Addressing for the first time the issue of whether the Patent Trial and Appeal Board (PTAB) may rely on an inter partes review (IPR) petitioner’s arguments and adopt its position wholesale, the US Court of Appeals for the Federal Circuit upheld a PTAB ruling essentially based on the petitioner’s submissions, and found that the claims of the challenged patent were obvious in view of prior art and that there was sufficient motivation to combine the prior art references. Outdry Tech. Corp. v. Geox S.P.A., Case No. 16-1769 (Fed. Cir., June 16, 2017) (Moore, J).

Geox filed an IPR petition against a patent owned by Outdry Technologies on the basis that Outdry’s patented methods for waterproofing leather were obvious in view of prior art. The challenged patent disclosed that prior art methods of waterproofing leather clothing and shoes consisted of sewing or gluing a semi-permeable membrane inside the leather around the membrane’s perimeter. The patent specification further stated these prior art methods allowed a water cushion to form in which water penetrated the leather and became trapped between the membrane and interior surface of the leather. The claimed invention sought to overcome this issue by “directly pressing” a semi-permeable membrane onto the leather via a dotted glue pattern. The PTAB found, however, that such method was obvious in view of prior art. Outdry appealed, arguing that the PTAB had incorrectly construed “directly pressing” and that it had failed to adequately articulate why a person of ordinary skill in the art would have been motivated to combine the various references.

Applying the broadest reasonable interpretation standard, the Federal Circuit upheld the PTAB’s construction of “directly pressing,” holding that Outdry’s proposed narrow construction was not supported by the specification. The Court also agreed with the PTAB that the preamble of the challenged claims, reciting a “process for waterproofing leather,” was simply a statement of intended use and was not claim limiting. Regardless, the PTAB concluded that “[s]atisfaction of the claimed steps necessarily results in satisfying a ‘process for waterproofing leather,’” so the prior art references did not need to explicitly discuss “a process”—a conclusion with which the Court agreed.

On the substantive obviousness issues, Outdry argued that it was improper for the PTAB to rely solely on Geox’s petition to find a motivation to combine without making any explicit findings of its own, and that the PTAB failed to identify a reason why one of skill in the art would have been motivated to combine the references to solve the specific problem identified in the challenged patent. The Federal Circuit, however, upheld the PTAB’s determination that a person of ordinary skill in the art would have been motivated to combine the prior art references and that the PTAB was not required to limit its motivation to combine inquiry to the problem faced by the inventor of the challenged patent. As for the PTAB’s reliance on the petitioner’s arguments, the Court stated that such reliance “does not undermine its otherwise adequate explanation for finding a motivation to combine.” In doing so, the panel distinguished prior decisions where similar reliance was reversed, finding that in this case the PTAB “clearly articulated arguments for why a person of ordinary skill in the art would have been motivated to” combine the references, and that there were sufficient factual citations and explanations from the PTAB.

Practice Note: Patent owners should fully respond to petitioners’ motivation to combine arguments, pointing out any factual deficiencies and challenging the petitioner’s explanations. Petitioners, on the other hand, should make sure that all arguments are sufficiently supported by factual citations and explanations, understanding that the PTAB may then adopt their position wholesale.