PTAB Grants the First Motion to Amend
International Flavors & Fragrances Inc. v. The United States of America, IPR2013-00124, Paper No. 12 (PTAB May 20, 2014)
The International Flavors decision marks the first time that the Patent Trial and Appeal Board (PTAB) has granted a patent owner’s motion to amend in an inter partes review (IPR) proceeding. The decision follows suggestions from the PTAB that motions to amend, if done properly, can succeed in limited circumstances.
35 U.S.C. § 316(d) and 37 CFR § 42.121 govern motions to amend during IPR proceedings. A patent owner may file one motion to amend the patent by canceling any challenged claim or by proposing “a reasonable number of substitute claims” for each challenged claim. “The presumption is that only one substitute claim would be needed to replace each challenged claim ….” 37 CFR § 42.121. The amendment cannot enlarge the scope of the claim or introduce new matter. Moreover, the motion must include a claim listing showing the amendments, and must identify support in the original disclosure for the proposed amendments. Id.
A motion to amend must be filed no later than the filing of the patent owner response. 37 CFR § 42.121. Typically, a patent owner files the motion to amend together with the patent owner response. Motions to amend are limited to 15 pages and may be opposed. 37 CFR §§ 42.22 – 42.24.
The PTAB’s decision in Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2014-00027, Paper No. 26 (PTAB, June 11, 2013) sets forth the framework for motions to amend. In Idle Free, the PTAB held that as the moving party, the patent owner bears the burden of demonstrating by a preponderance of the evidence that the substitute claims are patentable. Id., p. 7. To carry this burden, the PTAB held, the patent owner must demonstrate why the substitute claims are patentable over not only the prior art at issue in the IPR proceeding, but the closest prior art known to the patent owner. Id. To establish a patentable distinction over the prior art, the PTAB held that a patent owner must (a) specifically identify features added to the substitute claims and (b) present “technical facts and reasoning about those feature(s), including construction of new claim terms” sufficient to demonstrate patentability. Id. The PTAB further cautioned that
[a] mere conclusory statement by counsel, in the motion to amend, to the effect that one or more added features are not described in any prior art, and would not have been suggested or rendered obvious by prior art, is on its face inadequate. Id., p. 8.
The PTAB decides the motion to amend when it issues its final written decision in the IPR proceeding. Reflecting the heavy burden on patent owners, the PTAB had not granted a single motion to amend prior to the International Flavors decision.
In International Flavors, the petitioner challenged claims 1, 4, 5, 7, 8, and 14-26 of U.S. 7,579,016 (“the ‘016 patent”). International Flavors, p. 2. The PTAB instituted trial as to all of the challenged claims. Id. Following institution, the patent owner did not file a patent owner response. Id. Instead, the patent owner filed a motion to amend, in which it requested cancellation of claims 1-26 and substitution of claims 27-45. Id. The petitioner did not oppose the motion. The failure to file a patent owner’s response, the cancellation of the original claims at the same time the substitute claims were proposed, and the failure of the petitioner to oppose the motion to amend are not typical of IPR proceedings involving motions to amend.
The ‘016 patent was directed toward a method for repelling arthropods. Original claim 1 required treating an object or area with an isolongifolenone analog. One of the prior art references in the IPR (Behan) disclosed repelling mosquitoes and cockroaches using a particular isolongifolenone analog. Substitute claim 27 was identical to claim 1 except that it limited the isolongifolenone analogs to five compounds included in a larger Markush group that was the subject of original claim 8. Id., p. 7. This group excluded the analog disclosed in the Behan prior art reference. Substitute claims 28-44 depended on claim 27 and corresponded to original claims 9-26. Id. Substitute claim 45 was identical to claim 1 except that it limited the arthropods to ticks or mites, rather than limiting the class of chemical compound. Id.
The PTAB granted the motion to amend as to substitute claims 27-44, but denied it with respect to claim 45. In the case of claims 27-45, it was straightforward for the patent owner to establish that the substitute claims did not broaden the original claims, because each added limitations to the original claims. Id., pp. 9-10. It was also straightforward to demonstrate written description support for the added features, because in the case of claims 27-44, the features previously were set forth in a dependent claim. See id., p. 10. Moreover, the feature added to claim 45 was explicitly disclosed in the patent specification. Id.
Substitute claims 27-44 were novel over the Behan reference because they excluded the analog disclosed in Behan. To demonstrate the nonobviousness of the substitute claims over Behan, the patent owner submitted several publications as well as an expert declaration. Id., p. 12. The patent owner relied on the references and the declaration to demonstrate that even small structural changes could result in compounds having very different properties, including compounds that would no longer repel insects. Id., pp. 12-14.
The PTAB held that the patent owner’s evidence proved that substitute claims 27-44 were patentable:
The evidence cited by Patent Owner demonstrates that even small changes in structure can challenge the biological activity of an insect repellant. Because the prior art does not provide a reason to modify isolongifolanone to arrive at the modified isolongifolanone compounds of proposed claim 27, nor does it provide a reasonable expectation that such modifications would result in a compound having the desired insect repellant activity, we conclude that the preponderance of the evidence supports the patentability of claim 27. As to dependent claims 28-44, because those claims incorporate all of the limitations of claim 27, they would be patentable for the same reasons. Id., p 16.
Claim 45 limited the class of arthropods to ticks and mites, thereby excluding cockroaches and mosquitos. As with claims 27-44, the patent owner submitted publications and an expert declaration to establish that a compound used to repel mosquitoes and cockroaches would not be expected to repel ticks and mites. Id., p. 17. The PTAB nevertheless held that the patent owner failed to carry its burden of proving patentability because the patent owner
provides no evidence that ticks and mites would not be present on the same objects or areas where mosquitoes and cockroaches are found, which are the insects addressed by Behan. Thus, by applying the isolongifolanone taught by Behan to an object or airspace for the purpose of repelling mosquitoes or cockroaches, one would also inherently repel ticks and mites. Id., pp. 17-18.
Accordingly, the PTAB denied the motion to amend as to substitute claim 45.
In International Flavors, a patent owner, for the first time, successfully persuaded the PTAB to grant a motion to amend. However, it is important to bear in mind that, as noted above, the petitioner did not oppose the motion to amend. In particular, the petitioner failed to respond with its own evidence, in the form of documents and/or expert declarations that could have rebutted the patent owner’s evidence regarding the effect of structural changes on insect-repellant properties. Had the petitioner opposed, it is possible that the outcome would have been different. Moreover, the PTAB’s decision to deny the motion as to substitute claim 45 on the grounds that patent owner’s evidence was inadequate illustrates that the bar for successful motions to amend remains high.