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Court calls Patent Trial & Appeal Board “Arbitrary and Capricious”

Source: Grill IP patents news

PTAB-decision-rejected-claim-amendmentsThe US Patent Trial & Appeal Board (PTAB) acted “arbitrarily and capriciously” when it denied the patentee’s motion to amend its challenged claims. The dressing down was issued by the Federal Circuit as part of a limited rejection of an Inter Partes Review amendment procedure in Veritas Tech v. Veeam Software.

    During proceedings for intellectual property rights, claim amendments are allowed, however once a case reaches the PTAB, the board will approve amendments only after the patentee demonstrates that the amended claims are patentable according to the case references at issue. For an approval, according to Toyota Motor Corp. v. American Vehicular Sciences LLC (2014), the PTAB requires a patentee mention each added feature to their 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.”

    In Veritas Tech v. Veeam Software, the patentee failed to provide an individual discussion of each added feature, although they did mention that the combination of additions was not described in the prior art. The PTAB rejected this explanation, holding 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” since there was no discussion of those features independent of one another.

    This interpretation was rejected by the Federal Circuit, which found the PTAB’s reasoning “arbitrary and capricious.” According to the Circuit, the discussion of the features in combination did not differ “meaningfully” 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.”  

In the future, this case may weigh on the ongoing en banc appeal In re Aqua Products. That appeal focuses on 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?

That said, the Circuit contends that the PTAB’s decision in Veritas is wrong irrespective of Aqua’s outcome.

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