Monday, September 17, 2018

CAFC chastises PTAB in DuPont case: the evidence in this case supports the unremarkable fact that an oxidation reaction is affected by temperature and PO2. No substantial evidence supports the Board’s contrary finding that it made under the wrong legal standard.

DuPont, at the CAFC, won its appeal of a PTAB decision:

E. I. du Pont de Nemours and Company and ArcherDaniels-Midland
Company (collectively, “DuPont”) appeal
from an inter partes review (“IPR”) decision of the United
States Patent and Trademark Office Patent Trial and
Appeal Board (the “Board”). See DuPont v. Furanix
Techs. B.V., No. IPR2015-01838, Paper No. 43, slip op.
(P.T.A.B. Mar. 3, 2017) (“Decision”). The Board held that
DuPont failed to prove by preponderant evidence that
claims 1–5 and 7–9 of U.S. Patent 8,865,921 (“’921 patent”)
would have been obvious at the time of the claimed
invention. We conclude that the Board applied the wrong
legal standards for obviousness, and reverse.

As to standing

Under the circumstances here, we agree with DuPont
that it has standing to appeal the Board’s decision. As in
the declaratory judgment context, a petitioner who appeals
from an IPR decision need not face “a specific threat
of infringement litigation by the patentee” to establish
jurisdiction. ABB Inc. v. Cooper Indus., LLC, 635 F.3d
1345, 1348 (Fed. Cir. 2011). Rather, on appeal the petitioner
must generally show a controversy “of sufficient
immediacy and reality” to warrant the requested judicial
relief. Id. (citing MedImmune, Inc. v. Genentech, Inc., 549
U.S. 118, 127 (2007)).
Such a controversy exists here because DuPont currently
operates a plant capable of infringing the ’921
patent. After Synvina challenged DuPont’s standing in
its responsive brief,12 DuPont submitted several declarations
in support of standing.

As to obviousness:

Our review of a Board decision is limited. In re Baxter
Int’l, Inc., 678 F.3d 1357, 1361 (Fed. Cir. 2012). We
review the Board’s legal determinations de novo, In re
Elsner, 381 F.3d 1125, 1127 (Fed. Cir. 2004), but we
review the Board’s factual findings underlying those
determinations for substantial evidence, In re Gartside,
203 F.3d 1305, 1316 (Fed. Cir. 2000). A finding is supported
by substantial evidence if a reasonable mind might
accept the evidence as adequate to support the finding.
Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 229
DuPont asserts that the Board erred in its obviousness
analysis primarily in two ways. First, DuPont
argues that the Board misinterpreted our precedent and
erroneously refused to apply a burden-shifting framework
in the context of overlapping prior-art ranges from cases
such as In re Peterson, 315 F.3d 1325 (Fed. Cir. 2003), and
Ormco Corp. v. Align Technology, Inc., 463 F.3d 1299
(Fed. Cir. 2006). Second, DuPont contends that the Board
invoked a “result-effective variable” requirement inconsistent
with precedent. Given these errors, DuPont
argues that the Board’s decision should be reversed with
respect to each instituted claim

As to optimization:

The legal principle at issue in this case is old. For
decades, this court and its predecessor have recognized
that “where the general conditions of a claim are disclosed
in the prior art, it is not inventive to discover the optimum
or workable ranges by routine experimentation.” In
re Aller, 220 F.2d 454, 456 (CCPA 1955); see also, e.g., In
re Geisler, 116 F.3d 1465, 1469–70 (Fed. Cir. 1997); In re
Woodruff, 919 F.2d 1575, 1578 (Fed. Cir. 1990). Thus,
“[n]ormally, it is to be expected that a change in temperature,
or in concentration, or in both, would be an un-
patentable modification.” Aller, 220 F.2d at 456. A more
specific application of this general principle is that “[a]
prima facie case of obviousness typically exists when the
ranges of a claimed composition overlap the ranges disclosed
in the prior art.” Peterson, 315 F.3d at 1329 (collecting
cases). We have said that such overlap creates a
presumption of obviousness. See Galderma Labs., L.P. v.
Tolmar, Inc., 737 F.3d 731, 737–38 (Fed. Cir. 2013);
Ormco, 463 F.3d at 1311; Iron Grip Barbell Co. v. USA
Sports, Inc., 392 F.3d 1317, 1322 (Fed. Cir. 2004).
There are several ways by which the patentee may
rebut that presumption. First, a modification of a process
parameter may be patentable if it “produce[s] a new and
unexpected result which is different in kind and not
merely in degree from the results of the prior art.” Aller,
220 F.2d at 456. A claimed range that demonstrates such
unexpected results is referred to as a “critical” range, and
the patentee has the burden of proving criticality. Id.
Second, and relatedly, a patentee may rebut the presumption
of obviousness by showing that the prior art taught
away from the claimed range. Ormco, 463 F.3d at 1311.
Third, a change to a parameter may be patentable if the
parameter was not recognized as “result-effective.” In re
Applied Materials, Inc., 692 F.3d 1289, 1295 (Fed. Cir.
2012) (citing In re Antonie, 559 F.2d 618, 620 (CCPA
1977)). But “[a] recognition in the prior art that a property
is affected by the variable is sufficient to find the
variable result-effective.” Id. at 1297. Fourth, we have
reasoned that disclosure of very broad ranges may not
invite routine optimization. Genetics Inst., LLC v. Novartis
Vaccines & Diagnostics, Inc., 655 F.3d 1291, 1306 (Fed.
Cir. 2011) (holding that ordinary motivation to optimize
did not apply where disclosure was 68,000 protein variants
including 2,332 amino acids); Peterson, 315 F.3d at
1330 n.1. As we explain, the presumption of obviousness
applies here, and none of the means for rebutting it has
been shown.

As to overlapping range:

We agree with DuPont that the Board erred in concluding
that the type of burden-shifting framework consistently
applied in our overlapping range cases was
implicitly foreclosed by subsequent cases not addressing
this framework. We have articulated the relevant framework
as follows. “[W]here there is a range disclosed in the
prior art, and the claimed invention falls within that
range, the burden of production falls upon the patentee to
come forward with evidence” of teaching away, unexpected
results, or other pertinent evidence of nonobviousness.
Galderma, 737 F.3d at 738; see Allergan, Inc. v.
Sandoz Inc., 796 F.3d 1293, 1304–05 (Fed. Cir. 2015)
(citing Galderma, 737 F.3d at 737–38); Ormco, 463 F.3d
at 1311 (“Where a claimed range overlaps with a range
disclosed in the prior art, there is a presumption of obviousness.
The presumption can be rebutted if it can be
shown that the prior art teaches away from the claimed
range, or the claimed range produces new and unexpected
results.”) (citations omitted)); Iron Grip Barbell, 392 F.3d
at 1322 (same). The factfinder then assesses that evidence,
along with all other evidence of record, to determine
whether a patent challenger has carried its burden
of persuasion to prove that the claimed range was obvious.

Since Dynamic Drinkware and Magnum Oil did not
alter the framework governing overlapping range cases,
and Synvina presents no persuasive argument supporting
a special rule for IPRs, we conclude that the same scheme
applicable to district court adjudications and PTO examinations
controls in IPR proceedings. Thus, “where there
is a range disclosed in the prior art, and the claimed
invention falls within that range, the burden of production
falls upon the patentee to come forward with evidence”
of teaching away, unexpected results or criticality,
or other pertinent objective indicia indicating that the
overlapping range would not have been obvious in light of
that prior art. Galderma, 737 F.3d at 738.

The Board committed legal error as to result-effective variable:

Next, we address DuPont’s argument that the Board
erred in holding that the PO2 and temperature of a known
oxidation reaction were not “result-effective variables.”
Synvina disagrees, arguing that the Board properly
concluded that DuPont failed to prove that the claimed
parameters were result-effective.
We agree with DuPont that the Board erred in its
analysis of whether PO2 and temperature were resulteffective
variables. As we explain, the Board did not
apply the proper legal standard for result-effective variables,
and, under the correct standard, PO2 and temperature
are result-effective variables.

The idea behind the “result-effective variable” analysis
is straightforward. Our predecessor court reasoned
that a person of ordinary skill would not always be motivated
to optimize a parameter “if there is no evidence in
the record that the prior art recognized that [that] particular
parameter affected the result.” Antonie, 559 F.2d at
620. For example, in Antonie the claimed device was
characterized by a certain ratio, and the prior art did not
disclose that ratio and was silent regarding one of the
variables in the ratio. Id. at 619. Our predecessor court
thus reversed the Board’s conclusion of obviousness. Id.
at 620.
Antonie described the situation where a “parameter
optimized was not recognized to be a result-effective
variable” as an “exception” to the general principle in
Aller that “the discovery of an optimum value of a variable
in a known process is normally obvious.” Id. at 620.
Our subsequent cases have confirmed that this exception
is a narrow one. Indeed, we have located no case where
this court relied on a variable not being result-effective in
an obviousness analysis. In summarizing the relevant
precedent from our predecessor court, we observed in
Applied Materials that “[i]n cases in which the disclosure
in the prior art was insufficient to find a variable resulteffective,
there was essentially no disclosure of the relationship
between the variable and the result in the prior
art.” 692 F.3d at 1297. Likewise, if the prior art does
recognize that the variable affects the relevant property
or result, then the variable is result-effective. Id. (“A
recognition in the prior art that a property is affected by
the variable is sufficient to find the variable resulteffective.”).
And “the prior art need not provide the exact
method of optimization for the variable to be resulteffective.”
Although the Board correctly articulated the basic
standard for result-effective variables, Decision, slip op. at
16–17 (citing Applied Materials, 692 F.3d at 1297), it did
not follow it. Rather, the Board appears to have required
DuPont to prove that the disclosures in the prior art
“necessarily required” the variable to be within the
claimed range, or that the variables “predictably affected
FDCA yields.” Id. at 19. But that was not DuPont’s
burden. Under the applicable standard, DuPont needed
to show that it was recognized in the prior art, either
expressly or implicitly, that the claimed oxidation reaction
was affected by reaction temperature and PO2. See
Applied Materials, 692 F.3d at 1297; Antonie, 559 F.2d at
620. And there does not appear to be a legitimate dispute
that temperature and PO2 were understood to affect the
claimed oxidation reaction, which was known at the time
of invention.
Rather, each reference relevant to claims 1–5 expressly
disclosed appropriate or preferred temperatures and air
pressures for the reaction, indicating that persons of
ordinary skill understood that the reaction was affected
by temperature and pressure. The testimony of thenpatent
owner Furanix’s expert was consistent with this
understanding. He explained that temperature generally
affects the rate of chemical reactions, and if a temperature
is too low, the reaction may not occur at all.

Altogether, the evidence in this case supports the unremarkable
fact that an oxidation reaction is affected by
temperature and PO2. No substantial evidence supports
the Board’s contrary finding that it made under the wrong
legal standard.14 On the record evidence, only one finding
was permissible: temperature and PO2 were recognized
as result-effective variables.

Footnote 14: We assume, without deciding, that whether a variable
was recognized as result-effective is a question of
fact. See Graham v. John Deere Co. of Kan. City, 383 U.S.
1, 17 (1966) (scope and content of the prior art are factual



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