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En Banc Federal Circuit To Review Standards for Amending Claims During AIA Proceedings

In a rare grant of a petition for rehearing en banc, the court decided that an appeal “warrants en banc consideration” of who bears what burden when amending in an IPR.  In re: Aqua Products, No. 15-1177, slip op. at 2 (Fed. Cir. August 12, 2016).  From the very beginning of IPRs, the Patent Trial and Appeal Board has required the patent owner to bear the burden on a motion to amend.  Idle Free Sys., Inc. v. Bergstrom, Inc., IPR2012-00027 (PTAB June 11, 2013).  That is, when a patent owner during an IPR filed a motion to amend its claims, the Board required the patent owner to prove the patentability of its amended claims.  Id.  That requirement might soon change. 

Crest, CourtThat Board practice has been consistently upheld by the Federal Circuit in precedential decisions.  Thus, in the Aqua Products appeal, a panel of the court unanimously wrote that “[g]iven our precedent, this panel cannot revisit the question.”  823 F.3d 1369, ___ (Fed. Cir. 2016).

Aqua filed its petition for rehearing en banc challenging the Board’s practice as directly contrary to the statute which states that “[i]n an inter partes review . . ., the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.”  35 U.S.C. § 316(e).  Aqua argued that “Congress established a single, universal burden of proof for any ‘proposition of unpatentability’ and expressly assigned that burden to the petitioner.”  Pet. at 6 (emphasis in original).  Aqua also pointed out how the Board’s practice “unduly restricted the amendment option,” noting that the Board’s own study reported that as of April 30, 2016 the Board had granted only 6 of 118 motions to amend, which Aqua said represented “a 95% failure rate.”  Id. at 15. 

The Director of the PTO had earlier intervened in the appeal, and Zodiac Pool Systems, Inc. (the petitioner in the IPR) then withdrew as a party to the appeal. The Director opposed the en banc petition, citing half a dozen Federal Circuit cases and arguing that “every panel of this Court that has addressed this issue has reaffirmed that the patent owner bears the burden to show patentability of proposed substitute claims.”  Opp. at. 1.

One might have thought that there’d be little chance of success for rehearing because there had been 11 different Federal Circuit judges on the six panels which the Director cited.  In order of seniority, they were Chief Judge Prost, and Circuit Judges Newman, Mayer, Lourie, Bryson, Dyk, Reyna, Wallach, Taranto, Chen, and Stoll.  Of those, only Judge Newman had dissented on the issue in earlier cases.  Yet, surprisingly, the court unanimously granted rehearing (Judge Stoll did not participate).

In another unusual twist, the court set two principal questions it wanted addressed in the en banc briefing, even though Aqua had presented only a single question in its rehearing petition.  First, the court asked not only who should bear the burden, but also the nature of the burden – the distinction between the burden of persuasion and the burden of production. Second, the court asked what appears to be a hypothetical in the context of the Aqua case, under what conditions and burdens can the Board itself sua sponte raise patentability issues?  The court’s order reads:

(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?

Slip op. at 2.

The court invited the views of amici curiae, set a briefing schedule, and scheduled oral argument for December 9, 2016.  It will be interesting to see how many amicus briefs there are for each side.

© 2020 Foley & Lardner LLPNational Law Review, Volume VI, Number 228



About this Author

George Quillen, Patent interference litigator, appeals, prosecution, Foley and Lardner

George E. Quillin is a partner and intellectual property lawyer with Foley & Lardner LLP. Mr. Quillin litigates patent interferences and patent appeals, and counsels clients in patent prosecution. He is a member of the firm’s IP Litigation, Mechanical & Electromechanical Technologies and Appellate Practices.