CAFC concludes PTAB lacked substantial evidence in THE CHEMOURS COMPANY FC, LLC v. DAIKIN INDUSTRIES, LTD.

The background:

Chemours Company FC, LLC, appeals the final written decisions of the Patent Trial and Appeal Board from two inter partes reviews brought by Daikan Industries, Ltd., et al. Chemours argues on appeal that the Board erred in its obviousness factual findings and did not provide adequate support for its analysis of objective indicia of nonobviousness. Chemours also argues that the Board issued its decision in violation of the Appointments Clause because the Board’s decision came after this court’s decision in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1335 (Fed. Cir. 2019), but before this court issued its mandate. Chemours argues that the Board’s decision should be vacated and remanded.1 We decline to vacate and remand this case pursuant to Arthrex. We conclude that the Board’s decision on obviousness is not supported by substantial evidence and that the Board erred in its analysis of objective indicia of nonobviousness. Accordingly, we reverse.

The issue related to motivation to combine in an obviousness rejection:

Chemours argues that the Board’s final written decision on obviousness is erroneous because its factual findings on motivation to combine are unsupported by substantial evidence. Appellant’s Br. 19. Specifically, Chemours argues that Daikin did not meet its burden of proof because it failed to show that a person of ordinary skill in the art (“POSA”) would modify Kaulbach’s polymer to achieve the claimed invention. Id. at 25–31.
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The Board’s obviousness findings are not supported by substantial evidence. Although the Board may rely on other prior art to inform itself of the state of the art at the time of the invention, the scope of the relevant prior art is that which is “‘reasonably pertinent to the particular problem with which the inventor was involved.’” Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1535 (Fed. Cir. 1983) (quoting In re Wood, 599 F.2d 1032, 1036 (CCPA 1979)). In deciding whether a reference is from a relevant art, it is key to first determine whether the reference is within the inventor’s field of endeavor, and if not, “whether the reference is reasonably pertinent to the particular problem confronting the inventor.” In re GPAC Inc., 57 F.3d 1573, 1578 (Fed. Cir. 1995) (citing Wood, 599 F.2d at 1036). Here, the Board appears to have ignored the express disclosure in Kaulbach that teaches away from the claimed invention and relied on teachings from other references that were not concerned with the particular problems Kaulbach sought to solve. In other words, the Board did not adequately grapple with why a skilled artisan would find it obvious to increase Kaulbach’s melt flow rate to the claimed range while retaining its critical “very narrow molecular-weight distribution.” Kaulbach col. 3 ll. 34–35, 59–65


Blocking patents are mentioned:

A blocking patent is an earlier patent that prevents practice of a later invention—the invention of the patentin-dispute. See Acorda Therapeutics, Inc. v. Roxane Labs., Inc., 903 F.3d 1310, 1337 (Fed. Cir. 2018) (“A patent has been called a ‘blocking patent’ where practice of a later invention would infringe the earlier patent.”); Galderma Labs., L.P. v. Tolmar, Inc., 737 F.3d 731, 740 (Fed. Cir. 2013); Prima Tek II, LLC v. A-Roo Co., 222 F.3d 1372, 1379 (Fed. Cir. 2000).

The Board erred by misapplying the “blocking patents” doctrine to the challenged patents themselves. A blocking patent is one that is in place before the claimed invention because “such a blocking patent may deter non-owners and non-licensees from investing the resources needed to make, develop, and market such a later, ‘blocked’ invention.’” Accorda, 903 F.3d at 1337. However, the challenged patent, which covers the claimed invention at issue, cannot act as a blocking patent. Accordingly, we reverse the Board as to these findings.