On July 22, 2021, the United States Court of Appeals for the Federal Circuit (“Court of Appeals”) reversed decisions of the Patent Trial and Appeal Board (“PTAB”) that certain claims of U.S. Patent Number 7,122,609 to Earnest, Jr. et al. (“‘609 patent”) and U.S. Patent Number 8,076,431 to Earnest, Jr. et al. (“‘431 patent”) were obvious. Daikin Industries Ltd. and Daikin America, Inc. filed a petition at the PTAB requesting Inter Partes Review of claims in the ‘609 and ‘431 patent. The disputed patents are for High Melt Flow Fluropolymer, a copolymer capable of being extruded at high speed such that it is substantially free to alkali metal salt to coat and insulate wires, giving insulated wires high quality. The PTAB issued a final written decision that all challenged claims by Daikin Industries Ltd. and Daikin America, Inc. were unpatentable due to being obvious in view of U.S. Patent No. 6,541,588 to Kaulbach (“‘588 patent”). Chemours Co. FC, LLC v. Daikin Indus., Ltd., 4 F.4th 1370 (Fed. Cir. 2021). The Court of Appeals reversed such finding.
The Appellant, Chemours Company FC, LLC initially made an argument that the PTAB’s decision was in violation of the Appointments Clause, but since this Appeal followed the decision of United States v. Arthrex, Inc., No. 19-1434, 2021 WL 2519433, at *4 (U.S. June 21, 2021), the Court of Appeals denied vacating and remanding the present case pursuant to Arthrex, but found the PTAB erred in its analysis of objective indicia of nonobviousness. Chemours Co. FC, LLC v. Daikin Indus., Ltd., at 1377.
When making a determination of patentability, an element that Examiners rely on is obviousness. The condition is that the invention must be non-obvious subject matter, specifically, that a patent may not be obtained if the differences between the invention and the prior art are such that a person with an ordinary skill in the art would find obvious. 35 U.S.C. § 103 (2018). Additionally, whether such person would have been “motivated to combine references, and whether a reference teaches away from the claimed invention are questions of fact.” Chemours Co. FC, LLC v. Daikin Indus., Ltd., at 1374. This has been a condition in United States Patent Law since around 1851, when the Supreme Court decided in Hotchkiss v. Greenwood that patentability requires “something more.” 52 U.S. 248 (1850).
Chemours patents relate to polymers with unique properties, but more relevant to the issues in the appeal are the claims relating to the polymer’s specific and “high melt flow rate of about 30±3 g/10 min.” Id. at 1380. The PTAB found all challenged claims of patents ‘609 and ‘431 to be obvious in view of the ‘588 patent. The Court of Appeals acknowledges the fact that the ‘588 patent appears to teach away from broadening the molecular weight distribution and known methods of increasing melt flow rate. Id. at 1376. The ‘588 patent’s inventive concept is a narrow molecular weight distribution polymer. It generally discusses that a high processing rate can be achieved despite narrow molecular weight distribution, but to do so would increase the melt flow rate by broadening the molecular weight distribution. Id. at 1376-1377. Notably, to increase the melt flow rate would go against the key feature of the patent, the narrow molecular weight distribution of the polymer. A person skilled in the art would not have incentive to attempt to enter the claimed range in Chemour’s patents. Id. Additionally, the ‘588 patent “cautions” for processing techniques that increase flow rate to not be used “due to the risk of obtaining a broader molecular weight distribution.” Id. Accordingly, the Court of Appeals found that the Appellee did not show that a person of ordinary skill in the art would be motivated to reach the flow rate of Chemour’s patents. Id. at 1377.
In an analysis of obviousness, evidence of objective indicia of nonobviousness, also known as secondary considerations, must be considered, if applicable. An applicant may assert commercial success in support of its contention of nonobviousness and bears the burden of proof in establishing a connection between the claimed invention and evidence of commercial success. The Appellant contended that the PTAB erred in rejecting a showing of commercial success and that the novel combination of all the patents’ properties drove their commercial success. Id. The ‘588 patent disclosed all features of the claimed invention except the high melt flow rate, leading the Board to the conclusion that there was “no nexus between the claimed invention and the alleged commercial success.” Id. at 1378. When a patent owner shows significant sales in connection with its invention, the commercial success can be attributed to the inventive elements and patented invention itself. Chemours also argued that sales data alone are sufficient to demonstrate commercial success and that the PTAB erred in deciding that that gross figure sales without market share data are inadequate to establish commercial success. Id. The Court of Appeals agreed on both points.
Finally, Chemours argued that the PTAB incorrectly applied the blocking patent doctrine, where later inventions would be blocked from entering the relevant market. The Court of Appeals reversed the PTAB on this basis as well, due to the challenged patent not functioning as a blocking patent. Id. Because the Court of Appeals found that the PTAB erred in its analysis of certain objective indicia of nonobviousness and findings of obviousness were not substantially supported, the PTAB decision was reversed here.