Veritas Tech v. Veeam Software (Fed. Cir. 2016)
In an important decision, the Federal Circuit issued a limited rejection of Inter Partes Review amendment procedure — holding that the PTAB acted in an arbitrary and capricious manner by denying the patentee’s motion to amend its challenged claims.
Although claim amendments are officially allowed in IPR proceedings, the Patent Trial & Appeal board has a practice of only approving amendments after the patentee shows that the claims as amended are patentable over the references at issue in the case. As part of this process, the PTAB requires that the patentee discuss each feature added to the claim and “whether the feature was previously known anywhere, in whatever setting, and whether or not the feature was known in combination with any of the other elements in the claim.” Toyota Motor Corp. v. American Vehicular Sciences LLC, IPR2013-00419, slip op. at 4–5 (Paper 32) (PTAB March 7, 2014).
Here, the patentee did not discuss each new feature individually but rather merely stated that the combination of new features were not described in the prior art. And, because the patentee failed to discuss each added feature separately, the PTAB found that the patentee “failed to meet its burden of showing that it is entitled to an award of a patent on a system having those features.”
On appeal, however, the Federal Circuit rejected that analysis — finding it “arbitrary and capricious.” In particular, the court wrote that the discussion of the combination was not “meaningfully different” from the PTAB’s proposal.
In this case, we fail to see how describing the combination is meaningfully different from describing what is new about the proposed claims, even in comparison to the unamended claims.
This case may have some impact on the pending en banc appeal In re Aqua Products. That appeal addresses the following two questions:
(a) When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them? Which burdens are permitted under 35 U.S.C. § 316(e)?
(b) When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim? If so, where would the burden of persuasion, or a burden of production, lie?
The Veritas court writes that the PTAB decision here is erroneous regardless of the outcome of Aqua.