In Uniloc 2017 LLC v. Hulu, LLC, No. 2019-1686 (Fed. Cir. July 22, 2020), the Federal Circuit affirmed the PTAB's denial of Uniloc's requested substitute claims, holding that the PTAB may consider patent eligibility under 35 U.S.C. § 101 when determining the patentability of proposed substitute claims in IPR.

Uniloc sued Hulu and Netflix in district court, alleging infringement of U.S. Patent No. 8,566,960. Hulu and Netflix filed IPR petitions against the '960 patent. The PTAB found the original claims unpatentable and rejected Uniloc's substitute claims as not patent eligible under § 101. Uniloc appealed.

The Federal Circuit affirmed. The Court explained that the text, structure, and legislative history of the IPR statutes showed Congress's intent to allow the PTAB to evaluate patent eligibility of substitute claims. First, the Court observed that the plain language of the statute directs the PTAB to determine “patentability” and § 101 is part of a patentability determination. The Court also explained that § 311 addresses the petition phase of the IPR, not the adjudication of claims, which falls under § 316. The Court next noted that substitute claims have not previously undergone examination and thus the PTAB may determine patentability of those claims under additional bases. The Court thus affirmed the PTAB's ability to determine patent eligibility of substitute claims.

Judge O'Malley dissented and would have held that the PTAB could not reach patentability of the substitute claims because the original claims had been held invalid in a prior district court decision, which the Court had affirmed, and thus there were no claims to substitute. Judge O'Malley would have also found that the PTAB could not reach questions of patent eligibility when reviewing substitute claims.

Originally published by Finnegan, August 2020

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