Another Requirement to a Successful Motion to Amend Claims

Concept - businessman who has failedIt is getting hard to keep track of all the hoops and hurdles that need to be navigated in bringing a successful motion to amend in an inter partes review proceeding.  Each new decision seemingly raises the bar further.  The latest task to add to the list is to ensure that, among all the other things that must be established in the 15 page motion, support for the new amendment is shown in the application from which priority is claimed (of course), but also in each intervening application from that priority document through the patent-at-issue.  In Toyota Motor Corp., v. American Vehicular Sciences LLCIPR2013-00415, Paper 40, Patent Owner sought clarification regarding its Motion to Amend Claims and also sought authorization to file a second Motion to Amend Claim in response to procedural argument made by Petitioner in its opposition to the Motion to Amend. Id. at 2. The purpose of the amendment was to allow Patent Owner to point to supporting disclosure in each ancestral application in the chain of applications leading to the original application from which priority was claimed.  Id.

The Board pointed out that, if any application in the priority chain fails to make the requisite disclosure of the claimed subject matter under 35 U.S.C. § 112, first paragraph, the later-filed application is not entitled to the benefit of the filing date preceding the break in disclosure within the priority chain. Hollmer v. Harari, 681 F.3d 1351, 1355 (Fed. Cir. 2012).

There were five intervening applications between Patent Owner’s involved patent and the application from which Patent Owner claimed priority. Yet, Patent Owner’s Motion to Amend Claims discussed supporting disclosure only with regard to the application that issued as the involved patent and the original application.  The Motion to Amend did not include an explanation of support relative to the five intermediate applications. Id. at 3.

The Board determined at the late stage in the proceeding, there was insufficient time to provide Petitioner sufficient time to respond to a second motion. Id. at 4. It was further determined it would be improper for Patent Owner, in its Reply to Petitioner’s Opposition to Patent Owner’s Motion to Amend Claims, to address and account for the supporting disclosures, if any, in any of the five intervening ancestral applications. Id.  As such, another Motion to Amend will surely go down to defeat.

More PTAB Motion to Amend Guidance in Inter Partes Reviews

frustrationIn view of the continued denial of Motions to Amend in inter partes review practice (no motions have been granted to date), it is worth noting a recent decision, from well-respected Judge Jameson Lee, that provides significant guidance on the required content of a Motion to Amend.  Toyota Motor Corp. v. Am. Vehicular Sciences, LLC, IPR2013-00419, Paper 32 (March 7, 2014).

While there have been numerous denials of Motions to Amend, from which practice tips can be gleaned, the linked order provides the most substantive advice on the issue since the seminal Idle Free decision.

Trio of Final Written Decisions Go Against Patent Owner

iStock_000020200155XSmallEarly results of Inter Partes Review proceedings continue to favor Petitioners as all challenged claims in a threesome of Columbia University patents have been cancelled by the PTAB in Illumina, Inc. v. The Trustees of Columbia Univ. in the City of N.Y., IPR2012-00006, -00007, and -00011.

The inventions at issue in the three Illumina decisions involve sequencing DNA by incorporating a base-labeled nucleotide analogue into a primer DNA strand, and then determining the identity of the incorporated analogue by detecting the label attached to the base of the nucleotide.

In general, the Board’s analysis of the prior art in coming to its findings of obviousness with respect to all the challenged claims comprises a fairly straightforward analysis, with heavy reliance on the expert witness testimony elicited in the case.

Of greater interest was the Board’s consideration of secondary considerations relative to the claimed invention.  To that end, Patent Owner argued that the obviousness challenges fail because of: 1) unexpected results, 2) the invention received praise and awards, 3) commercial success, 4) evidence of copying, 5) skepticism, and 6) attempts by Petitioner to license the patents.  -00006 Order at 29.  The Board did not find the proffered evidence on these points persuasive:

Unexpected results: Citing In re Baxter Travenol Labs., 952 F.2d 388, 392 (Fed. Cir. 1991), the Board found that, like that case, here “[m]ere recognition of latent properties in the prior art does not render nonobvious an otherwise known invention.”  Id. at 31.  Further, the Board noted that unexpected results must be made relative to the closest prior art.  In this case, the Board found that the argued unexpected results were not performed relative to the closest prior art, rendering the evidence unpersuasive.  Id. at 33.

Praise and Awards: The Board cursorily brushed aside this evidence, finding “it of insufficient weight and relevance to deem it persuasive.”  -00006 Order at 38.

Commercial Success:  The Board noted that commercial success involves establishing success in the marketplace of a product encompassed by the claims and a nexus between the commercial product and the claimed invention.  In this case, Patent Owner’s expert testified that he reviewed the Petitioner’s technical documents and found that all elements of the patented claims were met by Petitioner’s offering. Commercial success of the product must, however, “be due to the merits of the claimed invention beyond what was readily available in the prior art.”  -00006 Order at 36.  Because the aspects of the invention argued to be the commercial success nexus were found in the prior art, that evidence was unpersuasive.

Copying:  The Board did not comment on this evidence.

Skepticism:  With the evidence of “praise,” the Board cursorily brushed aside this evidence, finding “it of insufficient weight and relevance to deem it persuasive.”  -00006 Order at 38.

Licensing:  While the Board recognized the evidence of Petitioner’s offers to license the technology, it found that there was “insufficient evidence that the licensing strategy was driven by a recognition of the merits of the claimed invention, rather than knowledge of a patent potentially covering their own product.”  -00006 Order at 38.

Also of interest in the decisions, was the Board’s reconsideration of an earlier reconsideration relating to an issue of incorporation by reference.  In its Decision to Institute, the Board did not grant a challenge ground based on a reference that incorporated another piece of prior art by reference.  In a decision based on Petitioner’s motion for reconsideration, the Board, in a rare move, changed its mind and included the ground in the trial.  In the Final Written Decision, however, the Board went back to its original position that the incorporation by reference was insufficient.

Lastly, it is worth noting that another three Motions to Amend went down to defeat in these three Illumina decisions.  Patent Owners are winless on the point.

Another Motion to Amend Denied in IPR Final Written Decision

iStock_000016813098XSmallWhile Patent Owners have finally succeeded in having claims survive an inter partes review proceeding, no Patent Owner has yet to find the magic formula that successfully navigates a motion to amend.  In a Final Written Decision in Blackberry Corp. v. Mobilemedia Ideas LLC, IPR2013-00016 (Paper 32), the Board again denied Patent Owner’s motion to amend, finding that the high burden for inherent in such motions was not met.

The case arrived at its conclusion with an interesting posture.  Patent Owner previously had conceded that the six claims challenged in the Petition were unpatentable and they were, therefore, cancelled.  Instead of fighting for those claims, Patent Owner filed a motion to amend the six challenged claims.  Petitioner opposed the motion, but then entered into a settlement agreement with Patent Owner.  In light of the advanced stage of the proceeding, however, the motion to terminate the proceeding was granted with respect to Petitioner, but not with respect to Patent Owner and the proceeding went to a Final Written Decision.

Turning to the merits of the motion to amend, the Board found four faults in Patent Owner’s motion.  First, the Board found that Patent Owner failed to set forth a reasonable claim construction for each claim feature added.  Importantly, Patent Owner did provide a claim construction, supported by expert testimony, but in the Board’s view, it was unreasonable.  Order at 12-15.  Second, the Board found that Patent Owner’s amendment did not respond to a ground of unpatentability.  In its proposed amended claims, Patent Owner eliminated all of the features of several original claims.  For example, instead of adding limitations to those claims, it deleted the material language in its entirety and substituted new language that “has little to do” with the language of the original claim.  Order at 15-18.

Third, the Board found that Patent Owner’s motion did not present a reasonable number of claims.  In general, the Board found that the proposed substitute claims did not correspond to their original claims but were, instead, all proposed substitute claims for the independent claim at issue.  Because Patent Owner did not provide a reasonable explanation as to why five substitute claims were required for one challenged claim, this formed an independent ground for denying the motion.  Lastly, even in light of the above, the Board further found that Patent Owner had failed to demonstrate patentability of the new claims over the prior art.  Citing many of the now familiar concepts from the Idle Free decision, the Board determined that: 1) because Patent Owner limited its discussion to references cited in the petition, 2) did not discuss the level of ordinary skill in the art, and 3) did not discuss what was previously known regarding the added features, the motion to amend should be denied.

Quartet of Final Inter Partes Review Decisions Go Against Patent Owner

Micro ChipThe tide of inter partes review proceedings continues to batter Patent Owners, as the PTAB issued four decisions in cases brought by Intellectual Ventures against Xilinx, rendering all challenged claims at issue unpatentable.  Intellectual Ventures Management, LLC v. Xilinx, Inc., IPR2012-00018, -00019, -00020, and -00023.

The first two decisions, each authored by Judge Arbes, were similar in their content, and revealed two interesting takeaway issues.  IPR2012-00018, -00019. First, in its decision to initiate, the Board construed the term “array of landing pads disposed on an inside surface of the integrated circuit package.”  As the trial progressed from that decision, however, it became clear that what was an “inside surface” needed further elucidation.  As such, the Board undertook further claim construction analysis in the Final Written Decision, rejecting Patent Owner’s contention that “inside surface” required that the ICP completely surrounded the pads.  Instead, and referencing a figure created by Petitioner, and included in its Reply brief, the Board found that a pad could be located on an inside surface and not be completely surrounded by the ICP.  Id at 9-18.  The second significant issue related to Patent Owner’s Motion to Amend.  The Board denied that motion because: 1) there was insufficient testimony or evidence that the new references cited by Petitioner, in combination, would work as Patent Owner suggested (at 40); 2) there was insufficient evidence that the new combination would not have been obvious (at 41); and 3) Patent Owner failed to provide at least some explanation as to why one of skill would not have found the combination obvious (at 42).  As such, all claims were deemed unpatentable, and no amended claims were entered.

The third decision (IPR2012-00020), authored by Judge Medley, was interesting in its discussion of the parties experts.  While both parties submitted expert testimony, in this battle of experts, Petitioner was more persuasive because Patent Owner’s expert only expressed conclusory opinions (at 10).  Relatedly, the Board noted that Patent Owner did not depose Petitioner’s expert or otherwise challenge his testimony in key regards (at 13).  In the end, giving substantial weight to Petitioner’s expert, and less weight to Patent Owner’s expert, resulted in a finding that all challenged claims were unpatentable.

In the fourth decision (IPR2012-00023), authored by Judge Easthom, the Board addressed the issue of whether an expert declaration can fill in holes in a prima facie case of obviousness.  In that case, Patent Owner argued that the art was silent on a key limitation of the claims (a double poly layer) and that Petitioner had attempted to fill that hole in the art only via expert testimony.  The Board did not sustain this argument, however, finding that 35 U.S.C. § 312(a)(3)(B) allows for expert testimony in support of a Petition.  Referencing the Federal Circuit’s KSR decision, the Board made clear that declaration testimony about common sense and general knowledge in the art was appropriate in IPR proceedings.  In general, therefore, until further notice, expert testimony may be used to supply missing claim limitations not shown in a printed publication or patent.  Id. at 36-40.

Motions to Amend Take Center Stage as IPR Practice Approaches 1 Year Anniversary

As Inter Partes Review proceedings move through the Patent Owner Response and Motion to Amend stages (due 3 months after a decision to initiate an IPR trial), the Board has found itself faced with multiple inquiries regarding the requirements and processes for amending a patent in an IPR proceeding. As has become a pattern with other key issues, individual three-judge panels offer guidance for a while, but then a “major” Order, setting forth great detail about a particular issue comes forth, and future panels begin referring parties to the major Order.  For motions to amend, that decision is the now ubiquitous “Idle Free” decision – Idle Free Sys., Inc. v. Bergstrom, Inc., IPR2012-00027 (Paper 26). This article summarizes the requirements of Idle Free, and will be followed up with an article updating various other issues addressed in Motion to Amend contexts.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]

§ 42.121. Amendment of the patent.

(a) Motion to amend. A patent owner may file one motion to amend a patent, but only after conferring with the Board.

(1) Due date. Unless a due date is provided in a Board order, a motion to amend must be filed no later than the filing of a patent owner response.

(2) Scope. A motion to amend may be denied where:

(i) The amendment does not respond to a ground of unpatentability involved in the trial; or

(ii) The amendment seeks to enlarge the scope of the claims of the patent or introduce new subject matter.

(3) A reasonable number of substitute claims. A motion to amend may cancel a challenged claim or propose a reasonable number of substitute claims. The presumption is that only one substitute claim would be needed to replace each challenged claim, and it may be rebutted by a demonstration of need.[/pullquote]

Idle Free Sys., Inc. v. Bergstrom, Inc.

In general, Patent Owner in the Idle Free case took a broad view of the Motion to Amend requirements, figuring that, because 23 claims were challenged in the proceeding, they were able to propose 23 amended claims in its Motion to Amend.  As discussed below, this interpretation is incorrect, but the actual Idle Free Order is a denial, without prejudice, of Patent Owner’s Motion to Amend for failure to comply with 37 CFR § 42.121(a), requiring a conference with the Board regarding any Motion to Amend.  The Board took the opportunity of such denial to provide detailed guidance on what must be contained in any Motion to Amend in inter partes review practice.  Further, the importance of this Order is underscored by the fact that virtually every subsequent decision from the Board that refers to a Motion to Amend references this Idle Free decision.

Claim-by-Claim Analysis

The Board first addressed the requirement, in both the statute and regulations, that only a reasonable number of substitute claims (a presumption of one substitute claim for each challenged claim) can be presented in a Motion to Amend.  Such a requirement is a nod to the expedited nature of IPR proceedings.  As such, the Board held that, “in the absence of a special circumstance, a challenged claim can be replaced by only one claim, and a motion to amend should, for each proposed substitute claim, specifically identify the challenged claim which it is intended to replace.”  Order at 5.  That is, Patent Owners do not get to simply propose the same number of amended claims as challenged claims – there must be a claim-to-claim correspondence between an amended claim and its corresponding challenged claim.

Additionally, on a claim-by-claim basis, the requirements of 37 CFR § 42.121(a)(2) should be addressed.  Specifically, Patent Owner should identify (i) how the amendment responds to a ground of unpatentability involved in the trial and (ii) why the amendment does not enlarge the scope of the claim or introduce new matter.

Special Circumstances

The “just” resolution of an IPR, set forth in 37 CFR § 42.1(b), permits Patent Owner to seek authorization for other amendments, in addition to those allowed (i.e., propose two or more amended claims for a single challenged claim), as discussed above, if there is a “special circumstance.”  Such actions must be discussed with the Board prior to the filing of a Motion to Amend, and there are plenty of hurdles to overcome….

For example, the Board specifically stated that a desire to have a new set of claims with a hierarchy of different scope is NOT a special circumstance.  Indeed, the Board suggested such a desire was “general and common.”  Order at 11.  Instead, because inter partes review proceedings are more adjudicatory than examinational, a Patent Owner desiring a remodeling of its claim structure, according to a different strategy, may do so in another type of proceeding before the office.  For example, via ex parte reexamination.  Left unaddressed by the Board is how this could actually take place.  Every reexamination proceeding that has been co-pending with an IPR proceeding has been stayed by the Board.  Further, it may be impossible to initiate an ex parte reexamination after an IPR proceeding given that any patent that survives inter partes review most likely will not be able to meet the “substantial new question of patentability” standard.

Regardless, the Idle Free requirements are in place, until the Federal Circuit has an opportunity to weigh in, and until that time, there are high hurdles that have been established to meet the “special circumstances” requirement.  To that end, the Board identified three instances where patentable distinction must be shown to achieve an acceptable Motion to Amend.

1.  Distinction Over the Prior Art

Patent Owner bears the burden of showing entitlement to the relief requested.  Order at 7.  To that end, of course, Patent Owner must show a patentable distinction of each proposed substitute claim over the prior art.  37 CFR § 42.20(c).  To meet this burden, the Board instructs that Patent Owner should identify, specifically, the feature added to the substitute claim, as compared to the claim it replaces, and come forward with “technical facts and reasoning” sufficient to persuade the Board that there is patentable distinction over the prior art.  Importantly, this distinction must be over art not just of record, but also all art known to Patent Owner.

“A mere conclusory statement by counsel…to the effect that one or more added features are not described in any prior art, and would not have been suggested or rendered obvious by prior art, is on its face inadequate.”  Order at 8.  As such, it is important to include declaration testimony from a technical expert that discloses: (a) the significance and usefulness of the added feature(s), and (b) the level of ordinary skill in the art, in terms of ordinary creativity and the basic skill set.

In opposition to a Motion to Amend, Petitioner may come forward with specific evidence and reasoning, including citation of prior art and submission of expert testimony, that rebuts the purported distinction over the prior art.

2.  Distinction Over All Other Proposed Claims for the Same Challenged Claim

To the extent Patent Owner proposes more than one substitute claim for a challenged claim, Patent Owner should label each additional proposed claim, after the first, as a “proposed new claim,” to signal its special status, and also identify the challenged claim it is intended to replace.  Order at 8.  Because a special circumstance is needed to justify more than one substitute claim for each challenged claim, to succeed in such a proposal, Patent Owner must show patentable distinction of the additional substitute claim over all other substitute claims for the same challenged claims.  By way of example, assume Proposed Claim 1′ is offered in place of challenged Claim 1, and Patent Owner also wishes to offer Proposed Claim 1”.  In addition to showing why Claims 1′ and 1” are patentably distinct over the prior art, Patent Owner must also demonstrate why Claim 1” is patentably distinct over Claim 1′.  In short, and as instructed by the Board, “[s]ubmission of multiple patentably non-distinct substitute claims is redundant and not meaningful in the context of an inter partes review.”  Order at 9.

3.  Distinction Over a Substitute Claim for Another Challenged Claim

A last situation identified by the Board is the case of Patent Owner offering an amendment to a claim that is dependent from a claim that has also been amended.  That is, consider the situation where Claims 1 and 2 are both challenged, with Claim 2 depending from Claim 1.  Patent Owner may offer Claim 1′, that is intended to replace Claim 1 upon a showing that Claim 1′ is patentably distinct over the prior art.  Patent Owner may also offer Claim 2′, without argument, if that claim is identical to Claim 2, but for a change in dependency (to new Claim 1′).  But, if Patent Owner seeks to add a further feature to Claim 2′, it must identify a special circumstance for adding that feature.  Per the Board, without such an explanation, the additional feature, on its face, would not be responsive to a ground of unpatentability.  That is, the amendment to Claim 1′, from which 2′ depends, ostensibly responds to a ground of unpatentability and, as such, the additional amendment to Claim 2′ requires a special circumstance.  To that end, Patent Owner is required to show patentable distinction between proposed Claim 1′ and proposed Claim 2′.  In short, “[a]dding features for no meaningful reason is generally inconsistent with proposing a reasonable number of substitute claims, and also not responsive to an alleged ground of unpatentability.”  Order at 9-10.

Statement of Contingency of Substitution

Lastly, the Board instructed that “the condition and target of substitution should be clearly stated, without ambiguity.”  Order at 10.  That is, Patent Owner must, on a claim-by-claim basis, identify the contingency of substitution; including which claim should be substituted for which claim, and under what circumstances.  Practitioners have taken to placing this statement in a parenthetical just before a proposed claim – i.e., “10.  (Conditional Proposed Substitute for Claim 1, to be entered if Claim 1 is deemed unpatentable).”

In the end, having completely re-vamped the requirements for a Motion to Amend, the Board gave Patent Owner a reasonable chance to fix its previously-filed Motion to Amend.  Onto the Federal Circuit…

The Mechanics of Motions to Amend in Inter Partes Review

As the first inter partes review trials head toward the deadline for a Patent Owner Response and potential Motion to Amend, the focus of the earliest trials is starting to turn to the mechanics of a Motion to Amend.  In addition to the Trial Practice Rules, the Board provided some guidance for motions to amend in an Order relating to the “Conduct of the Proceeding” in the first-filed inter partes review, Garmin Int’l v. Cuozzo Speed Tech. (IPR2012-00001).

Starting first with the applicable rules, motions to amend, like all motions, must comply with §42.22 “Content of petitions and motions.”  Specifically, a motion to amend must be filed as a separate paper and include: 1) a statement of the requested relief, 2) full statement of reasons for that relief, 3) any showings required by the rules for inter partes review, 4) a statement of material facts, and 5) any other showings or explanations required by the Board as a condition for authorizing the motion.  In addition, pursuant to §42.24(a)(v), the motion to amend must not exceed 15 pages.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]§42.121(a)(3) – “A reasonable number of substitute claims.  A motion to amend may cancel a challenged claim or propose a reasonable number of substitute claims.  The presumption is that only one substitute claim would be needed to replace each challenged claim, and it may be rebutted by a demonstration of need.”[/pullquote]

Motions to amend the patent-at-issue must also comply with §42.121 “Amendment of the patent.”  Pursuant to this regulation, one motion to amend is allowable, after conferring with the Board. Typically, such conferring occurs during the initial conference call that occurs shortly after institution of the inter partes review.  The due date for a motion to amend is no later than the filing of a Patent Owner Response.  The scope of the motion to amend must be limited to a response to a ground of unpatentability involved in the trial.  Further, no amendment may enlarge the scope of a claim or introduce new subject matter.  Lastly, the motion to amend must identify where in the disclosure of the patent the support for any amendment is located.

What is sure to be the most controversial portion of Rule 121 is the requirement that only a reasonable number of substitute claims be offered in a motion to amend.  As compared to reexamination practice, where unlimited numbers of claims could be offered, inter partes review rules state that there is a presumption that only one substitute claim is needed to replace each challenged claim.

In the Garmin case, the Board took the opportunity of a conference call, and subsequent order, to emphasize many of the above-requirements, including instructing the patent owner regarding the following:

  • Any proposed amendment or substitution of claims must explain how it obviates the grounds of unpatentability underlying the institution of the inter partes review;
  • Any proposed amendment or substitution of claims must explain where corresponding written description support in the specification can be found;
  • Such explanations should be contained in a motion to amend claims, which is separate from the Patent Owner Response; and
  • The motion to amend should not make any change to claims not involved in the proceeding.

While amending claims that are subject to inter partes review is an advantage to a patent owner, that advantage has been severely limited, as compared to the amendment practice common in reexamination proceedings.  Most particularly, it will be interesting to see how the Board handles the presumption of one substitute claim per challenged claim.  Given the Board’s strict reading of the Trial Practice Rules to date, however, patent owners should not expect much leeway regarding the number of claims proposed.