Federal Circuit Places The Burden Of Persuasion For Motions To Amend In IPRs On Petitioners

The Federal Circuit issued an en banc decision instructing the PTAB to assess patentability of amended claims in IPR proceedings without placing the burden of persuasion on the patent owner. Aqua Products, Inc. v. Matal, No. 2015-1177 (Fed. Cir. Oct. 4, 2017) (en banc, Stoll not participating).

Zodiac Pool Systems filed a petition for IPR of an Aqua Products patent. The PTAB instituted trial. Aqua Products filed a motion to amend its claims. The PTAB issued a final written decision determining that Aqua Products did not demonstrate patentability of the amended claims and denied the motion. Aqua Products appealed. A Federal Circuit panel affirmed the PTAB’s decision. Aqua Products sought rehearing en banc.

Sitting en banc, the Federal Circuit vacated and remanded the PTAB’s denial of Aqua Products’ motion to amend. On remand, the en banc court instructed the PTAB to issue a final decision assessing the patentability of the amended claims without placing the burden of persuasion on the patent owner.

The vacatur and remand result was supported by seven of the eleven participating Federal Circuit judges. Various judges had different views on the judgment and the rationale supporting that judgment.

According to Judge O’Malley, whose opinion was joined by four judges, the AIA statute authorizing claim amendments unambiguously requires the petitioner to prove unpatentability of amended claims. Therefore, O’Malley reasoned, the Patent Office’s contrary position placing the burden on the patent owner is not entitled to Chevron deference.

The remaining six judges believed that the statute is ambiguous on the allocation of the motion to amend burden, but those six judges split on the ramifications of the statute being ambiguous. Judge Taranto, joined by three judges, referred to the PTAB’s Rule 42.20(c). This rule places the burden of proof for a motion on the moving party, and the Patent Office made it clear that this rule applies to motions to amend. Judge Taranto took the position that the Patent Office’s placement of the burden for motions to amend on the patent owner is entitled to Chevron deference. Judge Reyna on the other hand, whose opinion was joined by Dyk, considered that the Patent Office has not proffered a fully considered interpretation of the statute authorizing claim amendments, and the Office’s position is therefore not entitled to Chevron deference.