In two appeals from IPR invalidations, the panels affirm in part and reverse in part. In REG v. Neste, the panel reverses and remands a finding of anticipation because the inventor was shown to have conceived the invention prior to the date of the prior art. In NuVasive, the panel determines that as to one of the IPRs at issue in that case, NuVasive was not given adequate opportunity to respond to an argument made by the petitioner in its reply brief.
In a third decision, SAS v ComplementSoft, Judge Newman’s dissent was noted as precedential but because her dissent is similar to many other dissents she has written, we have not summarized her opinion. The issue in SAS was whether the Board should have the power under the AIA to review some but not all of the claims noted in a petition for IPR.
Thanks to my colleague Gillian Bunker for her help this week.
REG v. Neste – This appeal arises from a petition for IPR filed by Neste against a patent owned by REG. The panel affirms the determination that some of the claims of the patent are anticipated by a patent to Craig. REG argued that Craig does not anticipate because Craig discloses “area” percentages rather than weight percentages. The Board noted that the area percentages do not by themselves establish weight percentages within the claimed ranges of the claims. The panel agrees with the Board, however, that Dr. Klein converted the area percentages of Craig into the weight percentages recited in the ’804 patent using several different relative response factors from prior art that REG’s own expert cited in his expert declaration. Therefore, substantial evidence supports the Board’s factual finding that the area percent disclosed in Craig could be reliably translated to the claimed weight percent.
Other claims of the patent were found by the Board to be anticipated by a published application by Dindi. REG argued before the Board that Dindi was not prior art to the ’804 patent because Mr. Abhari invented the subject matter of the patent before the June 13, 2008 filing date of Dindi. The panel agrees with REG that it has proven conception prior to the filing date of Dindi based on Exhibits 2011 and 2058, both already admitted in evidence, and the content of Exhibit 2061, which the Board incorrectly excluded from evidence based on hearsay.
As to the excluded exhibit, the panel holds that the Board erred to the extent that it excluded the content of Exhibit 2061 because REG offered the Exhibit 2061 for the non-hearsay purpose to show that Mr. Abhari thought he had achieved 80 wt% purity C18 product. The act of writing and sending the email is, by itself, probative evidence on whether Mr. Abhari recognized—at the time that he had written the email—that the sum of the weight percentages of even-carbon-number paraffins in his compositions was at least 80 wt% and communicated this to a third party. However, because the Board did not make factual findings on diligence or reduction to practice in the first instance, the panel remands to the Board to make these findings.
NuVasive – The Circuit affirms a determination of obviousness in a first of two IPRs but vacates and remands the determination in a second IPR, holding that the patent owner NuVasive did not have an adequate opportunity to respond to assertions on which the Board relied.
Medtronic filed two petitions for IPR of NuVasive’s patent directed to implants for spinal fusion surgery. The relevant part of claim 1 recites that the implant has a length greater than 40 mm and that the length is at least two and a half times greater than the width of the implant.
In its first IPR, Medtronic argued that a first prior art reference (Frey) taught an implant whose length is at least 2.5 times the width, and that it would have been obvious to modify the Frey implant to have a length greater than 40 mm based on a second reference (Michelson). Medtronic’s second IPR alleged obviousness in view of a different primary reference in combination with Michelson, and did not include an assertion about or citation to material encompassing Michelson’s Figure 18.
In its replies, Medtronic pointed to Michelson’s Figure 18, and argued that it disclosed an implant whose length was greater than 40 mm and at least 2.5 times its width. NuVasive objected to the argument regarding Figure 18, contending that it was a new ground of invalidity asserted for the first time on reply, and requested leave to file motions to strike or, alternatively, sur-replies, which the Board denied. The Board ultimately held that all but one of the challenged claims were obvious in both IPRs, relying heavily on its findings that Michelson, by itself, discloses an implant whose length is both greater than 40 mm and at least 2.5 times its width.
The panel rules that in the first IPR, NuVasive had at least “a minimally sufficient” opportunity to address Medtronic’s contention. Medtronic’s petition put NuVasive on notice that Medtronic was relying on particular portions of Michelson to teach the ’334 patent’s claimed long-and-narrow implants, and NuVasive’s response presented an adequate opportunity to respond.
The panel says that the second IPR was different, since in that proceeding, Medtronic did not include in its petition the same citations to or assertions about the Michelson passage that it included in the first petition. Thus, there was no notice as to the Figure 18 point before NuVasive filed its response, and the Board relied on Figure 18 in its determination of invalidity. Thus, NuVasive’s rights were violated under the Administrative Procedure Act.
REG Synthetic Fuels, LLC v. Neste Oil Oyj, Fed. Cir. 2015-1773 (November 8, 2016)
A petition for IPR was filed by Neste against claims 1–5 and 8 of REG’s ’804 patent. The Board instituted trial, and found claims 1, 3, 4, and 8 anticipated by a patent to Craig, and claims 1–3, 5, and 8 anticipated by a published patent application to Dindi. During trial, both parties filed motions to exclude documentary evidence, and the Board excluded several REG exhibits based on hearsay and other grounds. REG appeals the Board’s unpatentability determinations and its exclusion of certain REG exhibits. For the reasons stated herein, we affirm-in-part, reverse-in-part, vacate-in-part, and remand for further proceedings.
The ’804 patent is directed to paraffin compositions containing primarily even-carbon-number paraffins and methods of making them. Paraffins are hydrocarbon chains that contain carbon and hydrogen atoms, and even-carbon-number paraffins are saturated hydrocarbon chains with the general chemical formula CnH2n+2, in which the “n” is an even number. Even-carbon-number paraffins are useful as phase change materials (PCMs), which can be used as insulation in a house because they can absorb heat during the warm portions of the day by undergoing a solid-liquid phase transition and return the heat during the cooler portions of the day by re-freezing. The thermal storage capacity of PCMs is determined by their latent heat of fusion, which is higher for even-carbon-number paraffins than for odd-carbon-number paraffins. The ’804 patent seeks to increase the production of compositions with higher percentages of even-carbon-number paraffins. One method disclosed in the ’804 patent is the hydrogenation and deoxygenation of naturally occurring fatty acids and esters, such as bio-oils, to produce primarily even-carbon-number paraffins.
Claim 1 is representative for purposes of this appeal:
1. A phase change material composition comprising at least 75 wt% even carbon number paraffins, wherein the paraffins are produced by hydrogenation/hydrogenolysis of naturally occurring fatty acids and esters.
Anticipation by Craig
We begin with REG’s argument that Craig does not anticipate claims 1, 3, 4, and 8 of the ’804 patent because Craig discloses area percentages rather than weight percentages. The Board determined that Table 9 of Craig discloses naturally occurring feedstocks, including canola oil, rapeseed oil, and palm oil, and the hydrocarbon products produced from each of these feedstocks. Table 9 shows the results of a GC-MS analysis of the hydrocarbon products produced by Craig, shown in peak area percentages for each hydrocarbon, e.g., C16. The Board noted that the GC-MS area percentages do not by themselves establish, by a preponderance of evidence, weight percentages within the claimed ranges of the ’804 patent. The Board agreed, however, with Neste’s expert (Dr. Klein) that a person of ordinary skill in the art could use relative response factors to convert GC-MS area percentages into weight percentages.
REG argued to the Board that Craig does not provide enough information to accurately convert the GC-MS peak area percentages to weight percentages using relative response factors, but the Board disagreed. The Board found that Dr. Klein’s Table 2 illustrated that Craig’s Table 9 disclosed products containing even-carbon-number paraffins sufficiently within the weight percentage range of 75 wt% recited in claim 1 of the ’804 patent.
REG argues that the Board used an erroneous inherency standard because the Board found it unlikely that Craig did not disclose the claimed limitations of “weight percentages.” REG believes that the Board relied on Dr. Klein’s testimony to “fill the gap” in Craig by estimating weight percentages using the area percentages of Craig, and in REG’s view, this conversion is not so straightforward. Neste responds that the Board did not use inherency because Craig expressly discloses the concentration of even-carbon-number paraffins in area percentages. Neste argues that substantial evidence supports the Board’s finding that a person of ordinary skill could readily convert Craig’s area percentages to the weight percentages recited in the claims using Dr. Klein’s calculations.
We agree with Neste. Dr. Klein converted the area percentages of Craig into the weight percentages recited in the ’804 patent using several different relative response factors from the prior art, including Göröcs and Chaurasia, which REG’s own expert, Dr. Lamb, cited in his expert declaration. Dr. Lamb agreed that relative response factors could be used to convert area percentages to weight percentages, and that Göröcs and Chaurasia disclosed that response factors increase linearly with carbon number, but he concluded that Craig did not provide any calibration data or other indicia of reliability. This is not an inherency issue, however, because the challenged limitation is not missing from Craig. Craig is not silent as to the concentration of even-carbon-number paraffins because it expressly discloses this concentration in area percentage. Dr. Klein simply converted one unit of measurement (area percent) into another unit of measurement (weight percent) by using relative response factors from the prior art. Dr. Klein explained that this conversion was a reliable technique given the very similar weight percentage results after using three different sets of relative response factors. On this record, substantial evidence supports the Board’s factual finding that the area percent disclosed in Craig could be reliably translated to the weight percent recited in the ’804 patent.
Anticipation by Dindi
Because claims 2 and 5 of the ’804 patent remain at issue, we must still address REG’s arguments with respect to anticipation of claims 2 and 5 by Dindi. Claim 2 depends on claim 1, and recites that the composition comprises at least 80 wt% even-carbon-number paraffins. Claim 5 depends on claim 1, and it recites that the even-carbon-number paraffins include n-dodecane and n-tetradecane.
REG argued before the Board that Dindi was not prior art to the ’804 patent because Mr. Abhari invented the subject matter of the ’804 patent before the June 13, 2008 filing date of Dindi. The Board recognized that to antedate Dindi, REG had to prove (1) a conception and reduction to practice before the filing date of Dindi or (2) a conception before the filing date of Dindi combined with diligence and reduction to practice after that date. In either case, REG had to prove conception prior to the June 13, 2008 filing date of Dindi.
We agree with REG that it has proven conception prior to the filing date of Dindi, based on Exhibits 2011 and 2058, both already admitted in evidence, and the content of Exhibit 2061, which the Board incorrectly excluded from evidence based on hearsay. These three exhibits provide documentary evidence that, by April 2008, Mr. Abhari conceived of a definite and permanent idea of the complete and operative invention, and that he had disclosed to a third party his complete thoughts in such clear terms that the third party was able to make his invention using his process.
Neste argues that nothing in Exhibits 2011 and 2058 discloses the process that Mr. Abhari attempted to test. This is incorrect because Exhibit 2011 shows that in October 2007, Mr. Abhari emailed SwRI a description of a process, and Exhibit 2058 shows that in April 2008, SwRI emailed Mr. Abhari the results of that process. Neste provides no reason to suggest that SwRI would not have followed Mr. Abhari’s express instructions.
Neste also asserts that nothing in Exhibits 2011 and 2058 shows that Mr. Abhari knew that the sum of the weight percentages of the even-carbon-number paraffins met claim 2’s limitation of “at least 80 wt%.” The sum of the four percentages for C14 (1.218%), C16 (21.926%), C18 (56.773%), and C20 (0.871%) is more than 80%, but it is true that nothing from Mr. Abhari in Exhibits 2011 and 2058 expressly stated that the percentages of even-carbon-number paraffins should be summed up or that the sum of these percentages met claim 2’s limitation of “at least 80 wt%.” This “knowledge” of Mr. Abhari is supplied by Exhibit 2061, which contains an email dated April 29, 2008 from Mr. Abhari to Microtek, another third party who specialized in PCM materials, stating that he could achieve an 80% purity C18 product.
We find that the Board erred to the extent that it excluded the content of Exhibit 2061 based on hearsay because REG offered Exhibit 2061 for the non-hearsay purpose to show that Mr. Abhari thought he had achieved 80 wt% purity C18 product. The act of writing and sending the email is, by itself, probative evidence on whether Mr. Abhari recognized—at the time that he had written the email—that the sum of the weight percentages of even-carbon-number paraffins in his compositions was at least 80 wt% and communicated this to a third party. In Knorr v. Pearson, 671 F.2d 1368 (C.C.P.A. 1982), the court found that a statement was not hearsay if “the communication (as opposed to the truth) ha[d] legal significance.” Knorr involved a telephone call, in which two co-inventors, Buergin and Pearson, discussed an invention, and which was overheard by a third party, Rutkowski. The court held that Rutkowski’s testimony on what he heard Buergin say to Pearson was not hearsay because the communication of the idea had legal significance as the basis for the conception of the invention. By contrast, Rutkowski’s testimony on “Buergin’s statements to Rutkowski regarding what Pearson said” was hearsay.
We reverse the Board’s findings on conception and its exclusion of the contents of Exhibit 2061 based on hearsay. We find that Exhibit 2061 shows that Mr. Abhari disclosed to others a composition including every feature or limitation of the claimed invention. We also find that, based on Exhibits 2011, 2058, and 2061, Mr. Abhari’s disclosure was a completed thought expressed in such clear terms as to enable those skilled in the art to make the invention. However, because the Board did not make factual findings on diligence or reduction to practice in the first instance, we remand for the Board to make these findings.
In re NuVasive, Inc., Fed. Cir. 2015-1672, -1673 (November 9, 2016)
Medtronic filed two petitions for IPR of NuVasive’s ’334 patent, which claims implants for spinal fusion surgery. The claimed implant is designed to be inserted between two vertebrae to replace a damaged or diseased intervertebral disc. The relevant part of claim 1 recites that the implant has a length greater than 40 mm and that the length is at least two and a half times greater than the width of the implant.
In the First Petition for IPR, Michelson’s Fig. 18 Was Noted, But It Was Not in the Second Petition for IPR
In its first IPR, Medtronic argued that a first prior art reference (Frey) taught an implant whose length is at least 2.5 times the width, and that it would have been obvious to modify the Frey implant to have a length greater than 40 mm based on a second reference (Michelson). But, in one brief passage, Medtronic’s petition alleged that “like Frey, Michelson discloses example lateral fusion implants having an elongated shape” and “dimensions that are longer than wide.” The portion of the Michelson reference cited in this passage included a discussion of Michelson’s Figure 18, which shows an alternate embodiment having a narrower width.
Medtronic’s second IPR alleged obviousness in view of a different primary reference in combination with Michelson, and did not include an assertion about or citation to material encompassing Michelson’s Figure 18.
When NuVasive filed its Patent Owner Responses, it argued that no single reference taught an implant that was both longer than 40 mm and had a length at least 2.5 times its width, referring to Michelson’s Figures 16, 19, and 20 (but not 18) as evidence that a person of ordinary skill would size an implant to be both long and wide (rather than long and narrow) in order to maximize the surface area of contact with the vertebrae. NuVasive further argued that there was no reason for a person of skill in the art to combine the length of Michelson with the length-to-width ratio of the primary references, because doing so would make the resulting implant an unsuitable size for the intended surgical insertion path of the primary references.
In its replies, Medtronic pointed to Michelson’s Figure 18, and argued that it disclosed an implant whose length was greater than 40 mm and at least 2.5 times its width. NuVasive objected to the argument regarding Figure 18, contending that it was a new ground of invalidity asserted for the first time on reply, and requested leave to file motions to strike or, alternatively, sur-replies, which the Board denied. NuVasive also attempted to address the matter at oral argument, but the Board refused to allow NuVasive to make substantive arguments in response. The Board assured NuVasive that it would consider the propriety of Medtronic’s arguments when making a final decision. The Board ultimately held that all but one of the challenged claims were obvious in both IPRs, relying heavily on its findings that Michelson, by itself, discloses an implant whose length is both greater than 40 mm and at least 2.5 times its width.
Notice to NuVasive in the First IPR Was “at Least Minimally Sufficient”
On appeal, NuVasive contended that it did not receive adequate notice of or opportunity to address Medtronic’s reading of Figure 18 and its consequences for the overall obviousness analysis. For a formal adjudication like an IPR, the Administrative Procedure Act (APA) imposes particular requirements on the USPTO to timely inform the patent owner of the matters of fact and law asserted, and must allow a party to submit rebuttal evidence as may be required for a full and true disclosure of the facts. Furthermore, although the Board is not limited to citing only portions of the prior art specifically drawn to its attention, in both IPRs, it was clear that the Board treated Michelson’s Figure 18 as an essential part of its obviousness findings. The Board relied on Michelson’s Figure 18 and nothing else for a prior-art disclosure of an implant having a length that is greater than 40 mm and at least 2.5 times its width, made no findings that another reference disclosed an implant having both those characteristics, and made no findings that such dimensions would have been obvious even if not found together in a single piece of prior art.
Thus, Figure 18 did not merely serve to describe the state of the art at the time of the invention, and under the APA’s standards, NuVasive was entitled to an adequate opportunity to respond to the asserted fact about Michelson’s Figure 18. This entitlement was not lessened by virtue of NuVasive’s opportunity to respond to other factual assertions about Michelson. In the first IPR, NuVasive had that opportunity. Medtronic’s petition put NuVasive on notice that Medtronic was relying on particular portions of Michelson to teach the ’334 patent’s claimed long-and-narrow implants, and NuVasive’s Patent Owner Response was an adequate opportunity to respond. In so concluding, this notice was at least minimally sufficient.
There Was a Failure of Adequate Notice as to the Second IPR
The second IPR was different, since in that proceeding, Medtronic did not include in its petition the same citations to or assertions about the Michelson passage that it included in the first petition. Thus, there was no notice of the Figure 18 point before NuVasive filed its Patent Owner Response, and the opportunity to file that Response did not provide the required opportunity to address the factual assertion about Figure 18 on which the Board ultimately relied. Thus, NuVasive’s rights were violated under the APA.
Despite a consolidated hearing in the two IPR proceedings, the Board treated each IPR as a separate, distinct proceeding, and it issued separate final written decisions, independently invalidating some of the same claims based on different mixes of prior art. Thus, notice in one proceeding did not constitute an obligation-triggering notice in the related proceeding.
Furthermore, although NuVasive was permitted to cross-examine Medtronic’s expert, and to file “observations” on the cross-examination, “observations” are not a vehicle for submitting new evidence, including new expert declarations, by the patent owner. Thus, such “observations” are not a substitute for the opportunity to present arguments and evidence.
For these reasons, the Board’s decision in the first IPR is affirmed, invalidating all but one of the challenged claims, and the Board’s decision in the second IPR is vacated and remanded for further proceedings regarding the claims not invalidated in the first IPR.
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