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26 July 2016Patents

Federal Circuit drills into fracking patent rejection, overturns PTAB ruling

The US Court of Appeals for the Federal Circuit has reversed a finding by the Patent Trial and Appeal Board (PTAB) concerning a patent covering fracking technology.

In a decision handed down yesterday, July 25, the court said an unfair burden was put on the patent’s owner, Magnum Oil Tools International, over the petitioner McClinton Energy Group.

The dispute centred on US patent number 8,079,413, which is directed to technology related to oil drilling through use of hydraulic fracturing, commonly known as “fracking”.

McClinton attempted to invalidate the patent and filed an inter partes review (IPR) petition at the PTAB, where it cited four prior art references to argue that the patent was obvious.

After the board issued a decision in favour of McClinton, the two parties settled the dispute and McClinton agreed not to participate in a separate appeal filed by Magnum challenging the PTAB’s findings.

The US Patent and Trademark Office (USPTO) intervened in the appeal to defend the PTAB’s decision.

The USPTO said if the PTAB grants an IPR then the petitioner, in this case McClinton, had demonstrated a reasonable likelihood of success, meaning the burden of producing evidence should shift to the patentee, Magnum.

But in its ruling, the Federal Circuit disagreed and said adopting that view would “introduce unnecessary confusion”.

The court wrote: “As explained above, the board erred in shifting the burden of proof on obviousness in this IPR from the petitioner, McClinton, to the patent owner, Magnum.

“The board’s decision was premised on a legally incorrect standard for assessing obviousness, and the board’s factual findings … lacked substantial evidence. Accordingly, we reverse the board’s decision.”

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