Takeaway: A patent owner may meet its burden in establishing that replacement claims are patentable over the prior art of record where the prior art does not indicate an art-recognized benefit corresponding to a new claim range limitation, even where the same prior art teaches or suggests a lower range having beneficial effects.

In its Final Written Decision, the Board held that Petitioner proved by a preponderance of the evidence that all challenged claims 1-24 of the ’492 patent are unpatentable for being obvious under 35 U.S.C. § 103. In one of few instances, however, the Board also granted Patent Owner’s Motion to Amend as to proposed substitute claims 25-28, finding those claims patentable in view of the prior art of record.

The ’492 patent “is directed to a process for the manufacture of diesel range hydrocarbons from bio oils and fats,” and, in particular, discloses “a two-step process in which a feed stream of biological origin, diluted with a hydrocarbon, is first hydrodeoxygenated, and then isomerized.” According to the ’492 patent, “deoxygenation via hydrogenolysis requires a large amount of hydrogen, and releases a significant amount of heat that must be dissipated.” The inventors sought to avoid these problems “by selectively favoring the decarboxylation/decarbonylation reaction pathways by ‘spiking’ the feed stream with sulfur.” Inter partes review was instituted based on alleged obviousness of claims 1- 24 over Jakkula, Monnier I, Gunstone, and various other secondary references.

The Board first briefly addressed claim construction, stating that “the parties’ dispute during trial focused on whether a person of ordinary skill in the art would have had reason to combine the prior art references, not on the presence or absence of any particular claim element or the particular construction thereof. . . . No explicit constructions are required, therefore, in order to resolve the issues pending before the Board.” The Board thus did not adopt any construction.

The Board then turned to the patentability of original claims 1-24. Because both parties agreed that there was no dispute that the individual components of the challenged claims were known in the art, the Board “turn[ed] to the question of whether REG has articulated sufficient reason to combine Jakkula and Monnier I.” The Board concluded that “the evidence of record establishes that a person of ordinary skill in the art would have had reason to combine Jakkula and Monnier I, and would not have been discouraged in doing so.” In siding with Petitioner, the Board was “not convinced by Neste’s arguments that Jakkula, or the prior art in general, teaches away from the use of sulfur.” Patent Owner asserted that a person of ordinary skill in the art “would have recognized that the use of sulfur . . . decreases the life expectancy of the HI catalyst over the long term,” which is costly. The Board noted that Patent Owner’s “arguments regarding teaching away may best be characterized as economic ones,” which “are not sufficient basis for a conclusion of teaching away.” The Board therefore concluded that original “claims 1-24 would have been obvious at the time of the invention, and thus are unpatentable under 35 U.S.C. § 103.” The Board did not expressly consider any other secondary reference.

Turning to Patent Owner’s Motion to Amend, the Board began by stating that “the patent owner bears the burden to establish that it is entitled to the relief requested” and “demonstrate the patentability of the proposed substitute claims.” The parties did not dispute that Patent Owner had satisfied all requirements, except for whether Patent Owner “met its burden of proof to establish that claims 25-28 are patentable.” The Board first noted that Patent Owner is “not required to prove that the claims are patentable over every item of prior art known to a person of ordinary skill,” but is rather “required to explain why the claims are patentable over the prior art of record.” In addition, however, Patent Owner’s “duty of candor to the Office requires that it discuss any relevant prior art not of record but known to it.” Petitioner pointed to three prior art references and argued that the Motion should be denied “because it fails to address all relevant prior art known to Neste.” The Board rejected petitioner’s argument, stating that “the three references cited by REG are relevant to Neste’s [rejected] teaching away argument, not any issue newly raised by the Motion to Amend.” Indeed, Petitioner did “not allege that any of the proposed substitute claims are unpatenteable over a combination of references that include [any of the three references cited by REG].” The Board thus found the present case distinguishable from ScentAir Tech., Inc. v. Prolitec, Inc., Case IPR2013-00179, slip. op. at 27–30 (PTAB June 26, 2014) (Paper 60).

The Board granted Patent Owner’s Motion to Amend because Patent Owner showed that the claims would be patentable over the prior art. While conceding “that the individual elements of [new independent] claim 25 were known in the art,” Patent Owner argued that “the claim as a whole” is patentable because “the combination of those elements would have run counter to prevailing wisdom in the art at the time of the invention.” The Board noted that in addressing the original claims “a person of ordinary skill in the art would have reason to combine Jakkula and Monnier I to add sulfur to the feedstock of an HDO process that is followed by an HI step, because the prior art suggests that concentrations of 2000 or 4431 w-ppm have beneficial effects on catalyst activation and decarboxylation selectivity.” However, the “question of whether a person of ordinary skill in the art would have had reason to add an even higher concentration of sulfur—in the range of 5000-8000 w-ppm—is an altogether different one.” The Board held that the record before it did “not establish persuasively that there was any art-recognized benefit to using a concentration of sulfur over 4431 w-ppm.” And “[a]bsent any indication of a benefit to be obtained from adding even greater amounts of sulfur, the skilled artisan would have no reason to make the modifications to [an EP published application] necessary to result in the claimed invention.” For these reasons, Patent Owner “established sufficiently that there was no reason to modify the prior art to arrive at the process of claim 25” and its dependents. Accordingly, Patent Owner’s Motion to Amend was granted.

REG Synthetic Fuels LLC v. Neste Oil Oyj, IPR2014-00192
Paper 48: Final Written Decision
Dated: June 5, 2015
Patent: 8,278,492 B2
Before: Sheridan K. Snedden, Christopher L. Crumbley, and Jon B. Tornquist
Written by: Crumbley