July 27, 2015
In a decision that sends a clear message to Patent Owners that the Patent Trial and Appeal Board (PTAB) is opening the door for amendments in post grant review proceedings, on July 15, 2015 the PTAB issued a new order regarding motions to amend claims in American Invents Act (AIA) post-grant review proceedings. An expanded panel of six judges issued an order elaborating on the Patent Owner’s burden to set forth a prima facie case of patentability for substitute claims in a motion to amend. To reinforce the message, within days of entering the decision, PTAB designated it as a representative opinion, making it clear that PTAB wanted to bring the decision to the public’s attention.

In the order, MasterImage 3D Inc. v. Reald Inc., the PTAB clarified its 2013 decision in Idle Free Systems, Inc. v. Bergstrom, Inc., which held that in order to show a proposed amendment is patentable “the patent owner [must] show a patentable distinction over the prior art of record and also prior art known to the patent owner. In MasterImage 3D, PTAB made it clear that the Idle Free decision does not require a patent owner to do an exhaust prior art search to show a prima facie case of patentability for substitute claims.

In response to much criticism by both patent owners and judges that the ability to amend is mostly an illusion (see In re Cuozzo Speed Technologies), PTAB has been trying over the past several months to clarify its position on the main points of Idle Free. In fact, during its first “boardside chat” webinars to update the public about the PTAB's activities, former PTAB Chief Judge James Smith acknowledged the criticism and concern that the Idle Free decision requires patent owners to show that a proposed amendment is patentable over all prior art known to humankind. He stated that he believed that the decisions made clear that no such representation was required of patent owners. But, the criticism persisted. Now, PTAB has issued a formal order making it clear that patent owners are not required to search for all prior art that could render the proposed amendments invalid.

In its decision, PTAB made three points of clarification regarding the Idle Free decision:

1) The reference to “prior art of record,” per PTAB should be understood as referring to:
  • any material art in the prosecution history of the patent;
  • any material art of record in the current proceeding, including art assert in ground on which the Board did not institute review; and 
  • any material art of record in any other proceeding before the Office involving the patent.
2) The reference to “prior art known to the patent owner” should be understood as no more than the material prior art that Patent Owner makes of record in the current proceeding pursuant to its duty of candor and good faith to the Office under 37 C.F.R. 42.11.

3) When considering the duty of candor and good faith under 37 C.F.R. 4211, the Patent owner should place initial emphasis on each added limitation; information about the added limitation can still be material even if it does not include all of the rest of the claim limitations.

For additional information on the MasterImage 3D decision and how it may impact your business concerns, please contact the author or your Polsinelli attorney.