United States: How Might The Director Improve The PTAB For Patent Owners?

Pro-Patent Owner Options

The new Director of the U.S. Patent & Trademark Office (USPTO) has issued a Notice of Proposed Rulemaking (NPRM) in record time. With only a few weeks on the job, the Director issued a NPRM to switch the Broadest Reasonable Interpretation (BRI) currently used in Patent Trial & Appeal Board (PTAB) trial proceedings to a Phillips claim construction. The proposal was quickly lauded by Patent Owners believing that the application of the Phillips standard by the PTAB will lead to narrower claim constructions, and thus, more patents being upheld by the agency. But, as I pointed out previously, in practice, BRI is rarely different from a Phillips construction. In fact, utilizing the same standard at the PTAB as in the courts might only make matters worse for Patent Owners from a monetization perspective.

Impact of the proposed claim construction change aside, the speed at which the Director has acted speaks to his keen interest in improving the PTAB playing field for Patent Owners. With the Director expected to issue further proposals to aid Patent Owners, below are some likely candidates.

Patent Owner Estoppel

Patent Owner estoppel stems from 37 C.F.R. 42.73(d)(3)(i) — it is a rule that many Patent Owners do not find out about until it is too late. This rule finds no basis in the AIA statutes. The rule recites that when a patent claim is cancelled or finally refused in a PTAB trial, the Patent Owner is thereafter precluded from taking an inconsistent action before the USPTO. This preclusion includes, obtaining in any patent, a claim that is not patentably distinct from the finally refused or cancelled claim.

Many Patent Owners are now learning that losing at the PTAB could mean that related prosecution (e.g., continuations, reexamination, and reissue) is estopped. The policy behind Rule 42.73 is justified by the agency as a means to ensure that parties do not walk away from a PTAB proceeding only to re-present the same claims (or indistinct variations) in another, ex parte proceeding. And, the agency has explained that any "indistinct" claim amendments should be made during the trial, not elsewhere.

While the rationale behind the rules makes sense, given the aversion to amending at the PTAB (discussed below), Patent Owners are likely lobbying the Director that this rule is ripe for rescission. Perhaps another option to consider would be to provide a safe harbor from this rule where amendment is at least attempted at the PTAB.

Of course there are aspects of issue preclusion/administrative estoppel that would still exist within the agency, but the concern over the later presentation of indistinct (but narrower) claims would be significantly alleviated. The impact of this rule is already being seen at the Federal Circuit, such as in Arthrex, Inc., v. Smith & Nephew, Inc., Arthrocare Corp.


While the Federal Circuit has adjusted PTAB amendment practices in its In re Aqua Products decision, the amendment process remains a target of Patent Owner criticism. In response, the new Director has indicated that changes to the PTAB amendment process are currently being considered.

Much of the amendment reform focus to date has been on providing a so called "off-ramp" by which the amendment process would be handled by patent examiners. I first proposed this idea over 4 years ago to get away from the PTAB motion to amend procedure, but post Aqua Products, this proposal would not offer Patent Owners much value. The vast majority of failed amendments at the PTAB are rejected on the merits. Switching in patent examiners is not going to change that equation.

On the other hand, Patent Owners might find value in the decoupling of the PTAB amendment process from the "substitute" claim concept. That is, the agency could provide for a rule allowing for a reasonable number of new claims to be added in AIA trial proceedings. Current amendment practices in IPR stem from 35 U.S.C. 316(d):

Amendment of the Patent.—
(1)In general.—During an inter partes review instituted under this chapter, the patent owner may file 1 motion to amend the patent in 1 or more of the following ways:
(A) Cancel any challenged patent claim.
(B) For each challenged claim, propose a reasonable number of substitute claims.

As noted above, the statute provides for cancellation, and/or substitution (substitute claims stand in place of challenged claims found unpatentable), the statute does not provide for "new" claims. The ability to add new claims (i.e., claims that could be secured in addition to, rather than in the substitute of challenged claims), would provide significant value to Patent Owners. The agency may have some rule-making flexibility here given the authority provided by 35 U.S.C. § 316 (a).

There are a number of reasons that amendments are currently undesirable for Patent Owners in AIA trial proceedings, not the least of which is intervening rights. Of course, intervening rights is not a new reality for Patent Owners, and yet amendment was far more commonplace in inter partes reexamination. Why?

Amendment in reexamination did not communicate weakness as is arguably the case in AIA trials. It was rare to see an original claim amended in reexamination and there was no need to correlate new claims to claims that would be "substituted." New claims were simply added value to Patent Owners in reexamination. Of course, reexamination also did not require some of the procedural requirements to amend that AIA trials do, but post Aqua Products, the most significant hurdle for Patent Owners has now been removed. Perhaps amendments would be more attractive if Patent Owners did not have to present them as "substitutes."

Absent some kind of "something for nothing" change to amendment practices, amendment will never be commonplace in AIA trials.


The holding in SAS Institute is a significant negative for Patent Owners. To alleviate potential prejudice to Patent Owners at Final Written Decision (FWD) the Board might consider issuing orders at the close of briefing to encourage the petitioner to limit overlapping grounds in much the same way as a district court prunes invalidity defenses for trial. While the FWD must track challenged claims after SAS, the need to include overlapping grounds came as quite a surprise to Patent Owners. Providing a mechanism to prune such grounds at the close of briefing would address Patent Owner concerns that the Board would need to address all such grounds at FWD to find in favor of the Patent Owner, but perhaps only a single (strongest) such ground to side with the Petitioner.

With a number of significant Federal Circuit decisions on the horizon, and further rule changes on tap, 2018 is shaping up to be a year of change at the PTAB.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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