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Aug 30

Federal Circuit Demonstrates Willingness to Rein in PTAB’s Onerous Idle Free Rules Regarding Claim Amendments

cafc1Patentees have been generally frustrated with the Board’s unwillingness to grant motions to amend. The Board’s Idle Free case, and its progeny, have added a number of requirements to a motion to amend that are above and beyond the simple requirements set forth in the IPR implementing statute. While the Federal Circuit has, generally, stated that the Board can, via decisions like Idle Free, define the characteristics of IPR proceedings, some of those requirements are beginning to fall by the wayside. Another requirement was knocked down by the Court today in Veritas Techs. v. Veeam Software (August 30, 2016). No longer must a patentee show that added claim elements in a motion to amend are, individually, inventive over the known prior art.  The Federal Circuit’s rebuke of the Board on this point  gives patentees more hope for future amendments.

The Veritas IPR involved a patent covering systems and methods for restoring computer data.  As a first line of defense, the patentee argued for a narrow claim construction in an effort to avoid the prior art.  That argument was rejected by both the Board and the Federal Circuit, with citation to the broadest reasonable construction claim construction standard.  As a second line defense, the patentee presented a conditional motion to amend which explicitly added the patentee’s claim construction argument to the claims.  The Board also rejected that motion, a ruling the Federal Circuit characterized as “based on its insistence that the patent owner discuss whether each newly added feature was separately known in the prior art.”  Specifically, the Board had faulted the patentee for discussing only “the newly added features in combination with other known features.”  The Federal Circuit held that position to be arbitrary and capricious and thus in violation of the Administrative Procedure Act.

Specifically, the Court found several instances in the record where the patentee (or its expert) explained that prior art systems did not contain the newly added features.  The Court could “not see how the Board could reasonably demand more from Veritas,” particularly in light of the “long line of Supreme Court and Federal Circuit cases (including KSR) which note “that novel and nonobvious inventions often are only a combination of known individual features.”  In light of that precedent, the Court “fail[s] to see how describing a combination is meaningfully different from describing what is new about the proposed claims, even in comparison to the unamended claims.”

As a final note, the Court explained the recent grant of en banc rehearing in In re Aqua Products (concerning the allocation of burdens in IPR amendment practice) did not affect the issue in this case.  The Court thus remanded instead of waiting for the decision in Aqua Products.