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Rarely Granted Motion to Amend Defeated in the Federal Circuit
July 12, 2017

In Shinn Fu Co. of Am. v. Tire Hanger Corp., No. 16-2250 (Fed. Cir. 2017), the Federal Circuit reviewed a successful motion to amend[1] granted by the Patent Trial and Appeal Board (“Board”).  This appeal arose from an inter partes review (“IPR”) proceeding of U.S. Patent No. 6,681,897.  Shinn Fu Co. of Am. v. Tire Hanger Corp., No. IPR2015-00208, Paper 24 (PTAB April 22, 2016).  Shinn Fu not only provides a unique opportunity to understand the Federal Circuit’s approach to this rare issue, but also offers additional details concerning the Board’s statutory obligations under the Administrative Procedure Act (“APA”). 

The patent at issue relates to a vehicle wheel replacement method that allows a worker to avoid bending over while holding the wheel.  Shinn Fu, No. 16-2250 at 2-3.  The key step of the invention is essentially to hang the removed wheel temporarily on a support arm adjacent to the operation site.  Id.  In response to Shinn Fu’s patentability challenge, the patent owner, Tire Hanger, filed a motion to amend, adding claim limitations that require various steps to be performed by a human actor instead of other apparatuses or structures.  Id at 4-5.  While motions to amend during an IPR are rarely granted due to one or more statutory grounds[2], the Board here dismissed Shinn Fu’s oppositions to the motion to amend and rejected its arguments relating to unpatentability that the substitute claims were unpatentable. 

During the IPR trial, the Board first found that the scope of the substitute claims was not broadening as alleged by Shinn Fu, because the one limitation removed from the dependent claim 9 was added to the underlying independent claim.  Shinn Fu, No. IPR2015-00208, Paper 24 at 17-18.  The Board also disagreed with Shinn Fu’s argument that characterized the term “human” in the claims as being broader than the term “worker” in the written specifications.  Id. at 18.  The Board further found that it would not have been obvious to combine the prior art references because (1) none of the references that teach a wheel hanger “recognize[s] the desire to reduce bending over while handling a heavy object;” (2) the Komorita reference only teaches a “patentably distinct” wheel cradle rather than a wheel hanger; and (3) to combine the wheel hanger reference with Komorita “would have led to the loss of the very benefits on which Komorita is premised.”  Id. at 20-25 (emphasis in original).  The Board concluded that Tire Hanger carried its burden to prove that the substitute claims are patentable, and therefore granted the motion to amend.  Id. at 26.

On appeal, Shinn Fu alleged that the Board erred in its § 103 analysis by not addressing its proposed combination of two specific prior art references, Curran and Conrad.  Shinn Fu, No. 16-2250 at 5.  The Federal Circuit agreed, but focused its analysis on the approach the Board took rather than the prior art references themselves.  It faulted the Board for addressing a different manner of combination from that advanced by Shinn Fu.  Id. at 9.  Specifically, the Federal Circuit found that Shinn Fu proposed combining the references in an additive manner; while the Board only analyzed combinations in a subtractive manner.  Id. at 7-8. 

An additive approach adds simple features from multiple prior art references together to reach the claimed invention, while a subtractive approach removes features from a complex primary reference when it is modified with another reference.  Shinn Fu proposed to add the tire hanger of Conrad to the vehicle lift of Curran, and proffered the motivation to do so, i.e. to achieve “convenience and avoidance of injury.”  Id. at 7 (citing Joint Appendix filed for Shinn Fu).  To the contrary, the Board’s analysis was limited to modifying a portion of the complex Komorita frame structure, i.e. the tire cradle, with a simple tire hanger, thereby removing several important features of the Komorita apparatus.  Id. at 7-8.  Finding that a skilled artisan would not be motivated to do so in view of the lost features, the Board concluded that the motivation to combine is lacking in the subtractive manner.  The Board therefore largely ignored Shinn Fu’s combination in an additive manner despite recognizing it being the “centerpiece of [Shinn Fu’s] argument.”  Id. at 8 (citing oral argument transcript).  

The Federal Circuit emphasized that although the Board does not have to address every combination discussed throughout the proceedings, it does have to address arguments that “the parties present to it” – and the essence of Shinn Fu’s argument here is “represented by the manner [in which the references are combined].”  Id. at 9 (emphasis added).  By “entirely fail[ing] to consider [this] important aspect of the [§ 103 analysis],” the Board acted arbitrarily and capaciously in violation of the APA.  Id. at 6.  This procedural deficiency warranted the vacatur and remand in this case.[3]

The Federal Circuit once again emphasized the Board’s obligation to address the arguments presented by the parties.  See also In re Magnum Oil Tools International, Ltd., 829 F.3d 1364 (Fed. Cir. 2016)(stating that the Board “must base its decision on arguments that were advanced by a party”).  This case is particularly instructive to practitioners because the Federal Circuit provided detailed explanation of the Board’s obligation in the context of a § 103 analysis.  Specifically, the Federal Circuit held that such an obligation is not limited to addressing the prior art references advanced by the parties, but also extends to addressing the manner in which the parties propose to combine the references.  As such, in analyzing the Board’s final written decisions and formulating arguments for the Federal Circuit appeal, practitioners should make sure that the Board has considered a particular manner of combining prior art references proposed by a relevant party.

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[1] As of April 30, 2016, a total of six motions to amend had been granted or granted-in-part since the inception of the America Invents Act, according to USPTO’s Patent Trial and Appeal Board Motion to Amend Study (4/30/2016), https://www.uspto.gov/sites/default/files/documents/2016-04-30%20PTAB%20MTA%20study.pdf.  The other five IPRs where motions to amend were granted are Int’l Flavors & Fragrances, Inc. v. United States, No. IPR2013-00124, Paper No. 12 (PTAB May 20, 2014); Riverbed Tech., Inc. v. Silver Peak Sys., Inc., Nos. IPR2013-00402, Paper No. 33, IPR2013-00403, Paper No. 35 (PTAB Dec. 30, 2014); Chi. Mercantile Exch., Inc. v. 5th Market, Inc., No. CBM2013-00027, Paper No. 38 (PTAB Mar. 23, 2015); REG Synthetic Fuels LLC v. Neste Oil OYJ, No. IPR2014-00192, Paper No. 48 (PTAB June 5, 2015).  Only one additional granted motion to amend has been located: Valeo N. Am., Inc. v. Schaeffler Tech., AG & Co. KG, No. IPR2016-00502, Paper No. 37 (PTAB. June 20, 2017).  

[2] The statutory grounds for the denial include 35 U.S.C. §§ 101-103, § 112, and § 316(d).  See USPTO’s Patent Trial and Appeal Board Motion to Amend Study (4/30/2016), https://www.uspto.gov/sites/default/files/documents/2016-04-30%20PTAB%20MTA%20study.pdf.

[3] See also the blog postings on similar issues: Jafon Fearson, Marc V. Richards, The Federal Circuit Gives Patent Owners A Fighting Chance: Due Process In IPR Proceedings, June 26, 2017, http://www.brinksgilson.com/the-federal-circuit-gives-patent-owners-a-fighting-chance-due-process-in-ipr-proceedings; Miyoung Shin, How Far Is Too Far? Institution Decision to Final Written Decision, May 31, 2017, http://www.brinksgilson.com/how-far-is-too-far-institution-decision-to-final-written-decision.

*Summer associate, S. Li, assisted in preparing this blog posting.