In an IPR proceeding, may the Board find a patent obvious based on arguments that the petitioner did
Rovalma, S.A., v. Böhler-Edelstahl GmbH & Co. KG
Decided: May 11, 2017
In an IPR proceeding, may the Board find a patent obvious based on arguments that the petitioner did not make, and that the Board first suggested during the oral hearing? In a case in which the Board did not adequately explain the bases for its obviousness findings, the United States Court of Appeals for the Federal Circuit (Federal Circuit) said no.
Patent owner Rovalma’s U.S. Patent No. 8,557,056 is directed to a method for making steel with properties related to high thermal conductivity. The challenged claims include limitations relevant to the steel’s chemical composition (which includes types of carbides), as well as process steps related to selecting characteristics of the steel's constituent materials.
Böhler’s petition cited references that disclose steel with the same chemical composition as claimed, but that were not made using the claimed process steps. In its claim construction arguments, Böhler said that the claims should be construed to cover the specific chemical composition in the claims, regardless of the process steps used to make the steel. The petitioner did not take the position that the cited references disclose the claimed process steps, and made no argument that these process steps would have been obvious over the cited references.
For its part, the patent owner argued that the claims must be construed to cover the recited process steps; and in response to an objection that its proposed construction did not meet the enablement requirement, it submitted additional evidence and arguments regarding these process steps. Specifically, Rovalma argued that: (1) given the specification, an ordinary artisan would have been able to predict the formation of the claimed carbides based on particular heat treatments; (2) that ordinary artisan would have been able to use commonly available software tools to carry out the needed calculations; and (3) based on the disclosures in a textbook by Bayati & Elliot, an ordinary artisan would know that a steel’s thermal conductivity depends on lattice defects and impurities.
In its reply, petitioner Böhler did not argue that the claims were invalid under the patent owner's proposed construction; instead, Böhler repeated its contention that the claim should be construed only to cover chemical compositions, not processes. And regarding the patent owner’s arguments about the knowledge of an ordinary artisan (including references to the text by Bayati & Elliot), Böhler said only that they were irrelevant.
In its institution decision, the PTAB agreed with Böhler that the claims should be construed to cover the specific chemical composition in the claims, regardless of whether the steel was created using the recited process steps.
At oral argument, the Board appeared to change course when it questioned Rovalma about whether its claims would be invalid over Böhler’s references in light of the textbook and other references that it (Rovalma) had submitted.
The Board’s final written decision rejected the petitioner’s construction—which it had adopted in the institution decision—and adopted patent owner Rovalma’s construction; it then found the challenged claims invalid as obvious over the references submitted by the petitioner in light of Rovalma’s background references and its statements at the oral hearing.
In its opinion remanding the case, the Federal Circuit found substantive and procedural flaws with the Board’s decision, both of which were related to the decision’s insufficient analysis. The Court’s opinion begins with a discussion of KSR’s requirement that an obviousness analysis—including discussions about the scope and content of the prior art, the knowledge of an ordinary artisan, the motivation to combine references and the reasonable expectation of success—must be explicit, so that an appeals court may perform a meaningful review.
The opinion goes on to say that although the Board’s decision showed that one of the claimed process steps is disclosed in the asserted prior art references, the Board did not sufficiently lay out the basis for its implicit findings about the remaining process limitations. In those implicit findings, the Board said that a person of ordinary skill would have at least inherently completed some of the process steps, and that other steps would have been obvious in view of the patent owner’s submissions. But the Board did not explain the evidentiary basis for these determinations, and the petitioner did not provide any explanation regarding the process claim elements that the Board could adopt as its own. The Federal Circuit also found lacking the Board’s evidence regarding an ordinary artisan’s motivation to make steels of the claimed thermal conductivities, and the Board’s evidence regarding the reasonable expectation of success in making the claimed invention. The panel concluded: “the Board has not provided a sufficiently focused identification of the relevant evidence or explanation of its inferences for us to confidently review its decision and avoid usurping its factfinding authority.”
The patent owner also challenged the Board’s decision on procedural grounds. Here again, the Court of Appeals ruled that because it was unclear how the Board reached its conclusion that the challenged claims would have been obvious, it could not conclusively determine whether the Board’s actions complied with the APA’s procedural requirements.
Finally, the Court said that to the extent that the Board did rely on the patent owner’s submissions—and drew reasonably disputable inferences from them—the patent owner was entitled to adequate notice of and opportunity to address those inferences. This did not take place here, since: (1) the petitioner never described what inferences were to be made (since it essentially disregarded the process steps throughout the IPR proceeding); and (2) although the Board discussed the process steps extensively at the oral argument, that was too late because there was no additional adequate opportunity for the patent owner to be heard.