Reg Synthetic Fuels, LLC v. Neste Oil Oyj

Addressing a patent owner’s motion to amend by cancelling claims and substituting claims, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB or Board) granted in part and denied in part the patent owner’s motion, finding that cancellation was appropriate but that the patent owner failed to meet its burden on the patentability of the substitute claims.  Reg Synthetic Fuels, LLC v. Neste Oil Oyj, Case No. IPR2013-00178 (PTAB, Aug. 29, 2014) (Tornquist, APJ).

Syntroleum filed a petition for inter partes review (IPR).  The patent owner, Neste Oil Oyj, did not file a Patent Owner Response and chose instead to file a motion to amend.  In its motion to amend, Neste Oil requested cancellation of the issued patent claims and substitution of those claims with 10 new claims.  At the final hearing, the PTAB determined that the patent owner did not meet its burden to prove by a preponderance of the evidence that the proposed substitute claims are patentable.  Accordingly, the PTAB granted the patent owner’s motion to amend with respect to the cancellation of the original patent claims and denied the motion with respect to the substitution of the 10 new claims, essentially eviscerating the challenged patent.

In evaluating the substitute claims, the PTAB noted that, unlike examination, “entry of the proposed substitute claims in an inter partesreview is not automatic.”  Instead, “Patent Owner must establish that it is entitled to the requested relief.”  In evaluating whether the substitute claims constituted a reasonable number of claims, the PTAB found that two proposed substitutes for one original claim were not proper, given that the patent owner failed to show that the two claims were patentably distinct.  Further, the PTAB found that the patent owner failed to show adequate written description support for the substitute claims.

As to patentability, the PTAB rejected Neste Oil’s argument that the substitute claims were patentably distinct from the prior art.  The PTAB found that the patent owner failed to address why the claims were non-obvious or the knowledge, skill and creativity of one of ordinary skill in the art with respect to the added limitations.  Thus, the PTAB granted the motion to amend solely with respect to patent owner’s non-contingent request to cancel the issued claims.