Lectrosonics, Inc. v. Zaxcom, Inc.

When a patent owner files a motion to amend in an inter partes review, a request to substitute claims is ordinarily treated as contingent, the burden of persuasion on unpatentability of substitute claims ordinarily lies with the petitioner by a preponderance of the evidence, and the Board must first determine that the motion meets the requirements of 35 U.S.C. § 316(d) and 37 C.F.R. § 42.121. Those requirements include a reasonable number of substitutes (presumptively one per challenged claim), responsiveness to a ground involved in the trial, no enlargement of scope or new matter, written description support in the original disclosure set out in the motion itself, and a claim listing. No prior precedent is named as overruled. The Order consolidates guidance on motions to amend and applies Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc), the Board's November 2017 Memorandum, and Bosch Automotive Service Solutions, LLC v. Matal, 878 F.3d 1027 (Fed. Cir. 2017). A petitioner ordinarily bears the burden of showing substitute claims unpatentable by a preponderance of the evidence, and its opposition is limited to 25 pages. A petitioner also has a duty of candor about information inconsistent with its positions, such as objective evidence of non-obviousness. A patent owner no longer bears the burden of persuasion on patentability, but it must still meet the statutory and regulatory requirements. These include written description support for each substitute claim as a whole, cited to the original disclosure as filed and set out in the motion rather than the claim listing. The patent owner must also disclose material information about each added limitation. The Board relied on Aqua Products and Bosch for the burden allocation, and on TurboCare and In re Rasmussen for the new matter and written description requirement. LEGAL TEST OR STANDARD: Under 35 U.S.C. § 316(d) and 37 C.F.R. § 42.121, the Board first determines whether the motion meets the statutory and regulatory requirements. A request to cancel is not contingent, but a request to substitute ordinarily is, and a substitute is considered only if the original claim is shown unpatentable by a preponderance of the evidence. There is a rebuttable presumption of one substitute per challenged claim, rebutted by a demonstration of need, judged claim by claim. The amendment must respond to a ground of unpatentability involved in the trial, and additional § 101 or § 112 fixes are allowed once a claim is amended for a prior art ground. It must not enlarge scope or add new matter, must show written description support for each substitute claim as a whole, and must include a claim listing showing changes. Only then does the Board decide unpatentability by a preponderance of the evidence on the entire record, with the burden ordinarily on the petitioner. TRIGGERING FACTS: The patent owner files, after conferring with the Board under 37 C.F.R. § 42.121(a), a motion to amend in an instituted inter partes review (here IPR2018-01129 and IPR2018-01130) by DUE DATE 1 in the Scheduling Order. The motion proposes substitute claims, or cancels claims, under 35 U.S.C. § 316(d)(1). The petitioner may oppose with additional evidence, the patent owner may reply, and the petitioner may file a sur-reply. The Board may rely on record evidence itself if, for example, the petitioner ceases to participate. KEY QUOTE: "Rather, as a result of the current state of the law and USPTO rules and guidance, the burden of persuasion ordinarily will lie with the petitioner to show that any proposed substitute claims are unpatentable by a preponderance of the evidence." (Paper 15, p. 4) PRIOR PRECEDENT AFFECTED: No prior Board precedential or informative decision is overruled. The Order applies Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017), the Memorandum "Guidance on Motions to Amend in view of Aqua Products" (Nov. 21, 2017), and Bosch Automotive Service Solutions, LLC v. Matal, 878 F.3d 1027 (Fed. Cir. 2017). It cites Veeam Software Corp. v. Veritas Techs., LLC, Case IPR2014-00090, slip op. at 26-29 (PTAB July 17, 2017) (Paper 48), and MLB Advanced Media, L.P. v. Front Row Techs., LLC, Case IPR2017-01127, slip op. at 2-4 (PTAB Jan. 16, 2018) (Paper 24). PRACTICE TIP: Patent owners should put written description support for each whole substitute claim, cited to the original application as filed, in the body of the motion and not in the claim listing appendix. They should also map each substitute claim to the challenged claim it replaces, state the contingency claim by claim, and disclose material information about each added limitation. Petitioners should prepare to carry the burden on unpatentability of the substitute claims.