Wednesday, March 24, 2021

CAFC affirms PTAB in Transtex case; "reasonable" expectation of success explicated

The outcome

Transtex, Inc., formerly known as Transtex Composite Inc. (“Transtex”), is the owner of U.S. Patent No. 8,449,017 (“the ’017 patent”). The ’017 patent is directed to a “trailer skirt” for a road trailer. A trailer skirt is one type of fairing used to reduce aerodynamic drag on a trailer when it is being hauled. It thereby improves fuel efficiency. ’017 patent, col. 1, ll. 31–33. The ’017 patent has 20 claims. Claims 1, 11, and 17 are independent claims. WABCO Holdings, Inc. and Laydon Composites, Ltd. (collectively, “WABCO”) petitioned the United States Patent and Trademark Office, Patent Trial and Appeal Board (“Board”), for inter partes review of the ’017 patent. After instituting and conducting inter partes proceedings, on January 20, 2020, the Board rendered its decision. WABCO Holdings Inc. v. Transtex Composites Inc., No. IPR2018-01319, Paper 25, at 1 (Jan. 10, 2020) (“Final Written Decision”). In its decision, the Board held that WABCO had proved by a preponderance of the evidence that claims 1, 5–11, and 15–19 of the ’017 patent were unpatentable as obvious over the combination of U.S. Patent No. 7,578,541 to Layfield et al. (“Layfield”) and U.S. Patent No. 5,280,990 to Rinard (“Rinard”). Id. at 64–65. The Board also held, however, that WABCO had failed to prove that claims 2–4, 12–14, and 20 of the patent were unpatentable as obvious over the same combination. Id. Transtex now appeals the Board’s holding that claims 1, 5–11, and 15–19 of the ’017 patent were unpatentable. For its part, WABCO cross-appeals the Board’s decision that claims 2–4 and 12–14 of the ’017 patent were not shown to be unpatentable. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A). For the reasons stated below, we affirm the Board’s decision in all respects.

Standard of review:

Under 35 U.S.C. § 316(e), a petitioner in an inter partes review has the burden of proving a claim’s invalidity by a preponderance of the evidence. We review the Board’s factual findings for substantial evidence and its legal conclusions de novo. In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1281 (Fed. Cir. 2015). Thus, we review the Board’s ultimate determination of obviousness de novo and its underlying factual determinations for substantial evidence. Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359, 1364 (Fed. Cir. 2015). The underlying factual findings include “findings as to the scope and content of the prior art, the differences between the prior art and the claimed invention, the level of ordinary skill in the art, the presence or absence of a motivation to combine or modify with a reasonable expectation of success, and objective indicia of nonobviousness.” Id

Arthrex arises in footnote 3:

Transtex also argues that the Board’s panel of Administrative Patent Judges (“APJs”) that issued the Final Written Decision was unconstitutionally appointed. Transtex Br. 40–41 (citing Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019)). The Director of the United States Patent and Trademark Office intervened solely to address this issue. We reject Transtex’s Arthrex argument. Our court’s holding in Arthrex was expressly limited “to those cases where final written decisions were issued.” Arthrex, 941 F.3d at 1340. The Board’s APJs were constitutionally appointed as of the date that Arthrex issued, which was before the Board’s Final Written Decision in this case. See Caterpillar Paving Prods. Inc. v. Wirtgen Am., Inc., 957 F.3d 1342, 1342–43 (Fed. Cir. 2020); see also Daikin Indus. v. Chemours Co. FC, No. 2020-1616, ____ F. App’x ____, 2021 WL 717017, at *4 n.5 (Fed. Cir. Feb. 24, 2021); Infineum USA L.P. v. Chevron Oronite Co., No. 2020-1333, ____ F. App’x ____, 2021 WL 210722, at *8 (Fed. Cir. Jan. 21, 2021).

The matter of conclusory assertions arose:

The Board’s finding of a motivation to combine Layfield and Rinard was more than an impermissible conclusory assertion. See In re Van Os, 844 F.3d 1359, 1361 (Fed. Cir. 2017) (citing KSR, 550 U.S. at 418, 421). In the Final Written Decision, the Board agreed with WABCO that “Layfield and Rinard both seek to provide fairing panels with ‘sufficient flexibility’ to bend when encountering objects.” Final Written Decision at 42 (quoting J.A. 1854–55). The Board disagreed with Transtex that “one would not consider the benefits of using the resilient materials disclosed in Layfield and Rinard to make Layfield’s struts resilient,” noting that “the advantages of resilient materials, as taught by Rinard, . . . are compelling reasons as to why one of ordinary skill in the art would have made the minor modifications proposed.” Id. at 41 n.22. The Board ultimately “determine[d] that Petitioner ha[d] shown that one of ordinary skill in the art would have had a reason with rational underpinning to look to other similar types of trailer components that are flexible to make further improvements to Layfield’s design.” Id. at 43 (citing KSR, 550 U.S. at 417).

We also disagree that the Board failed to articulate its reasons for finding an expectation of success. First, we note that our court has made clear that a relevant artisan’s expectation of success “need only be reasonable, not absolute.” Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1364, 1367–68 (Fed. Cir. 2007). The Board began by rejecting Transtex’s arguments against a reasonable expectation of success, which were premised on an understanding of Layfield as having rigid and non-moving upper skirt panels. Having found Layfield’s upper skirt panels to be resilient, the Board did not give weight to Transtex’s arguments. Final Written Decision at 43–44. The Board concluded that “Petitioner ha[d] demonstrated sufficiently that one of ordinary skill in the art would have had reason with rational underpinning to combine the teachings of Rinard and Layfield in the manner proposed by [WABCO] with a reasonable expectation of success.” Id. at 44. In reaching this conclusion, the Board disagreed that there was no reasonable expectation of success “for the same reasons” the Board rejected Transtex’s arguments regarding motivation to combine. Id.

As noted, there is no requirement that there be an “absolute” expectation of success; a “reasonable” expectation is sufficient. Mr. Tres’s declarations confirm that the expectation of success here is reasonable in view of the teachings of Layfield and Rinard. See First Tres Declaration at ¶¶ 196–197, J.A. 1010–11; Third Tres Declaration ¶ 47, J.A. 2446

Of dictionary definitions:

The dictionary’s use of the term “hollowed” does not “broaden[ ] ‘concave’ such that it does not mean curved or rounded inward.” Id. We thus affirm the Board’s claim constructions and its corresponding determinations that WABCO did not establish that claims 2–4 and 12–14 were obvious over the combination of Layfield and Rinard.


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