PTAB Grants Motion to Amend Patent Claims in IPR, Finds Patent Valid with Substitute Claims

By Vincent J. Allen

The Inter Partes Review (IPR) procedure enacted by Congress in the America Invents Act (AIA) a few years ago has quickly become a favorite tool for use by those accused of infringement of a patent as well as those seeking to expand the freedom to operate prior to product launch.  A successful IPR results in some or all of the claims of the patent being invalidated.  Some have commented that IPRs are where patents go to die due to the relatively high percentage of patents that have been invalidated to date.

As a fallback to a challenge of invalidity in an IPR, it is important for the patent owner to consider potential substitute claims that might help avoid a finding of invalidity.  Patent Owner Neste Oil discovered how important this is in a recent decision by the Patent Trial and Appeal Board (PTAB) finding that all of the claims of its original patent were invalid based on obviousness, but the PTAB went on to hold that the substitute claims presented were not invalid, allowing the patent to survive to see another day.

During examination of a patent application, the claims that define the scope of the invention claimed can be freely amended.  This is not the case in an IPR, where historically the PTAB has been reluctant to grant motions for amendment of the claims.  REG Synthetic Fuels v. Neste Oil is one of a handful of cases where amendment has been allowed.

The reluctance by the PTAB to amend a patent is due in part to the restrictions placed on amendments by Congress and the subsequent regulations implementing the AIA.  The AIA provides for the opportunity to file a motion for amendment to the patent to 1) cancel a challenged claim, 2) propose claims to be substituted for challenged claims; and 3) effect changes to the claims pursuant to a settlement agreement between the parties.

Where substitute claims are proposed in an attempt to avoid a charge of invalidity, the patent owner’s motion must show 1) that the amendment is responsive to a ground of unpatentability; 2) the amendment does not enlarge the scope of the claims or introduce new matter; 3) the proposed amendment contains a reasonable number of claims; 4) that the original disclosure supports the proposed claims; and 5) that the substitute claims are patentable over the prior art of record as well as any relevant prior art known to the patent owner.

In the recent Neste Oil decision, the PTAB found that the requirements for amendment had been satisfied.  Neste Oil’s patent claimed a process for the manufacture of diesel fuel.  It was undisputed by the parties that all elements of the claims were present in the prior art; however, the parties disagreed on the obviousness of combining the elements together.  Neste Oil argued that the references could not be properly combined because combining the elements led to unexpected results and would have run counter to the prevailing wisdom in the art at the time of the invention.

While the PTAB agreed with the challenger, REG, that the original claims were obvious in that a person of ordinary skill in the art would have been led to make the claimed combination, the PTAB went on to hold that the person of ordinary skill would not have been motivated to select a specific sulfur concentration that was claimed in the substitute claims.  REG argued that such a selection was simply “routine optimization,” but the PTAB disagreed, reasoning that “although such an increase in [sulfur] concentration would have been considered technologically feasible by one of ordinary skill, the prior art reflects practical and economic considerations that would have counseled against increasing sulfur concentration beyond what was necessary to achieve beneficial effects . . . [and] more than doubling the concentration of sulfur when faced with these considerations would not have been ‘routine’.”

Neste Oil took care in its review of the invalidity challenge and developed sound arguments supported by its expert as to why the particular sulfur concentration would not have been chosen by the person having ordinary skill in the art.  Had it not done so, it would have been left with an invalid patent.  Because the motion to amend must be filed with the patent owner’s response three months after initiation of the IPR, or as required in the scheduling order entered by the boad, it is important for the patent owner to carefully consider its chances of success and develop alternative arguments regarding validity of the patent very early in the IPR proceeding.  These arguments should be supported by expert evidence that is based on a reliable foundation.  Mere conclusory statements by an expert are given little if any weight by the PTAB.

So while the IPR can prove to be a thorn in the side of patent holders, carefully evaluating the challenger’s arguments and hedging your bets with alternative claims  can carry the day where there are well-reasoned arguments supported by the evidence presented.  The PTAB just may be looking in some cases for a reason not to invalidate the patent.  It is up to the patent owner to give it to them.

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