Rovalma v. Bohler-Edelstahl GmbH & Co. KG, (Fed. Cir. May 11, 2017) (Before Wallach, Taranto, and Stoll, J.) (Opinion for the court, Taranto, J.)
The Federal Circuit vacated and remanded the Patent Trial and Appeal Board’s decision in an inter partes review proceeding that a patent owned by Rovalma S.A., which related to methods for making steels with certain thermal conductivities, was invalid for obviousness.
In its Petition for inter partes review, Böhler-Edelstahl GmbH & Co. KG (“Böhler”) argued that the challenged claims should be construed to cover certain chemical compositions described in the specification. The claims, construed in this manner, would have been obvious over the asserted prior art references, regardless of whether the compositions were created according to the “providing,” “creating,” “selecting,” and “setting” steps recited in the claims. The Board instituted review based on Böhler’s proposed construction.
In its Patent Owner Response, Rovalma argued that the claims should be construed to require performance of the claimed steps—not simply the compositions in the specification. As background for its construction, Rovalma submitted documents and other evidence tending to show that the claims would have been obvious to a person of ordinary skill at the time of the invention. In its reply, Böhler did not address Rovalma’s construction or evidence, instead repeating its contentions from the Petition.
In its final written decision, the Board rejected Böhler’s construction and adopted Rovalma’s. Applying Rovalma’s construction, the Board found that the claims would have been obvious to a skilled artisan over the asserted prior art. The Board relied on the evidence submitted by Rovalma to show what a skilled artisan would have understood as obvious in light of the prior art invoked by Böhler. Rovalma appealed, arguing that the Board’s decision was not supported by substantial evidence and that the Board committed procedural errors in relying on Rovalma’s own submissions to find the claims obvious.
The Court found that the Board did not set forth its reasoning for finding the asserted claims obvious in enough detail for the Court to determine whether it was supported by substantial evidence. The Board found that the asserted prior art expressly disclosed the “providing” step recited in the claims but did not sufficiently explain its implicit findings that the remaining steps were disclosed in the prior art. Instead, the Board noted only that a person of ordinary skill “would have at least inherently completed the ‘selecting’ steps” and the “creating” and “setting” steps would have been obvious based on the background evidence submitted by Rovalma. Nor did the Board adequately explain or cite to any evidence suggesting why a person of ordinary skill would have been motivated to improve upon the processes in the prior art or would have reasonably expected the improvements to be successful. In the end, the Board’s decision did not provide any insight into “what evidence the Board relied on to support its implicit factual findings, how the Board interpreted that evidence, and what inferences the Board drew from it.”
The Board also did not set forth its reasoning in sufficient detail for the Court to determine whether its obviousness decision was procedurally proper. The Board must comply with certain procedural requirements in conducting an inter partes review under the Administrative Procedure Act (APA), including informing the patent owner of “the matters of fact and law asserted,” give the patent owner an opportunity to submit facts and arguments, and permit the patent owner to submit rebuttal evidence. Additionally, while the Board is permitted to use a party’s own submissions against it, it must provide adequate notice of its intent to rely on the submissions and an opportunity for the submitting party to respond. Because the Court was unable to determine how the Board reached its obviousness conclusion, it could not conclusively determine whether the Board’s actions complied with the APA’s procedural requirements. In particular, the Court could not determine what inferences the Board drew from Rovalma’s submissions and thus could not determine whether the Board provided Rovalma with adequate notice of its intent to rely on the submissions and an opportunity for Rovalma to respond.
A final written decision by the Board in an inter partes review will be overturned if the Board does not explain its reasoning for finding the asserted claims unpatentable in sufficient detail. A final written decision may also be overturned if the Board relies on arguments and evidence submitted by a party in its patentability decision but does not give the submitting party adequate notice of its intent to rely on the evidence or an opportunity to respond with rebuttal evidence.