CAFC Faults Treatment of Motion to Amend

Last week, the Federal Circuit remanded an Inter Partes Review (IPR) appeal from the Patent Trial & Appeal Board (PTAB) so that Patentee's motion to amend could be reconsidered. In the decision, the Court faulted the Board for applying a strict view of the Idle Freerequirements (softened by the PTAB after this decision in Masterimage). Additionally, the Court found the Board's analysis lacking as to the patentable distinctiveness of substitute claims. Nike, Inc. v. Adidas AG 14-1542 (here)

While the Appellant-Patentee also sought to unravel the requirement to demonstrate patentability in a PTAB motion to amend, the Court maintained its course as established in Microsoft Corp. v. Proxyconn, Inc.  While far from an eventful remand, the Court's mandate publicly demonstrates the corrective evolution of PTAB amendment practice. Decisions such as this will no doubt serve as data points in the Cuozzo appeal to the Supreme Court.

Specifically, the Court explained:

The PTO further explained that, although the Board’s denial of Nike’s motion to amend was based on a reasonable reading of Idle Free, given the clarification in MasterImage 3D, the PTO acknowledged that the Board “read Idle Free too aggressively in this decision.”

We agree with the PTO. At the heart of Idle Free, as interpreted by MasterImage 3D, is the question of whether the patent owner has submitted the necessary information to comply with its duty of candor to the office. In this case, there is not, and there has never been, an allegation that Nike violated its duty of candor. Moreover, the PTO acknowledged that Nike’s statement about the substitute claims’ patentability over prior art not of record but known to Nike would satisfy the obligation as explained in MasterImage 3D.

(internal citations omitted)

Going forward, it seems the Board will have to accept a simple certification from Patentee's attorney as to this aspect of the Idle Free requirements. 

As to the distinctiveness of multiple substitute claims, the Court explained:

The Board explained that, under Idle Free, whether both claim 48 and claim 49 could be substituted for original claim 19 depended on whether those claims were patentably distinct from each other. Despite recognizing this standard, the Board proceeded to compare the limitations in each of these claims to the prior art.  .    .    .    .    .The Board then concluded that Nike had not demonstrated “that claims 48 and 49 are patentably distinct from each other.”     .      .       .

      We agree with Nike that, despite correctly reciting the Idle Free standard that multiple substitute claims are permissible if they are patentably distinct from each other, the Board nevertheless did not engage in any such analysis .    .    .

(internal citations omitted)

That is, while the claims may very well be indistinct, that determination needs to flow from a comparison of the claims to each other.

On remand, the Board will focus on the substitute claims as they compare to the art of record, which Appellee argued demonstrates unpatentability in any event. The Court declined to reach these issues.