Motions to Amend at the PTAB after Aqua Products, Inc. v. Matal – What’s a Patent Owner to Do?

Article co-written by Yuri Levin-Schwartz, Ph.D., a law clerk at MBHB.

In 2011, Congress enacted the America Invents Act and created new mechanisms to challenge issued claims at the Patent Office. The goal was to expeditiously resolve issues of patent validity in response to the public outcry that validity challenges in the federal courts were too difficult, costly, and time-consuming. In these new proceedings, petitioners were provided many advantages over similar actions in district courts, such as a lower evidentiary standard. In what appeared to be an attempt to even the playing field, Congress provided patent owners with the statutory authority to amend claims in these proceedings – a benefit not available in Federal court.

However, in practice, this ability has proven all but illusory. This is plainly demonstrated by the Motion to Amend Studies conducted by the Patent Trial and Appeal Board (“PTAB” or “Board”) that analyzed statistics in all IPRs, CBMs, and PGRs. The third and most recent iteration included data through the Fiscal Year 2017 (which ended on September 30, 2017). The first thing this study revealed is that motions to amend were filed in only 275 out of 2,766 completed trials, or 10%. The Board counted a trial as “completed” when it was terminated due to settlement, when there was a request for adverse judgement, when it was dismissed, or when there was a final written decision. Moreover, joined or consolidated trials were only counted once in the statistics. Then, out of those 275 trials, a decision on the merits was only reached for 170 motions to amend with substitute claims. Strikingly, the motions were only granted in four cases, with a grant-in-part in an additional 10 cases.

These low numbers have been thought to be due, at least in part, to the fact that the Patent Office put the burden on the patent owner to prove patentability. This burden shifting to the patent owner, however, was not found in either the statute or the rules promulgated by the Patent Office. Instead, the PTAB interpreted its regulations in an early decision, Idle Free Sys., Inc. v. Bergstrom, Inc.[1] In Idle Free, the PTAB indicated that the burden is on the patent owner to show “a patentable distinction over the prior art of record and also prior art known to the patent owner.”[2] The Board subsequently relaxed the patent owner’s burden in MasterImage 3D, Inc. v. RealD Inc., by only requiring the patent owner to identify how its claim amendments were patentable over the “prior art of record,” which could include “any material art in the prosecution history of the patent.”[3] Two three-judge panels of the Federal Circuit approved of the PTAB’s interpretations of its own regulations, Microsoft Corporation v. Proxyconn, Inc. for the Idle Free interpretation and Nike v. Adidas (Fed. Cir. 2016) for the MasterImage clarification. As a result, an en banc decision was required at the Federal Circuit to allow them to correct this practice via appellate review. And this is exactly what the Federal Circuit did last year.

Aqua Products, Inc. v. Matal

In Aqua Products, Inc. v. Matal, a highly fractured en banc Federal Circuit determined that the PTAB can no longer place the burden of establishing the patentability of amended claims on the patent owner in IPR proceedings.[4] The decision itself contained multiple opinions (five to be exact) and, not surprisingly, figuring out the actual outcome is anything but trivial. Even identifying which judge agreed with which opinion is fairly convoluted. The “main” opinion was authored by Judge O’Malley, and was joined by Judges Newman, Lourie, Moore, and Wallach. It expressed the judgment of the court because Judges Dyk and Reyna concurred in the result. However, despite 148 pages of opinions, there were only two legal conclusions (according to Judge O’Malley) that can be gleaned as supporting the judgment of the court. The rest, as Judge O’Malley put it, were cogitations.

The first legal conclusion stemmed from the belief of the majority that 35 U.S.C. § 316(e), the statute that establishes the evidentiary standard for IPRs, was ambiguous with regard to whether the burden of persuasion of establishing the unpatentability of substitute claims should be on the petitioner. Correspondingly, because it was necessary to reach “Chevron Step Two,” the court found that “the PTO has not adopted a rule placing the burden of persuasion with respect to the patentability of amended claims on the patent owner that is entitled to deference.”[5] The second legal conclusion flowed from this, specifically “in the absence of anything that might be entitled to deference, the PTO may not place that burden on the patentee.”[6] As a result, the court vacated the original PTAB final written decision “insofar as it denied the patent owner’s motion to amend.”[7] The case was “remanded for the Board to issue a final decision under § 318(a) assessing the patentability of the proposed substitute claims without placing the burden of persuasion on the patent owner.”[8] Moreover, the Board was instructed to follow the same practice “in all pending IPRs unless and until the Director engages in notice and comment rule-making.”[9]

The only opinion (or part thereof) that garnered a majority of the Judges was authored by Judge Reyna. His opinion was joined in whole by Judge Dyk, but included a “Part III” that was joined by Chief Judge Prost and Judges Taranto, Chen, and Hughes. Interestingly, these four all dissented from the ultimate judgment. This Part III was directed to the burden of production, and specifically whether the patent owner as the moving party has the burden of production for motions to amend. Judge O’Malley belittled Part III because it allegedly had no proposed judgement attached to it. Therefore, according to her, it amounted to nothing more than dicta. Judge Reyna disagreed, arguing that Part III of his opinion did set forth a judgement of the court “on what the Board may and may not do with respect [to] the burden of production on remand in this case.”[10] He concluded that “the Patent Office must by default abide by the existing language of inter partes review statute and regulations, § 316(d) and 37 C.F.R. § 42.121, which only allocate a burden of production to the patent owner.”[11] In subsequent decisions, the Patent Office appears to disagree with Judge O’Malley that Judge Reyna’s pronouncement was mere dicta because it has cited to Part III of his opinion as authoritative.[12]

The Aqua Products case, however, might not be the panacea hoped for by patent owners. It is possible that more claim amendments will survive such proceedings, and it is likely that more motions to amend will be filed. But any amended claim will still be susceptible to intervening rights. Considering that the majority of patents involved in IPRs are also being asserted in concurrent district court litigation, claim amendments might not always be feasible.

The Chief Judge Responds

On November 21, 2017, PTAB Chief Judge Ruschke issued a memorandum entitled “Guidance on Motions to Amend in view of Aqua Products.”[13] The Chief Judge based his guidance on one aspect of the Aqua Products case, specifically that “the Board will not place the burden of persuasion on a patent owner with respect to the patentability of substitute claims presented in a motion to amend.”[14] In fact, the guidance suggested that “practice and procedure before the Board will not change,” other than that motions to amend will be granted in cases in which the “entirety of the evidence of record before the Board is in equipoise as to the unpatentability of one or more substitute claims . . . .”[15] As a result, patent owners must still meet the requirements for amending the claims as found in 37 C.F.R. § 42.121 (or § 42.211 for PGR proceedings), including only proposing a reasonable number of substitute claims, not enlarging the claim scope or introducing new matter, and making the claim amendments responsive to a ground of unpatentability involved in the trial. Moreover, the Chief Judge reminded patent owners (as well as petitioners) that they have a duty of candor and good faith to the Office during the proceedings, pursuant to 37 C.F.R. § 42.11. Correspondingly, patent owners still have a duty to disclose information of which they are aware that would be material to the patentability of any substitute claims.

With regard to how motions to amend will be handled procedurally, Chief Judge Ruschke also indicated that nothing will change. Therefore, the rules regarding types, timing, and page limits for briefs will not change. In addition, the standard scheduling order will continue to provide that patent owners may file motions to amend on “Due Date 1.” And not surprisingly, patent owners are still required to confer with the Board before filing a motion to amend as provided by 37 C.F.R. §§ 42.121(a) and 42.221(a). With regard to trials that have already been instituted, the Chief Judge implied that the Board would be open to addressing new or substitute claims.[16]

Does Anyone Have The Burden (and Will That Change)?

The one detail that is missing from the guidance is whether the petitioner bears any burden with regard to motions to amend. Even while acknowledging that the patent owner does not bear the burden of persuasion, the Board has apparently taken the position that no one actually does. Instead, the Board has indicated that it will rule on such motions by simply looking at the entirety of the record.[17] This raises the possibility that the Board could deny a motion to amend in cases where the patent owner has satisfied the statutory requirements, even where the petitioner has not opposed the motion (or provided any evidence with regard to the substitute claims).

Moreover, the Aqua Products decision left open the possibility that the burden of persuasion for claim amendments could be placed back on the patent owner, provided the Office first goes through proper notice and comment rule-making. There has been no indication from the Office that it intends to do so. But in an action that might have tipped its hand, the Office recently filed an Intervenor’s Petition for Panel Rehearing in the case of Bosch Automotive Service Solutions, LLC v. Matal.[18] The Office is not asking the Court to alter its judgment in the case, but rather to revise the opinion because it believes the panel decision incorrectly stated the holding of Aqua Products when it said: “Rather, the petitioner bears the burden of proving that the proposed amended claims are unpatentable ‘by a preponderance of the evidence.’ 35 U.S.C. § 316(e).”[19] This reading would suggest that the statute is not ambiguous, and as such, any promulgated rule would not be entitled to Chevron deference. While the Office may have a valid point, it begs the question why it is expending the energy and resources to request this change. That is, unless it has plans to promulgate a new rule in the future.

[1] IPR2012-00027, Paper 26 (PTAB June 11, 2013).

[2] Id. at 7.

[3] IPR2015-00040, Paper 42 at 2 (PTAB July 15, 2015).

[4] 872 F.3d 1290, 1296 (Fed. Cir. 2017).

[5] Id. at 1327.

[6] Id.

[7] Id. at 1296.

[8] Id. at 1328.

[9] Id.

[10] Id. at 1341.

[11] Id. at 1342.

[12] See, e.g., Apple Inc. v. Personalized Media Communications LLC, IPR2016-01529, Paper 38 at 56 (PTAB Feb. 15, 2018) (“‘There is no disagreement that the patent owner bears a burden of production in accordance with 35 U.S.C. § 316(d). Indeed, the Patent Office has adopted regulations that address what a patent owner must submit in moving to amend the patent.’ [Aqua Products] at 1341.”)

[13] Memorandum from David P. Ruschke, Chief Administrative Patent Judge, to the Patent Trial and Appeal Board, U.S.P.T.O (Nov. 21, 2017), available at

[14] Id. at 2.

[15] Id.

[16] Id. at 3.

[17] See, e.g., Apple Inc., IPR2016-01529, Paper 38 at 57 (Accordingly, we base our decision on the substitute claims provided in the Motion to Amend on the entirety of the record before us.)

[18] 878 F.3d 1027 (Fed. Cir. 2017).

[19] Id. at 1040.


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