USPTO Provides New Guidance on Motions to Amend During IPR

| Benjamin Anger

On June 1, 2018 the U.S. Patent and Trademark Office designated a Board order in Western Digital Corporation v. SPEX Technologies, Inc. as informative on the issue of Motions to Amend during an IPR. At the same time, the USPTO de-designated two previously designated orders concerning Motions to Amend. The Western Digital order provides eight separate areas of guidance for the parties in the event the patent owner elects to file a Motion to Amend. Some of the information may be familiar to IPR practitioners because of overlap with the de-designated orders, but the Western Digital order importantly incorporates new guidance from recent cases and Board practice. Thus, IPR litigants should be aware of several important practice changes reflected in the order.

First, the Western Digital order states that Motions to Amend will normally be treated as contingent, i.e., the Board will only consider the amended claim if a preponderance of the evidence establishes that the original patent claim it replaces is unpatentable. The Board, however, encouraged patent owners to identify the contingency of the amended claims on a claim-by-claim basis.

Second, the order confirms that “a patent owner does not bear the burden of persuasion to demonstrate the patentability of substitute claims presented in a motion to amend.” Such guidance is in line with, and a result of, the Federal Circuit’s en banc decision in Aqua Products Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017), in which the court reversed the Board’s practice of placing the burden of proving patentability of proposed substitute claims on the patent owner. The Western Digital order states that the burden of persuasion “will ordinarily lie with the petitioner to show that any proposed substitute claims are unpatentable.” The Board seems to qualify its guidance—“will ordinarily lie”—because the order also recognizes that the Board itself may be required to “justify any findings of unpatentability” when, for example, the petitioner ceases to participate in the proceeding.

Third, the Board reiterated its original guidance that, a “reasonable number” of substitute claims per challenged claim is generally presumed to be one, but the patent owner may rebut this presumption by demonstration of need.

Fourth, the Western Digital order confirms that proposed substitute claims are not strictly limited to addressing issues of novelty and nonobviousness in the instituted grounds. As a threshold, proposed claim amendments must address all grounds of unpatentability, but a patent owner may also propose “[a]dditional modifications that address potential 35 U.S.C. § 101 or § 112 issues.” The Board reasons here that allowing patent owners to address any § 101 or § 112 issues serves the public interest and ensures a just and fair resolution to the proceeding. Further, the Board pointed to its previously-promulgated Rule (37 C.F.R. § 42.121) that “[a] motion to amend may be denied where . . . [t]he amendment does not respond to a ground of unpatentability involved in the trial” (37 C.F.R. § 42.121(a)(2)(i)) and “amendment . . . may not enlarge the scope of the claims of the patent.” 37 C.F.R. § 42.121(a)(2)(ii).

Fifth, the Board further pointed to Rule 121(a)(2)(ii)’s requirement that the Motion to Amend may not add new matter. Both requirements of Rule 121(a)(2)(ii) are required by statute, 35 U.S.C. § 316(d).

Sixth, the Board noted its provision in the Rules that a claim listing for each proposed substitute claim is required and may be placed in a separate Appendix that does not affect the page limit of the Motion to Amend.

Seventh, the Board noted the long-standing page limit requirements in the Rules for Motions to Amend and oppositions to Motions to Amend. The petitioner may submit additional testimony and evidence with an opposition to the Motion to Amend, and a patent owner may do likewise with a reply.

Finally, Western Digital order reiterates that the duty of candor under 37 C.F.R. § 42.11 extends to both the patent owner and the petitioner. In the context of a Motion to Amend, the patent owner’s duty includes disclosure of information that is material to patentability of the substitute claims. The order warns patent owners that “[i]nformation about an added limitation may be material even if it does not include the rest of the claim limitations.” Here, the Board seems to suggest that patent owners should be inclusive in disclosure of information that may be material to patentability of the substitute claims. The order also reminds the petitioner that it bears a duty of candor to the Patent Office, which, the order states, could include submitting “objective evidence of non-obviousness” of the proposed substitute claims that is not already of record in the case. However, the order does not expound further on the petitioner’s duty of candor, except to cite to the regulation, 37 C.F.R. § 42.51(b)(iii) (“[A] party must serve relevant information that is inconsistent with a position advanced by the party during the proceeding concurrent with the filing of the documents or things that contains the inconsistency.”).

By designating the Western Digital order as informative, the Board has brought together its existing and new guidance for Motions to Amend in one place, providing IPR litigants a helpful guide in navigating this path that has traditionally been seldom-traveled. According to USPTO statistics, Motions to Amend have been filed in just 9% of post-grant trials through the end of FY2017. Subsequent to Aqua Products Motions to Amend have increased, but it remains to be seen if the Board grant rate for Motions to Amend will significantly increase going forward.