LiquidPower Specialty Products Inc. (“LSPI”) wins appeal at CAFC in asphaltenic crude oil case

The outcome:



LiquidPower Specialty Products Inc. (“LSPI”) appeals
the final written decision on inter partes review of the
Patent Trial and Appeal Board holding claims 8–10 of
U.S. Patent No. 8,022,118 unpatentable for obviousness
over U.S. Patent No. 6,015,779 (“Eaton”), a publication
titled “The Chemistry of Alberta Oil Sands, Bitumens and
Heavy Oils” (“Strausz”), and U.S. Patent No. 4,983,186
(“Naiman”).1 Because the Board erred by failing to weigh
LSPI’s objective evidence of nonobviousness, we vacate
and remand.



Of the technology:


The ’118 patent relates to high molecular weight drag
reducing polymers for use in heavy, asphaltenic crude oil
(“HAC”). ’118 patent at 1:8–12. Independent claim 10 is
illustrative and recites:

10. A method comprising:

introducing a drag reducing polymer having a solubility
parameter of at least about 17 MPa1/2, into
a pipeline, such that the friction loss associated
with the turbulent flow through the pipeline is reduced
by suppressing the growth of turbulent eddies,
into a liquid hydrocarbon having an
asphaltene content of at least 3 weight percent
and an API gravity of less than about 26° to
thereby produce a treated liquid hydrocarbon
wherein the viscosity of the treated liquid hydro-
carbon is not less than the viscosity of the liquid
hydrocarbon prior to treatment with the drag reducing
polymer;
wherein the drag reducing polymer has a solubility
parameter within 4 MPa1/2 of the solubility parameter
of the liquid hydrocarbon and the drag
reducing polymer comprises at least about 25,000
repeating units, and wherein a plurality of the repeating
units comprise a heteroatom, wherein the
heteroatom is selected from the group consisting
of an oxygen atom, a nitrogen atom, a sulfur atom
and/or a phosphorus atom and wherein the drag
reducing polymer has a weight average molecular
weight of at least 1×106 g/mol and
the drag reducing polymer is added to the liquid
hydrocarbon in the range from about 0.1 to about
500 ppmw.



The CAFC noted:


The Board declined to consider LSPI’s
objective evidence because it found that LSPI did not
establish it was entitled to a presumption of nexus. The
Board’s reasoning is not entirely clear, but we need not
determine whether the presumption applies because there
was extensive direct evidence of nexus and arguments
related thereto presented by LSPI. J.A. 876–99. To the
extent that the Board made a fact finding that LSPI failed
to establish nexus for its objective evidence, we conclude
that this fact finding is not supported by substantial
evidence.

For example, LSPI submitted ample support establishing
nexus for its objective evidence related to the
commercial products of LSPI, Baker Hughes, and
Flowchem. For LSPI’s product ExtremePower, it submitted
evidence of commercial success driven by the claimed
features of the ’118 patent, including its ability to reduce
drag in HAC. J.A. 883–84; J.A. 2865–82. It also submitted
evidence that ExtremePower was recognized in the
industry as a pioneering technological breakthrough.
J.A. 882–83; J.A. 2864–65. There is no evidence in the
record that this commercial success or industry praise
was due to any unclaimed features of the product. LSPI
also submitted evidence detailing how its competitors
copied drag reducing agents from the ’118 patent to
develop their own products that practice the claimed
methods. J.A. 884–99; J.A. 2882–86. By tying the evidence
to these commercial products that are designed and
marketed to reduce drag in the flow of HAC through a
pipeline, LSPI has put forth enough evidence to establish
a nexus to the claimed invention. J.A. 884, 896;
J.A. 2881–85.