Amazon v. Uniloc (IPR2017-00948, Paper 34): Substitute Claims Can Be Challenged under § 101

An inter partes review petition may challenge issued claims only on prior art grounds under 35 U.S.C. §§ 102 and 103. Amazon.com, Inc. v. Uniloc Luxembourg S.A., IPR2017-00948, Paper 34 (entered January 18, 2019), addressed whether the same limit applies to substitute claims a patent owner proposes in a motion to amend. The Board held that it does not. The decision was later designated precedential.

Background

Amazon, joined by Hulu and Netflix as petitioners, challenged claims 1–25 of U.S. Patent No. 8,566,960 on prior art grounds. Uniloc filed a contingent motion to amend proposing substitute claims 26, 27 and 28 to replace claims 1, 22 and 25 if those were found unpatentable.

Meanwhile, in related litigation, a district court held all claims of the patent ineligible under 35 U.S.C. § 101, and the Federal Circuit affirmed. In opposing the motion to amend, the petitioner argued that the substitute claims were also ineligible under § 101. Uniloc did not respond on the merits; it argued only that § 101 could not be raised against substitute claims in an IPR.

In its final written decision (Paper 31), the Board found original claims 1, 22 and 25 unpatentable, reached the motion, and denied it because the substitute claims were directed to ineligible subject matter. Uniloc requested rehearing under 37 C.F.R. § 42.71(d).

What the Board decided

The Board denied rehearing.

1. Aqua Products did not remove § 101. Uniloc argued that by rejecting the patent owner’s burden of persuasion, Aqua Products, Inc. v. Matal (Fed. Cir. 2017) (en banc) also eliminated the basis for considering § 101. The Board disagreed. Aqua Products concerned who bears the burden, not which grounds may be considered. Here the Board had placed the burden on the petitioner, which proved ineligibility by a preponderance of the evidence on a record where Uniloc was silent.
2. Section 311(b) governs petitions, not substitute claims. Section 311(b) limits what a petitioner may request: cancellation of claims of a patent on §§ 102 and 103 grounds. Section 316(d), which gives the right to amend, contains no such limit.
3. The statute treats proposed claims differently. Under § 318(a) and (b), the Board decides the patentability of challenged patent claims and of “any new claim added,” and new claims enter the patent only through the certificate. The Board relied on the Aqua Products lead opinion’s recognition of that distinction.
4. Board practice and other authority. The Board noted earlier panels that had evaluated substitute claims under § 112, and read the Federal Circuit’s statements in Secure Axcess about IPR limits as background concerning issued claims, not substitute claims. It explained that Western Digital supported the view that § 101 issues can be raised and addressed in a motion to amend.

In a footnote, the Board added that the patent owner’s duty of candor under 37 C.F.R. § 42.11, and its duty to identify related matters under § 42.8(b)(2), meant the adverse court rulings should have been in the record regardless of the petitioner’s choice to submit them.

Why it matters

Substitute claims have never been examined. If the Board could test them only against prior art, a motion to amend could add claims to a patent with obvious eligibility or definiteness problems. The decision means a patent owner drafting substitute claims should consider § 101 and § 112 as well as prior art, particularly where a court has already questioned eligibility. For the broader framework, see the overview of amending patent claims during inter partes review.

Later developments

In Uniloc 2017 LLC v. Hulu, LLC (Fed. Cir. 2020), the Federal Circuit affirmed the Board’s authority to consider § 101 eligibility of substitute claims in an IPR. In 2019 the Board designated Lectrosonics, Inc. v. Zaxcom, Inc., IPR2018-01129, Paper 15, precedential as general guidance on motions to amend. The USPTO later adopted motion-to-amend procedures by rule; readers should check current 37 C.F.R. § 42.121. Designations can change, so check the USPTO’s list of precedential and informative decisions.

Key takeaways

• Section 311(b) restricts the grounds in a petition against issued claims, not the grounds against substitute claims.
• The Board may find substitute claims unpatentable under § 101, with the petitioner bearing the burden of persuasion.
• Aqua Products allocated the burden; it did not narrow the grounds the Board may consider.
• A patent owner’s candor obligations extend to court rulings bearing on substitute claims.