Background and Summary
The Patent Trial and Appeal Board’s (PTAB) obstacles to successful motions to amend have been daunting. As published previously, filing motions to amend have historically been an exercise in futility due to their low chance of success. But since 2019 the PTAB has taken steps to overhaul the motion to amend system, such as implementing its pilot program on motions to amend[i]. And the PTAB recently finished an in-depth study to better understand how motions are filed and the reasons they are granted or denied.[ii]
Aside from rulemaking, on July 6, 2020 the Precedential Opinion Panel (POP) issued Hunting Titan, Inc. v. DynaEnergetics Europe GmbH, IPR2018-00600, Paper 67 (PTAB July 6, 2020) that answered two outstanding questions regarding motion to amend practice:
(a) Under what circumstances and at what time during an inter partes review may the Board raise a ground of unpatentability that a petitioner did not advance or insufficiently developed against substitute claims proposed in a motion to amend?
(b) If the Board raises such a ground of unpatentability, whether the Board must provide the parties notice and an opportunity to respond to the ground of unpatentability before the Board makes a final determination.
In addressing the first question, the POP held the PTAB does have “the ability to raise a ground of unpatentability a petitioner has not advanced or has insufficiently developed” sua sponte. However, the POP also indicated that it “should do so only under rare circumstances.”[iii] These rare circumstances are limited situations in which the adversarial system, which underlies the inter partes review system, “fails to provide the Board with potential arguments for unpatentability of the proposed substitute claims.”[iv] This includes situations “where petitioner chooses not to oppose the motion to amend” or “where certain evidence of unpatentability has not been raised by the petitioner, but is readily identifiable and persuasive such that the Board should take it up in the interest of supporting the integrity of the patent system.”[v]
In addressing the second question, the POP further held that “due process requires that a patent owner receive notice of how the prior art allegedly discloses the newly-added limitations of each proposed substitute claim, as well as a theory of unpatentability asserted against those claims.”[vi] “And the patent owner must have the opportunity to respond to those factual allegations and legal theories.”[vii] This requirement is met only when patent owner is given “some explanation—from the petitioner when opposing a motion to amend or, in rare circumstances, the Board—of how the prior art allegedly meets the newly-added limitations.”[viii] It cannot, however, be given by pointing to the grounds asserted in the petition against the original claims and claiming that the arguments provide sufficient notice to a patent owner that the Board may apply the same ground against the newly–proposed substitute claims as petitioner in Hunting Titan attempted to do.[ix]
The PTAB’s Ability to Raise New Grounds
The POP’s reasoning that the PTAB has the ability to raise new grounds of unpatentability sua sponte held “the Board should not be constrained to arguments and theories raised by the petitioner in its petition or opposition to the motion to amend….Otherwise, were a petitioner not to oppose a motion to amend, the Patent Office would be left with no ability to examine the new claims.”[x]
In determining under what circumstances the PTAB should raise such arguments, the POP relied heavily on the notion that the adversarial process underlies the inter partes review system and generally the parties are in a better position to make the best arguments for their parties’ desired outcomes. Therefore, placing the burden on the PTAB to raise arguments sua sponte generally diminishes the incentives for petitioner to fully and cogently explain the basis for concluding the proposed substitute claims are unpatentable.[xi] As a result, in most instances it is inappropriate for the PTAB to raise arguments sua sponte regarding patentability because it undermines the adversarial process envisioned by Congress. The POP, however, realized that there are instances where, in the interest of supporting the integrity of the patent system, it would be appropriate for the PTAB to raise such arguments. Such situations include: (1) where a petitioner chooses not to oppose the motion to amend, and (2) where the record readily and persuasively establishes that substitute claims are unpatenable for the same reasons that corresponding original claims are unpatentable.[xii] Therefore, in limited circumstances the PTAB is allowed to raise arguments regarding patentability sua sponte.
In this case, the original PTAB panel had raised its own ground of anticipation against the proposed substitute claims. Based on the legal framework it set forth, the POP ultimately held that the original panel in this case should not have raised its own grounds related to unpatentability because the situations outlined in (1) and (2) above did not exist.[xiii]
Notice and Ability of Patent Owner to Respond
In determining the requisite notice to be given to patent owners, the POP recognized that neither party disputed that some form of notice should be given to patent owners.[xiv] Recognizing that due process required “the patent owner must have an opportunity to respond to those factual allegations and legal theories” attacking its patent, the POP suggested that once allegations and theories seeking to invalidate the patent were put forth, the patent owner should be given an opportunity to respond to these. Giving two possible paths to do so, the POP suggested either: (1) allowing the patent owner to provide supplemental briefing, or (2) holding an oral hearing to address the issues.[xv]
The POP went on to indicate that in this case, “even if this were a case in which the Board should have raised [unpatentability arguments] on its own, the parties lacked adequate notice of such an issue with respect to the proposed amended claims” and therefore the notice requirement was not met.
The POP balanced promoting motions to amend with the PTAB’s need to protect the public through a framework that both allows the PTAB to make arguments in limited circumstances when there are glaring validity issues, while also giving patent owners the ability to respond to these arguments so as to not violate their due process rights.
[i] See https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/new-pilot-program-concerning-motions
[ii] See https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/motions-amend-study
[iii] Hunting Titan, IPR2018-00600, Paper 67, 5.
[iv] Id. at 12.
[v] Id. at 12-13.
[vi] Id. at 15.
[ix] Id., 14.
[x] Id. at 7-8.
[xi] Id. at 11-12.
[xii] Id. at 12-13.
[xiii] Id. at 25-26.
[xiv] Id. at 14.
[xv] Id. at 14-15.