Thursday, May 11, 2017

CAFC vacates PTAB decision in Rovalma

From the CAFC decision:

Rovalma, S.A. owns U.S. Patent No. 8,557,056, which describes and claims methods for making steels with certain desired thermal conductivities. In October 2014, Böhler-Edelstahl GmbH & Co. KG (Böhler) petitioned the Patent Trial and Appeal Board for an inter partes review of claims 1–4 of the ’056 patent. The Board instituted a review based on Böhler’s construction of the claims at issue. In its final written decision, however, the Board rejected Böhler’s construction and adopted Rovalma’s construction instead. Böhler had not submitted arguments or evidence for unpatentability based on Rovalma’s construction. Nevertheless, the Board determined that Rovalma’s own submissions demonstrated that the claims, construed as Rovalma urged, would have been obvious to a relevant skilled artisan over the same prior art that Böhler invoked. Rovalma appeals. It argues both that substantial evidence does not support the Board’s determination and that the Board committed prejudicial procedural errors in relying on Rovalma’s own submissions when determining that the claims would have been obvious under Rovalma’s construction. We conclude that the Board did not set forth its reasoning in sufficient detail for us to determine what inferences it drew from Rovalma’s submissions. We therefore cannot determine whether the Board’s decision was substantively supported and procedurally proper. We vacate the Board’s decision and remand for further proceedings.


In challenging the Board’s decision in this case, Rovalma argues both evidentiary insufficiency and procedural inadequacy. We address those arguments in turn. We conclude that a remand is advisable in both respects, for related reasons.

Of the insufficiency:

In this case, the Board did not adequately explain the basis for the findings that Rovalma challenges. The Board found that EP ’813 and the other asserted prior-art references expressly disclosed steel compositions “including carbidic constituents and, by weight, 2–10% Mo+W+V,” as required by the “providing” steps in claims 1 and 4 of Rovalma’s patent. Final Written Decision 22. But the Board did not sufficiently lay out the basis for its implicit findings regarding the remaining process limitations. With respect to those limitations, the Board found that a person of ordinary skill “would have at least inherently completed the ‘selecting’ steps” and apparently determined that the other steps would have been obvious in view of Rovalma’s submissions. Id. But it did not explain the evidentiary basis for those determinations, and Böhler did not provide any explanation regarding the process claim elements that the Board could adopt as its own.


Adequate explanation is also lacking for why a person of ordinary skill in the art would have reasonably expected success in achieving the claimed thermal conductivities. The Board found that Rovalma’s submissions disclosed that a person of ordinary skill would have understood “heat transfer through metallic matrices and entrained metal carbides” and “the ability to model the effects of thermal processing on steel alloy microstructure,” and from that finding the Board inferred that a person of ordinary skill “would have had a reasonable expectation of success in arriving at the claimed invention.” Id. Again, however, the Board did not cite any evidence to support the inference that a person of ordinary skill would have reasonably expected to achieve the specific thermal conductivities recited in the claims. Without more explanation than we have, we are not prepared to reach a bottom-line judgment on Rovalma’s substantial-evidence challenge. The Board has not provided a sufficiently focused identification of the relevant evidence or explanation of its inferences for us to confidently review its decision and avoid usurping its factfinding authority. See Consolidated Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229 (1938) (“Substantial evidence . . . means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”). Accordingly, as we have concluded in similar circumstances, these deficiencies call for a vacatur and remand for further explanation from the Board. See, e.g., Icon Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1044 (Fed. Cir. 2017); In re Van Os, 844 F.3d 1359, 1360–62 (Fed. Cir. 2017); Personal Web Technologies, 848 F.3d at 991–94; Ariosa Diagnostics, 805 F.3d at 1364–67.

Of procedure:

Rovalma makes essentially two arguments in favor of its contention that the Board committed prejudicial procedural error. One argument is that the inter partes review statute prohibited the Board, after adopting Rovalma’s own claim construction, from relying on Rovalma’s own submissions in determining that the claims, so construed, would have been obvious over the Böhler-asserted prior art. The other argument is that Rovalma was denied adequate notice of and an adequate opportunity to address the possibility that the Board would rely on Rovalma’s submissions, as it ultimately did. 1


Magnum Oil, we conclude, is best understood as supporting Rovalma’s contention only with respect to the requirement of notice and opportunity to be heard, and no further. Here, the Board resolved an active dispute over claim construction in favor of the patent owner and, using the patent owner’s construction, relied on the patent owner’s own submissions to determine how a skilled artisan would have read the very prior-art references on which the petitioner’s obviousness challenge was based


Magnum Oil was addressing only the Director’s broad assertion that the Board could raise any argument that could have been included in a petition. Rejecting that broad assertion does not imply precluding reliance on a patent owner’s own submissions (part of the record created by the parties) essentially as admissions, if adequate notice and opportunity to be heard are provided. And Rovalma has identified nothing in the statute that forbids the Board to follow the principle, which is well established in other adjudicatory settings, that a tribunal may use a party’s own submissions against it, even if the opposing party bears the burden of persuasion. See, e.g., Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607 F.3d 817, 832 (Fed. Cir. 2010) (“To the extent that the district court relied on Mr. Riceman’s testimony to explain Mr. Bauer’s motives for listing himself as the ’773 patent inventor, . . . we find this error harmless because [the patent owner’s] own evidence . . . provided a sufficient basis on which to infer that Mr. Bauer intended to deceive the PTO.”);


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