In Re: Aqua Products, Inc. , 823 F.3d 1369 ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
IN RE: AQUA PRODUCTS, INC.,
Appellant
______________________
2015-1177
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2013-
00159.
______________________
Decided: May 25, 2016
______________________
JAMES R. BARNEY, Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP, Washington, DC, argued for
appellant. Also represented by TIMOTHY P. MCANULTY,
DAVID MROZ; ANTHONY A. COPPOLA, ANTHONY J. DIFILIPPI,
JEFFREY A. SCHWAB, Abelman Frayne & Schwab, New
York, NY.
MEREDITH HOPE SCHOENFELD, Office of the Solicitor,
United States Patent and Trademark Office, Alexandria,
VA, argued for intervenor Michelle K. Lee. Also repre-
sented by NATHAN K. KELLEY, FARHEENA YASMEEN
RASHEED, SCOTT WEIDENFELLER.
______________________
2 IN RE: AQUA PRODUCTS, INC.
Before PROST, Chief Judge, REYNA, Circuit Judge, and
STARK, Chief District Judge 1.
REYNA, Circuit Judge.
Aqua Products, Inc. (“Aqua”) appeals from the final
written decision of the Patent Trial and Appeal Board
(“Board”) in an inter partes review (“IPR”) of U.S. Patent
No. 8,273,183 (“’183 patent”). The Board denied Aqua’s
motion to substitute claims 22–24. Aqua challenges the
Board’s amendment procedures, which require the pa-
tentee to demonstrate that the amended claims would be
patentable over the art of record. We affirm.
BACKGROUND
A. Patented Technology
The ’183 patent concerns automated swimming pool
cleaners, which are devices used to filter water and scrub
pool surfaces. Such cleaners typically propel themselves
about a swimming pool using motor-driven wheels, water
jets, suction, or some combination thereof. See ’183
patent col. 1 ll. 30–48. According to the ’183 specification,
propelling a cleaner using motor-driven wheels enables
the cleaner to move in a controlled pattern, but the tech-
nique can be expensive because it requires equipping the
cleaner with a drive motor and integrated circuitry. See
id. col. 2 ll. 47–56. Cleaners that use suction or water jets
do not require a drive motor, but they traditionally move
in erratic rather than controlled patterns. Id. col. 2 ll. 57–
61.
The ’183 patent discloses an automated swimming
pool cleaner that uses “an angled jet drive propulsion
system” to move in a controlled pattern. Id. col. 1 ll. 1–4,
1 The Honorable Leonard P. Stark, Chief District
Judge, United States District Court for the District of
Delaware, sitting by designation.
IN RE: AQUA PRODUCTS, INC. 3
col. 3 ll. 15–20. Rather than using a motor to drive
wheels, the disclosed cleaner shoots filtered water back-
wards at an angle to create both a forward force that
propels the cleaner and a normal force that keeps the
cleaner’s wheels in contact with the pool floor. Id. col. 4 ll.
13–25, 46–49. As shown in Figure 9, the cleaner draws
pool water through a bottom opening, filters the water,
and shoots the filtered water backwards from elbow 120R
or 120L at an angle α so as to create the forward and
normal forces. Id. col. 4 ll. 46–51, col. 10 ll. 47–51.
’183 Patent, Figure 9.
B. Board Proceedings
Zodiac Pool Systems (“Zodiac”) petitioned the Board
for IPR of claims 1–14, 16, and 19–21 of the ’183 patent.
Among the references Zodiac cited were U.S. Patent Nos.
3,936,899 (“Henkin”) and 3,321,787 (“Myers”). Henkin
discloses a pool cleaner that moves randomly, in part by
shooting a water jet from an adjustable nozzle that can be
angled “to yield both a downward thrust component (i.e.,
normal to the vessel surface) for providing traction and a
forward component which aides in propelling the car.”
Henkin at col. 5 ll. 19–22. Unlike the cleaner of the ’183
patent, Henkin’s cleaner uses three wheels rather than
four and moves along a “random” rather than controlled
path. Id. at Abstract. Henkin’s jet is also powered by an
external rather than an internal pump, and it shoots
unfiltered rather than filtered water. Id. col. 5 ll. 15–19.
4 IN RE: AQUA PRODUCTS, INC.
Myers discloses a prior art cleaner that uses an internal
pump to create a filtered water jet for erratic movement.
Myers at col. 1 ll. 63–65 (“electric motor”), col. 2 ll. 22–33
(describing an internal filter), col. 3 ll. 6–12 (“water
exiting from the unit and into the pool will provide a jet
force to move the unit”).
The Board instituted trial on all the challenged claims
except claims 10–12. Aqua moved to substitute new
claims 22–24, which amended claims 1, 8, and 20 to
additionally require that (1) the jet creates a downward
vector force rear of the front wheels (the “vector limita-
tion”), and (2) the wheels control the directional move-
ment of the cleaner (the “directional movement
limitation”). Substitute claim 23 also added that the
cleaner has four wheels (the “four wheel limitation”), and
substitute claim 24 added that the jet shoots filtered
water (the “filtered water limitation”).
In its motion to amend, Aqua argued that the combi-
nation of Henkin and Myers does not render the substi-
tute claims obvious because it does not suggest the vector
limitation. J.A. 2289–91. Although Aqua referenced the
other added limitations, it did not argue that those other
limitations would have been non-obvious in light of Hen-
kin and Myers. Regarding objective indicia, Aqua charac-
terized its commercial embodiments as “successful” and it
implied that Zodiac may have copied the design, but Aqua
did not argue that these objective indicia were tied to the
vector limitation or that they otherwise demonstrated
that the vector limitation was non-obvious. J.A. 2288.
The Board denied Aqua’s motion to amend. It rea-
soned that the vector limitation would have been obvious
because Henkin teaches positioning the jet at an angle
that satisfies the vector limitation. J.A. 50–52. Regard-
ing the other new limitations, the Board concluded with-
out analysis or evidence that the limitations were within
the ordinary skill. Id. In a footnote, the Board also held
IN RE: AQUA PRODUCTS, INC. 5
without analysis that Aqua’s arguments regarding objec-
tive indicia of non-obviousness were unpersuasive. Id.
Aqua appeals the Board’s denial of its motion to
amend. Aqua argues that Board regulations requiring
the patentee to demonstrate that an amended claim is
patentable over the art of record are unsupported by
statute, and that the Board’s interpretation of those
regulations impermissibly places the burden on the
patentee to show non-obviousness. Moreover, Aqua
argues that the Board abused its discretion by denying
the motion to amend without considering all the new
limitations and the objective indicia of non-obviousness,
as would be required for invalidating an original claim.
DISCUSSION
We review the Board’s decisions using the standard
set forth in the Administrative Procedure Act (APA), 5
U.S.C. § 706. Dickinson v. Zurko, 527 U.S. 150, 154
(1999). Under that statute, we set aside actions that are
arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law. In re Sullivan, 362 F.3d 1324,
1326 (Fed. Cir. 2004). “We accept the Board’s interpreta-
tion of Patent and Trademark Office regulations unless
that interpretation is plainly erroneous or inconsistent
with the regulation.” Id. (internal citations omitted).
The America Invents Act (“AIA”) provides that a pa-
tent holder in an IPR “may file 1 motion to amend,” by
“propos[ing] a reasonable number of substitute claims.”
35 U.S.C. § 316(d)(1). The only statutory requirement is
that the amendment “may not enlarge the scope of the
claims of the patent or introduce new matter.” Id.
§ 316(d)(3). Section 318(b), however, provides that the
final written decision may incorporate into the patent any
new or amended claim “determined to be patentable.”
Pursuant to the statutory framework, the Patent and
Trademark Office (“PTO”) promulgated 37 C.F.R. §
6 IN RE: AQUA PRODUCTS, INC.
42.121, which allows the Board to deny a motion to amend
if the amendment expands the claim scope or “does not
respond to a ground of unpatentability involved in the
trial.” Because PTO regulations place the burden for any
motion on the movant, see 37 C.F.R. § 42.20(c), the Board
has interpreted § 42.121 as placing the burden on the
patentee to show that the proposed amendments would
make the claims patentable over the known prior art. See
Idle Free Sys., Inc. v. Bergstrom, Inc., IPR2012–00027,
2013 WL 5947697 (PTAB June 11, 2013).
Our precedent has upheld the Board’s approach of al-
locating to the patentee the burden of showing that its
proposed amendments would overcome the art of record.
In Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292,
1307−08 (Fed. Cir. 2015), we upheld the Board’s interpre-
tation of its regulations, requiring the patentee to estab-
lish that proposed amendments would overcome the art of
record. See also Prolitec, Inc. v. ScentAir Techs., Inc., 807
F.3d 1353, 1363 (Fed. Cir. 2015). In Nike, Inc. v. Adidas
AG, 812 F.3d 1326, 1333−34 (Fed. Cir. 2016), we further
held that the Board’s regulations concerning motions to
amend and its interpretation thereof are consistent with
the AIA’s statutory framework, even though the frame-
work generally places the burden of proving unpatentabil-
ity on the IPR petitioner. Given our precedent, this panel
cannot revisit the question of whether the Board may
require the patentee to demonstrate the patentability of
substitute claims over the art of record.
The only issue left open for our consideration is
whether the Board abused its discretion by failing to
evaluate objective indicia of non-obviousness and various
new limitations in the proposed claims, even though Aqua
did not argue that those indicia and limitations distin-
guish the proposed claims over the combination of Henkin
and Myers. We find no abuse of discretion. The burden of
showing that the substitute claims were patentable rested
with Aqua. It therefore follows that the Board’s evalua-
IN RE: AQUA PRODUCTS, INC. 7
tion of Aqua’s motion to amend was limited to considering
only those arguments that Aqua actually raised. To hold
otherwise would require the Board to fully reexamine the
proposed claims in the first instance, effectively shifting
the burden from the patentee to the Board. Denial of a
motion to amend in compliance with the APA only re-
quires that the Board show that it fully considered the
particular arguments raised by the patentee and that it
provided a reasoned explanation for why those arguments
were unpersuasive. Those requirements were satisfied
here.
Aqua contends that the Board was “on notice” of its
arguments with respect to all four added limitations.
Appellant’s Reply Br. 5–12. In fact, in its motion, Aqua
presented only one reason why the substitute claims
might overcome the combination of Henkin and Myers.
That reason was that the combination fails to teach the
newly added vector limitation. To deny the motion, the
Board needed to rebut only this argument.
To be sure, Aqua makes passing references in its mo-
tion to the additional limitations. Although Aqua identi-
fies in the record where it described the new limitations
and distinguished them from the prior art, none of the
descriptions were made in the context of supporting the
patentability of the amended claims in light of the combi-
nation of Henkin and Myers. Most of the arguments were
made in the course of the main IPR proceedings; none of
the arguments appeared in the portion of the motion to
amend that sought to explain why the “Substitute Claims
Are Not Obvious In View of Henkin and Myers.” Accord-
ingly, the Board was under no obligation to consider them
in evaluating the motion to amend. 2
2 Aqua excuses its failure to provide argument for
its additional limitations by emphasizing the 15 page
8 IN RE: AQUA PRODUCTS, INC.
The Board properly rebutted Aqua’s argument. The
Board explained that Henkin discloses the vector limita-
tion by teaching a jet whose angle “is selected to yield
both a downward thrust component (i.e., normal to the
vessel surface) for providing traction and a forward com-
ponent which aids in propelling the car.” J.A. 51 (citing
Henkin col. 5 ll. 19–22). The Board thus found that
Henkin taught the vector limitation explicitly.
Aqua argues that the Board’s analysis is unsupported
because the purpose of the angled jet in the prior art was
to promote random movement rather than stability, as in
the ’183 patent. That argument is unpersuasive because
nothing about the vector limitation precludes random
movement, and indeed, the ’183 specification teaches that
the invention encompasses both controlled and random
movement. See ’183 patent col. 5 ll. 4–9.
We conclude that the Board did not abuse its discre-
tion by denying Aqua’s motion to amend. The Board
rebutted Aqua’s sole argument that the vector limitation
made the substitute claims patentable over the combina-
tion of Henkin and Myers. Because Aqua’s arguments
with respect to that combination rested exclusively on the
vector limitation, the Board had no obligation to address
the other amendments or to consider the issue of objective
indicia of non-obviousness, which Aqua did not raise in
connection with the Henkin/Myers combination. We
affirm.
AFFIRMED
limit under which it operated. The problem here is that
Aqua did not ask the Board for additional pages, or any
similar relief. As such, we cannot say that the Board
abused its discretion by holding Aqua to the then-
applicable page limits.
IN RE: AQUA PRODUCTS, INC. 9
COSTS
No costs.