Addressing the standard for granting a motion to amend claims in inter partes review (IPR), the US Court of Appeals for the Federal Circuit rejected a conclusion by the Patent Trial and Appeal Board (PTAB or Board) that the patent owner must show that newly added claim features were not independently known in the prior art. Veritas Techs. LLC v. Veeam Software Corp., Case No. 15-1894 (Fed. Cir., Aug. 30, 2016) (Taranto, J).
The patent at issue relates to computer systems and methods for performing restores from backups while applications are active and accessing the data being restored. Veeam challenged the claims of the patent in an IPR and argued that the claims were invalid as being obvious in view of a combination of prior art references. The primary reference disclosed a block-level restoration system that uses two channels to provide an application on-demand access to lost data blocks while the lost data blocks are being restored.
After the PTAB instituted trial, Veritas filed a conditional motion to add two new claims if the PTAB found the existing claims to be unpatentable. Veritas argued that the new claims recited more expressly what Veritas was urging as the proper construction of the existing claims. In particular, the new claims related to a “file-level” data restoration, rather than a broader “block-level” restoration, as recited in the existing claims. Veritas argued that the newly added features specific to “file-level” restoration, in combination with other known features, were not in the prior art.
Applying the broadest reasonable interpretation standard, the PTAB declined Veritas’s proposed claim construction and canceled the existing claims upon finding them to be obvious in view of the prior art. The PTAB also denied Veritas’s motion to amend, stating that Veritas had failed to address whether each newly added feature in each proposed claim, as distinct from the claimed combination of features, was independently known in the prior art. Veritas appealed.
On appeal, the Federal Circuit affirmed the PTAB’s claim construction and finding that the existing claims were obvious. However, the Court vacated the PTAB’s denial of the motion to amend, stating that it was arbitrary and capricious in requiring Veritas to show that the newly added features were not separately known in the prior art. The Court noted that novel and non-obvious inventions often are only a combination of known individual features. Thus, the failure to show that the newly added features were not independently known should not have been fatal to the motion to amend. The case was remanded.
Practice Note: The Federal Circuit noted that the PTAB’s rationale was erroneous independent of any resolution of the pending en banc proceeding in In re: Aqua Products (IP Update, Vol. 19, No. 8). Going forward, when claim amendments are proposed in an IPR, patent owners and petitioners should focus non-obviousness and obviousness arguments on the proposed combination of claim features, rather than solely on the newly added features.