Federal Circuit Broadly Affirms PTAB’s Determinations on Analogous Art, Motivation to Combine References, and Obviousness of Claims

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The level of deference the Federal Circuit gives to the Board’s IPR decisions has been surprising to many practitioners, considering the Court’s reputation for reversing district court decisions.  The trend of deference to the Board continues, as illustrated in Unwired Planet, LLC v. Google Inc., 2015-1810, -1811, Nov. 15, 2016.

Unwired involved one patent, U.S. 7,024,205.  The Board nullified the patent twice over, finding the claims obvious in an IPR, and lacking written description in a CBM proceeding.  Unwired involved a consolidated appeal of both.  The Federal Circuit affirmed the Board’s obviousness finding, and thus did not reach the CBM decision.

The ‘205 patent involved a system and method for providing cell phone users with prioritized search results based either on the user’s location, or based on other criteria chosen by the network administrator (the point of the latter is to allow search providers to prioritize results based on whether, for example, a restaurant has paid to be listed).  More particularly, the patent claims a scheme wherein the search results list a further-away provider before listing a different, closer provider (called “farther-over-nearer ordering” in the opinion).

Google presented a variety of prior art including basic references on providing search results in an electronic setting and also a 1997 book by Galitz discussing principles for interface design, including various techniques for ordering text information and menus.  On appeal, Unwired presented 3 arguments:  (1) Galitz was non-analogous art; (2) the prior art does not teach farther-over-nearer ordering; and (3) there was inadequate motivation to combine Galitz with the other art.

The Federal Circuit rejected all three arguments.  As to non-analogous art, the Court first noted that the field of endeavor of a patent is not limited to the point of novelty, the narrowest conception of the field, or the particular focus within a given field.  Because both Galitz and the patent dealt, broadly speaking, with the field of interface design, the Court determined a person of ordinary skill would have looked to Galitz.

Second, as to the prior art’s alleged lack of teaching, the evidence was clear that the prior art sometimes would have returned results with farther-over-nearing ordering, even though that wasn’t necessarily the goal of that prior art.  Nonetheless, that was legally sufficient:  “We reject this argument because combinations of prior art that sometimes meet the claim elements are sufficient to show obviousness.”  Lastly, the Court found sufficient evidence (including in the form of expert testimony) to believe that a person of ordinary skill in the art would have combined the references.  Here too, the Court presented a relatively broad (and challenger-friendly) reading of the law:  “Google also argues that it does not need to show that there was a known problem with the prior art system in order to articulate the required rational underpinning for the proposed combination.  We agree.”  This final point is consistent with KSR, as the opposite position (that the problem need to have been known) would seem perilously close to the TSM test rejected in KSR.

The Federal Circuit’s deference to the Board, and challenger-friendly reading of the law, in IPR appeals continues to encourage parties to pursue their positions through IPR petitions.

PTAB Reversed Based on Non-Analogous Art Theory

34108250_sAlthough In re Natural Alternatives LLC (Fed. Cir. August 31, 2016) is not an IPR appeal, it should be of interest to those who care about IPRs and PGRs because it reflects a successful appeal from the Patent Trial & Appeal Board (PTAB) involving the fairly rare issue of non-analogous art.

Natural Alternatives (NA) owns US 6,080,330 (‘330), which claims compositions for deicing roads using less salt and fewer toxic chemicals than have traditionally been used for that purpose. NA licenses ‘330 to various manufacturers of road-deicing supplies. One of NA’s licensees decided to challenge the patent by filing a request for ex parte re-examination, which the PTO granted. Eventually the Examiner rejected all claims as obvious and the PTAB affirmed. NA appealed to the Federal Circuit (CAFC).

There were two “representative” limitations litigated before the PTAB and then the CAFC, and the key limitation in both claims was “desugared sugar beet molasses.” NA discovered that if you mix this particular molasses with any of a number of previously known deicing agents (mostly road salts), you enhance the salt’s deicing effectiveness, such that you get more deicing “bang” for the salt “buck.” This means that you can use less salt per winter, which is good because salt can corrode vehicles, pollute groundwater, etc. Before NA’s discovery, desugared sugar beet molasses was a waste product that was simply thrown away.

The crux of the PTO’s argument for prima facie obviousness was that PL 164018 (Zdzisław) disclosed an antifreeze containing sugar beet molasses (the parties disputed whether this molasses was desugared, but that point is not critical) and a prior art deicing agent (a class of alcohols). The principle difference between Zdzisław’s antifreeze and NA’s claimed composition are that NA’s claimed composition: (1) requires a particular ratio of molasses to deicing agent; and (2) at least some of NA’s claims require salt, not alcohol, as the deicing agent. The Examiner cited US 5,639,319 (Daly), which also used molasses and alcohol but in different ratios than used in Zdzisław. Daly uses the molasses/alcohol mix as a tire ballast (i.e., bulk weight loaded into a truck tire to make it more dense to improve driving on slick surfaces). Then the Examiner cited a study published in Public Works magazine to show that alcohol and road salt achieve essentially the same deicing effect. The PTAB considered that the range of molasses to alcohol ratios in Zdzisław and Daly—combined with the alleged interchangeability between alcohol and salt from Public Works—showed that it was nothing more than routine optimization to adjust the ratio of molasses and road salt to arrive at NA’s claimed deicing composition.

NA argued that it was not proper to combine antifreeze art (Zdzisław) and tire ballast art (Daly) because they are not analogous art fields. The PTAB took the position that both anti-freeze and tire ballast are things that you use in a car in the winter, and this made them part of the same general art field. The CAFC disagreed, citing In re Clay, 966 F.2d 656 (Fed. Cir. 1992). In Clay the PTO had argued that oil storage tanks and oil extraction rigs were all part of the same art field of “petroleum industry,” but the CAFC disagreed, holding that “petroleum industry” was too generic and abstract a way of framing the art fields in question. The panel in the present case similarly considered the things-you-do-to-a-car-in-winter view of analogous art to be too abstract. Because the PTO—which has the initial burden of establishing prima facie obviousness—had not offered a cogent explanation of why Zdzisław and Daly are analogous art, the CAFC held that prima facie obviousness was not established in the first instance, and therefore there was properly no rejection for NA to rebut. Therefore, the PTAB’s judgment was reversed.

PTAB Disqualifies Art as Being Non-Analogous to Claimed Invention

13111368_sA limited number of cases, to date, have dealt with the issue of analogous prior art in an obviousness analysis. In Schott Gemtron Corp. v. SSW Holding Co., IPR2014-00358, the Board addressed this type of issue, finding in favor of Patent Owner that the art-at-issue was not analogous and, thus, disqualifying its use in the IPR proceeding.

The ‘561 patent relates to shelving which has a hydrophobic top surface arranged in a pattern to contain spills. At issue in the petition was whether Petitioner had established that a reference which relates to microscope slides was analogous art.  The Board noted two factors in this determination, either of which is sufficient to establish a reference as analogous:

  • if the reference is from the same field of endeavor as the claimed subjected matter, regardless of the problem addressed; or
  • if the reference, even though not within the field of the claimed invention, is reasonably pertinent to the problem with which the inventor is involved.

Further, the Board noted that the purpose of the claimed invention and the purpose of the prior art reference are important to the inquiry of whether the reference is analogous art.

That the reference was not in the same field of endeavor as the ‘561 claimed invention was not in dispute.  Both parties agreed that shelving and microscope slides were not in the same field.  However, Petitioner argued that the reference was reasonably pertinent to the problem faced by the inventor of the ‘561 patent.  Specifically, Petitioner argued that both the reference and the ‘561 patent pertained to the problem of how to contain a liquid in a predetermined area using a thin structure that extends minimally from a surface.

Patent Owner argued that the reference was not analogous because the reference (related to microscope slides) did not pertain to containment of spills (construed as “an accidental or unintentional release of liquid” by the Board) because liquids are intentionally put on microscope slides.  The Board agreed with Patent Owner, citing the recitation of a “spill containment” pattern in the ‘561 claims and considerable support for a spill containment feature in the ‘561 specification.  Therefore, the reference and the ‘561 invention did not address the same problem.

Further, the Board explained that even if the reference qualified as prior art, it was different enough from other cited references that one skilled in the art would not have been familiar enough with the reference to combine it with others to mount a successful obviousness challenge.  Therefore, the Board dismissed the obviousness challenge.

19 for 20: Tire Pressure-Monitoring Patent is 19th Put Into Inter Partes Review Trial

OLYMPUS DIGITAL CAMERASchrader-Bridgeport was successful in forcing a patent owned by Continental Automotive Systems US into an inter partes review trial, in the case styled as Schrader-Bridgeport International, Inc. v. Continental Automotive Sys. US, Inc. (IPR2013-00014), involving US Patent No. 6,998,973.  The Board granted the IPR trial based on all 10 challenged claims and on one of 9 grounds for challenge.

The subject matter of the ‘973 patent involves a data transmission method for a tire-pressure monitoring system of a vehicle.  More particularly, the method prevents data collisions from the various wheel units of an automobile through the use of internal clocks in each wheel unit.  The main dispute between the parties involved the last clause of independent claim 1, including the terms “natural time lag” and “used to prevent collisions.”

Starting with the step of claim construction, the Board noted that Patent Challenger’s claim construction of “natural time lag” corresponds to a position taken by Patent Owner in concurrent district court litigation.  That definition, which Patent Owner urged the Board to adopt for purposes of this IPR, comprises “sensors with any amount of imprecision, even lower than +/- 1%, creates a sufficient ‘natural lag’ to be covered by the claim.”  Because the Board could not discern how this definition aligned with a litigation position, or why the +/- 1% limitation should be included, it found that the proposed construction was overly broad in light of the patent specification.  Instead, the Board looked to the specification and found that one of ordinary skill would have understood that term to mean that tolerance of the clocks is sufficiently poor so as to automatically and randomly induce time shifting of transmission from the clocks.  Order at 8.

Turning to the term “used to prevent collisions,” the Board agreed with the definition proposed by Patent Challenger; namely that the occurrence of collisions is reduced. All other terms in the challenged claims were given their ordinary and customary meanings.  Id.

Having construed the above-two terms, the Board turned to the issue of anticipation, noting that Patent Challenger’s arguments relied upon implicit disclosures.  That is, Patent Challenger relied upon inherency.  Order at 10.  With regard to the first reference at issue, the Board found that Patent Challenger’s inherency argument neglected to consider the entirety of the teachings of the reference.  In light of that more complete analysis, the disclosure would not necessarily function in a manner consistent with the claimed invention.  MEHL/Biophile International Corp. v. Milgraum, 192 F.3d 1362, 1365 (Fed. Cir. 1999) (“Inherency” requires that a given fact must necessarily result, and not be established based on mere probability or possibility).  Order at 12.  Relatedly, the Board found that the second reference upon which Patent Challenger asserts under an inherency theory was similarly insupportable.  Order at 13.

The Board was more persuaded, however, by Patent Challenger’s grounds for challenge based on obviousness.  The Board’s analysis overcame Patent Owner’s arguments that the combinations at issue were: 1) based on non-analogous art, 2) taught against the combination, and 3) there was “no reason” to combine.  With respect to the non-analogous art argument, the Board found that, while the art may not have been in the same field of endeavor, the test for whether a reference is analogous could, alternatively, be based on the fact that the reference is reasonably pertinent to the particular problem at issue.  Wyers v. Master Lock Co. 616 F.3d 1231, 1238 (Fed. Cir. 2010).  Order at 17.

The Board also found the “teaching away” argument to be unavailing.  Order at 18.  While the art at issue may recognize a particular preferred benefit, the reference did not criticize, discredit, or otherwise discourage investigation into other viable benefits.  DePuy Spine Inc. v. Medtronic Sofamor Danek, 567 F.3d 1314, 1327 (Fed. Cir. 2009).  Lastly, the board denied that there was “no reason” to combine the teachings of the subject references.  Because the combination constituted implementing known teachings concerning the basic technology at issue, this reasoning by Patent Owner was not given weight.  Order at 18-19.

In the end, the IPR trial was instituted based on a number of obviousness grounds.  Other grounds, deemed redundant to the above-discussed grounds, were denied.  Interestingly, the Board did provide additional background on this point, as compared to earlier decisions.  Specifically, the Board suggested that, if it did not succeed on the grounds put into the trial, Patent Challenger would likely fail with regard to the other grounds, as well.