CAFC Finds Harmless Error in USPTO Reliance On Doctrine of Inherency
In Southwire Co. v. Cerro Wire LLC, the Federal Circuit upheld the USPTO decision rendered in an inter partes reexamination proceeding that found Southwire’s patent invalid as obvious. Although the court found that the USPTO Board had erred in relying on the doctrine of inherency, it concluded the error was harmless because the Board’s factual findings adequately supported its determination of obviousness.
The Patent At Issue
The patent at issue was Southwire’s U.S. Patent 7,557,301, directed to a method of making an electric cable. As summarized by the court, the method involves incorporating “a lubricant … into the outer sheath such that the lubricant migrates to the surface of the sheath and results in a reduction in pulling force required to install the cable.” As noted by the court, the patent states that this method is an improvement over prior approaches that involve “coating the exterior surface of the cable with a lubricant, such as petroleum jelly, immediately prior to installation.”
The court identified claim 1 as representative:
1. In a method of manufacturing a finished electrical cable having a conductor core and a jacket formed primarily of a first material, the jacket surrounding at least said conductor core and defining the outermost exterior surface of the finished cable,
the improvement comprising combining a pre-selected lubricant with said first material prior to the formation of said jacket in order to provide a reduced coefficient of friction of said cable outermost exterior surface and also reduce the amount of force required to pull the cable, during its installation through building passageways,
in which said lubricant is of the type which migrates through said jacket to be available at said outermost exterior surface of said finished cable during the cable’s installation through building passageways,
the finished electrical cable having the characteristic that an amount of force required to install said cable … is at least about a 30% reduction in comparison to an amount of force required to install a non-lubricated cable of the same cable type ….
The Inter Partes Reexamination Decision
The Examiner conducting the inter partes reexamination determined that the claimed method was obvious in view of the Summers patent (U.S. Patent No. 6,160,940 ) and two secondary references. According to the court:
Summers describes a “fiber optic cable that is suitable for installation in a cable passageway” and teaches that “to reduce resistance to a cable pulling force,” the plastic material used to form the cable “can include a friction reducing additive” that “migrat[es] to the surface of the cable jacket,” such as, for example, fatty acids and silicone oils.
Although Summers “does not expressly teach that the friction reducing additive can reduce the pulling force by ‘at least about . . . 30%,'” the Examiner agreed with Cerro that that property would be “an inherent result of the cable being made in accordance with the method steps.”
Southwire appealed to the USPTO Patent Trial and Appeal Board which upheld the rejection. As summarized by the court:
The Board explained that “[w]here the claimed and prior art products are . . . produced by identical or substantially identical processes, a prima facie case of either anticipation or obviousness has been established.” …. It found that Summers’s lubricants “would achieve the claimed force reduction” because Summers (in view of Dow) teaches the same method steps—namely, extruding a cable jacket formed from a plastic material containing a lubricant, such that the lubricant migrates to the surface of the jacket and lubricates the interface between the cable and any surface of the cable passageway. …. Thus, the Board concluded, because Summers teaches reducing the coefficient of friction using a lubricant, it inherently teaches the 30% reduction limitation because it renders it “obvious to have selected [lubricant] amounts” that achieve the claimed reduction. ….
The Federal Circuit Decision
The Federal Circuit Decision was authored by Judge Lourie and joined by Judges Moore and Hughes. The court agreed with Southwire that the PTAB’s reliance on inherency was incorrect, but also found that the error was harmless.
With regard to inherency, the court referred to its recent decision in Honeywell:
We have held that “the use of inherency in the context of obviousness must be carefully circumscribed because ‘[t]hat which may be inherent is not necessarily known’ and that which is unknown cannot be obvious.” Honeywell Int’l v. Mexichem Amanco Holding S.A., No. 2016-1996, —F.3d—, 2017 WL 3254943, at *10 (Fed. Cir. Aug. 1, 2017) (quoting In re Rijckaert, 9 F.3d 1531, 1534 (Fed. Cir. 1993)). While “[w]e have recognized that inherency may supply a missing claim limitation in an obviousness analysis,” PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1194–95 (Fed. Cir. 2014) (collecting cases), we have emphasized that “the limitation at issue necessarily must be present” in order to be inherently disclosed by the reference, id. (emphasis added).
The problem with the decision on appeal was that “[t]he Board cited no evidence that a reduction of 30% in the pulling force would necessarily result from the claimed process, which contains no steps that ensure such reduction.” Thus, the court decided:
We conclude that the Board erred in relying on inherency without finding that Summers necessarily would achieve a 30% reduction in pulling force ….
The court found the error harmless, however, because the Board had “made the necessary underlying factual findings to support an obviousness determination.” The court explained:
None of the patented steps differs in any material way from the process disclosed in Summers (in view of Dow). And there is no evidence that the claimed 30% reduction in pulling force would have been unexpected or unattainable from the process disclosed in Summers. In fact, there is no evidence that the process disclosed in Summers did not produce an “at least . . . 30% reduction” in pulling force.
The court cited the CCPA decision in In re Best for the principle that:
where “all process limitations . . . are expressly disclosed by [the prior art reference], except for the functionally expressed [limitation at issue],” the PTO can require an applicant “to prove that the subject matter shown to be in the prior art does not possess the characteristic relied on.”
The court explained further:
Simply because Summers never quantified the reduction in pulling force achieved by its disclosed embodiments does not preclude the possibility, or even likelihood, that its process achieved at least a 30% reduction, especially since its stated purpose was the same as that of the ’301 patent—to reduce the pulling force on the cable for ease of installation. …. In the absence of any evidence that the claimed 30% reduction would have been unexpected in light of the Summers disclosure, there is no indication that the limitation is anything other than mere quantification of the results of a known process.
Thus, the court concluded that “the Board’s underlying factual findings are supported by substantial evidence and reasonably support its conclusion that it would have been ‘obvious to have selected such amounts’ as would achieve the claimed reduction in pulling force because … ‘Summers teaches reducing the coefficient of friction’ using the same process, for the same purpose.”
Inherency vs. Obviousness
When I saw that Judge Lourie–who recently filed a dissenting opinion in In re Stepan–had authored this opinion, I was concerned that the decision in this case might undermine the decision in Stepan, but the issues are quite different since the Board did not invoke the doctrine of “routine optimization” in rejecting Southwire’s claims.
I was encouraged to see the Federal Circuit hold firm against the Board’s improper reliance on the doctrine of inherency. While the court still found the claims at issue obvious, the fact that the cited reference appeared to use the same approach to impact the same property should distinguish this decision from other cases where the claimed result is not intended by the prior art, or is unexpected over the prior art.