“The opinion added that nothing in either the AIA or the PTAB regulations ‘precludes a patent owner from amending a claim to both overcome an instituted ground and correct other perceived issues in the claim.’”
The U.S. Court of Appeals for the Federal Circuit (CAFC) today issued a precedential decision affirming the Patent Trial and Appeal Board (PTAB) on two mixed inter partes review (IPR) decisions involving American National Manufacturing and Sleep Number Corp. that found some, but not all, of the challenged claims not unpatentable.
The IPRs on appeal involve U.S. Patent Nos. 8,769,747 and 9,737,154. They “describe systems and methods that purport to adjust the pressure in an air mattress ‘in less time and with greater accuracy’ than previously known.” American National filed IPR petitions challenging many claims of both patents and asserting that most of the challenged claims would have been obvious over various prior art references. The CAFC focused on four of the many issues raised on appeal:
“1) whether the Board erred in permitting the patent owner to present proposed amended claims that both responded to a ground of unpatentability and made other wording changes unrelated to the IPR proceedings;
(2) whether those proposed amended claims were not enabled because of an alleged error in the specification;
(3) whether those proposed amended claims should have been rejected for allegedly raising an inventorship issue; and
(4) whether the Board inappropriately considered the petitioner’s sales data in its secondary considerations analysis.”
In its analysis of the first issue, the CAFC upheld the PTAB’s “thoughtful analysis” based on the Board’s decision in Lectrosonics, Inc. v. Zaxcom, Inc., which explained that 37 C.F.R. 42.121 “does not require . . . that every word added to or removed from a claim in a motion to amend be solely for the purpose of overcoming an instituted ground.” The Federal Circuit’s opinion added that nothing in either the America Invents Act (AIA) or the PTAB regulations “precludes a patent owner from amending a claim to both overcome an instituted ground and correct other perceived issues in the claim.” While the AIA says amendments may not enlarge the scope of the claims or introduce new matter, and the PTAB regulations require that an amendment respond to a ground of unpatentability involved in the proceeding, there is no reason the patent owner can’t also make additional amendments, as long as they do not violate those requirements.
American National countered that allowing a patent owner to fix Section 112 errors via claim amendments “invites a violation of due process and the Administrative Procedure Act, by allowing the patent owner and the Board to address concerns that may be proper for [an] examination or reexamination proceeding, but that were never germane to an IPR process.” Since IPR petitions can’t challenge claims under Section 112, American National said it would be “asymmetr[ical]” and “unfair” to address such concerns. The CAFC remained unconvinced, citing Uniloc 2017 LLC v. Hulu, Inc., 966 F.3d 1295, 1305–07 (Fed. Cir. 2020) in its explanation:
“As we have previously explained, the petitioner can challenge the proposed amended claims on grounds beyond §§ 102 and 103, including under § 112…. Indeed, American National did so in its oppositions to Sleep Number’s motions to amend in these IPRs. Accordingly, we discern no unfairness or asymmetry in the Board’s granting of the motion to amend.”
Because each of Sleep Number’s proposed substitute claims included an amendment that was responsive to a ground of unpatentability raised in the proceedings by including “at least one responsive narrowing limitation,” Sleep Number “was free to include other amendments, including any addressing perceived §§ 101 and 112 issues,” said the CAFC. In both IPRs, American National challenged the proposed claims and the PTAB appropriately determined whether they were unpatentable and under which section, added the court.
American National next argued that the specification did not enable the claimed invention due to an admitted error in the specification of the application to which the ’747 and ’154 patents claim priority. An equation in the specification included the figure “168” where it should have read “176.” Sleep Number’s expert testified that a skilled artisan would have recognized the error as a typo and the CAFC said this was supported by simply reading the specification. A clear typographical error does not prove the claims unpatentable for lack of enablement, said the court.
As to the third issue, American National said the PTAB should have denied the motion to amend altogether because one of the amendments introduced an issue of inventorship. Specifically, Sleep Number added the term “valve enclosure,” which is used in other patents owned by Sleep Number that name different inventors than the patents at issue. American National argued this renders the patents “facially invalid.” The CAFC disagreed, explaining that the patents in suit incorporate the prior art patent naming different inventors by reference, and the ‘747 and ‘154 patents make clear that valve enclosures were well known in the art. “Sleep Number’s choice to recite these well-known structures in its amended claims does not make James Gifft an inventor of the ’747 and ’154 patents,” the CAFC noted. Fina Oil & Chem. Co. v. Ewen teaches that “[A] person will not be a co-inventor if he or she does no more than explain to the real inventors concepts that are well known and the current state of the art,”) wrote the CAFC. In a footnote, the court added that there may well be other reasons American National’s inventorship argument fails, including that it is “unclear whether the Board is authorized to address inventorship in the context of a motion to amend,” and “even if the proposed amended claims in this case did inject an inventorship issue, American National identifies
no statutory or regulatory prohibition on patent owners making such amendments.”
APA/Due Process Violations
Finally, American National’s argument that the PTAB violated the Administrative Procedure Act and due process when analyzing Sleep Number’s evidence of commercial success. The PTAB in its decision changed the term “infringement” to “read on” in one sentence, which American National said proves that the PTAB “inappropriately resolved infringement in violation of either or both of the Constitution or the APA.” The court, however, disagreed and noted the Board itself made it clear that it wasn’t resolving infringement issues and the CAFC declined to address the argument further because, in any case, American National admitted that Sleep Number’s evidence of commercial success had “minimal probative weight” and therefore would not change the patentability determination on appeal.
As to the remaining issues, including Sleep Number’s cross-appeal, the CAFC was unpersuaded and found that substantial evidence backed the PTAB’s reasoning on the obviousness findings and declined to reweigh the PTAB’s assessment of the strength of Sleep Number’s evidence of commercial success and industry praise. The court also rejected Sleep Number’s arguments that the Board misallocated the burden of persuasion to Sleep Number to prove non-obviousness or that it abused its discretion in concluding that American National satisfied the requirements of 37 C.F.R. § 42.104.
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