of a patent owner strategy. Indeed, like Shinn Fu Company of America, Inc. v. The Tire Hanger Corp., IPR2015-00208, Paper 24 (PTAB April 22, 2016), which we previously reported, this case demonstrates that when the Patent Owner provides detailed arguments evidencing why a proposed, substitute claim is patentable over the “prior art known to the patent owner,” the PTAB is willing to grant a motion to amend.