PTAB May Decide Patentability Under Section 101 in Inter Partes Reviews
Published: October 23, 2020
An inter partes review (IPR) is a procedure to challenge a patent in the U.S. Patent and Trademark Office (PTO). The IPR procedure was established by the American Invents Act, and was intended to be an improvement on the existing inter partes reexamination procedure. An IPR is brought before the PTO’s Patent Trial and Appeal Board (PTAB), which handles the proceeding and decides the outcome.
Any person can file a petition requesting an IPR of an issued patent. The petition must show that at least one claim of the patent is unpatentable on the grounds of anticipation (35 U.S.C. §102) or obviousness (35 U.S.C. §103). The petitioner must prove unpatentability by a preponderance of the evidence. The PTO decides whether to grant the petition.
If the petition is granted, an IPR is instituted. In response to an IPR, the patent owner may amend the challenged claims or cancel the challenged claims and file new, substitute claims. The new claims cannot be broader in scope than the challenged claims and cannot contain new matter.
In its written decision on the IPR, the PTAB must rule on the patentability of the challenged claims and of any new claims submitted by the patent owner.
Recently, the Federal Circuit Court of Appeals addressed the question of what grounds the PTAB could use to determine the patentability of new claims presented in an IPR. Is the PTAB limited to the grounds of anticipation or obviousness, as those are the only grounds that can be asserted by the challenger in an IPR? Or may the PTAB consider other grounds to determine patentability, specifically, whether the claims contain patent-ineligible (non-statutory) subject matter under §101? When a patent application is filed, the examiner must determine whether each claim satisfies §101 first, before anticipation and obviousness are considered, in order for the claim to be allowed. Likewise, shouldn’t the PTAB be permitted to determine whether the patent owner’s new claims, that have never been examined, satisfy §101 before the claims are allowed?
The Federal Circuit has answered this question. The court held that the PTAB is permitted to decide whether a new claim submitted by the patent owner is patent-eligible under §101, and, if it is not, may find the claim unpatentable on this grounds.
The case is Uniloc 2017 LLC v. Hulu, LLC, Netflix, Inc., et al. (Fed. Cir. July 22, 2020). Hulu and Netflix had filed a petition for an IPR of a Uniloc patent that covered a system to help consumers use one software license for multiple devices. The PTO initiated an IPR.
Uniloc sought to amend its patent and submitted new, substitute claims in place of the challenged claims. Hulu opposed the motion to amend, contending that the new claims were directed to patent-ineligible subject matter under §101. The PTAB denied Uniloc’s motion to amend on the grounds of §101, agreeing with Hulu. Uniloc appealed to the Federal Circuit, arguing that the PTAB is not permitted to consider §101 in an IPR.
The Federal Circuit analyzed the text and legislative history of the statues providing for IPRs. The court concluded that the statutes were intended to permit the PTAB to decide the patentability of any new claim, and that, because patentability includes a determination under §101 of whether the claim is directed to patent-eligible subject matter, the PTAB is entitled to analyze the new claims under §101. The petitioner in an IPR cannot challenge the existing claims of the patent on the grounds of §101, but the PTAB must be able to determine whether any new claims satisfy §101. If it cannot do so, those claims would never be examined under §101.