The CAFC delves into analytical chemistry and hearsay in REG Synthetic v. Neste Oil
Overview of the case:
This appeal arises from a petition for inter partes review
filed by Neste Oil Oyj (Neste) against claims 1–5 and
8 of U.S. Patent No. 8,231,804 (’804 patent), which is
owned by REG Synthetic Fuels, LLC (REG). The United
States Patent and Trademark Office, Patent Trial and
Appeal Board (Board) instituted trial, and in its final
written decision, the Board found claims 1, 3, 4, and 8
anticipated by U.S. Patent No. 4,992,605 (Craig), and
claims 1–3, 5, and 8 anticipated by U.S. Published Patent
Application No. 2008/0312480 (Dindi). Neste Oil Oyj v.
REG Synthetic Fuels, LLC, No. IPR2013-00578, 2015 WL
1263029, at *14, 17 (PTAB Mar. 12, 2015). During trial,
both parties filed motions to exclude documentary evidence,
and the Board excluded several REG exhibits
based on hearsay and other grounds. REG appeals the
Board’s unpatentability determinations and its exclusion
of certain REG exhibits. For the reasons stated herein,
we affirm-in-part, reverse-in-part, vacate-in-part, and
remand for further proceedings.
The subject matter:
The ’804 patent is directed to paraffin compositions
containing primarily even-carbon-number paraffins and
methods of making them.
Claim 1 is representative for purposes of this appeal:
1. A phase change material composition comprising
at least 75 wt% even carbon number paraffins,
wherein the paraffins are produced by hydrogenation/hydrogenolysis
of naturally occurring fatty
acids and esters
Of the evidentiary issues:
We review the Board’s evidentiary rulings for abuse of
discretion. Chen v. Bouchard, 347 F.3d 1299, 1307 (Fed.
GC/MS data were being contested:
The Board noted
that the GC-MS area percentages do not by themselves
establish, by a preponderance of evidence, weight percentages
within the claimed ranges of the ’804 patent.
The Board agreed, however, with Neste’s expert (Dr.
Klein) that a person of ordinary skill in the art could use
relative response factors to convert GC-MS area percentages
into weight percentages.
REG argued to the Board that Craig does not provide
enough information to accurately convert the GC-MS
peak area percentages to weight percentages using relative
response factors, but the Board disagreed.
REG argues that the Board used an erroneous inherency
standard because the Board found it unlikely that
Craig did not disclose the claimed limitations of “weight
percentages.” REG believes that the Board relied on Dr.
Klein’s testimony to “fill the gap” in Craig by estimating
weight percentages using the area percentages of Craig,
and in REG’s view, this conversion is not so straightforward.
REG points to evidence that converting weight and
area percentages requires calibration of the instrument to
account for actual instrument operating conditions. Dr.
Klein did not perform this calibration, and instead used
several different estimates to suggest precision. REG
contends that precision does not mean accuracy, absent
The CAFC did not agree with REG:
We agree with Neste. Dr. Klein converted the area
percentages of Craig into the weight percentages recited
in the ’804 patent using several different relative response
factors from the prior art, including Göröcs and
Chaurasia, which REG’s own expert, Dr. Lamb, cited in
his expert declaration. J.A. 2895–98.
This is not an inherency issue,
however, because the challenged limitation is not missing
from Craig. See Cont’l Can Co. USA v. Monsanto Co., 948
F.2d 1264, 1268 (Fed. Cir. 1991) (“To serve as an anticipation
when the reference is silent about the asserted inherent
characteristic, such gap in the reference may be filled
with recourse to extrinsic evidence.”). Craig is not silent
as to the concentration of even-carbon-number paraffins
because it expressly discloses this concentration in area
percentage. Dr. Klein simply converted one unit of measurement
(area percent) into another unit of measurement
(weight percent) by using relative response factors from
the prior art. Dr. Klein explained that this conversion
was a reliable technique given the very similar weight
percentage results after using three different sets of
relative response factors. J
As to a different claim issue, the CAFC reviewed the
legal meaning of "conception":
REG argued before the Board that Dindi was not prior
art to the ’804 patent because Mr. Abhari invented the
subject matter of the ’804 patent before the June 13, 2008
filing date of Dindi. The Board recognized that to antedate
Dindi, REG had to “prove (1) a conception and reduction
to practice before the filing date of [Dindi] or (2) a
conception before the filing date of [Dindi] combined with
diligence and reduction to practice after that date.”
Taurus IP, 726 F.3d at 1323. In either case, REG had to
prove conception prior to the June 13, 2008 filing date of
Conception is “the formation, in the mind of the inventor
of a definite and permanent idea of the complete
and operative invention, as it is thereafter to be applied in
practice.” Coleman v. Dines, 754 F.2d 353, 359 (Fed. Cir.
1985) (emphasis in original) (quoting Gunter v. Stream,
573 F.2d 77, 80 (C.C.P.A. 1978)). Conception must include
every feature or limitation of the claimed invention.
Davis v. Reddy, 620 F.2d 885, 889 (C.C.P.A. 1980). “Conception
must be proved by corroborating evidence which
shows that the inventor disclosed to others his ‘completed
thought expressed in such clear terms as to enable those
skilled in the art’ to make the invention.” Coleman, 754
F.2d at 359 (quoting Field v. Knowles, 183 F.2d 593, 600
(C.C.P.A. 1950)). However, “there is no final single formula
that must be followed in proving corroboration.”
Kridl v. McCormick, 105 F.3d 1446, 1450 (Fed. Cir. 1997)
(quoting Berry v. Webb, 412 F.2d 261, 266 (C.C.P.A.
We agree with REG that it has proven conception prior
to the filing date of Dindi, based on Exhibits 2011 and
2058, both already admitted in evidence, and the content
of Exhibit 2061, which the Board incorrectly excluded
from evidence based on hearsay.
Of Exhibit 2061:
true that nothing from Mr. Abhari in Exhibits 2011 and
2058 expressly stated that the percentages of evencarbon-number
paraffins should be summed up or that
the sum of these percentages met claim 2’s limitation of
“at least 80 wt%.” This “knowledge” of Mr. Abhari is
supplied by Exhibit 2061, which contains an email dated
April 29, 2008 from Mr. Abhari to Microtek, another third
party who specialized in PCM materials, stating that he
could achieve an 80% purity C18 product.
Of the hearsay issue:
Neste argued before the Board that these emails were hearsay
because they contain out of court statements by Ms.
Mantz. REG responded that these emails were not hearsay,
because it did not offer the emails to prove the truth
of the matter asserted. Rather, REG contended that it
offered the emails to show that Mr. Abhari recognized the
usefulness of high even-carbon-number paraffins as a
PCM material and that he would not have otherwise
contacted Microtek. The Board agreed with REG, in part,
finding that the fact that Mr. Abhari contacted Microtek
was a non-hearsay use of Exhibit 2061, and the Board
admitted Exhibit 2061 for that limited purpose. The
Board did not consider the content of Exhibit 2061, which
it found to be hearsay.
We find that the Board erred to the extent that it excluded
the content of Exhibit 2061 based on hearsay
because REG offered Exhibit 2061 for the non-hearsay
purpose to show that Mr. Abhari thought he had achieved
80 wt% purity C18 product.9 The act of writing and sending
the email is, by itself, probative evidence on whether
Mr. Abhari recognized—at the time that he had written
the email—that the sum of the weight percentages of
even-carbon-number paraffins in his compositions was at
least 80 wt% and communicated this to a third party. In
Knorr v. Pearson, 671 F.2d 1368, 1372–73 (C.C.P.A. 1982),
the U.S. Court of Customs and Patent Appeals found that
a statement was not hearsay if “the communication (as
opposed to the truth) ha[d] legal significance.” Knorr
involved a telephone call, in which two co-inventors,
Buergin and Pearson, discussed an invention, and which
was overheard by a third party, Rutkowski. Id. at 1370.
The court held that Rutkowski’s testimony on what he
heard Buergin say to Pearson was not hearsay because
the communication of the idea had legal significance as
the basis for the conception of the invention
Id. at 1373-74. By contrast, Rutkowski’s testimony on “Buergin’s
statements to Rutkowski regarding what Pearson said”
was hearsay. Id. at 1373.
[So, Rutowski testimony of what Buergin said "not hearsay" but
Rutkowski on what Buergin said that Pearson said hearsay (double-hearsay?).
The CCPA is allowing "what Rutowski heard" of Buergin's end of
the phone call but not what Buergin told Rutowski that Pearson said.]
The CAFC also noted:
The Board also found that it could not determine
from Exhibit 2061 the specific product or process that Mr.
Abhari had in mind, or the fact that Mr. Abhari had
recognized that he had created something new, when he
had emailed Microtek that he could achieve at least 80
wt% purity C18 product. Conception, however, does not
require that Mr. Abhari recognize that he created a PCM
material, or the specific process by which he had created
80 wt% purity C18 product, because the Board’s construction
of the claims did not limit the invention based on
these features. The only feature at issue here is whether
Mr. Abhari disclosed a composition containing at least 80
wt% even-carbon-number paraffins to others, and we find
that he did. Mr. Abhari’s email to Microtek expressly
states that he could achieve at least 80% purity C18 product,
which was new in April 2008 because this product did
not exist in the prior art, given the record before us. Nor
does Neste dispute that Mr. Abhari sent this email to
Microtek because the Board admitted Exhibit 2061 to
show that Mr. Abhari contacted Microtek, which Neste
does not appeal.
The CAFC reverses the Board on "lack of conception":
We reverse the Board’s findings on conception and its
exclusion of the contents of Exhibit 2061 based on hearsay.
We find that Exhibit 2061 shows that Mr. Abhari
“disclosed to others,” see Coleman, 754 F.2d at 359, a
composition including every feature or limitation of the
claimed invention, see Davis, 620 F.2d at 889. We also
find that, based on Exhibits 2011, 2058, and 2061, Mr.
Abhari’s disclosure was a “‘completed thought expressed
in such clear terms as to enable those skilled in the art’ to
make the invention.” Coleman, 754 F.2d at 359. However,
because the Board did not make factual findings on
diligence or reduction to practice in the first instance, we
remand for the Board to make these findings.