February 11, 2016

Federal Circuit Provides Guidance on Motions to Amend in IPR

In Nike v. Adidas, the Federal Circuit today gave patent owners in IPR the beginnings of a roadmap for how to successfully amend claims in an IPR. Readers of this blog will know by now that the PTAB rarely grants motions to amend, and that the Federal Circuit has shown little inclination to make the PTAB more generous in granting such motions.

Previous appeals from a denial of motion to amend have focused on the legal standard that the PTAB applies when evaluating amendments. Microsoft Corp. v. Proxyconn Inc., 789 F.3d 1292, 1305 (Fed. Cir. 2015) (“Proxyconn argued that because DRP was not one of the references over which the PTO had instituted review… the Board exceeded its authority under § 42.121(a)(2)(i) to deny substitute claims…”); Prolitec Inc. v. ScentAir Techs., 807 F.3d 1353, 1363 (Fed. Cir. 2015) (“Prolitec argued that it did not have the burden to establish patentability over prior art references cited in the patent’s original prosecution history because they are not prior art of record in the IPR,”); Synopsys Inc. v. Mentor Graphics, slip op. at 25 (“Mentor argues that Proxyconn does not control because [it] did not address whether the patentee ought to bear the burden to distinguish all prior art known to the patent owner and whether this requirement is contrary to 35 U.S.C. § 316(e),”). By contrast, Nike spent less time challenging the standard that the PTAB applies, and more time simply explaining why its substitute claims are patentable over the art at issue. Because the Federal Circuit could not affirm the PTAB’s obviousness conclusions, it remanded the case back to the PTAB, directing the PTAB to reconsider the motion to amend in view of the defects in the PTAB’s obviousness analysis.

The take-home message here is that if you want the Federal Circuit to grant your motion to amend, you should focus on why your substitute claims are patentable over the art in the case. Do not focus on whether the PTAB is applying an incorrect standard for evaluating when amendments are proper, because the PTAB’s standards will be evaluated under very deferential Chevron review.

A last important point to note here is that Adidas asked the Federal Circuit to deny the amendment because Nike had included a single sentence in its motion asserting that the new claims were “patentable over prior art known to Nike, but not part of the record of the proceedings.” The PTAB concluded that this was facially inadequate, and that having acknowledged that it knew of art not already of record, Nike was obliged to discuss such art before the motion could properly be granted. The Federal Circuit explicitly disagreed with this conclusion. Rather, the Federal Circuit held that “we cannot see how the statement used by Nike would be inadequate, absent an allegation of conduct violating the duty of candor.” Because there were no allegations in this record that Nike had violated its duty of candor, the Federal Circuit held that Nike’s failure to discuss other art cannot be a ground on which to deny the motion to amend. This is good news for patent owners, because it means that valuable page limits do not need to be consumed discussing non-record art.