The Patent Trial and Appeal Board (PTAB) has been notoriously shutting down attempts to amend claims during inter partes review proceedings, leading one Federal Circuit judge to remark that the option to amend “thus far appears to be almost entirely illusory.” In these decisions, the PTAB has stringently interpreted its rules for presenting a motion to amend, and the Federal Circuit has treated the PTAB’s interpretations with great deference. In Prolitec, Inc. v. Scentair Techs., Inc., the majority of the Federal Circuit panel again applied a deferential review and sustained the PTAB’s denial of a motion to amend, this time over a striking dissent.   

In this case, the PTAB faulted the patent owner for failing to discuss how its proposed claims would be patentable over all of the “prior art of record,” which the PTAB interpreted as including all of the references discussed during the IPR and all of the references cited during the original prosecution of the challenged patent, even if those references were not discussed in the IPR petition. Because one of the references cited during the original prosecution included the feature that the patent owner sought to include by amendment, and because the patent owner did not address whether that reference could be combined with the other references discussed in the IPR to render the amended claim obvious, the Federal Circuit sustained the PTAB’s refusal to enter that amendment. Of particular note is the deferential review provided by the Federal Circuit, sustaining the actions of the PTAB because they were “not in conflict with any statute or regulation” and “not unreasonable.” As a result, parties in an IPR proceeding would be well served to keep abreast of the evolving PTAB rules for amending claims, including the current requirement to consider all of the art cited in the IPR and in the original prosecution. 

The Facts of Prolitec, Inc. v. Scentair Techs., Inc.

Scentair Technologies, Inc. (Scentair) challenged a patent owned by Prolitec, Inc. (Prolitec) based on several prior art references. As part of its defense, Prolitec sought to amend claim 1 of its patent to incorporate a feature that appeared to overcome the particular references used by Scentair in the IPR proceeding. In fact, Prolitec’s proposed amendment sought to explicitly incorporate a claim construction position it had taken as part of its initial defense, along with an explanation of how the prior art provided by Scentair would not render its claims unpatentable under its construction.

However, the PTAB denied Prolitec’s attempt to amend on the ground that Prolitec did not demonstrate that the amended claim was patentable over all of the “prior art of record,” which the PTAB interpreted to include the references cited during the original prosecution of the patent at issue in addition to the specific references raised by Scentair. In particular, the PTAB noted that one of the references cited during the original prosecution of the patent discussed the specific feature Prolitec sought to include by its amendment, and faulted Prolitec for failing to address why that reference could not be combined with the other prior art references raised by Scentair to render the amended claim obvious.

On appeal, Prolitec challenged the PTAB’s actions, but to no avail. Instead, the Federal Circuit reviewed the PTAB’s decision and concluded that it was “a reasonable one at least in a case, like this one, in which the Board’s denial of the motion to amend rested on a merits assessment of the entire record developed on the motion, not just on the initial motion itself.” The Federal Circuit also noted that the PTAB’s interpretation “is not in conflict with any statute or regulation” and that allocating this burden to the patent owner is “not unreasonable” because “the prior art references cited in the original patent’s prosecution history often will be the closest prior art and will already have been reviewed by the patentee.” The Federal Circuit appears to be taking a policy-based approach to this decision, stating that such a rule helps “effectuate the purpose of IPRs to improve patent quality and limit unnecessary and counterproductive litigation costs.” The Federal Circuit further emphasized that the PTAB rejected Prolitec’s motion “on the merits,” noting the opportunities Prolitec had to discuss the particular references identified by the PTAB, including a direct question about a particular combination during oral argument. The Federal Circuit made clear that its decision was based on an assessment of the full record, and was not a decision “based entirely on procedural or other deficiencies in the initial motion, independently of any consideration or assessment of the full record developed on the motion for what it indicates about the patentability of the proposed substitute claims.”

In dissent, Judge Newman disagreed with the PTAB’s approach and, after review of the legislation that authorized IPR proceedings (the America Invents Act), stated that “entry of a complaint amendment is of statutory right.” As a result, according to Judge Newman: “When a proposed amendment would resolve a dispositive aspect of claim breadth, refusal to enter the amendment is contrary to both the purpose and the text of the America Invents Act.” The dissent further noted that the PTAB’s evolving rules, which had changed during the course of the appeal, conflicted with the positions taken by the Patent Office in this case. In addition, the dissent argued that placing the burden for proving validity of an amended claim on the patent owner is contrary to the America Invents Act, which in her view properly places the burden on the petitioner. To conclude, the dissent emphasized how IPR proceedings were crafted to provide “a careful balance of the various interest and needs” of the patent system, which supposedly includes both the ability to invalidate overly broad claims and to amend claims to properly protect actual inventions, in order to “rehabilitate the innovation incentive.” But, in her view, the majority’s deferential review failed to meet its “judicial obligation to assure that the administrative mechanisms are faithful to the legislative purpose.”