No burden shifting upon institution of inter partes review
In re: Magnum Oil Tools International, No. 2015-1300 (Fed. Cir. July 25, 2016)
The Federal Circuit reversed the Patent Trial and Appeal Board’s (PTAB’s) finding of obviousness duringinter partes review (IPR) of a patent related to the drilling practice of hydraulic fracturing, commonly known as “fracking.” The Federal Circuit, reinforcing the plain language of 35 U.S.C. § 316(e), concluded that the PTAB had improperly shifted the burden of proof to the patentee to prove that its patent was non-obvious. The PTAB, which had intervened in the appeal, contended that its decision to institute IPR should serve to shift the “burden of production” to the patent owner—making it responsible for coming forward with evidence of patentability. The Federal Circuit rejected this argument, holding that when the only question is an analysis of Graham’s four obviousness factors, no burden shifts from the petitioner to the patent owner. Thus, the petitioner continues to bear the burden of proving obviousness by a preponderance of the evidence.