Aqua Products, Inc. v. Joseph Matal (USPTO)


Docket No. 2015-1177 (IPR2013-00159)

En banc Opinion
October 4, 2017

Update:  USPTO issued guidance on Nov. 21, 2017, explaining that “the Board will not place the burden of persuasion on a patent owner with respect to the patentability of substitute claims presented in a motion to amend.”  Provided the “motion to amend…meets the requirements of 35 U.S.C. § 316(d)” (as well as § 42.121 and § 42.221), “the Board will proceed to determine whether the substitute claims are unpatentable by a preponderance of the evidence based on the entirety of the record, including any opposition made by the petitioner” (“[I]f the entirety of the evidence of record before the Board is in equipoise as to the unpatentability of one or more substitute claims, the Board will grant the motion to amend.”)  “[C]urrent briefing practice” will not change, but “if any party…believes there is need to discuss the impact of Aqua Products with the Board in a particular case”, a conference call may be arranged (before or after Due Date 1, and the Board may contact parties with pending motions to amend “to let them know that a request for a conference call is appropriate in this regard”).

Brief summary: Earlier appeal of IPR decision remanded “to the Board to issue a final decision under § 318(a) assessing the patentability of the proposed substituted claims without placing the burden of persuasion on the patent owner.”

Summary: This en banc opinion (6-5 decision) follows its now vacated 2016 Panel Decision finding the Board did not abuse its discretion in denying Aqua Products motion to amend the claims of its US 8,273,183 related to automatic swimming pool cleaners during an IPR. During IPR, Aqua moved to substituted ‘183 claims 1, 8, and 20 with proposed claims 22, 23 and 24, respectively, asserting that “they did not enlarge the scope of the original claims or introduce new matter…and were patentable over the obviousness combinations at issue”, but was denied because “the Board concluded Aqua had failed to prove the substitute claims were patentable.” The Panel Decision “upheld the Board’s approach” and did not “revisit” the patentability burden question. The majority in this opinion found “no interpretation of the statute by the [PTO] to which this court must defer under Chevron” (US 1984 (“a court reviewing an agency’s construction of a statute it administeres” must “determine first ‘whether Congress has directly spoken to the precise question at issue’” and if it has not “the court must consider ‘whether the agency’s answer [to the precise question at issue] is based on a permissible construction of the statute”)). It wrote that “Congress explicitly placed the burden of persuasion to prove propositions of unpatentability on the petitioner for all claims, including amended claims”, “consistent with § 316(d)).” The court therefore remanded the case “to the Board to issue a final decision under § 318(a) assessing the patentability of the proposed substituted claims without placing the burden of persuasion on the patent owner.” Four additional opinions issued with that of the majority. Judges Moore, Newman and O’Malley agreed with the majority that “the agency actions at issue are not entitled to Chevron deference” but “wrote separately to explain why” the PTO’s Idle Free and MasterImage “opinions are not entitled to Chevron deference” (“We cannot by judicial fiat usurp legislative authority and hand it over to the executive.”) Judges Reyna and Dyk disagreed “with [the] premise” that “Chevron deference…is a yes-or-no question”, agreeing the Panel Decision should be vacated and remanded but should be done “with instruction for the Agency to review the underlying motion to amend by applying only a burden of production on the patent owner, as § 316(d) and 37 C.F.R. § 42.21 currently permit, and not a burden of persuasion” (Judges Taranto, Chen and Hughes jointed Part III (“Burden of Production” is on the patent owner) of this opinion.) Judges Taranto, Prost, Chen and Hughes also dissented (joined in part by Judges Dyk and Reyna), writing that the Director can “address who has the burden of persuasion” and “§316(e) does not unambiguously bar assigning that burden to the patent owner.” Judges Hughes and Chen also dissented, writing that “the complicated reasons of the majority….do a serious disservice to the issue at hand, and to a stable interpretation of the law.”

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