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AQUA PRODUCTS: The Federal Circuit Shifts The Burden of Proof On Amending Claims During An IPR From The Patent Owner To The Petitioner

The United States Court of Appeals for the Federal Circuit’s recent decision in Aqua Products Inc., v. Matal materially changes the burden of proof associated with the patentability of amended claims during an inter partes review (“IPR”), shifting the burden from the Patent Owner seeking the amendment to the IPR Petitioner opposing it.

Prior to the Aqua decision, if a Patent Owner sought to amend claims during an IPR, the Patent Trial and Appeals Board (the “Board”) placed the burden on the Patent Owner to prove that the proposed amended claims were patentable.  When Patent Owner Aqua attempted to amend its claims during an IPR challenge to its U.S. Patent No. 8,273,183, the Board found that Aqua had not met its burden and denied Aqua’s motion to amend.

On appeal, the Federal Circuit initially “upheld the Board’s approach of allocating to the patentee the burden of showing that its proposed amendments would overcome the art of record.”  Aqua petitioned the Board’s decision for en banc rehearing, which was granted.

The controlling question faced and answered by the Federal Circuit in its en banc rehearing was which party bears the burden of establishing patentability of amended claims in an IPR: Patent Owner or Petitioner?  According to the Director of the USPTO and the Board, the burden properly belonged on the Patent Owner pursuant to 37 C.F.R. § 42.20, a regulation promulgated by the Director to govern all motion practice before the Board, requiring that “[t]he moving party has the burden of proof to establish that it is entitled to the requested relief.”

However, the Federal Circuit disagreed, determining that “Congress explicitly placed the burden of persuasion to prove propositions of unpatentability on the petitioner for all claims, including amended claims.” As a safeguard against issuance of “untested” amended claims, the Federal Circuit noted that proposed amended claims must be narrower in scope and cannot add new matter.  As a result, the amended claims are necessarily subjected to the same earlier examination the original claim faced and are reassessed to determine whether they are supported by the patent’s written description.

In applying its final written decision to Aqua’s en banc appeal, the Federal Circuit vacated and remanded the Board’s original decision insofar as it denied the Patent Owner’s motion to amend claims.  Further, the matter was remanded for the Board to issue a final decision assessing the patentability of the proposed substitute claims without placing the burden of persuasion on the patent owner.  Importantly, the Federal Circuit also stipulated that the Board must follow this same practice in all pending IPRs unless and until the Director engages in notice and comment rulemaking regarding the correct burden on this issue.

It remains to be seen how the Director (or the Supreme Court) will respond to the Federal Circuit’s Aqua decision.  At least for now, the Board can no longer place the burden of establishing the patentability of amended claims in an IPR on the Patent Owner.  As such, this decision has the potential to be the most significant change to IPR proceedings since their statutory institution.  If the Director and the Board embrace a liberal amendment process in adherence with this decision, it is a brave new world for IPR proceedings where Petitioner risk could substantially increase.

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Michael T. Renaud

Member / Chair, Intellectual Property Division

Michael T. Renaud is an intellectual property litigator and patent strategist who helps Mintz clients protect and generate revenue from their patent holdings. Clients rely on Mike's counsel on complex and sensitive licensing agreement negotiations, acquisitions, and other technology transactions.
William A. Meunier is a Mintz attorney who has mastered inter partes review (IPR) proceedings and high-stakes patent litigation. He has helped patent owners achieve success in over 90% of IPRs, compared to the industry average of only 35%. Bill has decades of experience litigating patent cases.
Michael C. Newman represents Mintz clients in intellectual property disputes, with a focus on Section 337 investigations before the US International Trade Commission. His experience spans all phases of litigation. Michael successfully represents patent owners in inter partes review proceedings.
Matthew S. Galica focuses his practice on patent litigation, strategic IP counseling, and patent valuation. He represents high-tech companies, including those with standard-essential technology, before the International Trade Commission, Federal district courts, and Patent Trial and Appeal Board.