At first glance, the America Invents Act ("AIA") appears to grant a Patentee a statutory right to amend the claims being challenged during inter partes review ("IPR").[1]  Indeed, the U.S. Patent and Trademark Office ("PTO") promulgated such a regulation in 37 C.F.R. § 42.121, which provides that "[a] patent owner may file one motion to amend a patent, but only after conferring with the Board."  It would seem, then, that the Patentee may file one motion to amend as a matter of right, although with some important restrictions - most notably "[a] motion to amend may be denied where: (i) the amendment does not respond to a ground of unpatentability involved in the trial; or (ii) the amendment seeks to enlarge the scope of the claims of the patent or introduce new subject matter."  (37 C.F.R. § 42.121, emphasis added.)  Because IPR's are a contested proceeding, from the outset one could easily imagine that amending challenged claims during an IPR was never going to be a simple matter.  However, the surprise has not been the opposing party's opposition to granting the motion, but rather the Board's general reluctance to even consider such motions.

Since the inception of IPR practice on September 16, 2012[2], the Patent Trial and Appeals Board ("PTAB") and the Court of Appeals for the Federal Circuit ("CAFC") have continued to restrict the Patentee's ability to amend challenged claims.  The decision by the CAFC affirming the PTAB's decision in Prolitec, Inc. v. ScentAir Technologies, Inc. ("Prolitec") is the latest addition to the ever-growing list of restrictions. [3]

The ultimate issue during the Prolitec appeal was whether a proposed amendment to the claims of U.S. Patent No. 7,712,683 (the "'683 Patent"), owned by Prolitec, Inc. ("Prolitec") must overcome prior art submitted during an IPR, or must overcome all prior art of record during prosecution of the '683 Patent.  Interestingly, this issue was brought to light due to the use of the term "may" in the specification of the '683 Patent as it relates to the rejected claims.  A dispute over claim construction ultimately led to the need for Prolitec to amend the challenged claims.  However, before turning to the issue of amending the challenged claims during an IPR, the court reviewed whether the challenged claims of the '683 Patent were anticipated by PCT Application No. WO2004/080604A2 to Benalikhoudja ("Benalikhoudja"), or in the alternative, obvious over Benalikhoudja in view of U.S. Patent No. 7,131,603 to Sakaida ("Sakaida").

The court ultimately affirmed the PTAB's claim construction regarding the term "mounted" used in the context of 'a diffusion head mounted to the reservoir.' " (See Slip Op. at 5, citing the '683 Patent at col. 16 ll. 1, 35.)  Prolitec argued that "mounted" should mean "permanently joined" and that " '[t]he very purpose of the '683 patent' [is] to provide a 'disposable cartridge for one time use.' " (Slip Op. at 5, citing Appellant's Br. 31-34.)  The court, however, noted that the specification of the '683 Patent uses the term "may" to describe aspects of the invention.  The court further noted that the specification states that " ' [i]t is also anticipated that all of cartridge 104 may be made of a biodegradable material, as it may be desirable that the cartridge is configured to be used only one time before being discarded.' "  (Slip Op. at 5, citing the '683 Patent at col. 11, ll. 6-9, emphasis in original.)  Further still, the court noted that "the key passage in the '683 patent relied upon by Prolitec states that 'head assembly 604 and reservoir 602 may be jointed to each other by heat or ultrasonic welding spin welding, or by use of an adhesive."  (Slip Op. at 6, quoting the '683 Patent at col. 13, ll. 31-33, emphasis in original.)

Indeed, the use of the non-limiting term "may" does not foreclose other, non-permanent, means for affixing the diffusion head to the reservoir.  However, this terminology, without further limiting language in the claims, leaves the claim unduly broad in view of the prior art.  Thus, the court affirmed the PTAB in that the challenged claims of the '683 Patent were anticipated by Benalikhoudja.[4]  (See e.g., Slip Op. at 12.)  Due to this result, the court did not reach the question of obviousness with respect to Benalikhoudja and Sakaida. (See e.g., Slip Op. at 12.)

Next, the court considered Prolitec's appeal of its motion to amend the '683 Patent to substitute 'permanently joined' for the term 'mounted' in claim 1.  ScentAir, Inc. ("ScentAir") opposed the motion and "asserted that a patent by Allred cited during the original prosecution of the '683 patent teaches permanently joining of a diffusion device."  (Slip Op. at 13.)  The PTAB ultimately denied the motion, "finding that Prolitec failed to demonstrate that the proposed claim 'is patentable over, for example, Benalikhoudja in view of Allred."  (Slip Op. at 13, citing Board Decision at 30.)

The court initially tackled the issue of whether the Patentee bears the burden of proving patentability of proposed claim amendments during an IPR.  This issue was essentially resolved by Microsoft Corp. v. Proxyconn, Inc.,[5] ("Proxyconn"), decided by the CAFC shortly after the present appeal, which affirmed the PTAB's "denial of the patentee's motion to amend because it failed to show that its proposed substitute claims were patentable over 'prior art of record' - namely, a reference that the Board used as grounds for instituting review of claims other than those sought to be amended.  (Slip Op. at 14, citing 789 F.3d at 1303-08, emphasis in original.)

However, the court noted that the issue of "whether the PTO's additional guidance about the patentee's burden in Idle Free[6] also constituted a permissible interpretation of the PTO's regulations" was not reached in Proxyconn.  (Slip Op. at 14, citing 789 F.3d at 1307 n. 4.)  Subsequent to the Proxyconn decision, the PTAB issued further guidance on the Patentee's burden on a motion to amend in MasterImage 3D, Inc. v. RealD Inc.[7] (MasterImage), wherein the PTAB stated that "prior art of record" includes "any material art in the prosecution history of the patent."  (MasterImage at 2.)

After review, the court concluded that "the PTO's approach is a reasonable one at least in a case, like this one, in which the Board's denial of the motion to amend rested on a merits assessment of the entire record developed on the motion, not just on the initial motion itself."  Indeed, the court notes that "[t]he prior art references cited in the original patent's prosecution history often will be the closest prior art and will already have been reviewed by the patentee.  Evaluating the substitute claims in light of this prior art helps to effectuate the purpose of IPRs to 'improve patent quality and limit unnecessary and counterproductive litigation costs.' "  (Slip Op. at 14-15, citing Proxyconn, 789 F.3d at 1308.)

In view of the newly defined burden imposed upon Prolitec, and a new definition of what constitutes prior art during a determination of whether to enter a motion to amend, the court noted that "Prolitec simply failed to support adequately its assertion of patentability over Allred (cited in the prosecution history) and Benalikhoudja (the key IPR prior art), even after ScentAir had called attention to Allred in opposing the motion to amend."  (Slip Op. at 15-16, citing Board Decision at 29.)  Indeed, "Prolitec ... conceded that Allred teaches the very element of 'permanently joined' that Prolitec was seeking to add."  (Slip Op. at 16, citing Board Decision at 29-30.)  Therefore, the court ultimately affirmed the PTAB's decision to deny the motion to amend.

Judge Newman dissented, defending the Patentee's statutory right to enter a compliant amendment, stating that "entry of a compliant amendment is of statutory right, and patentability of the amended claim is properly determined by the PTAB during the IPR trial, not for the first time at the Federal Circuit."  (Slip Op, Dissent at 4.)  Judge Newman further noted that the AIA places the burden of patentability upon the petitioner, which is at odds with the PTAB and majority opinion.  (Id. at 5, ("[t]he statute places the burden of proving invalidity (unpatentability) on the petitioner.".)

It is clear that the IPR progressively slipped away from Prolitec due to several key issues:  (1) claim construction; (2) the burden of proving patentability of the proposed amendments; and (3) ultimately what constitutes prior art with respect to a motion to amend. As such, Prolitec highlights the importance of the specification when defining claim elements.  As the claims are ultimately given their broadest reasonable interpretation in view of the specification, terms used in the specification define the scope of the claims. [8]  Broad language such as "may" used in the specification permits a claim to encompass broader subject matter than if the specification used more definite terms such as "is", "shall", or "must."  However, as noted by the court in Prolitec, one "cannot rewrite the intrinsic record of the '683 patent to narrow the scope of the patent and the claim element[s]."  (Slip Op. at 6.)  Thus, any narrowing of the claim must be done within the claim itself, which is what Prolitec ultimately tried to do.

In the end, this case serves as a good illustration of the shifting landscape that is IPR practice, but with time, each decision rendered by the PTAB and/or CAFC will further define what is required in order to successfully enter proposed amendments during an IPR.  Although the decision in Prolitec provides further guidance for practitioners, serious questions remain, as noted in the dissent by Judge Newman, as to whether the PTO is overstepping its bounds when interpreting its own regulations in a manner that seemingly restricts Patent Owners rights afforded by the AIA.