The Patent Trial and Appeal Board (PTAB) gets most of its attention (judicial and otherwise) regarding its decisions in inter partes review and covered business method proceedings. But the Board also has responsibility for deciding ex parte appeals of Examiner rejections that fell within the purview of its predecessor, the Board of Patent Appeals and Interferences. In August, the Federal Circuit reviewed the Board's decision affirming rejection of claims for obviousness in In re Stepan Co. in a precedential decision vacating the decision and sending it back on remand for a proper application of the law.
The application at issue, U.S. Application No. 12/456,567 (U.S. Patent Application Publication No. US 2009/0318294 A1), claimed an invention related to herbicidal formulations of glyphosate salt and a surfactant, which the specification described as being "based on the unexpected discovery that surfactant systems comprising dialkoxylated alkylamine, water miscible solubilizer and amine oxide allow for formulation of ultra-high loaded ('high-strength') glyphosate salt concentrates possessing high or no cloud points." The advantage of the formulation having high or no cloud point was quicker formulation and quicker delivery to market. Claim 1 is representative:
Claim 1: An ultra-high load, aqueous glyphosate salt-containing concentrate comprising:
a. water;
b. glyphosate salt in solution in the water in an amount greater than about 39 weight percent of acid equivalent, based on the weight of the concentrate, said glyphosate salt being selected from the group consisting of the isopropylamine salt of glyphosate, the potassium salt of glyphosate, mixtures of the isopropylamine salt and the potassium salt of glyphosate and mixtures of the potassium salt and the ammonium salt of glyphosate;
c. a surfactant system in an amount ranging from about 1 to about 20 weight percent, based on the weight of the concentrate, comprising:
i. from about 10 to about 60 weight percent, based on the weight of the surfactant system, of one or more dialkoxylated alkylamines;
ii. from about 5 to about 30 weight percent, based on the weight of the surfactant system, of one or more water miscible solubilizers; and
iii. from about 30 to about 75 weight percent, based on the weight of the surfactant system, of one or more amine oxides;
said concentrate having a cloud point above at least 70oC or no cloud point when the concentrate is heated to its boiling point.
Dependent Claim 26 specifies that the water miscible solubilizer is a polyalkylene glycol with a molecular weight from about 200 to about 1000, and claim 27 further limits the water miscible solubilizer to polyethylene glycol.
The Examiner rejected all claims as being obvious under 35 U.S.C. § 103 over prior art disclosing glyphosate formulations with surfactants having cloud points of 50-60oC (Pallas). The Examiner contended that this art taught species recited in dependent claims, and as to the ranges recited in the claims these were "routine optimization." Higher cloud points (i.e., 70oC) disclosed in the prior art were also unconvincing in establishing non-obviousness for the Examiner as being merely optimization of the claimed formulations.
With regard to dependent claim 26 and 27, the Examiner rejected these claims as being obvious over the combination of the Pallas reference and U.S. Patent No. 5,843,866, which discloses formulations comprising PEG 600 (falling within the range of 200-1000).
The Board adopted these grounds of rejection and Stepan appealed.
The Federal Circuit vacated the Board decision and remanded to the PTAB for further consideration, in a decision by Judge Moore, joined by Judge O'Malley; Judge Lourie filed a dissenting opinion. While acknowledging that its review of factual matter required the Court to give deference to the Office the opinion faulted the Board for failing to provide sufficient basis for review:
Because the Board failed to adequately articulate its reasoning, erroneously rejected relevant evidence of nonobviousness, and improperly shifted to Stepan the burden of proving patentability, we vacate the Board's decision that claims 1–31 of the '567 application would have been obvious.
According to the opinion, the Examiner (and the Board) failed to explain the basis for finding the distinctions between the claimed invention and the prior art to be nothing more than routine experimentation. This failure to make findings of fact sufficient for reviewing court to "conduct meaningful review" required the matter to return to the Board for proper explication of the Office's reasoning in the Court's opinion, citing In re Lee, 277 F.3d 1338, 1346 (Fed. Cir. 2002). Merely stating that the skilled worker would have arrived at the claimed invention through routine experimentation does not satisfy the standard, because what is missing is why this is the case. The opinion analogizes the case before it and the Board's failure to enunciate its reasoning to cases where the Board has based rejection on "common sense" or "intuition" without explanation, such as Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355, 1362 (Fed. Cir. 2016), and In re Van Os, 844 F.3d 1359, 1360 (Fed. Cir. 2017). The explanation of the Board's reasoning was held to be insufficient in these cases and the same reasoning applies here according to the majority.
Of all the rationales proffered by the Office on appeal, the panel majority considered them to be "post hoc generalizations" and not a proper basis for the required findings.
The panel also based its decision on the grounds that the Board did not enunciate a reason why the cited art would not have given the skilled worker a reasonable expectation of success: "to have a reasonable expectation of success, one must be motivated to do more than merely to vary all parameters or try each of numerous possible choices until one possibly arrived at a successful result," citing Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1365 (Fed. Cir. 2007) (quoting Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1165 (Fed. Cir. 2006)).
The opinion also found that the Board ignored Stepan's evidence that the claimed surfactants had failed in the experiments disclosed in the Pallas reference and directed the Board to consider this evidence on remand.
Finally, the panel opined that the Board had shifted the burden of proof onto Stepan without providing a prima facie case of obviousness because it failed to articulate its reasoning, citing In re Kahn, 441 F.3d 977, 986 (Fed. Cir. 2006). In this regard, the panel held that the Board did not properly consider the cloud point element in considering obviousness (which was a feature the majority found might distinguish the prior art formulations with regard to nonobviousness).
Judge Lourie's dissent was based on his opinion that the claims were obvious based on their expressly recited elements and not on the cloud point limitation (which he considered a feature and not a limitation that Stepan could rely upon to establish nonobviousness). Furthermore, in Judge Lourie's reading of the claims the Pallas reference itself almost anticipates claim 1, based on the recited elements. The claims in his view in this case are broad, and broad ("shotgun") claims cannot be non-obvious due to a discovery of a new property (in this case, the cloud point).
And with regard to the reasonable expectation of success requirement he states: "Where, as here, there is a single prior art reference, there does not need to be a finding of reasonable expectation of success for those skilled in a particular art to make conventional modifications to the prior art and look for improvements in some parameter," citing In re Ethicon, Inc., 844 F.3d 1344, 1351 (Fed. Cir. 2017)
In re Stepan Co. (Fed. Cir. 2017)
Panel: Circuit Judges Lourie, Moore, and O'Malley
Opinion by Circuit Judge Moore; dissenting opinion by Circuit Judge Lourie
