Western Digital v. SPEX (IPR2018-00082, -00084): Motion to Amend Guidance after Aqua Products

Western Digital Corp. v. SPEX Technologies, Inc., IPR2018-00082 and IPR2018-00084, Paper 13 (entered April 25, 2018), is an order titled “Information and Guidance on Motions to Amend.” It was issued before any motion had been filed, as general guidance in case the patent owner chose to amend. The Board designated it informative on June 1, 2018. It was the Board’s first designated statement of motion-to-amend practice after the Federal Circuit’s en banc decision in Aqua Products.

Background

Before late 2017 the Board treated the patent owner, as moving party, as bearing the burden of proving that substitute claims were patentable, an approach reflected in Idle Free and MasterImage. In Aqua Products, Inc. v. Matal (Fed. Cir. 2017) (en banc), the Federal Circuit held that the patent owner does not bear the burden of persuasion on patentability of substitute claims. The Board issued a memorandum in November 2017, and the Federal Circuit addressed the issue again in Bosch Automotive Service Solutions, LLC v. Matal (Fed. Cir. 2017). The Western Digital order collected the resulting practice in one place.

What the Board decided

The order emphasized that it was not suggesting that the patent owner file a motion, and that the patent owner still had to confer with the Board under 37 C.F.R. § 42.121(a). It then set out the following.

• Contingency. Cancellation is not contingent. Substitution ordinarily is: a substitute claim is considered only if the original claim it replaces is shown unpatentable by a preponderance of the evidence.
• Burden of persuasion. Under Aqua Products, the memorandum and Bosch, the patent owner does not bear the burden of persuasion. The burden ordinarily lies with the petitioner to show substitute claims unpatentable by a preponderance of the evidence. The Board may also rely on evidence in the record, as it must if the petitioner stops participating.
• Threshold requirements. Before reaching patentability, the Board decides whether the motion meets 35 U.S.C. § 316(d) and § 42.121: a reasonable number of substitute claims (presumptively one per challenged claim), each traceable to the claim it replaces; amendments that respond to a ground of unpatentability in the trial; no broadening; and no new matter.
• Other issues can be addressed. Once an amendment responds to a prior art ground, the patent owner may also add limitations to address potential § 101 or § 112 problems.
• Written description. Support must be shown in the motion itself, citing the application as filed, for each substitute claim as a whole, including dependent claims whose only change is their dependency.
• Claim listing. The claim listing may go in an appendix that does not count toward the length limit, but it may not contain argument.
• Duty of candor. Under § 42.11, the patent owner must disclose information material to patentability of the substitute claims if not already of record, focusing on each added limitation. The petitioner, too, has a duty regarding information inconsistent with its positions, such as known objective evidence of nonobviousness.

Why it matters

Western Digital marked the move from a patent-owner burden to a petitioner burden while preserving the threshold requirements that remain the patent owner’s responsibility. Its statement that limitations addressing § 101 or § 112 may be added was later relied on in Amazon v. Uniloc to confirm that the Board can evaluate substitute claims under grounds other than prior art. For an overview, see amending patent claims during inter partes review.

Later developments

In 2019 the Board designated Lectrosonics, Inc. v. Zaxcom, Inc., IPR2018-01129, Paper 15, precedential as guidance on motions to amend, and it covers much of the same ground as this order; the earlier Idle Free and MasterImage guidance was de-designated. The USPTO later adopted motion-to-amend procedures, including the allocation of burdens, by rule. Readers should check current 37 C.F.R. § 42.121 and current USPTO guidance, and should check the USPTO’s list of precedential and informative decisions for the current status of this order, since designations can change.

Key takeaways

• Designated informative in 2018, the order restated motion-to-amend practice after Aqua Products.
• The petitioner ordinarily bears the burden of persuasion that substitute claims are unpatentable.
• The patent owner must still satisfy § 316(d) and § 42.121: reasonable number, responsiveness, no broadening, no new matter.
• Amendments responding to a prior art ground may also address § 101 or § 112 concerns.
• Both parties have candor obligations relevant to substitute claims.