IP Law Daily PTAB applied wrong obviousness standards in invalidating patent
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Monday, September 17, 2018

PTAB applied wrong obviousness standards in invalidating patent

By Peter Reap, J.D., LL.M.

In an inter partes review (IPR) of a patent for a method of forming 2,5-furan dicarboxylic acid (FDCA) owned by Synvina (previously owned by Furanix Technologies during the IPR proceeding), the Patent Trial and Appeal Board erred by failing to apply the burden-shifting framework applicable to overlapping ranges, the U.S. Court of Appeals for the Federal Circuit has decided, concluding as a matter of first impression that this framework applies in IPR proceedings as it does in district court cases. Furthermore, strong evidence of obviousness and only weak evidence of nonobviousness led the court to conclude that the claims at issue were obvious. The Board’s ruling that E. I. du Pont de Nemours and Company and Archer-Daniels-Midland Company (collectively, DuPont) failed to prove by the preponderance of the evidence that those claims would have been obvious at the time of the claimed invention was reversed (E. I. du Pont de Nemours and Co. v. Synvina C.V., September 17, 2018, Lourie, A.).

Synvina C.V. owns U.S. Patent 8,865,921 ("’921 patent"), directed to a method of oxidizing 5-hydroxymethylfurfural ("HMF") or an HMF derivative, such as 5-methylfurfural ("5MF") or 2,5-dimethylfuran ("DMF"), under specified reaction conditions to form 2,5-furan dicarboxylic acid ("FDCA"). Undisputedly, the oxidation of HMF and its derivatives to yield FDCA was known at the time of the claimed invention. The main issue on appeal was whether the reaction conditions claimed in the ’921 patent—specifically, the choice of temperature, pressure, catalyst, and solvent—would have been obvious to a person of ordinary skill at the time of the invention.

DuPont and Synvina are competitors in the production of FDCA for industrial use. DuPont petitioned for IPR of the ’921 patent. The petition asserted several grounds of obviousness including two relevant on appeal: (1) claims 1–5 over the ’732 publication, alone or in combination with RU ’177 and the ’318 publication; and (2) claims 7–9 over the ’732 publication in view of Applicants Admitted Prior Art, or additionally Lewkowksi and/or Oae, and optionally in view of RU ’177 and the ’318 publication.

In its final written decision, the Board held the instituted claims not unpatentable as obvious. The Board rejected DuPont’s contention that a burden-shifting framework applied, reasoning that the Federal Circuit’s decisions in In re Magnum Oil Tools International, Ltd., 829 F.3d 1364, 1375 (Fed. Cir. 2016), and Dynamic Drinkware, LLC v. National Graphics, Inc., 800 F.3d 1375, 1378 (Fed. Cir. 2015), foreclosed such a framework in an IPR. DuPont appealed.

Standing. Synvina argued that DuPont lacked standing to appeal the Board’s decision to the Federal Circuit because DuPont has not suffered an actual or imminent injury in fact. Since no action for infringement of the ’921 patent had been brought against DuPont, Synvina contended that DuPont can posit only speculative future harm. DuPont responded that a specific threat of infringement is not necessary for an appellant to demonstrate injury in fact. Rather, DuPont contended that an appellant must only face a significant risk of infringement liability, and that it faces such a risk for several reasons.

The Federal Circuit agreed with DuPont. 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.

Such a controversy existed here because DuPont currently operates a plant capable of infringing the ’921 patent, the court observed. Synvina’s allegations of copying before the Board and its refusal to grant DuPont a covenant not to sue further confirmed that DuPont’s risk of liability was not "conjectural" or "hypothetical." Thus, DuPont satisfied the injury in fact requirement for Article III standing.

Obviousness. The Federal Circuit has long 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). Thus, "[n]ormally, it is to be expected that a change in temperature, or in concentration, or in both, would be an unpatentable modification." Id. 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." In re Peterson, 315 F.3d 1325, 1329 (Fed. Cir. 2003). Such overlap creates a presumption of obviousness.

There are several ways by which the patentee may rebut that presumption, the court noted. 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. Second, and relatedly, a patentee may rebut the presumption of obviousness by showing that the prior art taught away from the claimed range. Third, a change to a parameter may be patentable if the parameter was not recognized as "result-effective." Fourth, disclosure of very broad ranges may not invite routine optimization. In this case, the presumption of obviousness applied, and none of the means for rebutting it was demonstrated, the Federal Circuit held.

The Board erred in concluding that the type of burden-shifting framework consistently applied in the Federal Circuit’s overlapping range cases was implicitly foreclosed by subsequent cases not addressing this framework. The relevant framework has been articulated as: "[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 Labs., L.P. v. Tolmar, Inc., 737 F.3d 731, 738 (Fed. Cir. 2013).

Galderma and other Federal Circuit cases applied this concept in a district court case. The same basic framework is also applicable to examination at the USPTO, the appellate court held, noting that this was the first time it had been asked to decide whether this framework governs in the IPR context. The Board addressed this issue in a single paragraph, and did not cite, let alone discuss, the cases above applying the framework in both district court and USPTO proceedings. Instead, the Board interpreted two more recent cases, Dynamic Drinkware and Magnum Oil, as prohibiting any burden-shifting framework from applying in an IPR. The Board erred, as these two cases did not overturn the procedural scheme for overlapping range cases.

Neither Dynamic Drinkware nor Magnum Oil involved overlapping ranges. 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, the same scheme applicable to district court adjudications and USPTO examinations controls in IPR proceedings, the court reasoned. 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.

Next, the Board erred in holding that the PO2 and temperature of a known oxidation reaction were not "result-effective variables," the appellate court ruled. 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. The evidence in this case supported the fact that an oxidation reaction is affected by temperature and PO2. No substantial evidence supported the Board’s contrary finding that it made under the wrong legal standard. On the record evidence, only one finding was permissible: temperature and PO2 were recognized as result-effective variables, the Federal Circuit opined.

Claims 1-5. The Board held that the combination of the ’732 publication, RU ’177, and the ’318 publication did not render claims 1–5 unpatentable as obvious. Under the applicable legal standards, the Board’s conclusion was error and reversed.

The ’732 publication disclosed oxidizing HMF to FDCA with a cobalt, manganese, and bromine catalyst and an acetic acid solvent. RU ’177 similarly discloses the oxidation of 5MF to FDCA, also with a Co/Mn/Br catalyst and an acetic acid solvent. Thus, the only relevant difference between these references and claim 1 is in the disclosed ranges of temperature and PO2. As the appellate court had concluded, temperature and PO2 were recognized as result-effective variables, and "discovery of an optimum value of a result effective variable in a known process is ordinarily within the skill of the art." In re Boesch, 617 F.2d 272, 276 (CCPA 1980). The record here presented such an ordinary case.

The ranges disclosed in the prior art overlapped with those of claim 1. Claims 2–5 fared no differently from claim 1, as each of these claims adds limitations taught by the ’732 publication. Thus, DuPont demonstrated that the prior art as a whole—three references each disclosing the same oxidation reaction of HMF or an HMF derivative to FDCA—taught the claimed reaction, as well as conditions either identical to or overlapping with those of claims 1–5. This showing based on the prior art shifted the burden of production to the patent owner to demonstrate teaching away, unexpected results, or some other evidence of nonobviousness.

Substantial evidence supported the Board’s findings that Furanix failed to establish unexpected results, satisfaction of a long-felt need, or copying, the Federal Circuit reasoned. Thus, the objective evidence presented by Furanix did not outweigh the strong case of obviousness based on the prior art. Here, there was a strong case of obviousness based on very close prior art and weak evidence of nonobviousness. The Board therefore erred in not concluding that claims 1–5 would have been obvious at the time of the claimed invention.

Claims 7-9. Claims 7–9 recite the same oxidation reaction as claim 1 with the added limitation of esterifying the FDCA product. The esterification of FDCA was known at the time of the invention, as acknowledged in the ’921 patent. Synvina did not argue that claims 7–9 are separately patentable from claims 1–5. As the court had concluded that claims 1–5 would have been obvious at the time of the invention, it held the same for claims 7–9.

This case is No. 2017-1977.

Attorneys: Michael J. Flibbert (Finnegan, Henderson, Farabow, Garrett & Dunner, LLP) for E. I. du Pont de Nemours and Co. and Archer Daniels Midland Co. Paul M. Richter, Jr. (Pepper Hamilton LLP) for Synvina C.V.

Companies: E. I. du Pont de Nemours and Co.; Archer Daniels Midland Co.; Synvina C.V.

MainStory: TopStory Patent FedCirNews

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