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PTAB May Reject Motions to Amend In Inter Partes Reviews on Any Ground of Patentability

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On July 22, 2020, the Federal Circuit ruled that the Patent Trial & Appeal Board (“PTAB”) was not limited in its review of substitute claims in an inter partes review (“IPR”), and therefore could reject such claims as not patent-eligible under § 101. Uniloc 2017 LLC v. Hulu, LLC, No. 2019-1686 (Fed. Cir. Jul. 22, 2020).

In Uniloc 2017, the patent owner submitted a contingent motion to amend the claims in the event that PTAB found any of the claims unpatentable. Petitioner opposed the motion on several grounds, including that the claims were patent-ineligible under § 101. Patent owner replied that petitioner was not allowed to raise patent-eligibility issues in responding to a motion to amend, arguing that the Board may only reject amended claims as unpatentable based on anticipation and obviousness. In other words, the scope of review of substitute claims was confined to the scope of review of the challenged claims. Patent owner did not respond on the merits to Petitioner’s patent eligibility arguments. In the final written decision, PTAB found all claims unpatentable, and rejected patent owner’s motion to amend solely because the amended claims were unpatentable under § 101. Patent owner moved for rehearing, which was denied. Patent owner appealed.

The Federal Circuit rejected patent owner’s arguments, and held that PTAB may reject substitute claims on grounds other than merely anticipation or obviousness based on patents or printed publications. The Federal Circuit noted the IPR statute repeatedly requires PTAB to determine the “patentability” of proposed substitute claims, and that the Director should issue a certificate incorporating any amended claim “determined to be patentable.” § 318(c). Thus, because § 101 is a “patentability” issue, the Board may consider it. Further, the Federal Circuit ruled the failure to allow PTAB to fully review the claims could provide patent owner a way to unfairly obtain claims it could not obtain through ordinary prosecution. Accordingly, the PTAB’s rejection of the claims under § 101 was affirmed.

The Federal Circuit also rejected arguments that the appeal was moot in view of an earlier Federal Circuit opinion invalidating the same patent at issue in the IPR. In concurrent litigation, the Federal Circuit upheld a district court’s finding that the patent was invalid under § 101. Uniloc USA, Inc. v., Inc., 243 F. Supp. 3d 797, 811 (E.D. Tex. 2017), aff’d 733 F. App’x 1026 (Fed. Cir. 2018). Petitioner did not request rehearing before PTAB on its substitute claims until after the Federal Circuit affirmed the invalidity of the patent. Nevertheless, the majority opinion held that the case was not moot, because the Federal Circuit could still provide relief to appellant patent owner by reversing PTAB and allowing the substitute claims to issue.

Judge O’Malley dissented on both points. Following the Federal Circuit’s first opinion upholding the invalidity of the patent, she noted the patent was dead. In the statute, Judge O’Malley pointed out that a motion to amend is intended to present “substitute” claims, and no claim can be substituted for dead patent. As a result, the appeal should be moot in view of the Federal Circuit’s prior opinion. Further, the IPR statute requires the board to issue a decision on “patentability” as to the challenged and substitute claims. The term “patentability” should therefore have the same meaning as applied to both the challenged claims and the substitute claims. For this reason, Judge O’Malley argued the PTAB’s review of the patentability of substitute claims is limited to anticipation and obviousness over prior art patents and printed publications. Thus, any concerns that this would enable patent owners to unfairly broaden their patents or add new matter are addressed by separate statutory provisions expressly prohibiting broadening amendments. See § 316(d)(3).

What This Means for You

Petitioners should consider challenging motions to amend on any available ground of patentability, including subject matter eligibility under § 101, written description and definiteness under § 112, among other issues. Similarly, IPR patent owners should be prepared to argue that proposed substitute claims are patentable, and should respond on the merits to any argument raised by petitioners that the claims are not. Additionally, because this holding broadens PTAB authority, and with a divided panel, IPR litigants should monitor this case in the event that appellant requests rehearing en banc, or petitions for certiorari.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.