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Federal Circuit Gives IPR Petitioners Burden of Persuasion for Proving Patentability of Amended Claims

October 9, 2017

Since the early days of the America Invents Act (AIA), the U.S. Patent and Trademark Office has required patent owners seeking to amend claims in post-grant proceedings, such as inter partes reviews (IPRs), to demonstrate patentability of the amended claims, not only over a petitioner’s instituted grounds of unpatentability, but in light of all prior art known to the patent owner. As a result of this heightened standard, the Patent Trial and Appeal Board has thus far denied 95 percent of all patent owners’ motions to amend. This practice was upended on Wednesday, October 4, 2017, by a sharply divided en banc panel of the Federal Circuit in Aqua Prod., Inc. v. Matal, No. 2015-1177 (Fed. Cir. Oct. 4, 2017).

With five opinions spanning 148 pages, the Federal Circuit ultimately held that the burden is on the petitioner—not the patent owner—to show that a patent owner’s proposed amended claims are unpatentable over the prior art. In vacating its prior panel decisions that upheld PTO rules which placed the burden on the patent owner, this decision is anticipated to elevate post-grant claim amendments to a more attainable level.


The AIA permits a patent owner to “file 1 motion to amend the patent” by “cancel[ing] any challenged patent claim” and “[f]or each challenged claim, propose a reasonable number of substitute claims.” 35 U.S.C. § 316(d). The language of this statutory provision does not expressly allocate a burden of persuasion on the patent owner. The PTO, however, promulgated rules governing all motion practice before the PTAB, requiring in part that “[t]he moving party has the burden of proof to establish that it is entitled to the requested relief.” 37 C.F.R. § 42.20(c). In the case of motions to amend, the PTAB has since interpreted this rule to place the burden of persuasion on the moving party, the patent owner, requiring a showing—by a preponderance of the evidence—that any proposed claim amendments are patentable over known prior art, even art that is not part of the instituted grounds. According to some commentators, the PTO’s rules have since been in tension with Congress’s overall mandate that “[t]he petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.” 35 U.S.C. § 316(e).

Federal Circuit’s Opinion

Writing for the majority and facing a fractured panel, Judge O’Malley aptly summarized what she describes as “a narrow holding”:

Upon review of the statutory scheme, we believe that § 316(e) unambiguously requires the petitioner to prove all propositions of unpatentability, including for amended claims. This conclusion is dictated by the plain language of § 316(e), is supported by the entirety of the statutory scheme of which it is a part, and is reaffirmed by reference to relevant legislative history. Because a majority of the judges participating in this en banc proceeding believe the statute is ambiguous on this point, we conclude in the alternative that there is no interpretation of the statute by the Director of the Patent and Trademark Office (“PTO”) to which this court must defer under Chevron, U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). And we believe that, in the absence of any required deference, the most reasonable reading of the AIA is one that places the burden of persuasion with respect to the patentability of amended claims on the petitioner.

Opinion at 5-6.

Central to the decision was whether Chevron deference should apply to the PTO’s requirement that the patent owner bear the burden of persuasion regarding the patentability of amended claims presented in a motion to amend. Led by Judge O’Malley, a plurality held that no deference should be afforded because the literal text, legislative history and statutory framework of §§ 316(d) and (e) clearly indicate a congressional intent “to place the burden of persuasion for all propositions of unpatentability on the petitioner.” Opinion at 43. They reasoned inter alia that § 316(e) unequivocally states “the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence,” and explained that this burden never shifts to the patent owner—even in the context of a motion to amend claims. Id. at 24.

In support of this position, the majority pointed to the fact that “Section 316(e) uses the term ‘unpatentability,’ which may refer to either pending or issued claims, rather than the term ‘invalidity,’ which both courts and the PTO apply only to issued claims.” Id. at 26. The majority stressed that “[t]he terms ‘patentability’ and ‘unpatentability’ do not raise separate inquiries; if they did, Congress would not have placed the burden of proving ‘unpatentability’ on the petitioner in § 316(e) and then required the Board to issue a decision on ‘patentability’ in § 318(a) as if that were a disparate concept.” Id. at 27. Accordingly, the majority found that the burden enunciated in the statute applies equally to “all propositions of unpatentability arising during IPRs, whether related to originally challenged or entered amended claims.” Id. at 26 (emphasis in original).

The majority also addressed the PTO regulatory argument that § 316(a)(9) grants the Director of the PTO the authority to “set[] forth standards and procedures for allowing the patent owner to move to amend the patent under subsection (d) to cancel a challenged claim or propose a reasonable number of substitute claims.” The PTO argued that placing the burden of proving patentability of amended claims on the patent owner under Rules 42.20 and 42.121 is derived from this broad authority. Opinion at 44. This argument was also rejected. In reconciling the language of these regulatory requirements, the majority reasoned that Rules 42.20 and 42.121 merely “address preconditions to entry of the amended claims into the IPR,” and do “not address the ultimate relief sought by the petitioner in the IPR: a determination of unpatentability, leading to the cancellation of challenged patent claims—as originally issued or amended—after a final written decision.” Id. at 47.

Under a de novo review of the statutes, Judges O’Malley, Newman, Lourie, Moore, Wallach, Dyk and Reyna all agreed that the most natural reading of §§ 316(d) and (e) places the burden on petitioner to prove unpatentability of the amended claims. Using a separate line of reasoning, Judges Renya and Dyk found § 316(e) to be ambiguous with regard to allocating the burden of persuasion, but nevertheless agreed the Chevron deference did not apply. The Federal Circuit thus vacated the PTAB’s decision to deny the patent owner’s motion to amend and remanded for further proceedings.

With the burden now resting squarely on the petitioner, an increase in filed and granted motions to amend may be expected. It remains unclear though whether the petitioner is restricted to the asserted prior art in the instituted grounds to carry its burden of unpatentability with respect to any amended claim, or whether the petitioner can introduce additional prior art references. Compare Opinion at 26 (“The only remaining question is whether they are unpatentable in the face of the prior art cited in the IPR and any new art relevant to § 102 or § 103 that the petitioner asks be introduced into the IPR.”) with Reyna concurrence at 2 (“The only question that remains is whether the amended claims are patentable over the asserted prior art.”); see also Dissent at 23 n.6 (“Additional prior art may be needed to evaluate a new claim with a new element: if that element was absent from the claims on which the IPR was instituted, the petitioner may not have initially introduced prior art that addressed the element.”).

It also remains to be seen if the PTAB’s current motion practice is incongruent with the Federal Circuit’s decision given that the party bearing the burden of persuasion is now afforded but a single submission, while the non-burden-bearing party is afforded two submissions—having both the first and last word on the issue. These are questions with which the PTO, PTAB, and the courts will have to wrestle in the inevitable aftermath of the Federal Circuit’s decision.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Deborah H. Yellin
Partner – Washington, D.C.
Phone: +1.202.624.2947
Ali Tehrani
Counsel – Washington, D.C.
Phone: +1.202.624.2797
Kainoa Asuega
Counsel – Orange County
Phone: +1.949.798.1371