Inherent Prior Art Feature Must Show Specific Percent Limitation and Claimed Percent Must Be Unexpected in Prior Art

The Court of Appeals for the Federal Circuit (a) overruled the U.S. Patent and Trademark Office (PTO) Patent Trial and Appeal Board (PTAB) finding that the use of inherency in the context of obviousness must be carefully circumscribed because that which may be inherent is not necessarily known and that which is unknown cannot be obvious; and (b) the patent was nonetheless invalid as being obvious in light of the prior art because none of the patented steps differ in any material way from the process disclosed in the prior art reference and there was no evidence that the claimed 30% reduction in pulling force would have been unexpected or unattainable from the prior art process. Southwire Co. v. Cerro Wire LLC, Case No. 2016-2287 (Federal Circuit Sept. 8, 2017) (Available Here).

Southwire Co. appealed from the decision of the PTAB in an inter partes reexamination concluding that claims in the’301 patent were are unpatentable under 35 U.S.C. § 103. Although the Federal Circuit overruled the PTAB on the issue of inherency, the court affirmed the invalidity ruling on separate grounds.

The ’301 patent is directed to a method of manufacturing an electric cable, wherein a lubricant is incorporated into the outer sheath such that the lubricant migrates to the surface of the sheath and results in a reduction in pulling force required to install the cable. The critical claim limitation in method claim 1 provides that: “the finished electrical cable having the characteristic that an amount of force required to install said cable through corresponding holes in an arrangement of four 2″ x 4″ wood blocks having holes drilled at 15° through the broad face and the centerlines of the holes are offset 10″ and pulled through at 45° to the horizontal from the last block is at least about a 30% reduction in comparison to an amount of force required to install a non-lubricated cable of the same cable type and size through corresponding holes in said arrangement.”

The prior art reference to Summers describes a “fiber optic cable that is suitable for installation in a cable passageway” and teaches that “to reduce resistance to a cable pulling force,” the plastic material used to form the cable “can include a friction reducing additive” that “migrat[es] to the surface of the cable jacket,” such as, for example, fatty acids and silicone oils.

The Examiner adopted IPR Petitioner Cerro’s argument that the finished cable of Summers, in view of the other references, “has the characteristic that an amount of force required to install said cable . . . is at least a 30% reduction” because that characteristic “is an inherent result of the cable being made in accordance with the method steps.” The PTAB concluded, because Summers teaches reducing the coefficient of friction using a lubricant, it inherently teaches the 30% reduction limitation because it renders it “obvious to have selected [lubricant] amounts” that achieve the claimed reduction.

The Federal Circuit “review[s] the Board’s legal determinations de novo, In re Elsner, 381 F.3d 1125, 1127 (Fed. Cir. 2004), and 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 to support the finding. Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). Obviousness is a question of law, based on underlying factual findings, including what a reference teaches, whether a person of ordinary skill in the art would have been motivated to combine references, and any relevant objective indicia of nonobviousness. Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1047–48, 1051 (Fed. Cir. 2016) (en banc).”

Southwire argued, and the Court agreed, that the PTAB’s finding that a “skilled artisan would have had reason to select [lubricant] concentrations that did” achieve the 30% reduction in pulling force is the antithesis of inherency, which requires certainty, not experimentation.

IPR Petitioner Cerro contended that it is well-established law that, in cases such as this one, a prima facie case for obviousness is met where the only difference between the claimed and prior art process is a property that results from performing the process. Cerro argued that it is not inventive to claim a test for cables made in accordance with known prior art methods and discover that the cable has that certain performance characteristic.

In overruling the PTAB, the appeals court stated “We have held that ‘the use of inherency in the context of obviousness must be carefully circumscribed because ‘[t]hat which may be inherent is not necessarily known’ and that which is unknown cannot be obvious.’ Honeywell Int’l v. Mexichem Amanco Holding S.A., No. 2016-1996, —F.3d—, 2017 WL 3254943, at *10 (Fed. Cir. Aug. 1, 2017) (quoting In re Rijckaert, 9 F.3d 1531, 1534 (Fed. Cir. 1993)). While ‘[w]e have recognized that inherency may supply a missing claim limitation in an obviousness analysis,’ PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1194–95 (Fed. Cir. 2014) (collecting cases), we have emphasized that ‘the limitation at issue necessarily must be present’ in order to be inherently disclosed by the reference, id.”

The PTAB erred in relying on inherency without finding that Summers necessarily would achieve a 30% reduction in pulling force, but rather finding that it merely renders that limitation obvious.

The PTAB rejected all of Southwire’s evidence set forth in data tables because the tables fail to report standard deviations, statistical significance, or certain relevant details of the experimental design.

In invaliding the claimed method patent for nonobviousness, the Federal Circuit stated: “None of the patented steps differs in any material way from the process disclosed in Summers (in view of Dow). And there is no evidence that the claimed 30% reduction in pulling force would have been unexpected or unattainable from the process disclosed in Summers. In fact, there is no evidence that the process disclosed in Summers did not produce an ‘at least . . . 30% reduction’ in pulling force. Our predecessor court has held that where ‘all process limitations . . . are expressly disclosed by [the prior art reference], except for the functionally expressed [limitation at issue],’ the PTO can require an applicant ‘to prove that the subject matter shown to be in the prior art does not possess the characteristic relied on.’ In re Best, 562 F.2d 1252, 1254–55 (CCPA 1977) (emphases added) (internal quotation marks omitted). The court noted that ‘[w]hether the rejection is based on ‘inherency’ under 35 U.S.C. § 102, [or] on ‘prima facie obviousness’ under 35 U.S.C. § 103, . . . the burden of proof is the same.’ Id.”

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