Applying the substantial evidence standard to support an invalidity determination by the Patent Trial and Appeal Board (PTAB or Board), the U.S. Court of Appeals for the Federal Circuit affirmed the PTAB’s decision with respect to both anticipation and obviousness. Kennametal, Inc. v. Ingersoll Cutting Tool Co., Case No. 14-1350 (Fed. Cir., Mar. 25, 2015) (Linn, J.).

Kennametal (the patent owner) filed suit against Ingersoll (the petitioner) for infringement of a patent related to cutting tools with a binder containing ruthenium and having a physical vapor deposition (PVD) coating.  Ingersoll successfully petitioned the Patent and Trademark Office (PTO) for inter partes reexamination of the asserted patent, raising both anticipation and obviousness grounds. The examiner refused to adopt the proposed anticipation rejections, but rejected all of the claims as obvious. The o appealed the obviousness rejections to the PTAB, and the petitioner cross-appealed the examiner’s refusal to adopt its proposed anticipation rejections.  The PTAB found that the examiner erred by not adopting the petitioner’s proposed anticipation rejection and affirmed the obviousness rejections.  The patent owner appealed all of the PTAB’s rejections to the Federal Circuit.

The Federal Circuit affirmed the PTAB’s finding of anticipation.  There was no dispute that the prior art disclosed all of the limitations of the rejected claim.  The patent owner, however, argued that the prior art failed to disclose all the claimed limitations—here, the combination of ruthenium and PVD coatings— “arranged or combined in the same way as in the claim.”  The Federal Circuit explained that can anticipate a claim even if it “d[oes] not expressly spell out” all the limitations arranged or combined as in the claim, if a person of skill in the art, reading the reference, would “at once envisage” the claimed arrangement or combination.  Here, the question for the purposes of anticipation is “whether the number of categories and components” disclosed in the prior art is so large that the combination of ruthenium and PVD coatings “would not be immediately apparent to one of ordinary skill in the art.”  After reviewing the PTAB’s reasoning, the Federal Circuit concluded that the prior art’s express contemplation of PVD coatings is “sufficient evidence that a reasonable mind could find that a person of skill in the art would immediately envisage applying a PVD coating” and that “actual performance” of combining ruthenium and PVD coatings was not required.

With regard to the PTAB’s decision of obviousness, the Federal Circuit explained that although a prior art reference that anticipates an invention can, theoretically, still not make that invention obvious, that is the rare case.  Here, because there was only a limited number of possible combinations disclosed in the prior art, it would have been obvious to a person of ordinary skill in the art to combine ruthenium and PVD coatings with a reasonable expectation of success.  As for the patent owner’s assertion of unexpected results, the Federal Circuit concluded that because the precise combination of ruthenium binders and PVD coatings was taught in Grab, the patent owner’s secondary consideration argument falls short.