On Monday, February 24, 2020, in Reactive Surfaces LTD., LLP v. LG Chem LTD., IPR2018-01520, the Patent Trial and Appeal Board (PTAB) allowed substitute claims by granting a motion to amend for the fourth time this year, matching the total number of grants for such motions from 2013 through 2017.  This is a growing trend as grant rates for such motions continue to rise following the Federal Circuit’s decision in Aqua Products.

To put the numbers in context, the USPTO publishes studies on the outcomes of motions to amend in AIA trials. The studies are available here.  The first study, published in April 2016, contained data regarding practices and outcomes on motions to amend for the time period from 2013 through April 2016, including that:

  • Motions to amend had only been filed in approximately 10% of cases.
  • Only 62% of those motions actually made it to a Final Written Decision.
  • Approximately three in five decided motions were denied for reasons including anticipation or obviousness over the prior art of record.
  • Approximately one in five motions were denied based solely on procedural grounds, including:
    • failure to demonstrate a patentable distinction between the substitute and original claims; or
    • not being responsive to a ground of unpatentability involved in the trial.

That first study found only two of 118 motions to amend proposing substituted claims were granted in their entirety, with an additional four motions granted in part such that some, but not all, substitute claims were accepted, for a total of six motions being at least granted in part. That is, approximately 2% of motions were granted, or 5% of motions at least granted in part.

An update to the study through September 30, 2017, showed the grant rate barely climbing, with four motions granted out of 170, and 14 motions granted or granted in part, or approximately 2% and 8%, respectively. Rates for motion filings, making it to a Final Written Decision, and the reasons for denial remained approximately the same.  This study update occurred at a useful point in time—the Federal Circuit’s decision in Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017), issued days later on October 4, 2017, which reversed PTAB practice and shifted the burden of persuasion with respect to the patentability of amended claims to the petitioner.  Thus, comparing this update with later study updates provides insights into how filing practices and the PTAB’s treatment of motions to amend have changed following Aqua Products.

Unsurprisingly, Aqua Products prompted a wave of motions to amend.  Prior to Aqua Products, around 60 motions to amend were filed each fiscal year for several years. In an updated study for Fiscal Year 2018 (the latest update available), the USPTO reported that 114 motions to amend had been filed.

Aqua Products not only prompted an enthusiastic response from patent owners anticipating improved chances for success with a motion to amend, but also seems to have caused a significant, but modest, increase in grant rate.  Of the 35 motions to amend decided in Fiscal Year 2018, four were granted, and a total of seven were at least granted in part, or 11% and 20%, respectively.  This represents a significant increase for grants from previous years, and an increase of 2-3 times for grants together with grants in part.

Further, filings of motions to amend showed a slight increase from around 10% to 13% of cases filed or decided in 2018, and motions making it to a Final Written Decision increased from around 62% to 69%.

Although the USPTO has not yet updated its study for Fiscal Year 2019, a high-level search of Final Written Decisions issued during that time indicates 111 decisions addressing substitute claims, with 18 granted and a total of 22 at least granted in part, for approximately 16% and 20%, respectively. An additional search for Fiscal Year 2020 to date[1] reveals 55 decisions, with 11 granted and 14 at least granted in part, for approximately 21% and 27%, respectively.

This data, and the increasing trend in grant rates, is shown below.

Beyond the increasing grant rates, the number of Final Written Decisions addressing motions to amend also suggests an uptick in motions filed, and possibly an increase in those motions surviving to the Decision stage. Looking to the future, it is likely that grant rates, filing rates, and survival rates will continue to increase in light of the USPTO’s Motion to Amend Pilot Program, whose proposal we previously commented on, and which was officially implemented in the first quarter of 2019.  While none of the decisions to date have relied on the Pilot Program, which is designed to give a patent owner preliminary guidance that may aid the success of motions to amend, the grant rate of motions should increase when avoidable errors can be addressed by patent owners in the revised motions.

As an example of a case where the PTAB’s requirements for a Patent Owner were met, in the Reactive Surfaces case mentioned above, the PTAB determined that the Patent Owner, LG Chem, met its required burden before the burden of persuasion on unpatentability shifted to the Petitioner.[2]  These requirements included that: 1) there were a reasonable number of substitute claims, 2) the proposed substitute claims responded to a ground of unpatentability involved in the trial, 3) the substitute claims did not enlarge the scope of the claims or introduce new subject matter, and 4) the proposed substitute claims were described and supported by the specification and any priority applications.  Responding to arguments presented by the Petitioner, the PTAB found that 1) there was no undue experimentation required to practice the substitute claims, 2) the substitute claims were not indefinite, and 3) the substitute claims were not obvious in view of the prior art combinations proposed by Reactive Surfaces.  As the PTAB was not persuaded that the Petitioner met its burden to show that the substitute claims were unpatentable, it granted the motion to amend.

Conversely, in Investors Exchange LLC v. NASDAQ, INC. CBM2018-00039, the PTAB determined that the Patent Owner had not demonstrated sufficient written description support for its supported claims, finding a string citation presented in a chart of claim elements to be insufficient explanation for how the elements were supported.  It is possible that if this failure were pointed out to the Patent Owner under the Motion to Amend Pilot Program, they would have been able to correct it in a revised motion to amend.

Similarly, in Apple Inc. v. Qualcomm Inc., IPR2018-01278, the PTAB determined that two of four proposed substitute claims would not be obvious over the prior art of record, but found that to be moot because all four proposed claims introduced new matter.  As such, the motion to amend was denied. Here, again, guidance under the Motion to Amend Pilot Program potentially could have saved the substitute claims.

The motion to amend, which historically has been filed in a low percentage of cases and granted at an even lower rate, is becoming an increasingly important strategy for patent owners to consider as grant rates increase and in view of the Motion to Amend Pilot Program.

[1] The most recent Final Written Decision considered issued on February 25, 2020.

[2] In this case, LG Chem was represented by the author’s firm, Rothwell Figg.