Source: https://www.1600ptab.com/2020/07/federal-circuit-confirms-that-the-ptab-can-consider-the-patent-eligibility-of-substitute-claims-proposed-during-an-ipr/
Timestamp: 2020-08-09 06:04:38
Document Index: 792212506

Matched Legal Cases: ['§ 101', '§ 101', '§ 101', '§ 101', '§ 311', '§ 318', '§ 101', '§ 311', '§ 101']

Federal Circuit confirms that the PTAB can consider the patent eligibility of substitute claims proposed during an IPR | 1600 PTAB & Beyond
Home » Federal Circuit confirms that the PTAB can consider the patent eligibility of substitute claims proposed during an IPR
By Andrew T. Dufresne on July 24, 2020
Posted in Amendments, Appeals, Federal Circuit, IPR, Precedential, Section 101
In Uniloc 2017 LLC v. Hulu, LLC, No. 2019-1686 (Fed. Cir. July 22, 2020), the Federal Circuit considered whether the AIA permits the PTAB to reject substitute claims proposed during an IPR for patent ineligibility under § 101. The panel majority affirmed the PTAB’s denial of a motion to amend on that basis.
The patent owner had asserted U.S. Patent 8,566,960, which had claims relating to adjustable licensing of digital products, against several defendants in district court. While defending against that suit, the defendants filed a parallel IPR petition challenging the ʼ960 patent as anticipated and obvious over the prior art. The PTAB instituted the IPR and concluded that most of the challenged claims would have been unpatentable over the prior art. Along the way, however, the patent owner filed a contingent motion to amend, asking the PTAB to allow substitute claims for each of the ʼ960 patent’s original independent claims in the event those claims were held unpatentable over the prior art.
The petitioners opposed the motion to amend on several grounds, including that the substitute claims were not patent eligible under § 101. The patent owner didn’t defend the patent eligibility of the substitute claims; it instead argued categorically that the PTAB couldn’t declare claims ineligible in an IPR. In the final written decision, the PTAB held that it could address the patent eligibility of substitute claims and these claims failed under § 101. It rejected the petitioners’ other challenges to the substitute claims.
Meanwhile, the district court had held all of the ʼ960 patent’s original claims invalid under § 101, and the Federal Circuit affirmed that ruling shortly after the PTAB issued its final written decision. Thus prohibited from further disputing the patentability of the original claims, the patent owner filed a petition for rehearing before the PTAB arguing only that the PTAB had no authority to consider the patent eligibility of the substitute claims. In its decision on rehearing, the PTAB rejected that argument as a matter of law, and the Director designated the rehearing denial as a precedential decision. Amazon.com, Inc. v. Uniloc Luxembourg S.A., IPR2017-00948, Paper 34 (PTAB Jan. 18, 2019).
The Federal Circuit affirmed
The panel majority held that the text, structure, and legislative history of the AIA confirmed that the PTAB may review the patent eligibility of proposed substitute claims. The patent owner argued that § 311(b) limits review to anticipation and obviousness, but the court disagreed. Under § 318, the PTAB must determine the “patentability” of proposed substitute claims, and § 101 is a patentability requirement. In contrast, the court explained that § 311 addresses the criteria for canceling original claims, and proposed substitute claims cannot be canceled because they are not part of a patent. The court also noted that the legislative history confirmed that the PTAB may review proposed new claims for more than patentability over prior art.
Because the patent owner had not actually argued that the substitute claims satisfied § 101 on the merits, the PTAB’s ability to consider patent eligibility was dispositive.
In her view, the appeal was moot because the final judgment invalidating the original claims in the district-court action meant that there were no longer any original claims to “substitute” for, leaving the Board without authority to act on the patent owner’s motion to amend. She therefore would have dismissed the appeal before reaching the merits. But she also disagreed with the majority on whether the Board was entitled to consider the eligibility of substitute claims, concluding that even for substitute claims, the Board is limited to assessing patentability over patents and printed publications.
The net result was an affirmance for the Board, and the takeaway is that during IPRs the PTAB may continue to consider (and petitioners may continue to challenge) substitute claims presented in a motion to amend on patent-ineligibility grounds, even though IPR petitions can challenge the original claims based solely on prior art.