In its recent decision, In re Magnum Oil Tools International, No. 2015-1300, the Federal Circuit clarified the burden of proof for IPR proceedings. In particular, it held that the PTAB improperly shifted the burden of proof to the patent owner to disprove obviousness.
When filing its petition with the PTAB, McClinton argued that the claims at issue would have been obvious over a first and second set of prior art. While McClinton and its expert appeared to have fully addressed the first set of prior art, they only “incorporated by reference” the arguments from the first set onto the second set of prior art. In responding, patent owner Magnum contended, among other things, that McClinton’s analysis for the second set of prior art failed to “specify where each element of the claim is found” and to describe how a skilled artisan would have modified the second set of prior art. Despite these shortcomings, the PTAB found that McClinton had established a reasonable likelihood of success based on only the second set of prior art and instituted the IPR. Relying on that analysis in the Final Written Decision, the PTAB held that the claims at issue were invalid as being obvious over the second set of art.
Subsequently, McClinton and Magnum settled the dispute, in which McClinton agreed to not participate in any appeal.