By Phillip S. Beck and Christian Platt

On October 21, 2019, the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office (“USPTO”) provided a Notice of Proposed Rulemaking (“NPRM”) concerning their rules of practice in allocating burdens of persuasion on motions to amend in America Invents Act (“AIA”) trial proceedings before the PTAB.  These new proposed rules will allocate to patent owners the burden of demonstrating that a motion to amend complies with necessary statutory and regulatory requirements, and to petitioner, the burden to show the unpatentability of substitute claims proposed in a motion to amend.  In addition, the proposed rules grant the PTAB discretion to, in the interests of justice, grant or deny a motion to amend based on the record in the proceeding and regardless of the burdens assigned to any party.

The NPRM indicates that its purpose is to “issue specific rules applicable to motions to amend,” a move that is due in part to the Federal Circuit’s decision in Aqua Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc) (“Aqua Products”), in which the Federal Circuit concluded, among other things, that the USPTO had not yet adopted a rule allocating the burden of persuasion with respect to the patentability of proposed substitute claims in AIA trials.  For further background, see our post on Aqua Products and subsequent posts on related developments following Aqua Products.  In light of Aqua Products, as well as comments received from the public in response to a Request for Comments, the USPTO proposes specific rules[1] concerning burdens of persuasion in motions to amend.

The NPRM adds identical subsections addressing burdens of persuasion to 37 C.F.R. §§ 42.121 (provisions for inter partes review) and 221 (provisions for post-grant review) for “[a]mendment of the patent” in AIA trials:

(d)       Burden of Persuasion. On a motion to amend:

(1) A patent owner bears the burden of persuasion to show, by a preponderance of the evidence, that the motion to amend complies with the requirements of paragraphs (1) and (3) of 35 U.S.C. 316(d), as well as paragraphs (a)(2), (3), (b)(1), and (2) of this section;

(2) A petitioner bears the burden of persuasion to show, by a preponderance of the evidence, that any proposed substitute claims are unpatentable; and

(3) Irrespective of paragraphs (d)(1) and (2) of this section, the Board may, in the interests of justice, exercise its discretion to grant or deny a motion to amend for any reason supported by the evidence of record.

Whether the USPTO may place the burden of persuasion on the patent owner for all of these requirements under proposed subsection (d)(1) is, however, a potentially open question post-Aqua Products.  Under Aqua Products, patent owners have a burden of production on motions to amend, to assist the PTAB in determining whether the motion is compliant.  It is not clear, however, whether the USPTO can also place on patent owners a burden of persuasion, as it may conflict with § 316(e).  Under 35 U.S.C. §  316(e), “the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.”  Subsection (d)(1) of the proposed rules, for instance, requires patent owners to carry the burden of persuading the PTAB that the proposed substitute claims are proper in scope because they “respond to a ground of unpatentability involved in the trial.”  See 37 C.F.R. § 42.121(a)(2)(i).  To comply with the rules, patent owners may have to argue that the substitute claims are responsive to a ground of unpatentability because they overcome the prior art of record in the proceeding.  That outcome seems contrary to § 316(e) and the Federal Circuit’s holding in Aqua Products.

Finally, subsection (3) of the proposed rules allows the PTAB to make a determination on its own whether a motion to amend is compliant, or whether proposed substitute claims are unpatentable, if, for instance, the petitioner or patent owner has dropped out of the proceeding.

The NPRM will be open for written comments from the public until December 23, 2019.

[1] The proposed rules also allocate burdens of persuasion as set forth in a precedential PTAB decision, Lectrosonics, Inc. v. Zaxcom, Inc., Cases IPR2018-01129, 01130 (P.T.A.B. Feb. 25, 2019) (Paper 15).

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Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Currently co-chairing the Firm's PTAB subpractice and involved in proceedings at the Board since the first day of their availability in September 2012, Matt regularly represents clients as both petitioners and patent owners at the Board. He further works as an advocate for clients in appeals from Board proceedings at the Federal Circuit.