Amending Patent Claims During Inter Partes Review

D. Richard Anderson for Corporate Counsel

January 28, 2016

The dramatic shift of U.S. patent validity “litigation” from federal district court to the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (PTO)) has created a dilemma for patent owners. Construing claims based on their “broadest reasonable interpretation” (BRI), and applying a relatively low standard of proof at trial, PTAB final decisions have overwhelmingly sided against patent owners. Faced with this new reality, a patent owner involved in a fast-moving America Invents Act (AIA) post-grant proceeding, such as an Inter Partes Review (IPR), must understand all options available for preserving its valuable U.S. patent rights. This article explores one such option – motions to amend – and explains the procedural hurdles, pitfalls and consequences associated with amending claims during an IPR trial.

IPRs Have Changed the Game

The AIA has quickly and profoundly impacted patent litigation in the U.S. – establishing the PTAB as the forum of choice for accused infringers seeking to challenge the patentability of asserted claims. Although third parties have long been able to seek PTO review of issued patents through ex parte reexamination, and more recently through inter partes reexamination, the IPR framework mandated by the AIA is fundamentally different in two respects.

First, IPRs move at a very fast pace. The PTO’s central reexamination unit (CRU) has no involvement in IPR – the proceeding is conducted entirely as a “trial” before the PTAB. Whereas an inter partes reexamination would typically proceed through a many-year back-and-forth with the CRU Examiner before ever reaching the PTAB for appeal of the CRU’s conclusions, IPR involves no “examination.” Absent special circumstances, an IPR must reach final PTAB decision within one year of institution. Due to this much shorter and certain time frame, as well as the very high likelihood that the parties will either settle the proceeding or that the PTAB will issue a final decision finding all, or at least some, challenged claims unpatentable, accused infringers can make a much stronger case for staying district court litigation pending outcome of PTO proceedings.

Second, both ex parte and inter partes reexamination afforded the patent owner an opportunity to present nonbroadening claim amendments, including adding new claims, as a matter of right. In contrast, amending claims during the IPR requires a detailed motion, with the patent owner bearing the burden of proving that the revised claims overcome grounds of unpatentability at issue in the IPR trial. Despite the PTO’s insistence that this mechanism for amending claims justifies applying the broadest reasonable claim construction standard during the IPR, patent owners have thus far found it very difficult to successfully amend claims before the PTAB, leading Judge Pauline Newman of the U.S. Court of Appeals for the Federal Circuit to refer to such relief as “almost entirely illusory.”

Since that assessment, however, the PTAB has implemented procedural “fixes” and offered additional guidance to aid patent owners seeking to successfully present a motion to amend. Moreover, Congress has raised the prospect of legislative changes, including, for example, the STRONG Patents Act introduced in the Senate in 2015 that would provide patent owners greater ability to amend claims. At least until the potential impact of such developments comes into greater focus, motions to amend should at least be considered as a potentially viable approach to preserving patent rights during IPR. Patent owners should, however, fully understand the procedural pitfalls associated with these motions and also consider preemptive measures to strengthen claim scope, including reissue or voluntary ex parte reexamination, before asserting a particular patent in district court.

Statutory and Procedural Hurdles to Amending Claims During IPR

As a starting point, motions to amend during an IPR are controlled by 35 U.S.C. § 316(d), specifying that a patent owner may file such a motion to either cancel challenged claims or to propose a “reasonable number of substitute claims.” Proposed claims cannot enlarge claim scope – broadening amendments are still not permitted. PTO Rule 42.121 puts a finer point on these restrictions, specifying that proposed amendments should be responsive to a ground of unpatentability at issue in the IPR and that, absent a showing of need, a “reasonable number of substitute claims” means a one-to-one correspondence between substitute/challenged claims. The rule further requires that the motion demonstrate how each amended (substitute) claim is supported by the original patent disclosure as well as any earlier priority disclosure.

Beyond the applicable statue and rule, early IPR decisions have highlighted what the PTAB deems necessary showings in a successful motion. In the “informative decision” of Idle Free Systems v. Bergstrom, the PTAB emphasized that IPR is neither patent examination nor reexamination. The patent owner bears the burden of establishing that the amended claim provides a “patentable distinction over the prior art of record, and over prior art not of record but known to the patent owner.” The PTAB cautioned in Idle Free that general, conclusory assertions that the amended claims are patentable over the prior art are inadequate.

Moreover, although patent owners may rely on expert testimony to demonstrate the significance of the amended claim relative to the prior art, petitioner can counter with its own evidence, including additional prior art and expert testimony. In Corning Optical v. PPC Broadband, the PTAB further emphasized the need for patent owners to show patentability for amended claims in general, and “not just over the references applied by the Petitioner against the original patent claims.” According to the panel in Corning Optical, focus should be on features being added to the claim, with the expectation that the motion specifically discuss what the patent owner knows about the state of the art pertaining to such added features.

Patent owners have thus far seen very limited success satisfying the requirements of Idle Free, with only a handful of motions to amend having been granted to date. Indeed, one of the few permitted by the PTAB, in International Flavors & Fragrances v. U.S. Department of Agriculture, was unopposed as a result of a settlement between the parties. Such “success stories” seem more like outliers than typical IPR scenarios.

But more recent developments offer patent owners at least a glimmer of hope that future motions to amend, as well as those currently in the pipeline, may see more balanced results. First, the PTO implemented what it characterized as a “quick fix” in March 2015, expanding the page limit for motions to amend from 15 to 25 pages, excluding the claims appendix. Although this “fix” may seem somewhat trivial at first blush, it serves as some recognition that the original requirements for motions to amend were “broken” and that patents owners deserve more procedural latitude when making their case for amendment.

Second, in July 2015, an expanded PTAB panel in Mastermind 3D v. Reald clarified the various references to “prior art of record” and “prior art known to the patent owner” in Idle Free. The PTAB in Mastermind 3D explained that “prior art of record” refers to material prior art from the patent’s original prosecution history, from the current IPR proceeding and from any other PTO proceedings involving the same patent. The PTAB further clarified that “prior art known to the patent owner” refers to material prior art that the patent owner has made of record pursuant to its duty of candor and good faith. This clarification provides patent owners with a more specific and manageable, albeit still significant, burden when explaining how the amended claims provide a patentable distinction over the relevant body of prior art.

Preemptive Measures More Important than Ever

Unless the above-mentioned “fixes” and “clarifications” are mere window dressing, one would expect to see motions to amend permitted in greater numbers going forward. Nonetheless, the actual impact of these changes will likely not be fully apparent for some time. And possible legislative intervention to enhance patent owners’ ability to amend may not materialize in the short term, if ever. Moreover, even a successful motion may provide accused infringers with a viable intervening rights defense under 35 U.S.C. § 252, effectively limiting damages to post-amendment acts of infringement.

Considering these uncertainties and drawbacks, not to mention the extremely high rate at which final IPR decisions are finding challenged claims unpatentable, it is more important than ever for patent owners to critically evaluate the strength of their claims before asserting a patent in district court – which is likely to invite an IPR challenge at the PTO. Through voluntary ex parte reexamination, a patent owner can present additional claim limitations, as well as more specific fallback claims, to more clearly define over any additional prior art, thus creating stronger claims that stand a better chance of surviving a post-grant patentability challenge at the PTO. Similarly, a reissue application can be filed to present more narrow claims or additional fallback claims. The Federal Circuit has recognized this “fallback claim” approach as a proper use of reissue applications in its 2011 Tanaka decision. Although not always practical for larger patent portfolios, maintaining a continuing application pending at the PTO for particularly important cases can provide flexibility to adapt claim scope as new prior art challenges arise. Finally, the AIA established “supplemental examination,” allowing patent owners to request PTO review of additional prior art deemed material to patentability of previously issued claims.

Such preemptive measures have potential drawbacks, including delay and expense before filing suit in district court. On the other hand, attempting to enforce broadly worded patent claims, post-AIA, provides an easy target for accused infringers to challenge though IPR proceedings.


Reprinted with permission from the January 28, 2016 edition of Corporate Counsel© 2016 ALM Media Properties, LLC. All rights reserved.
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