PTAB Clarifies Meaning of “Prior Art … Known to the Patent Owner”

Last week the PTAB sought to clarify the somewhat controversial requirement that a patent owner must “persuade the Board that the [amended] claim is patentable over the prior art of record, and over prior art not of record but known to the patent owner.” Idle Free Sys., Inc. v. Bergstrom, Inc., IPR2012-00027, Paper 26, 7 (PTAB June 11, 2013). Some PTAB commentators had previously suggested that a patent owner should go so far as to submit a certified prior art search in order to demonstrate good faith compliance with the broad language of Idle Free. This requirement is one of many which makes it extremely difficult for a patent owner to successfully amend claims at the PTAB. (For our full discussion of a Motion to Amend Claims, click here).

In MasterImage 3D, Inc. v. Reald, Inc., the PTAB issued a Conduct of Proceedings order from an expanded panel which included Nathan Kelley, Deputy Chief Administrative Patent Judge, and Scott Boalick, Vice Chief Administrative Patent Judge. IPR2015-00040, Paper 42 (PTAB July 15, 2015). The order was immediately designated a “representative decision” by the PTAB, meaning the decision provides a sample outcome which the Board wishes to bring to the public’s attention.

In the order, the Board placed limits on the phrase “prior art … known to the patent owner,” stating that this should be understood to mean “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, in light of a Motion to Amend.” Id. at 3. Thus, a patent owner’s burden of persuasion over prior art in a Motion to Amend is coextensive with the patent owner’s duty of candor. This construction of “prior art … known to the patent owner” is narrower than some previously used by other panels at the PTAB.

The Board also defines three categories of “prior art of record” which a patent owner must overcome: (1) prior art from the prosecution history of the patent, (2) prior art from the current proceeding, and (3) prior art used in other proceedings before the USPTO involving the same patent. Id. at 2.

Finally, the Board used the MasterImage order to discuss the burden of proof as it relates to a Motion to Amend. First, a patent owner has the burden to set forth a prima facie case of patentability of the amended claims over the prior art of record. Id. at 4. Then the burden shifts to the petitioner, who can attempt to rebut the prima facie case of patentability or can introduce new prior art against the amended claims. Id. Despite this shift in burden toward the petitioner, the Board states that “[t]he ultimate burden of persuasion remains with the patent owner” who, as movant, must demonstrate patentability of the amended claims. Id.

The MasterImage order will make it marginally easier for a patent owner to amend claims in a PTAB proceeding. Recent changes to the page limits on a Motion to Amend will also help. However, the deck remains stacked against successfully amending claims, as we noted in our full discussion of this topic.