E.I. DuPont de Nemours v Synvina C.V., (Fed. Cir. 2017-1977)
In this decision, the United States Court of Appeals for the Federal Circuit (“CAFC”) confirmed the legal standards for obviousness in patent law and clarified the burden-shifting framework within inter partes Review (“IPR”) proceedings.
The CAFC confirmed that E.I. du Pont de Nemours and Company and Archer-Daniels-Midland Company (“DuPont”) had standing to bring an appeal of the United States Patent and Trademark Office Patent Trial and Appeal Board’s (“the Board”) decision to the CAFC. The Board had concluded that DuPont failed to prove that claims 1-5 and 7-9 of the US Patent 8,865,921 (“921 Patent”) would have been obvious at the time of claimed invention. The CAFC held that the Board applied the wrong legal standard for obviousness and reversed the Board’s decision. [pg. 2]
Synvina C.V. (“Synvina”) owns the 921 Patent, directing a method of oxidizing 5-hydroxymethylfurfural (“HMF”) or an HMF derivative to form a 2,5-furan dicarboxylic acid (“FDCA”). It was undisputed that at the time if the claimed invention, the oxidation of HMF and its derivatives to yield FDCA was known. The main issue in the appeal was whether the reaction conditions (choice of temperature, pressure, etc.) claimed in the 921 Patent would have been obvious to a person of ordinary skill at the time of the invention. [pg. 2]
DuPont is one of Synvina’s competitor in the production of FDCA for industrial use. FDCA has attracted commercial interest because of its potential in the “green” chemical industry. [pg. 2-3] Claim 1 of the 921 Patent recites four relevant reaction conditions: 1) a temperature between 140 and 200 Celsius; 2) an oxygen partial pressure (“PO2”) of 1 to 10 bar; 3) a solvent comprising acetic acid and 4) a catalyst comprising cobalt (“Co”), manganese (“Mn”) and bromine (“Br”). The specifications describe the reaction conditions in detail. [pg. 3-4] DuPont petitioned for IPR of the 921 Patent on the grounds of obviousness. [pg. 6]
The CAFC explained that several claims recite narrower conditions than those recited in Claim 1 in the 921 Patent. Claims 2-5 each depend from Claim 1. [pg. 5] With these reaction conditions, the specification states that the inventors “surprisingly” achieved high yields of FDCA, which Furanix Technologies B.V. (owner of the 921 Patent at the beginning of the IPR proceedings) and Synvina have argued for the non-obviousness of the Patent. [pg. 5]
In its written decision, the Board found that the claims in the 921 Patent were not unpatentable, as they are not obvious. [pg. 9] The Board recognized that some prior art disclosed oxidizing HMF or its derivatives to FDCA under reaction conditions that overlapped with those claimed in the 921 patent, however, “none of the references relied upon by Petitioners expressly taught a process in which HMF or its derivatives were oxidized to FDCA using a Co/Mn/Br catalyst at a reaction temperature of between 140°C and 200°C while also maintaining the [PO2] between 1 and 10 bar.” The Board also held that DuPont had failed to demonstrate that reaction temperature and [PO2] are recognized as result-effective variables in the prior art. [pg. 10] DuPont appealed the Board’s conclusion of non-obviousness to the CAFC. [pg. 11]
The Board applied the wrong legal standards for obviousness
Before addressing the Board’s conclusions, the CAFC addressed Synvina’s argument that DuPont lacked standing to appeal the Board’s decision. Synvina contended that DuPont did not suffer an actual or imminent injury, and that since no action for infringement of the 921 Patent has been brought against DuPont, DuPont’s position is on “speculative future harm”. DuPont responded that there is no need for a specific threat of infringement to demonstrate injury in fact; only that there is a significant risk of infringement liability. DuPont argued that it has a demonstration plant capable of operating under the conditions established under the 921 Patent, that Synvina is its competitor, and that Synvina rejected DuPont’s request for a covenant not to sue. Consequently, in DuPont’s opinion, there are enough facts to prove an actual or imminent injury in fact. [pg. 11-12] The CAFC agreed with DuPont and explained that “on appeal the petitioner must show a controversy ‘of sufficient immediacy and reality’ to warrant the requested judicial relief”. In this case, the CAFC found there was a controversy, since DuPont operates a plant capable of infringing the 921 Patent. [pg. 12-13]
DuPont argued that the Board erred in its obviousness analysis by misinterpreting the precedents and wrongfully applying a burden-shifting framework. On the other hand, Synvina contended that the Board applied the proper standard of obviousness and that substantial evidence supports the Board’s findings. [pg. 15]
In its analysis, the CAFC first notes that it has long been recognized that “where the general conditions of a claim are disclosed in the prior art, it is not inventive to discover the optimum or workable ranges by routine experimentation”. [pg. 15] The CAFC adds that a prima facie case of obviousness typically exists when the ranges of a claimed composition overlap the ranges disclosed in the prior art. However, a patentee may rebut the presumption in different ways:
- The modification of a process parameter may be patentable if it “produce[s] a new and unexpected result which is different in king and not merely in degree from the results of the prior art.”
- By demonstrating that the prior art taught away from the claimed range.
- If the parameter was not recognized as “result-effective”, a change might be patentable.
- Disclosure of very broad ranges may not invite routine optimization.
Here, the presumption applies, and none of means of rebuttal have been shown. [pg. 16]
The CAFC found that the Board erred in concluding that the type of burden-shifting framework consistently applied in overlapping range cases was implicitly foreclosed by subsequent cases not addressing this framework. [pg. 17] The CAFC explains: “To our knowledge, this is the first time we have been asked to decide whether this framework governs in the IPR context. […] Instead, the Board interpreted two more recent cases, Dynamic Drinkware and Magnum Oil, as prohibiting any burden-shifting framework from applying in an IPR. The Board erred, as these two cases did not overturn the procedural scheme for overlapping range cases.” [pg. 18]
The CAFC agreed with DuPont that the Board erred in its analysis of whether PO2 and temperature were result-effective variables. The Board correctly articulated the basic standard for result effective variables but did not follow it. Instead, the Board seems to have required that DuPont prove that the disclosures in the prior art “necessarily require” the variable to be within the claimed range or that they “predictably affected FDCA yields”. However, that was not DuPont’s burden. [pg. 21-22] “On the record evidence, only one finding was permissible: temperature and PO2 were recognized as result-effective variables.” [pg. 23] The CAFC stated that the Board erred in not concluding that Claims 1-5 would have been obvious at the time of the claimed invention. The CAFC therefore reversed the Board’s decision with respect to Claims 1-5 and 7-9. [pg. 29-30]
The CAFC’s decision serves as a reminder for patentees that they must meet a certain burden of proof in cases where obviousness is alleged. While a patentee does not have the burden to prove the non-obviousness of its claim; in a case where a prima facie case of obviousness is established, the claim will be cancelled unless the patentee provides evidence to support its position. Patentees should therefore take the time to consult their patent agents to obtain their advice before filing their claims. If there is reason to believe that the claim may be contested for obviousness, patentees should consider developing a plan to demonstrate the non-obviousness of their claim, for instance, by determining if their claim fits into one of the exemptions (or means of rebuttal) listed by the CAFC.