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Federal Circuit Shifts Burden of Proof for Amendments in Post-Grant Proceedings

On October 4, 2017, the Federal Circuit, sitting en banc, issued a ruling in Aqua Products, Inc. v. Matal, placing the burden of persuasion on the petitioner to prove the invalidity of amended claims in post-grant proceedings, such as Inter Partes Reviews (IPRs).  While the decision comprised five separate opinions, the majority rejected the Patent Trial and Appeal Board’s (PTAB’s) interpretation that the America Invents Act (AIA) places the burden to prove the patentability of proposed amendments during post-grant proceedings on the patent owner.   Historically, the PTAB had denied about 95% of motions to amend, making it almost impossible for a patent owner to amend or substitute challenged claims. See Majority Op. at 12 (citing PTAB Motion to Amend Study).

This shift in the burden of proof to the petitioner will make it more likely that the patent owner will file an amendment in response to an IPR. This means that defendants in district court will likely find IPRs less attractive because they give the patentee an opportunity to strengthen their patent by amending it in response to strong prior art.  The burden is then placed on the petitioner to find and assert new prior art, making it more difficult and costly to successfully invalidate a patent via IPR.  Then, unsuccessful petitioners will find themselves facing carefully narrowed claims in district court and estopped from asserting many invalidity arguments following the IPR.


In the IPR review on appeal, Aqua Products, the patent owner, moved to substitute several claims of its patent under 35 U.S.C § 316(d). The statute allows the patent owner to move once to cancel or substitute a reasonable number of claims, so long as they do not enlarge the scope of the patent or introduce new matter. The PTAB denied Aqua’s motion to amend, expressly finding that the amendments complied with § 316(d), but holding that Aqua did not meet its burden to show that the substitute claims were patentable. Aqua appealed, arguing, among other things, that the PTAB was not permitted to assign the burden of persuasion as to validity to the patent owner, and a Federal Circuit panel declined to address the issue of the burden. The Federal Circuit granted Aqua’s petition for en banc rehearing, specifically on the issue of the burden of persuasion.


The decision focused on whether to give deference under Chevron to the decisions of the USPTO in its interpretation of the statute.  The USPTO had promulgated two rules defining the procedure for amending claims during an AIA, 37 C.F.R. § 42.20 (general motion practice), and § 42.121 (motions to amend the patent), but neither specifically addressed the burden of persuasion for patentability of such amendments.  The PTAB interpreted these rules to place the burden of persuasion on the patent owner to demonstrate, by a preponderance of the evidence, any proposed amended claims are patentable, and in light of prior art not already part of the IPR.

The Chevron inquiry proceeds in two steps. First, the court determines whether Congress has directly spoken to the precise question at issue, in which case the unambiguous intent of Congress is given effect. Chevron v. NRDC, 467 U.S. 837, 842 (U.S. 1984).  Next, if the statute was ambiguous, the court grants deference to the agency’s interpretation so long as it is “based on a permissible construction of the statute.”

Here, the majority ruled that the AIA unambiguously placed the entirety of the burden on petitioners to show patentability of all claims during an IPR review, and that the conflicting USPTO interpretation would thus not be entitled to deference. Specifically, the court ruled that § 317(d) related to “entry into the IPR, not for entry of an amended claim into the patent,” according to the PTAB’s own precedent, and that, once a claim is “entered” into the IPR, it is “assessed for patentability alongside the original instituted claims.” Thus, once the substitute claims are “entered,” meaning they meet the procedural requirements (i.e., only one such motion is allowed as of right, and the claims must be narrower and not introduce new matter), they are simply reviewed as part of the IPR in place of the claims they substituted.

Once the substitute claims are “entered” into the IPR, they are reviewed like any other claims under § 316(e), which states that “the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.” The court reasoned that § 316(e)’s language is broad and clear – containing “no language … that confines its application to original claims for which an IPR has been instituted,” and thus reaches “every proposition of unpatentability at issue in the proceeding.”


This decision will likely make IPRs less attractive to defendants in district court, who may now prefer to litigate in court rather than give the patent holder the opportunity to make an amendment during an IPR to avoid the strongest prior art. As the court explained, once a substitute claim is entered “the only remaining question is whether it is unpatentable in the face of prior art cited in the IPR and any new art relevant to § 102 or § 103 that the petitioner asks be introduced into the IPR.” This will shift the power dynamic in an IPR to the patent owner by potentially enabling it to moot the original petition and force the petitioner to locate and seek the PTAB’s permission to add new art to the IPR.  Petitioners could then find themselves facing carefully narrowed, stronger patents in court after the IPR and estopped from asserting many invalidity arguments against the patent.