Patentee bears the burden in IPR proceedings of proving patentability of any proposed substitute claims

Nike, Inc. v. Adidas AG, No. 2014-1719 (Fed. Cir. Feb. 11, 2016)

Following the grant of a petition for inter partes review (IPR), the patentee moved for entry of substitute claims. The Patent Trial and Appeal Board (PTAB or Board) denied the motion, because the patentee failed to “persuade the board that the proposed substitute claim is patentable over the prior art of record, and over prior art not of record but known to the patent owner.” The patentee appealed, asserting that the PTAB erroneously shifted the burden of proof. The Federal Circuit affirmed on this issue.

The Federal Circuit previously held that, in light of governing statutes and the U.S. Patent and Trademark Office (PTO) regulations, the PTAB appropriately placed the burden on patent owners to show that their substitute claims are patentable. (See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1306-08 [Fed. Cir. 2015]). However, the patentee argued that the burden allocation could not be reconciled with 35 U.S.C. § 316(e) which governs the evidentiary standards in IPR proceedings. The Federal Circuit found this argument unpersuasive. Section 316(e) “applies to ‘an IPR instituted under this chapter,’” where the burden “is on the petitioner to prove unpatentable those issued claims that were actually challenged in the petition for review and for which the Board instituted review.” It “does not necessarily apply to claims that were not in existence at the time a petition is filed, such as newly offered substitute claims proposed by a patent owner in a motion to amend filed as a part of an already-instituted IPR proceeding.” Thus, Section 316(e) does not preclude “placing the burden on [patent owners] to establish patentability over the prior art of [their] proposed substitute claims.”

A copy of the opinion can be found here.