In Nike, Inc. v. Adidas AG, the Federal Circuit re-affirmed the PTAB’s requirement that in IPR proceedings the Patent Owner must show the patentability of proposed substitute claims over both the prior art of record in the IPR and other prior art known to the Patent Owner. No. 2014-1719 (Fed Cir. Feb. 11, 2016). However, the court clarified that for known prior art not of record in the IPR, the Patent Owner needs only to submit a simple statement of patentability if the Patent Owner’s duty of good faith and candor to the PTO is not at issue.
The Patent Owner proposed substitute claims during the underlying IPR, which the Board rejected. On appeal, the Patent Owner argued that, because 35 U.S.C. § 316(e) puts the burden of proving unpatentability on the Petitioner, the Board erroneously placed the burden of proving patentability of the proposed substitute claims on the Patent Owner. The Federal Circuit, however, rejected this argument. In doing so, the court made clear that the burden of proof under § 316(e) is on the Petitioner to prove unpatentable only those issued claims that were challenged in the IPR petition, and not substitute claims proposed by the Patent Owner after the IPR has been instituted.
The court further explained that placing the burden on the Patent Owner to prove the patentability of proposed substitute claims is appropriate because IPRs are different from a typical prosecution, where an examiner performs a prior art search and independently conducts a patentability analysis. Placing the burden on the Patent Owner, therefore, ensures that proposed substitute claims are critically analyzed before they become part of the issued patent.
The Patent Owner also objected to the Board’s practice (which we wrote about here) of requiring a patent owner to establish patentability of substitute claims over all known prior art not of record. During the IPR, the Board denied the proposed substitute claims in part because the Patent Owner simply stated that the proposed claims were patentable over known prior art not of record. On this point, the Federal Circuit held that the simple statement from the Patent Owner sufficed to carry the burden of patentability, because there was no allegation that the Patent Owner violated its duty of candor and good faith to the PTO.
This decision re-affirmed the PTAB’s general authority to prescribe the standards and procedures for motions to amend a patent in an IPR. At the same time, the Federal Circuit clarified that the burden of proving patentability over known prior art not of record can be fairly simple if the Patent Owner’s duty of candor and good faith is not at issue.