During an IPR a patent owner may file one motion requesting amendment of the claims of the challenged patent.1 The PTAB’s general rule regarding motions brought before it is that “[t]he moving party has the burden of proof to establish that it is entitled to the requested relief.”2 In the context of motions to amend claims, the PTAB has interpreted this rule to require that the patent owner prove that the amendment results in patentable claims.3
In In Re Aqua Products, the patent owner moved to substitute new claims containing several additional limitations beyond those in the claims of the original patent.4 In its motion to amend the claims, Aqua Products argued that a single added limitation rendered the claims patentable over the prior art references in the IPR.5 Aqua Products, however, did not argue that the added limitation resulted in the claims being non-obvious over the prior art and did not make an argument with respect to any of the other added limitations.6 The PTAB denied the motion, and, without addressing any of the limitations that the patent owner did not argue, determined that the argued limitation would have been obvious in light of the prior art asserted in the IPR.7
Aqua Products appealed the PTAB’s decision, arguing that the patent owner’s burden of showing the amended claims to be valid is unsupported by statute.8 The Federal Circuit initially held that its own precedent dictated that the patent owner bears the burden of proving any amendment made during inter partes review to be patentable and therefore denied Aqua Products’ appeal.9 Then, in August of last year, the Federal Circuit granted Aqua Products’ petition for rehearing en banc and vacated its earlier ruling.10 In granting the en banc rehearing, the Court specifically pointed out the apparent dissonance between 35 U.S.C. § 316(e), which states “[i]n an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence,” and the USPTO’s rule that the patent owner has the burden of proving that amendments would be allowable over the prior art.11 Specifically, the Federal Circuit granted rehearing to address two questions:
(a) When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them? Which burdens are permitted under 35 U.S.C. § 316(e)?
(b) When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim? If so, where would the burden of persuasion, or a burden of production, lie?12
Almost all of the Federal Circuit’s questioning during the oral argument in December 2016 focused on the first of these questions. During Aqua Products’ argument, some members of the Court seemed particularly concerned that a potential consequence of the patent owner’s position that according to 35 U.S.C. § 316(e) only the petitioner bears the burden “of proving a proposition of unpatentability” is that, in some circumstances, claims amended during an IPR would issue with essentially no examination. The Court suggested that in the event that a motion to amend is brought and the petitioner subsequently moves to dismiss the IPR, there could be essentially no examination of the amended claims, as under the statute it would be exclusively the petitioner’s responsibility to show unpatenability of the amended claims. Aqua Products argued this concern was largely unfounded for several reasons. First, this is a relatively unlikely scenario according to Aqua Products. Second, because 35 U.S.C. 316(d) prohibits amended claims from introducing new matter and from enlarging the scope of the original claims, it is unlikely, if not impossible, for a patent owner to gain claim scope through an IPR amendment that it did not already have. And third, intervening rights resulting from the claim amendments would immediately end any pending litigation involving the original claims.
Aqua Products acknowledged that a patent owner bears the burden of proving the requirements of 35 U.S.C. 316(d) and must show that the amended or substituted claims do not add new matter to the claims and do not enlarge the scope of the original claims. Aqua Products argued, however, that this showing does not require a patent owner to prove that the amended claims are patentable over the petitioner’s cited prior art. It is also worth noting that Aqua Products acknowledged that a petitioner should have an opportunity to introduce additional prior art into an IPR if faced with an amended claim.
In questioning the USPTO, the Court focused on whether the USPTO’s rule deserves Chevron deference. The USPTO’s regulation, 37 C.F.R. § 42.121(a)(2)(i), permits denial of a motion to amend when “[t]he amendment does not respond to a ground of unpatentability involved in the trial,” and 37 C.F.R. § 42.20 requires that for all motions brought before the PTAB “[t]he moving party has the burden of proof to establish that it is entitled to the requested relief.” In its brief requesting rehearing, Aqua Products argued that 37 C.F.R. § 42.121(a)(2)(i) can be interpreted to align with 35 U.S.C. § 316(e) because “[r]esponding to an argument is not the same as prevailing over an argument.”13 In other words, according to Aqua Products, merely showing that an amendment is “respon[sive] to a ground of unpatentability” does not rise to the level of requiring proof that the amendment overcomes the ground of unpatenability; rather under 35 U.S.C. § 316(e) it is the petitioner’s burden to prove unpatenability. The Court questioned whether the PTAB’s interpretation of the USPTO regulation regarding amendment of claims deserved Chevron deference because the interpretation was an order from the PTAB and not a regulation that was addressed by notice and comment. The Court further questioned why the USPTO had not issued a rule that explicitly required patent owners to bear the burden of proving amended claims to be patentable.
It is difficult from the oral argument to predict the outcome the Federal Circuit will reach. While the Court appeared to have real concerns about the rule making process the USPTO relied upon, it also voiced a practical concern about the potential for claims to issue without examination, under certain circumstances, if Aqua Products’ argument prevails.
More recently, the PTAB granted Shire LLC’s motion to amend claims of a pharmaceutical patent in an IPR.14 Shire moved to substitute one new claim for one of the instituted claims and cancel the remaining instituted claims.15 The claim replaced by the substituted claim featured multiple dependencies to other claims in the patent.16 Some of the claims from which it depended had been instituted and some had not.17 The substituted claim simply removed the dependencies from the instituted claims, leaving the substituted claim only dependent upon claims that had not been instituted in the IPR.18 Because the PTAB had not instituted one of the claims from which the replaced claim depended, it reasoned that the replaced claim “is part of the trial only to the extent it depends from [the instituted claims].”19 The Board therefore determined that the effect of substituting a claim that depended only from non-instituted claims “would be to leave no instituted claim remaining in the trial.”20 Although the petitioner argued that Shire’s motion to amend should be denied “because Patent Owner has not demonstrated the patentability of [the substitute claim] as required by Board precedent,” the Board determined that the only effect of the amendment in this case was canceling instituted claims while leaving only a claim depending from non-instituted claims, which would itself be a non-instituted claim.21 Accordingly, the Board issued a final decision terminating the IPR, as no instituted claims remained after amendment.22
While the PTAB’s decision to grant Shire’s motion to amend is one of relatively few times the PTAB has granted a motion to amend, the circumstances of the decision do not suggest that the PTAB has made any change in its approach to granting amendments. We will have to wait for the en banc In Re Aqua Products decision, which should issue very soon, to see if there is going to be any real change in amendment practice during IPRs.