On June 19, 2018, the U.S. Court of Appeals for the Federal Circuit vacated the Patent Trial and Appeal Board’s denial of a contingent motion to amend claims in a patent owned by Sirona Dental Systems GMBH’s (“Sirona”). Specifically, the Court held that the Board had improperly placed the burden of establishing patentability of the amended claims on the patentee, holding that the burden of persuasion to show the unpatentability of any proposed substitute claims properly rests with an inter partes review petitioner. See Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc).

The Court also found that the Board had based its patentability decision on multiple references that were not asserted together as grounds in the original IPR petition. On remand, the Board was directed to consider the U.S. Supreme Court’s recent decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018) and determine in the first instance whether it could consider new theories and combinations of references that were not originally raised by Institut Straumann AG and Dental Wings Inc. (the “Petitioners”) in opposing a motion to amend patent claims.

Sirona’s patent at issue, U.S. Patent No. 6,319,00, relates to a tooth drilling template to precisely align a hole for a tooth implant relative to other teeth in the jaw. The Board rejected the Petitioners’ anticipation arguments but held that claims 1-8 were obvious in view of two German patents. After institution of the IPR, Sirona filed a contingent motion to amend its patent claims pursuant to 37 C.F.R. § 42.121, but the Board denied the motion and held that Sirona could not meet its burden to show that the proposed amendments would have made the claims non-obvious.

After the Board’s final written decision, Aqua Products was decided in October 2017, which shifted the burden to the petitioner to prove the unpatentability of proposed claim amendments. On appeal, Sirona argued that the Board erred in rejecting the proposed amendments based on a combination of references not raised by the Petitioners — in violation of the Administrative Procedure Act (“APA”). Sirona further argued that even if the Board could rely on a combination of references not originally asserted together as grounds in the petition, Sirona did not receive notice and an opportunity to respond to the newly asserted combination of references the Board relied on, as required by the APA.

The Federal Circuit agreed with Sirona, vacating portions of the decision. On remand, the Federal Circuit asked the Board to consider the U.S. Supreme Court’s recent SAS Institute decision and determine in the first instance whether the Board may rely on combinations of references that were not originally argued by a petitioner in opposing a motion to amend, and, if so, what procedures consistent with the APA are required to do so. As the Court stated:

An inter partes review must proceed “in accordance with or in conformance to the petition.” SAS Institute at 1356 (internal quotations omitted).” “Nothing suggests the Director enjoys a license to depart from the petition and institute a different inter partes review of his own design.” Id. … “[T]he statute tells us that the petitioner’s contentions, not the Director’s discretion, define the scope of the litigation all the way from institution through to conclusion.” Id. at 1357. It would thus not be proper for the Board to deviate from the grounds in the petition and raise its own obviousness theory, as Sirona contends.

What this Means for You

In Sirona, the Federal Circuit sends a clear signal that the Supreme Court’s decision in SAS Institute eliminates much of the Board’s discretion to modify the grounds laid out in a challenger’s IPR petition. Before SAS Institute, the Federal Circuit may have just remanded the decision and required the Board to provide the patent owner requisite notice and an opportunity to respond under the APA. Now, the Federal Circuit suggests that SAS Institute means that the Board may not rely on theories that depart from those set forth in the IPR petition. This decision encourages parties submitting an IPR petition to consider all combinations of references when alleging their grounds for unpatentability. And, patent owners may rely on this decision to limit the scope of challenges raised in the IPR process and prevent petitioners and the Board from developing new theories along the way.