872 F.3d 1290 (Fed. Cir. 2017), 2015-1177, Aqua Products, Inc. v. Matal
|Citation:||872 F.3d 1290, 124 U.S.P.Q.2d 1257|
|Opinion Judge:||O'Malley, Circuit Judge.|
|Party Name:||AQUA PRODUCTS, INC., Appellant v. JOSEPH MATAL, PERFORMING THE FUNCTIONS AND DUTIES OF THE UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR, U.S. PATENT AND TRADEMARK OFFICE, Intervenor|
|Attorney:||JAMES R. BARNEY, Finnegan, Henderson, Farabow, Garrett & Dunner LLP, Washington, DC, argued for appellant. Also represented by TIMOTHY P. MCANULTY, DAVID MROZ; ANTHONY A. COPPOLA, ANTHONY J. DIFILIPPI, JEFFREY A. SCHWAB, Abelman Frayne & Schwab, New York, NY. NATHAN K. KELLEY, Office of the Solic...|
|Judge Panel:||Before PROST, Chief Judge, NEWMAN, LOURIE, DYK, MOORE, O'MALLEY, REYNA, WALLACH, TARANTO, CHEN, and HUGHES, Circuit Judges.[*] Moore, Circuit Judge, with whom Circuit Judges Newman and O'Malley join. Reyna, Circuit Judge, joined by Circuit Judge Dyk; and in which Chief Judge Prost and Circuit Jud...|
|Case Date:||October 04, 2017|
|Court:||United States Courts of Appeals, Court of Appeals for the Federal Circuit|
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Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2013-00159, .
Zodiac Pool Sys. v. Aqua Prods., (Bd. Pat. App. & Interferences, Aug. 22, 2014)
JAMES R. BARNEY, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC, argued for appellant. Also represented by TIMOTHY P. MCANULTY, DAVID MROZ; ANTHONY A. COPPOLA, ANTHONY J. DIFILIPPI, JEFFREY A. SCHWAB, Abelman Frayne & Schwab, New York, NY.
NATHAN K. KELLEY, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor. Also represented by FARHEENA YASMEEN RASHEED, MEREDITH HOPE SCHOENFELD, SCOTT WEIDENFELLER; MARK R. FREEMAN, Appellate Staff, Civil Division, United States Department of Justice, Washington, DC.
GREGORY A. CASTANIAS, Jones Day, Washington, DC, for amicus curiae Intellectual Property Owners Association. Also represented by DAVID B. COCHRAN, Cleveland, OH; JOHN MARLOTT, Chicago, IL; JACLYN STAHL, Irvine, CA; MARK W. LAUROESCH, Intellectual Property Owners Association, Washington, DC; STEVEN W. MILLER, Global Legal Department, Procter & Gamble Company, Cincinnati, OH; KEVIN H. RHODES, 3M Innovative Properties Company, St. Paul, MN.
BRYAN A. SCHWARTZ, Squire Patton Boggs (U.S.) LLP, Cleveland, OH, for amici curiae Case Western Reserve University School of Law Intellectual Property Venture Clinic, The Ohio Venture Association. Also represented by STEVEN M. AUVIL; TIMOTHY J. O'HEARN, Shaker Heights, OH.
JAMES H. HALL, Blank Rome LLP, Houston, TX, for amicus curiae Houston Intellectual Property Law Association.
JAMES EDWARD TYSSE, Akin, Gump, Strauss, Hauer & Feld, LLP, Washington, DC, for amicus curiae Pharmaceutical Research and Manufacturers of America. Also represented by DIANNE B. ELDERKIN, Philadelphia, PA; DAVID EVAN KORN, Pharmaceutical Research and Manufacturers Association of America, Washington, DC.
HANSJORG SAUER, Biotechnology Innovation Organization, Washington, DC, for amicus curiae Biotechnology Innovation Organization. Also represented by Q. TODD DICKINSON, Polsinelli PC, Washington, DC; COLBY BRIAN SPRINGER, San Francisco, CA.
PETER J. AYERS, Law Office of Peter J. Ayers, Austin, TX, for amicus curiae American Intellectual Property Law Association. Also represented by DAVID R. TODD, Workman Nydegger, Salt Lake City, UT; MARK L. WHITAKER, Morrison & Foerster LLP, Washington, DC.
KEVIN J. CULLIGAN, Maynard, Cooper & Gale, PC, New York, NY, for amicus curiae Askeladden, L.L.C. Also represented by JOHN P. HANISH.
JOHN THORNE, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C., Washington, DC, for amici curiae The Internet Association, Computer & Communications Industry Association, Dell Inc., Garmin International, Inc., Intel Corporation, Red Hat, Inc., Samsung Electronics Co., Ltd., SAP America, Inc., SAS Institute, Inc., Software & Information Industry Association, Symmetry LLC, VIZIO, Inc. Also represented by JOSHUA D. BRANSON. Amicus curiae Intel Corporation also represented by Matthew John Hult, Intel Corporation, Santa Clara, CA.
Before PROST, Chief Judge, NEWMAN, LOURIE, DYK, MOORE, O'MALLEY, REYNA, WALLACH, TARANTO, CHEN, and HUGHES, Circuit Judges.[*]
[124 U.S.P.Q.2d 1258] O'Malley, Circuit Judge.
In this appeal, we consider the proper allocation of the burden of proof when
amended claims are proffered during inter partes review proceedings (" IPRs" ) under the Leahy-Smith America Invents Act (" AIA" ), Pub. L. No. 112-29, § 6(a)-(c), 125 Stat. 284-341 (2011) (provisions creating inter partes review codified in ch. 31 of Title 35, 35 U.S.C. § § 311-19 (2012)). Specifically, we consider how the AIA's statutory language in 35 U.S.C. § 316(e), which places " the burden of proving a proposition of unpatentability by a preponderance of the evidence" onto the petitioner in an IPR, applies to claim amendments authorized by 35 U.S.C. § 316(d), and whether the Patent Trial and Appeal Board's (" Board" ) current practices with respect to amendments accord with that application.
A panel of our court concluded that the Board did not abuse its discretion in denying Appellant Aqua Products, Inc.'s (" Aqua" ) motion to amend various claims of U.S. Patent No. 8,273,183 (" the '183 patent" ) during the course of an IPR. In re Aqua Prods., Inc., 823 F.3d 1369, 1373-74 (Fed. Cir. 2016) (hereinafter " Panel Decision " ). The court granted Aqua's request for en banc rehearing and vacated the panel decision. In re Aqua Prods., Inc., 833 F.3d 1335 (Fed. Cir. 2016) (en banc) (per curiam).
Upon review of the statutory scheme, we believe that § 316(e) unambiguously requires the petitioner to prove all propositions of unpatentability, including for amended claims. This conclusion is dictated by the plain language of § 316(e), is supported by the entirety of the statutory scheme of which it is a part, and is reaffirmed by reference to relevant legislative history. Because a majority of the judges participating in this en banc proceeding believe the statute is ambiguous on this point, we conclude in the alternative that there is no interpretation of the statute by the Director of the Patent and Trademark Office (" PTO" ) to which this court must defer under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). And we believe that, in the absence of any required deference, the most reasonable reading of the AIA is one that places the burden of persuasion with respect to the patentability of amended claims on the petitioner.1 Finally, we believe that the Board must consider the entirety of the record before it when assessing the patentability of amended claims under § 318(a) and must justify any conclusions of unpatentability with respect to amended claims based on that record.
Because the participating judges have different views--both as to the judgment we should reach and as to the rationale we should employ in support of that judgment, as explained below, today's judgment is narrow. The final written decision of the Board in this case is vacated insofar as it denied the patent owner's motion to amend the patent. The matter is remanded for the Board to issue a final decision under § 318(a) assessing the patentability of the proposed substitute claims without placing the burden of persuasion on the patent owner.
I. PROCEDURAL HISTORY
Automated swimming pool cleaners, such as those disclosed in the '183 patent, typically propel themselves in a swimming pool using motor-driven wheels, water jets, suction, or a combination thereof. Panel Decision, 823 F.3d at 1371. The '183 patent
discloses a jet-propelled pool cleaner with controlled directional movement and without an electric drive motor. '183 patent, col. 10, l. 41- col. 11, l. 3; id. col. 18, ll. 11-20.
The parties began litigating questions of infringement and validity related to this patent in district court. Aqua Prods., Inc. v. Zodiac Pool Sys., Inc., No. 12-09342 (S.D.N.Y.). While that litigation was pending, Zodiac Pool Systems, Inc. petitioned the Board for inter partes review on claims 1-14, 16, and 19-21 of the '183 patent, asserting invalidity under 35 U.S.C. § 102 and § 103 in light of several prior art references. The Board instituted an IPR on claims 1-9, 13, 14, 16, and 19-21 of the '183 patent, but not on claims 10-12. Panel Decision, 823 F.3d at 1372.
Aqua then moved to substitute claims 1, 8, and 20 of the '183 patent with proposed claims 22, 23, and 24, respectively. Id. Aqua asserted that substitute claims 22-24 complied with 35 U.S.C. § 316(d) because they did not enlarge the scope of the original claims or introduce new matter. Id. Aqua further argued that the substitute claims responded to and were patentable over the obviousness combinations at issue in the IPR. Id.
The Board denied Aqua's motion to amend. Although the Board expressly found that Aqua's amendments complied with the requirements of § 316(d) and 37 C.F.R. § 42.121(a)(2)(i)-(ii) (2015), the Board concluded Aqua had failed to [124 U.S.P.Q.2d 1259] prove the substitute claims were patentable. Aqua timely appealed that decision to this court.
On appeal, Aqua argued that it did not bear the burden of proving the patentability of its proposed substitute claims. Aqua relied on the plain language of § 316(e)-- which we discuss below--for its contention. The panel rejected Aqua's argument based on this court's precedent, which " has upheld the Board's approach of allocating to the patentee the burden of showing that its proposed amendments would overcome the art of record." Panel Decision, 823 F.3d at 1373 (citing Proxyconn, 789 F.3d at 1307-08; Prolitec, 807 F.3d at 1363; and Nike, 812 F.3d at 1333-34). The panel declined to " revisit the question of whether the Board may require the patentee to demonstrate the patentability of substitute claims" and held that " the burden of showing that the substitute claims were patentable rested with Aqua." Id. The panel also rejected Aqua's objection to the Board's failure to consider the entirety of the record before it when assessing the patentability of the amended claims. Aqua specifically objected to the Board's refusal to consider: (1) certain arguments Aqua made in its motion to amend; (2)...
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