«

»

Aug 14

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…