Thursday, November 05, 2015

CAFC reviews PTAB's Belden decision; CAFC finds claims 5,6 obvious, reversing PTAB

From Belden v. Berk-Tek -->

Belden Inc. owns U.S. Patent No. 6,074,503, which
discloses and claims a method for making a communications
cable. On a petition for inter partes review under 35
U.S.C. § 311 et seq. filed by the predecessor of Berk-Tek
LLC, the Patent and Trademark Office’s Patent Trial and
Appeal Board instituted a review and later reached a
mixed decision: it rejected claims 1–4 of the ’503 patent
for obviousness, while confirming claims 5 and 6. We now
affirm the rejection of claims 1–4 and reverse the upholding
of claims 5 and 6. We also reject Belden’s contention
that the Board denied it procedural rights in the review.

The issues:

We begin with a review of the substantive challenges
to the Board’s determinations on the evidence and arguments
presented to and considered by it. We then review
Belden’s procedural challenge to the Board’s decision to
allow Berk-Tek’s Reply evidence.


Mr. Baxter responded to Belden’s suggestion that a
skilled artisan would have had no reason to modify board
5 of JP ’910 to prevent twisting, as required by claim 1 of
Belden’s patent. He stated that JP ’910 and Belden’s
patent address the same problem of aligning conductors
with grooves in a cable’s core; that JP ’910’s touted elimination
of “back-stranding” of wires—imparting a preparatory
twist to the wires before cable manufacturing to
compensate for twisting during cabling, JP ’910 at ¶ 3—
made it evident that twisting should be prevented by
another means; and that a skilled artisan would have
seen that the die (board 5 in JP ’910) should be used to
control twisting. Mr. Baxter also plausibly explained why
the S-Z stranding in JP ’910 might increase the need to
prevent twisting at the die, contrary to Belden’s suggestions
that the alternating-direction stranding would by
itself so clearly prevent misalignment of the core with the
conducting wires that there was no reason to contemplate
using board 5 to prevent twisting.


Even giving the Board the deference it is due under the
substantial-evidence standard of review of factual findings,
we agree that the record requires the finding Berk-
Tek urges. The Board’s contrary finding rests on legal

There is no meaningful dispute here, and the Board
did not deny, that the two pieces of prior art in combination
teach or suggest the methods of claims 5 and 6. The
dispute concerns motivation to combine. The Petition and
the Institution Decision reveal the two related ways in
which that issue was presented and considered: whether a
skilled artisan would substitute the twisted pairs of CA
’046 into the method of JP ’910; alternatively, whether a
skilled artisan making the cable of CA ’046 would look to
the JP ’910 method to make it. The brief discussion in the
Petition suggests both views of the matter. J.A. 148–49
(“CA ’046 . . . in view of . . . JP ’910 . . . invalidates claims
3 through 5”); J.A. 155 (“JP ’910 uses single conductors
(4a-4d), but it is known to likewise use twisted pairs with
a cross shaped separator—see for example CA ’046”). The
Board’s Institution Decision does so as well: “[O]ne with
ordinary skill in the art would have understood that the
method of JP ’910 is applicable for use in manufacturing a
telecommunications cable.


None of the Board’s reasons for concluding otherwise
in its Final Written Decision withstands scrutiny through
the lens of governing law. The Board’s first reason was
that JP ’910 shows only conductors that are not individually
insulated, so that “one of ordinary skill, tasked to
produce the conventional twisted cable of CA ’046, would
not have been motivated by the teachings of JP ’910
simply to substitute twisted pairs of insulated conductors
for the bare metal conductors in the method of JP ’910.”
Berk-Tek, 2014 WL 1253012, at *23 (emphasis in original).
But JP ’910 plainly discloses the need to align the
conducting wires with the core and how to do so, as the
Board recognized in its analysis of claims 1 and 4, id. at
*13–14. The alignment problem and solution do not
depend on whether the wires are insulated. The Board’s
disregard of the insulation-independent alignment teaching
of JP ’910 violates the principle that “[a] reference
must be considered for everything it teaches by way of
technology and is not limited to the particular invention it
is describing and attempting to protect.” EWP Corp. v.
Reliance Universal Inc., 755 F.2d 898, 907 (Fed. Cir. 1985)
(emphases in original); see In re Applied Materials, Inc.,
692 F.3d 1289, 1298 (Fed. Cir. 2012).

There is discussion of the initial petition:

Our earlier discussion of the merits of the obviousness
issues shows how the prior art itself, together with the
Petition, sufficed to supply a prima facie case of obviousness—
as confirmed by the Institution Decision. For
example, as to claim 1, the Board found that JP ’910 itself
articulates a special need to have the wires aligned with
the grooves on the core after passing through board 5, and
that one with ordinary skill in the art would have known
that board 5 could and preferably should be made to
prevent twisting of the core that would cause misalignment.
Berk-Tek, 2014 WL 1253012, at *14–15; Nexans,
2013 WL 8595538, at *14. As to claim 2, the Board found
that both US ’582 and JP ’694 disclose the advantage of
using an additional die to center the core relative to the
transmission media, and that a person of skill in the art
would recognize that the same benefit predictably would
be achieved by using a third die in the method of JP ’910.
Berk-Tek, 2014 WL 1253012, at *18–19; Nexans, 2013 WL
8595538, at *15. Such findings are well supported in the
prior-art documents themselves, as are those which we
have concluded show obviousness of the methods of claims
5 and 6.
To be sure the Board cited Mr. Baxter’s declaration in
its Final Written Decision—mostly in explaining why it
was rejecting Belden’s arguments, but partly in stating
the affirmative reasons to find the motivation required for
a prima facie case. But such citations do not mean that
the Baxter declaration was “necessary” for the prima facie
case. Evidence admitted in rebuttal to respond to the
patent owner’s criticisms will commonly confirm the
prima facie case. That does not make it necessary to the
prima facie case. And nothing required the Board to write
its opinion to separate the material offered by Berk-Tek
at different stages of the proceeding.
No rule requires a Petition to be accompanied by any
declaration, let alone one from an expert guiding the
Board as to how it should read prior art. What the Board
can find without an expert depends on the prior art involved
in a particular case. Even in court, we have said,
“expert testimony is not required when the references and
the invention are easily understandable.” Wyers v. Master
Lock Co., 616 F.3d 1231, 1242 (Fed. Cir. 2010). And
Board members, because of expertise, may more often find
it easier to understand and soundly explain the teachings
and suggestions of prior art without expert assistance. In
the present case, which is all we address, we conclude
that the Baxter declaration was not necessary for the
prima facie case of obviousness.

As to due process

A patent owner in Belden’s position is undoubtedly
entitled to notice of and a fair opportunity to meet the
grounds of rejection. “The indispensable ingredients of
due process are notice and an opportunity to be heard by
a disinterested decision-maker.” Abbott Labs. v. Cordis
Corp., 710 F.3d 1318, 1328 (Fed. Cir. 2013). And for a
formal adjudication like the one at issue here, the Administrative
Procedure Act requires the PTO to “timely
inform[]” a patent owner of “the matters of fact and law
asserted” in an inter partes review of its patent, 5 U.S.C.
§ 554(b)(3), to give “all interested parties opportunity for
. . . the submission and consideration of facts [and] arguments
. . . [and] hearing and decision on notice,” § 554(c),
and to permit a party “to submit rebuttal evidence, and to
conduct such cross-examination as may be required for a
full and true disclosure of the facts,” § 556(d). See Bowman
Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419
U.S. 281, 288 n.4 (1974); Pension Benefit Guaranty Corp.
v. LTV Corp., 496 U.S. 633, 655 (1990). Section 554(b)(3)
has been applied to mean that “an agency may not change
theories in midstream without giving respondents reasonable
notice of the change” and “the opportunity to
present argument under the new theory.” Rodale Press,
Inc. v. FTC, 407 F.2d 1252, 1256–57 (D.C. Cir. 1968). In a
related PTO setting, this court has determined whether
the Board relied on a “new ground of rejection” by asking
“whether applicants have had fair opportunity to react to
the thrust of the rejection.” In re Biedermann, 733 F.3d
329, 337 (Fed. Cir. 2013) (internal quotation marks and
citation omitted).
But the rules and practices of the Board generally
protect against loss of patent rights without the required
notice and opportunity to respond. If there are deficiencies
in Board rules and practices, none has been established
as relevant to this case. Nor has Belden identified
a deficiency in the application of Board rules and practices
to this case.
The statute provides for inter partes review proceedings
to begin with a petition from the challenger. 35
U.S.C. §§ 311, 312(a). The patent owner has the right to
file a preliminary response to argue against the institution
of review. § 313. If a review is instituted, based on a
finding of a reasonable likelihood that the claims do not
meet statutory requirements, the patent owner has the
right to file a post-institution response to defend the
claims. § 316(a)(8). The petitioner also has a right to file
at least one set of written comments. § 316(a)(13). And
both parties have a right to an oral hearing. § 316(a)(10).


Here, the Board held Berk-Tek to the response-only
standard for evidence submitted with a Reply and even
held itself to ensuring that the prima facie case did not
depend on that evidence. It provided for Belden’s crossexamination
of Mr. Baxter and for submission of nonargumentative
observations on that cross-examination. It
accepted Belden’s detailed motion to exclude (and its
reply after Berk-Tek’s response). It provided Belden with
a meaningful opportunity to respond to the propriety of
Mr. Baxter’s evidence submitted with Berk-Tek’s Reply,
in that it granted every request Belden made for consideration
of the issue. Belden did not seek to file a surreply,
to file additional observations on its cross-examination, to
make arguments in those observations, or to have the
Board waive any other regulations that it believed prevented
it from adequately responding to Mr. Baxter’s
declaration. With no Board denial of concrete, focused
requests before us, we are not prepared to find that
Belden was denied a meaningful opportunity to respond
to the grounds of rejection, and we find no basis for disturbing
the Board’s denial of Belden’s motion to exclude.


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