## Facts

- Aqua Products, Inc. owned U.S. Patent No. 8,273,183 covering an automated swimming pool cleaner.
- Zodiac Pool Systems, Inc. petitioned for inter partes review (IPR), asserting instituted claims were anticipated and/or obvious.
- The Patent Trial and Appeal Board (PTAB) found all instituted claims unpatentable.
- Aqua moved to amend by proposing substitute claims under 35 U.S.C. § 316(d) and 37 C.F.R. § 42.121(a).
- The PTAB concluded the motion satisfied formal amendment requirements but denied it because Aqua had not proven the substitute claims patentable over the prior art.
- A Federal Circuit panel affirmed the PTAB’s denial of the motion to amend.
- The Federal Circuit granted rehearing en banc to decide who bears the burden of persuasion on the patentability of amended (substitute) claims in IPR.

## Issues

1. In an IPR, may the PTAB place on the patent owner the burden of persuasion to show proposed substitute claims are patentable?
2. Does 35 U.S.C. § 316(e) require that the petitioner bear the burden of proving unpatentability of substitute claims by a preponderance of the evidence?

## Decision

- The en banc Federal Circuit vacated the PTAB’s denial of Aqua’s motion to amend and remanded.
- A majority agreed that, under the governing statutes and existing PTO regulations, the PTAB may not impose on the patent owner the burden of persuasion to prove substitute claims patentable.
- The court held the burden of persuasion remains with the petitioner to prove substitute claims unpatentable by a preponderance of the evidence.
- Because the PTAB denied amendment by applying the wrong burden allocation, reconsideration under the correct standard was required.

## Legal Principles

- In IPR, 35 U.S.C. § 316(e) assigns the burden of proving “a proposition of unpatentability” to the petitioner by a preponderance of the evidence.
- Absent a valid PTO rule shifting the burden of persuasion for substitute claims, the PTAB cannot deny a motion to amend on the ground that the patent owner failed to carry that burden.
- When deciding a motion to amend that satisfies formal requirements, unpatentability of substitute claims must be shown by the petitioner (and assessed on the full record) under the preponderance standard.
- If the evidence is in equipoise on unpatentability of a substitute claim, the petitioner has not carried its burden, and the substitute claim cannot be rejected on that basis.

## Conclusion

The Federal Circuit’s en banc judgment required that, in IPR motions to amend, the PTAB apply § 316(e)’s allocation of the burden of persuasion: the petitioner must prove proposed substitute claims are unpatentable by a preponderance of the evidence, and the PTAB’s contrary denial of amendment must be vacated and reconsidered on remand.


Aqua Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc)