Takeaway: If a patent owner proposes two substitute claims to replace the same four original claims, the patent owner bears the burden to establish the need for the second substitute claim.

In its Final Written Decision, the Board granted Patent Owner’s Motion to Amend to the extent it requested the cancellation of claims 1-20 of the ’094 Patent and denied the Motion to the extent it requested the substitution of claims 21-30. The ’094 Patent relates to a two-step process for the manufacture of diesel range hydrocarbons from renewable sources, such as plant and animal oils or fats.

Patent Owner did not file a response addressing the patentability of claims 1-20, and instead filed a Motion to Amend requesting cancellation of claims 1-20 and substitution of proposed claims 21-30. The Board began with claim construction, noting that neither party challenged the claim constructions provided in the Decision to Institute; therefore, they were adopted in this Decision.  The Board then discussed the terms for which Patent Owner submitted constructions.  The Board adopted Patent Owner’s constructions for “isoparafins” and “n-paraffins,” which were not disputed by Petitioner.  The Board then addressed the constructions of “reaction temperature” and “high molecular weight hydrocarbons,” finding that because the parties conceded that their arguments did not rely upon the construction of either term, the Board declined to provide express constructions for these terms.

The Board next turned to the substance of the Motion to Amend. First, the Board discussed the requirement that a patent owner may propose a reasonable number of substitute claims for each challenged claim, with the presumption being a one-to-one substitution.  In the Motion, Patent Owner proposed to add claim 21 as a substitute for original claims 1, 3, 4, and 7, and to add new substitute claim 30, which depends from claim 21 and is also a substitute for claims 1, 3, 4, and 7.  The Board found that because more than one substitute claim is proposed for a single original claim, Patent Owner had to establish the need for a new claim 30.  The Board found that Patent Owner did not show that claim 30 is patentably distinct from claim 21, and therefore, did not meet its burden to show a need for substitute claim 30.  However, the Board exercised its discretion to group claim 30 with claim 21 for the purposes of considering patentability of the claims over prior art.

The Board then reviewed the written description support for the new claims. The Board found that Patent Owner had not provided adequate written description support for the limitations in the substitute claims requiring the use of dilution ratios outside a 5-30:1 ratio.  Therefore, the Board was not persuaded that Patent Owner had met its burden of showing adequate written description support.

The Board then turned to a review of patentability over the prior art. The Board noted that Patent Owner combined in substitute claim 21 the limitations from claims 1, 3, 4, and 7, arguing that these limitations now “distinguish the claims over the prior art;” however, Patent Owner did not address why these limitations would render the claim non-obvious nor did Patent Owner meaningfully discuss the knowledge, skill, and creativity of one of ordinary skill in the art with respect to these limitations.  Therefore, Patent Owner has not carried its burden to show these limitations are patentably distinct from the prior art.

The Board then focused on whether the two newly added limitations render claim 21 patentable over the prior art. The Board found that the proposed 280-330 °C temperature range was fully encompassed by the 200-500 °C temperature range disclosed in Jakkula because when a claimed range is encompassed by or overlaps with a prior art range, the claimed range is presumed to be obvious.  Patent Owner argued that the presumption of obviousness was rebutted because a prior patent teaches away from the use of HDO temperatures below 350 °C, however; the Board found Petitioner’s expert testimony persuasive stating that one of ordinary skill in the art would not have been dissuaded from considering the lower temperature range found in Jakkula because of the prior patent.

Regarding the second limitation – a product having less than 1 wt-% of high molecular weight hydrocarbons – Patent Owner argued, and supported with expert testimony, that no one of ordinary skill in the art would have appreciated the problem of high molecular weight hydrocarbon prior to the ’094 Patent. Petitioner stated that both Patent Owner and its expert were wrong, as the propensity for free fatty acids to form high molecular weight compounds has been well known for decades.  The Board found Petitioner’s arguments persuasive based upon statements made during the prosecution of the parent application to the ’094 Patent.  Patent Owner also argued that one of ordinary skill in the art would not have been able to optimize the Jakkula process to achieve the claimed result, but the Board found that the limitations of the proposed substitute claim 21 did not support this argument.

The Board then turned to the patentability of proposed substitute claims 22-30. The Board found that the arguments regarding claims 22 and 23 were limited to the grounds of unpatentability asserted by Petitioner, rather than addressing the prior art known to the patent owner, and did not address the patentability of claims 22 and 23 with respect to the knowledge and skill of an ordinary artisan.  Further, because Patent Owner did not individually address the patentability of claims 24-29, Patent Owner did not carry its burden regarding the patentability of those claims.

REG Synthetic Fuels, LLC v. Neste Oil Oyj, IPR2013-00178
Paper 63: Final Written Decision
Dated: August 29, 2014
Patent 8,212,094 B2
Before: Rama G. Elluru, Christopher L. Crumbley, and Jon B. Tornquist
Written by: Tornquist