TAKEAWAY: USPTO and PTAB may not place the burden of proving the patentability of proposed claim amendments during an IPR on the patent owner, but rather the burden of proving unpatentability is on the petitioner. As such, a patent owner may now have better success pursuing narrowing claim amendments by proposing substitute claims when a patent is challenged.

In Aqua Products, Inc., v. Matal, the Federal Circuit, sitting en banc, addressed which party in an inter partes review proceeding (IPR) before the Patent Trial and Appeal Board (PTAB) has the burden of proof regarding the patentability of proposed claim amendments. A previous panel of the Federal Circuit had upheld the PTAB’s decision denying the patent owner’s motion to amend various claims during an IPR.

The Federal Circuit’s analysis centered on 35 U.S.C. § 316(e), which states that “[i]n an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.” Relatedly, § 316(d) provides for the patent owner to file a motion to amend a challenged claim, so long as the amendment does not enlarge the scope of the claims or introduce new matter. The Court held that, rather than requiring the patent holder to prove the validity of proposed substitute claims, the petitioner has the burden of proving the invalidity of proposed substitute claims. The Court reasoned that this is in line with the petitioner’s burden in challenging the original patent claims, which is the basis of the IPR. The Court then delved into whether the Supreme Court’s Chevron standard required deference to the USPTO’s rule that allowed the PTAB to deny a patent owner’s motion to propose substitute claims at the PTAB’s discretion. However, the majority held that the statute was clear that the burden is on the petitioner, and thus, the USPTO’s rule is not entitled to any deference. Therefore, the PTAB cannot shift the burden of proving patentability of proposed claim amendments to the patent holder.

The Federal Circuit’s ruling is in line with the Court keeping a close eye on the PTAB and USPTO procedures under the America Invents Act. The decision may decrease a petitioner’s likelihood of success before by the PTAB by increasing the options available to a patent holder to maintain valid patent claims.