Applying its own precedent, the US Court of Appeals for the Federal Circuit confirmed that the burden remains on the patent owner to demonstrate the patentability of substitute claims over the art of record in an inter partes review (IPR), and therefore the Patent Trial and Appeal Board (PTAB or Board) need only consider those arguments raised by the patent owner for patentability. In re Aqua Products, Inc. Case No. 15-1177 (Fed. Cir., May 25, 2016) (Prost, J).

Aqua Products sued Zodiac alleging infringement of a patent relating to a swimming pool cleaner. In response, Zodiac filed an IPR petition. During the IPR proceeding, the PTAB denied Aqua Products’ motion to amend claims. Aqua Products appealed, arguing that the PTAB erred by placing the burden on the patentee to show non-obviousness. Aqua Products also argued that the PTAB abused its discretion by not considering all of the new claim limitations and the objective indicia of non-obviousness.

Citing Microsoft v. Proxyconn (IP Update, Vol. 18, No. 7) and Nike v. Adidas (IP Update, Vol. 19, No. 3), the Federal Circuit panel declined to revisit its prior holdings that the patent owner has the burden to “demonstrate the patentability of substitute claims over the art of record.” The Federal Circuit also found no abuse of discretion in the PTAB’s decision to rebut only the sole argument for patentability raised by Aqua Products. As the Court explained, “[t]o hold otherwise would require the Board to fully reexamine the proposed claims in the first instance, effectively shifting the burden from the patentee to the Board.” Because Aqua Products’ motion to amend focused on a single claim limitation, “the [PTAB] had no obligation to address the other amendments or to consider the issue of objective indicia of non-obviousness, which Aqua [Products] did not raise” in its motion to amend.

Practice Note: As observed by the Federal Circuit, most of the patentability arguments Aqua Products made on appeal were made in the course of the main IPR proceedings, but not in connection with the motion to amend itself. When filing a motion to amend, the patent owner cannot rest on arguments outside of the motion.

McDermott was counsel to petitioner at the PTAB in this case.