The US Court of Appeals for the Federal Circuit remanded a Patent Trial and Appeal Board (PTAB) inter partes review (IPR) decision finding a patent obvious and directed the PTAB to provide sufficient factual support for its obviousness findings. The Court also found that the PTAB violated procedural requirements by using the patent owner’s submissions without providing proper notice. Rovalma, S.A. v. Bohler-Edelstahl GMBH & Co. KG, Case No. 16-2233 (Fed. Cir., May 11, 2017) (Taranto, J).

Bohler petitioned the PTAB for IPR of Rovalma’s patent, which claims methods of making steel having certain thermal conductivity properties. In its petition, Bohler argued that the claims should be construed to cover the specific chemical compositions of the steel (which were taught in the prior art), whether or not the steel was created using the process steps in the claim. The PTAB adopted Bohler’s construction in its institution decision.

After institution, Rovalma argued against the adopted claim construction and proposed a construction that required performance of each of the process steps. As background for its claim construction, Rovalma submitted additional evidence and argument regarding the knowledge of a person of ordinary skill in the art (POSITA) of steel thermoprocessing. In its reply, Bohler only argued that the claims were obvious under its own proposed claim construction and did not address obviousness under Rovalma’s construction.

In its final decision, the PTAB adopted Rovalma’s claim construction but found the claims obvious in view of both the prior art cited by Bohler and Rovalma’s submissions regarding the knowledge of a POSITA. Rovalma appealed, arguing that there was a lack of substantial evidence to support the PTAB decision and that the PTAB made prejudicial procedural errors relying on Rovalma’s POSITA submission in its obvious analysis.

The Federal Circuit remanded back to the PTAB for two reasons. First, the Federal Circuit found that the PTAB failed to sufficiently explain the basis for its obvious determinations. The PTAB found that a POSITA would have inherently completed one of the process steps and that the remaining steps were obvious—but the Federal Circuit noted that the PTAB failed to cite record evidence for its obvious determinations. Accordingly, the PTAB did not provide a “sufficiently focused identification of the relevant evidence” and the Court was unable to review the PTAB’s decision without usurping the PTAB’s fact-finding authority.

Second, the Federal Circuit noted a procedural deficiency. During IPR, the PTAB must timely inform a patent owner of “the matters of fact and law asserted” and give the patent owner an opportunity “to submit rebuttal evidence” in response to new invalidity positions. Here, the Court found that, to the extent the PTAB relied on Rovalma’s own submissions in finding obviousness, Rovalma was entitled to adequate notice and a chance to address the PTAB’s positions regarding those submissions.

The Federal Circuit rejected Rovalma’s argument that the PTAB could not use Rovalma’s own submissions to find obviousness, however. The Court noted that “a tribunal may use a party’s own submissions against it, even if the opposing party bears the burden of persuasion,” if the PTAB provides adequate notice and allows the patent owner to respond to any new arguments made in view of the use of patent owner’s submissions. Finding lack of adequate notice, the Court remanded the case back to the PTAB for further proceedings.