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The Application of “Authentication by Comparison” at the PTAB

by April E. Weisbruch | Aug 26, 2021 | Patents

Directly addressing the application and operation of the Federal Rules of Evidence in proceedings before the Patent Trial & Appeal Board (Board), the US Court of Appeals for the Federal Circuit affirmed-in-part and reversed-in-part two inter partes review (IPR) decisions, criticizing the Board’s refusal to consider a particular reference relied upon by the patent challenger on the basis of failure to authenticate. Valve Corp. v. Ironburg Inventions Ltd., U.S. Federal Circuit Court of Appeals Nos. 20-1315, -1316, -1379 (Fed. Cir. Aug. 17, 2021) (Dyk, J.)

The Board found that an IPR petitioner, Valve Corporation, failed to show that several challenged patents were unpatentable based on a non-authenticated copy of a critical prior art reference (the Burns article). The Burns article was a printed copy of a 2010 online review of an Xbox 360 controller. Simon Burgess, a co-inventor of the patents at issue, had facilitated the publication of the Burns article by providing a test controller to Dave Burns (who worked for an online gaming magazine) for promotional purposes. Valve appealed the Board’s decision.

Valve argued that the Burns article copy submitted in connection with the IPR (the Exhibit) was merely a printout of the same online article cited and enclosed in the prosecution histories of the challenged patents, as well as another of Ironburg’s patents directed toward similar subject matter. The Board concluded that Valve failed to show that the Exhibit was the same version of the Burns article that appeared in the prosecution history and that it was not obligated to compare the documents in the absence of testimony from Valve that the two were identical. Valve appealed.

In reviewing the Board’s decision, the Federal Circuit first referred to the principles of authentication by comparison under Fed. R. Evid. 901(b)(3), which permits authentication of a document by a comparison with an authenticated specimen “by an expert witness or the trier of fact.” While the Court did note a discrepancy in the dates shown in the Exhibit and in the Burns article in one of the prosecution histories, the Court found that the difference in dates did not bear on the subject matter being disclosed, which was “virtually identical” between the two, as well as identical to the version of the same article in the other two relevant file histories. The Court held that the Board was obligated to perform this comparison and erred by failing to do so.

After determining that the Exhibit was “substantively the same” as the versions of the Burns article from the relevant prosecution file histories, the Court addressed the question of whether the Exhibit was a printed publication under 35 U.S.C. § 102(a)(1). The Board found “overwhelming evidence” that the Burns article was accessible prior to the critical date of the patents at issue, based in significant part on the fact that Mr. Burgess had provided a controller to Mr. Burns with the purpose of a “dialogue with the intended audience,” an indicia of public accessibility. The Board also noted its agreement with [...]

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Objective Indicia of Nonobviousness for Design Patents: Same Nexus Requirement as Utility Patents

by Paul Devinsky | Aug 26, 2021 | Patents

The US Court of Appeals for the Federal Circuit reversed two decisions by the Patent Trial & Appeal Board (Board), finding that a soup company and soup dispenser manufacturing company failed to prove the unpatentability of two design patents covering can dispensers. The Court also concluded that the analysis for objective indicia of nonobviousness for utility patents also applies to design patents. Campbell Soup Co. v. Gamon Plus, Inc., Case Nos. 20-2344, 21-1019 (Fed. Cir. Aug. 19, 2021) (Moore, J.)

Gamon Plus owns two design patents directed to “the ornamental design for a gravity feed dispenser display,” or a can dispenser. Gamon’s commercialized embodiment is called the iQ Maximizer gravity feed dispenser. For nearly a decade, Gamon sold tens of millions of dollars’ worth of its iQ Maximizer to Campbell Soup. Campbell attributed increased soup sales in part to the iQ Maximizer in its 10-K Securities and Exchange Commission reports (an industry publication) and in an internal marketing study. Campbell later began purchasing similar gravity feed dispensers from Trinity Manufacturing.

Gamon sued Campbell and Trinity for design patent infringement. Campbell and Trinity then petitioned for inter partes review (IPR) of Gamon’s patents. In its final written decisions, the Board found that Campbell and Trinity failed to prove unpatentability because the prior art was not similar enough to the claimed designs to constitute a proper primary reference. Trinity (Campbell) appealed.

In that appeal, the Federal Circuit disagreed, vacated and remanded. On remand, the Board again held that Campbell and Trinity failed to prove unpatentability, finding that the claimed designs would not have been obvious over the prior art. The Board reasoned that although the prior art alone had the same overall visual appearance as the claimed designs, there existed objective indicia of nonobviousness, including Gamon’s commercial success in selling iQ Maximizers to Campbell, Campbell’s praise of—and commercial success in—using the iQ Maximizer and Trinity’s copying of the iQ Maximizer. The Board presumed a nexus between those objective indicia evidences and the claimed designs because it found the iQ Maximizer to be coextensive with the claims, meaning that the product was essentially the disclosed invention with unclaimed features being insignificant. The Board also found that Gamon established such a nexus regardless of the presumption. Campbell and Trinity again appealed.

Again the Federal Circuit reversed, concluding that the claimed designs would have been obvious over the prior art. In doing so, the Court confirmed the Board’s finding that the prior art and the claimed designs shared the same overall visual appearance (which Gamon did not challenge) but found that the Board’s presumption of nexus and finding of a nexus-in-fact between the claimed designs and the evidence of commercial success and praise were not supported by substantial evidence. As for the presumption, the Court considered whether the iQ Maximizer was coextensive with the claimed invention. Nexus is presumed if the objective indicia evidence is tied to a specific product that is “coextensive” with the claimed invention. The Board recognized that the claimed portions of [...]

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When it Comes to Method of Use Claims, Preamble Language Regarding Intended Use is Limiting

by Paul Devinsky | Aug 26, 2021 | Patents

The US Court of Appeals for the Federal Circuit issued three separate but related rulings (two precedential, one non-precedential) affirming decisions by the Patent Trial & Appeal Board (Board) regarding the validity of nine US patents and addressing the limitations of preamble language and motivation to combine. Eli Lilly Co. v. Teva Pharmaceuticals, Case Nos. 20-1876, -1877, -1878 (Fed. Cir. August 16, 2021) (Lourie, J.); Teva Pharmaceuticals v. Eli Lilly Co., Case Nos. 20-1747, -1748, -1750 (Fed. Cir. August 16, 2021) (Lourie, J.); Teva Pharmaceuticals v. Eli Lilly Co., Case Nos. 20-1749, -1751, -1752 (Fed. Cir. August 16, 2021) (Lourie, J.). These decisions come as the latest events in a dispute between Teva and Eli Lilly Company over competing products for the treatment of migraine headaches.

Teva owns nine patents directed to humanized antagonist antibodies that target calcitonin gene-related peptide. In 2018, the Food and Drug Administration (FDA) first approved Teva’s version of the biologic fremanezumab (Ajovy®) and then approved Lilly’s biologics license application for galcanezumab (Emgality®) eight days later. Both drugs are part of a new class of migraine therapeutic agents called calcitonin gene-related peptide antagonists.

Lilly challenged the validity of Teva’s nine patents covering Ajovy® in a series of inter partes review (IPR) petitions, arguing that the claims were obvious. The Board instituted IPR for all nine Teva patents. The similarity of subject matter and arguments led to three separate written opinions, each addressing three of the patents. In these decisions, the Board upheld the validity of three of the patents at issue (which covered methods of treating migraines with the antibodies) but found the claims of the six other patents directed to the antibodies themselves invalid.

Lilly appealed the first Board ruling covering methods of treating migraines to the Court. Lilly argued that the Board erred by (1) “reading a result into the constructions of the preambles and the term ‘effective amount,’” which led the Board to erroneously require Lilly to prove that a skilled artisan would have had “a reasonable expectation of achieving a result that was not claimed,” and (2) applying a too-high standard when weighing evidence to determine whether a skilled artisan would have a reasonable expectation of success. Lilly contended that a claim preamble containing only a statement of purpose cannot be a claim limitation and that no weight should have been given to the preambles. Teva argued that Lilly was basing its analysis on a false dichotomy between “limiting preambles” and preambles that are mere statements of purpose.

The Federal Circuit found the claim preambles to be limiting, reasoning that claims directed to methods of using compositions “are not directed to what the method ‘is’” but rather to “what the method ‘does,’” which usually is recited in the preamble. The preambles provided the only metric by which one practicing the claim could determine whether the amount administered is an “effective amount” and provided the antecedent basis for at least one later claim term in the independent claims.

After finding the preambles to [...]

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Federal Circuit Finds Interlocutory Appeal Untimely

by Paul Devinsky | Aug 19, 2021 | Patents

Addressing the time limits for filing an interlocutory appeal in patent cases, the US Court of Appeals for the Federal Circuit dismissed such an appeal as untimely, finding that the appellant did not file within 30 days of all liability issues except for a determination of damages being resolved. Mondis Technology Ltd. v. LG Electronics Inc., Case No. 20-1812 (Fed. Cir. Aug. 3, 2021) (Hughes, J.)

Mondis Technology sued LG Electronics for infringement of a patent related to display technology. In a consolidated district court case joining other parties to dispute with LG, a jury found that (1) LG infringed certain claims of the patent owned by Mondis, (2) the patent claims were not invalid and (3) LG’s infringement was willful. The jury awarded $45 million in damages. LG filed multiple post-trial motions relating to infringement, invalidity, willfulness and damages. In September 2019, the district court denied LG’s motions regarding infringement, invalidity and willfulness. Then, in April 2020, the district court granted LG’s motion for a new trial on damages.

Within 30 days of the April 2020 order, LG filed a notice of interlocutory appeal with the Federal Circuit, seeking to challenge the denial of its three post-trial motions.

The Federal Circuit first discussed its jurisdiction to hear interlocutory appeals under 28 U.S.C. § 1292(c)(2), which provides the Court with exclusive jurisdiction over “an appeal from a judgment in a civil action for patent infringement which would otherwise be appealable to the . . . Federal Circuit and is final except for an accounting.” The Court explained that appeals under this section are subject to the time limits of § 2107(a), which in this case would give LG 30 days from the date the judgment became “final except for an accounting.” The Court cited to a previous case in which it held that a judgment is “final except for an accounting” under § 1292(c)(2) when all liability issues have been resolved and only a damages determination remains. The Court further supported its position by citing the Supreme Court of the United States’ 1988 decision in Budinich v. Becton Dickinson in which it found that the merits decision was final after the first post-trial order that resolved all issues except for attorneys’ fees. The Court thus found that all such liability issues were resolved as of the district court’s September 2019 order and that the 30-day clock started at that time.

LG also argued that Rule 4 of the Federal Rules of Appellate Procedure tolled the time to file its appeal. Rule 4(a)(4) provides that “the time to file an appeal runs for all parties from the entry of the order disposing of the last such remaining motion.” The Court disagreed with LG’s characterization, citing a Third Circuit opinion which found that a motion only tolls the time to file interlocutory appeals if the motion relates to the interlocutory judgment. The Court found that Rule 4(a)(4) did toll the time to file the interlocutory appeal but only until motions concerning liability [...]

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Without More, Mere Automation is Abstract—Not Construing Interchangeable Terms Doesn’t Give Them the Cold Shoulder

by McDermott Will & Emery | Aug 19, 2021 | Patents

In the latest development relating to patent eligibility of content-based identifier patents, the US Court of Appeals for the Federal Circuit affirmed decisions finding patent claims ineligible under 35 U.S.C. § 101. PersonalWeb Techs. LLC v. Google LLC, YouTube, LLC, Case No. 20-1543 (Fed. Cir. Aug. 12, 2021) (Prost, J.) (consolidating PersonalWeb Techs. LLC v. Facebook, Inc., Case No. 20-1553, and PersonalWeb Techs. LLC, Level 3 Commc’ns. LLC v. EMC Corp., VMWare, Inc., Case No. 20-1554).

PersonalWeb sued technology companies in the Eastern District of Texas in 2011 over three of its patents. The patents were directed to data-processing systems that assign each data item a substantially unique content-based identifier, generated by hash algorithm, which changes when the content changes and is used to perform data-management functions. Several defendants successfully motioned for transfer to the Northern District of California, where their companies were headquartered and/or their employees responsible for the development of the accused products were based. After claim construction in Texas, the cases were transferred and stayed pending several inter partes reviews before the US Patent Trial & Appeal Board (Board). Previous decisions before the Federal Circuit affirmed the Board’s findings that using hash-based identifiers for data management was disclosed in the prior art, that content-based identifiers in performing file-management functions, such as backing up files, were also known and other independently unpatentable aspects were recited in the claims. After the stay was lifted, the California court granted the defendants’ motion for judgment on the pleadings that the remaining asserted claims were patent ineligible under 35 U.S.C. § 101. PersonalWeb appealed.

To assess patent eligibility, the Federal Circuit applied the two-step Mayo/Alice framework. Under step one (determining whether the claims at issue are directed to a patent-ineligible concept, such as an abstract idea), the Court considered the focus of the claimed advance over the prior art and found that the claims were directed to an abstract idea. PersonalWeb contended that its claims were directed to “a substantially unique, algorithm-derived, content-based identifier for all data items in a networked computer, which allows a computer within a network containing diverse computing and storage systems to locate and distribute data without knowing either the file system of any device within the network or the conventional name of any data item.” However, the Court adopted the district court’s view, which was that the patents were directed to “(1) using a content-based identifier generated from a ‘hash or message digest function,’ (2) comparing that content-based identifier against something else, [that is,] another content-based identifier or a request for data; and (3) providing access to, denying access to, or deleting data.” Given the focus in Mayo/Alice step one of “whether the claims of the asserted patents fall within the excluded category of abstract ideas,” and citing to parallel examples from precedent cases, the Court concluded that the claims were directed to the use of an algorithm-generated content-based identifier to perform the claimed data-management functions, which include controlling access to data items, retrieving and delivering copies [...]

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If Intrinsic Evidence Provides a Clear Meaning, Just Stop

by Paul Devinsky | Aug 19, 2021 | Patents

The US Court of Appeals for the Federal Circuit vacated a final written decision of the Patent Trial & Appeal Board (Board) based on its finding that the Board erred in its ultimate claim construction by relying on extrinsic evidence that was inconsistent with the intrinsic evidence. Seabed Geosolutions (US) Inc. v. Magseis FF LLC, Case No. 20-1237 (Fed. Cir. Aug. 11, 2021) (Moore, C.J.)

In April 2018, Seabed Geosolutions petitioned for inter partes review of a patent owned by Magseis directed to “seismometers for use in seismic exploration.” Every claim recited a “geophone internally fixed within” either a “housing” or an “internal compartment” of a seismometer. The Board construed this limitation to require a non-gimbaled geophone based entirely on extrinsic evidence. The Board found that the term “fixed” had a special meaning of “non-gimbaled” at the time of the invention. Based on this finding, the Board determined that Seabed had failed to prove that the challenged claims were unpatentable because the cited prior art did not disclose a non-gimbaled geophone. Seabed appealed.

The Federal Circuit reversed the Board’s claim construction of the term “fixed” because it relied on extrinsic evidence that was inconsistent with the intrinsic evidence and unnecessary to consider given the clarity of the intrinsic evidence. The Court reminded the Board that it “resort[s] to extrinsic evidence to construe claims only if it is consistent with the intrinsic evidence,” and that “[i]f the meaning of a claim term is clear from the intrinsic evidence, there is no reason to resort to extrinsic evidence,” citing prior Federal Circuit decisions.

Contrary to the special meaning found by the Board, the Federal Circuit determined that the term “fixed” carried its ordinary meaning (i.e., attached or fastened). The Court found that the term “specifies the geophone’s relationship with the housing, not the type of geophone.” As an initial matter, the specification was silent as to whether the geophone was gimbaled or not. “That silence does not support reading the claims to exclude gimbaled geophones,” in part because the specification used the term gimbaled when describing other aspects of the invention. Had the applicant intended to limit the claimed geophone, it would have done so.

Furthermore, the specification described the internal mounting of the geophone as a key feature to overcome issues with the then-conventional method of separating the geophone from the seismometer’s other components. The specification reiterated that by internally mounting the geophone, the invention was “self-contained.” The prosecution history also revealed that both the applicant and examiner understood the term to carry its plain and ordinary meaning, equating “internally fixed within” with “disposed, and electrically connected, within.” That equivalence indicates that the term was intended to describe the relationship of the geophone with the seismometer, rather than to limit the type of geophone as contemplated by the Board. Accordingly, the Court found that the intrinsic record was clear, and that the Board’s reliance on extrinsic evidence—much less extrinsic evidence that was inconsistent with the specification itself—was improper and remanded for [...]

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Employee Agreement of What “Shall Be” is Future Promise, Not Present Assignment

by Paul Devinsky | Aug 12, 2021 | Patents

The US Court of Appeals for the Federal Circuit concluded that university bylaws did not automatically effectuate a present automatic assignment of patent rights and affirmed the district court’s denial of a motion to dismiss for lack of standing by the transferee. Omni MedSci, Inc. v. Apple Inc., Case No. 20-1715 (Fed. Cir. Aug. 20, 2021) (Linn, J.) (Newman, J., dissenting).

Upon joining the faculty of the University of Michigan, Dr. Mohammed Islam executed an employment agreement assenting to abide by the university’s bylaws. The bylaws provide, in relevant part, that patents obtained by university staff that are supported directly or indirectly by university funds “shall be the property of the University.” In 2012, Dr. Islam took an unpaid leave of absence and filed several provisional patent applications. After he returned to the university in 2013, he filed non-provisional patent applications claiming priority to the 2012 provisional applications. Once those applications issued as patents, he assigned the patent rights to the plaintiff, Omni MedSci.

In 2018, Omni initiated a patent infringement action against Apple asserting certain patents, including one in the family of patents that Islam assigned to Omni. Apple moved to dismiss, arguing that Omni lacked standing to assert the patents-in-suit because the university—not Omni—owned the patents-in-suit. Apple argued that the university’s bylaws automatically transferred legal title to Dr. Islam’s patents to the university, leaving Dr. Islam with nothing to assign. Therefore, Omni had no standing to assert the patents.

The US District Court for the Eastern District of Texas denied the motion to dismiss and transferred the action to the Northern District of California. The California court certified the standing question to the Federal Circuit.

In this interlocutory appeal, the Federal Circuit considered whether the university bylaws automatically assigned the patent rights to the university. The Court explained that a patent assignment clause may presently assign a to-be-issued patent automatically—in which case no further acts to effectuate the assignment are necessary—or may merely promise to assign the patent in the future. The issue in the appeal was which type of assignment was intended by the “shall be the property of the University” language in the bylaws—i.e., whether it was “a statement of an intended outcome [or] a present assignment.” Analyzing the university bylaws, the Court agreed with the district court that the bylaws did not automatically assign the patent rights to the university and therefore did not negate Dr. Islam’s assignment of the patent rights to Omni.

The Federal Circuit concluded that the bylaw language “is most naturally read as a statement of intended disposition and a promise of a potential future assignment, not as a present automatic transfer. … It does not purport to effectuate the present transfer of a present or future right.”

In dissent, Judge Pauline Newman noted that at the district court, Dr. Islam only argued that he was not subject the bylaw obligation since the patent applications were filed without university support. However, the district court did not rule on that issue and [...]

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The Skinny Label That Wasn’t—Federal Circuit Reinstates Induced Infringement Verdict

by Paul Devinsky | Aug 12, 2021 | Patents

The US Court of Appeals for the Federal Circuit vacated the district court’s grant of judgment as a matter of law (JMOL) of non-infringement where substantial evidence supported the jury’s verdict of induced infringement by an attempted “skinny label” that nonetheless encouraged doctors to engage in a patented use. GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., Case Nos. 18-1876, -2023 (Fed. Cir. Aug. 5, 2021) (Moore, C.J.) (Prost, J., dissenting).

GlaxoSmithKline LLC (GSK) sells a drug called carvedilol (brand name Coreg®), which is approved for three indications: Hypertension, congestive heart failure (CHF) and left ventricular dysfunction following a myocardial infarction (post-MI LVD). In 2002, Teva filed an abbreviated new drug application (ANDA) for US Food and Drug Administration (FDA) approval of its generic carvedilol for all three indications. At that time, GSK’s patent on the carvedilol compound was still in force; Teva certified that it would not launch its product until the patent expired in 2007. GSK also had a second patent on a method of treating CHF using carvedilol and a second agent. In 2002, Teva sent GSK a Paragraph IV notice contending that the claims of that patent were invalid over prior art. Rather than sue Teva, GSK applied for reissue of the patent. In 2004, Teva received FDA “tentative approval” for its ANDA “for the treatment of heart failure and hypertension,” which was to become effective at the expiry of the compound patent in 2007.

In January 2008, the method-of-use patent reissued with claims directed to a method of decreasing mortality caused by CHF by administering carvedilol with at least one other therapeutic agent. Just before its launch in 2007, Teva certified to the FDA that its label would not include the indication listed in the Orange Book as covered by the original method-of-use patent (i.e., “decreasing mortality caused by congestive heart failure”), and thus included only the hypertension and post-MI LVD indications. Teva’s press releases stated that its generic carvedilol was “indicated for treatment of heart failure and hypertension.” In 2011, the FDA asked Teva to revise its labeling to be identical with GSK’s. Teva obliged (listing again the CHF indication) and took the position that it did not need to provide certification for the reissued patent because it received final approval of its ANDA before the patent reissued. GSK sued.

GSK won a jury verdict that the challenged patents had not been shown to be invalid and that Teva was liable for induced infringement. At trial, GSK contended—and the jury heard evidence—that post-MI LVD is a form (and fell within the Court’s construction) of CHF such that Teva’s attempted skinny label nonetheless encouraged doctors to engage in a patented use. After trial, however, the district court granted JMOL of non-infringement because the CHF and post-MI LVD indications were different. On appeal, the Federal Circuit found that substantial evidence supported the implied jury, finding that post-MI LVD is a form of CHF such that the label with the post-MI LVD indication induced infringement of the reissued [...]

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As Due Process Recognizes, it’s Hard to Shoot at a Moving Claim Construction Target

by McDermott Will & Emery | Aug 5, 2021 | Patents

The US Court of Appeals for the Federal Circuit vacated several Patent Trial & Appeal Board (PTAB) decisions as violating due process and the Administrative Procedure Act (APA), referencing the parties’ inability to respond to the PTAB’s sua sponte construction of a term on which the parties had previously agreed. Qualcomm Inc. v. Intel Corp., Case Nos. 20-1589; -1594 (Fed. Cir. July 27, 2021) (Moore, C.J.)

After Qualcomm sued Intel over a patent directed to techniques for generating a power tracking supply voltage for a circuit that processes multiple radio frequency signals simultaneously, Intel filed six inter partes review (IPR) petitions challenging the validity of Qualcomm’s patents. In each petition, Intel proposed that the claim term “a plurality of carrier aggregated transmit signals” meant “signals for transmission on multiple carriers at the same time to increase the bandwidth for a user.” Qualcomm proposed a different construction: “signals from a single terminal utilizing multiple component carriers which provide extended transmission bandwidth for a user transmission from the single terminal.” Neither party disputed that the signals were required to increase user bandwidth, either at the PTAB or in a parallel proceeding before the US International Trade Commission (USITC) where the USITC adopted a construction—including the increased bandwidth requirement.

However, during the oral hearing, one of the administrative patent judges (APJs) asked Intel counsel about the inclusion of the bandwidth limitation in the claim construction. No other APJ raised, or asked Qualcomm, any questions about the increased bandwidth requirement in the claim construction. The day after the hearing, the PTAB sua sponte ordered additional briefing on the meaning of other claim terms that had been extensively discussed at the hearing.

The PTAB ultimately issued six final written decisions concluding that all challenged claims were unpatentable. In doing so, the PTAB omitted any requirement that the signals increase or extend bandwidth in construing the term “a plurality of carrier aggregated transmit signals” to mean “signals for transmission on multiple carriers.” The PTAB also held that “means for determining a single power tracking signal” (power tracker limitation) was a means-plus-function limitation and that an integrated circuit (IC) board, the “power tracker 582,” was the corresponding structure.

Qualcomm timely appealed, arguing that 1) it was not afforded notice of, or an adequate opportunity to respond to, the PTAB’s construction of “a plurality of carrier aggregated transmit signals” and 2) that the PTAB’s construction of the power tracker limitation was erroneous for failing to include an algorithm in the corresponding structure.

NOTICE AND OPPORTUNITY TO RESPOND TO THE PTAB’S CONSTRUCTION

The Federal Circuit has discussed the administrative and notice requirements provided by the APA and due process in IPR proceedings: “[a] patent owner in [an IPR] is undoubtedly entitled to notice of and a fair opportunity to meet the grounds of rejection” (Belden v. Berk-Tek). The Court observed that for IPRs, the PTAB must “timely inform” the patent owner of “the matters of fact and law asserted” and, in terms of notice, “must provide ‘all interested [...]

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Even Judges Have a Boss: PTAB Must Sufficiently Articulate its Obviousness Reasoning

by Paul Devinsky | Jul 29, 2021 | Patents

Addressing the sufficiency of the Patent Trial & Appeal Board’s (PTAB) justification of its inter partes review (IPR) determination, the US Court of Appeals for the Federal Circuit reversed the PTAB’s obviousness determinations, concluding that the PTAB’s findings regarding motivation to combine were not supported by substantial evidence. Chemours Company FC, LLC v. Daikin Industries, Ltd., Daikin America, Inc., Case No. 20-1289, -1290 (Fed. Cir., July 21, 2021) (Reyna, J.) (Dyk, J., concurring in part and dissenting in part).

Chemours, owner of the challenged patents, appealed the PTAB’s final written decisions in two IPRs initiated by Daikin. The challenged claims relate to a unique polymer for insulating communication cables formed by pulling wires through melted polymer to coat and insulate the wires, a process known as “extrusion.” The challenged claims of the patents recite that the polymer has a specific melt flow range of about 30+/- g/10 mins. The polymer’s melt flow range correlates with how fast the melted polymer can flow under pressure during extrusion. A higher melt flow rate means a faster coating of the polymer onto a wire. During the IPRs, the PTAB found all challenged claims unpatentable as obvious.

The Federal Circuit reviews the PTAB’s legal determinations de novo and its factual findings for substantial evidence, which “requires more than a ‘mere scintilla’ and must be enough such that a reasonable mind could accept the evidence as adequate to support the conclusion.” Obviousness is a question of law necessarily made on underlying findings of fact, and in making factual findings, the PTAB “must have both an adequate evidentiary basis for its findings and articulate a satisfactory explanation for those findings.”

In this instance, the Federal Circuit found that the PTAB’s obviousness findings were not supported by substantial evidence. According to the Court, while the PTAB may rely on prior art other than the references being applied or combined to inform itself of the state of the art at the time of the invention, the scope of the relevant prior art encompasses only that which is “’reasonably pertinent to the particular problem with which the inventor was involved.”’ Here, the Court explained that the only prior art reference relied on was not appropriate because it expressly taught away from the claimed invention and relied on teachings from other references that were not concerned with the particular problems the prior art sought to solve. As the Court noted, the PTAB “did not adequately grapple with why a skilled artisan would find it obvious to increase [the reference’s] melt flow rate to [the] claimed range while retaining its critical ‘very narrow molecular-weight distribution.’” To support its obviousness conclusion, the PTAB needed “competent proof showing a skilled artisan would have been motivated to, and reasonably expected to be able to, increase the melt flow rate of [the reference’s] polymer to the claimed range when all known methods for doing so would go against [the reference’s] invention by broadening molecular weight distribution.” By failing to provide its reasoning, the PTAB relied [...]

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