CAFC emphasizes “would have motivation” in obviousness determinations from Inter Partes Reviews

Michael Caridi | November 11, 2015

Belden, Inc. v. Berk-Tek, LLC

November 5, 2015

CAFC Panel and opinion author: Before Newman, Dyk and Taranto. Opinion by Taranto

Summary:

In an appeal from an Inter Partes Review, the CAFC rejected all claims of the ‘503 patent as being obvious over the prior art, emphasizing that the test for obviousness focuses on whether the skilled artisan would have a motivation to modify or combine the prior art disclosures to reach the claimed invention. The Court further upheld the authority of the Board to allow for consideration of a late filed Declaration by the Petitioner.

Details

I. Background

a. Parties

Belden Inc. owns U.S. Patent No. 6,074,503, (“the ‘503 patent”) which discloses and claims a method for making a communications cable. Belden and Berk-Tek compete in making and selling telecommunications cable and cabling systems.

The predecessor of Berk-Tek LLC filed a petition for inter partes review against the ‘503 patent, and the PTAB instituted a review.

b. Claims at issue

The ‘503 patent contained four claims when issued in 2000. Claims 5 and 6 were added in an ex parte reexam.

Claims 2 and 3 are directed to adding a third die.

Claims 5 and 6 requires that the transmission media be “twisted pairs of insulated conductors.”

 

 

 

 

 

 

 

Claims 2 and 3 are directed to adding a third die.

Claims 5 and 6 requires that the transmission media be “twisted pairs of insulated conductors.”

c. Prior Art

The central reference, JP ’910, describes a method of making a communication cable. The method entails extruding a core (thread-like object 1) through heated rollers (2a–2c) to form four grooves in the core, located at corners of a square when viewed in cross section. The core and four conducting wires (4a–4d) are fed through a die (wire-splitting board 5), the wires placed into the grooves on the core, and the assembly bunched, stranded, and jacketed to form a cable.

Two additional secondary references applied were JP ’694 which teaches passing a group of wires and shielding tape through a first die, then a second die, and finally a set of shaping tubes that wrap the shielding tape around the wires; and, US ’582 which similarly teaches making a cable core, in which a metallic tape and two groups of wires are fed through a first die and a second die.

The most pertinent secondary reference for claims 5 and 6 was the Canadian patent No. 2,058,046 (CA ’046). CA ’046 describes a telecommunications cable containing twisted pairs of conducting wires, separated by a spacer to minimize cross talk. The patent illustrates different spacers separating four twisted pairs of wires.

 

D. Berk-Tek’s declaration

Berk-Tek had attached no declaration to its Petition. After the review instituted, Belden submitted its Patent Owner Response attaching a declaration from its expert. Berk-Tek submitted its Reply attaching a declaration from its expert, Les Baxter.

Belden orally opposed receipt of Mr. Baxter’s declaration with the Reply, arguing that it had no opportunity to respond. The Board noted that its regulations permitted Belden to cross-examine Mr. Baxter, and that Belden could move to file non-argumentative observations (up to five pages) calling the Board’s attention to relevant aspects of the cross-examination. The Board also “cautioned” Berk-Tek that, if its Reply “includes material it should have submitted together with its Petition, the Board may decline the entirety of the Reply,” and the Board gave Bel-Tek “two days to consider whether to file a Revised Reply”—only to remove material, not add any. Berk-Tek submitted a revised Reply.

After taking Mr. Baxter’s deposition, Belden filed a motion for observations on what Mr. Baxter had said. The same day, Belden moved to exclude Mr. Baxter’s declaration and accompanying exhibits, arguing that portions of Mr. Baxter’s declaration were not responsive to Mr. Clark’s declaration and that and accompanying exhibits, arguing that portions of Mr. Baxter’s declaration were not responsive to Mr. Clark’s declaration and that Mr. Baxter’s declaration contained arguments and evidence necessary for the prima facie case of obviousness. The Board denied Belden’s motion to exclude, concluding that Mr. Baxter’s declaration “fairly respond[ed] to Mr. Clark’s declaration” and was unnecessary for Berk-Tek to establish a prima facie case of obviousness.

E. Conclusion of PTAB

As to claim 1, the Board concluded that, “by teaching alignment of the grooves and the conductors at board 5, JP ’910 suggests using board 5 to prevent twisting motion of core 1. Maintaining that a person of ordinary skill in the art would have recognized that preventing twisting motion of core 1 in relation to board 5 would maintain alignment between” the grooves and conductors “in accordance with the teaching of JP ’910.”

As to claim 2, the Board concluded that US ’582 and JP ’694 each teach “the benefit of a third die,” stating that adding a third die to JP ’910 would have “involve[d] merely a predictable use of a prior art element . . . to perform the same function it was known to perform and to yield no more than one of ordinary skill would expect from such use.”

As to claim 5, the Board determined that “JP ’910 cannot be understood reasonably as teaching or suggesting a method of manufacturing all types of twisted cables having a separator,” in particular “conventional twisted cable . . . that includes twisted pairs of individually-insulated conductors.” The Board faulted Berk-Tek for giving no “apparent reason to combine the known elements of JP ’910 and CA ’046.”

Belden appealed the cancellation of claims 1–4 and the denial of its motion to exclude. Berk-Tek appealed the upholding of claims 5 and 6.

II. Decision

a. The Court Affirms the Rejection of Claims 1-4

In challenging the cancellation of claim 1 for obviousness, Belden argued that JP ’910 does not teach making cables, but only transmission lines, “quads” (a component of a cable), and it disputes the Board’s finding of a motivation to use board 5 in JP ’910 to prevent the twisting of core 1.

The CAFC affirmed the Board first noting that the claims of the ’503 patent do not so limit the meaning of “cable” to a category that excludes quads, and Belden does not dispute that it never argued for a construction of “cable” before the Board.
As to motivation, the CAFC noted that the Board properly found motivation stating: “…obviousness concerns whether a skilled artisan not only could have made but would have been motivated to make the combinations or modifications of prior art to arrive at the claimed invention. See InTouch Technologies, Inc. v. VGO Communications, Inc., 751 F.3d 1327, 1352 (Fed. Cir. 2014). The Board found that “[v]iewed as a whole, JP ’910 does teach the importance of avoiding any misplacement of the conductors in relation to the core;” “[a] person with ordinary skill in the art would have recognized that such alignment of the grooves on core 1 with the fixed positions of the conductors on board 5 cannot be maintained if core 1 twists in relation to board 5” and “[t]herefore, by teaching alignment of the grooves and the conductors at board 5, JP ’910 suggests using board 5 to prevent twisting motion of core 1.” Claim 4 was linked to claim 1 and likewise was rejected.

As to claims 2 and 3, Belden disputed the Board’s finding of a reason to combine a third die with the method of JP ’910. The Board found that “die 71 in [US ’582] and die 31 in JP ’694 each suggests passing the transmission media and the core through a third die that generally centers the core relative to the plurality of transmission media,” and that each patent “teaches the benefit of a third die.” The Board further found that “a person of ordinary skill in the art would have added a third die, as recited in claim 2, in order to align further the cable components.”

The CAFC further added that it was significant that only in the context of those findings about why a skilled artisan would have had reason to add a third die that the Board quoted the Supreme Court’s reference to a “ predictable variation” in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007). The Court stating that: “[t]he Supreme Court’s passage does not establish that it suffices for obviousness that a variation of the prior art would predictably work, but requires consideration of whether, in light of factors such as ‘design incentives and other market forces,’ the hypothetical skilled artisan would recognize the potential benefits and pursue the variation. KSR, 550 U.S. at 417.”

b. The CAFC overruled the Boards upholding of claims 5 and 6

The Board’s first reason to maintain claims 5 and 6 was that JP ’910 shows only conductors that are not individually insulated, so that “one of ordinary skill, tasked to produce the conventional twisted cable of CA ’046, would not have been motivated by the teachings of JP ’910 simply to substitute twisted pairs of insulated conductors for the bare metal conductors in the method of JP ’910.”

To this the CAFC noted that JP ’910 plainly discloses the need to align the conducting wires with the core and how to do so, as the Board recognized in its analysis of claims 1 and 4. The alignment problem and solution do not depend on whether the wires are insulated. The Board’s disregard of the insulation-independent alignment teaching of JP ’910 violates the principle that “[a] reference must be considered for everything it teaches by way of technology and is not limited to the particular invention it is describing and attempting to protect.” EWP Corp. v. Reliance Universal Inc., 755 F.2d 898, 907 (Fed. Cir. 1985) (emphases in original); see In re Applied Materials, Inc., 692 F.3d 1289, 1298 (Fed. Cir. 2012).

The Board next reasoned that “Berk-Tek ha[d] not explained why a person of ordinary skill in the art would have had sufficient reason to use the S-Z stranding step of JP ’910 to manufacture the helically-twisted cable of CA ’046,” stating that “the S-Z stranding step of JP ’910 is inconsistent with production of a helically-twisted cable.” The CAFC held that this reasoning makes the same mistake regarding the Board’s reliance on the lack of insulation of the individual conductors in JP ’910: it disregards the evident independent force of JP ’910’s teaching of the alignment problem and solution.

The Court states: “[t]he Board did not find, and could not reasonably find, that the significance to claims 5 and 6 of JP ’910’s alignment teaching is dependent on the particular method of stranding described in JP ’910, any more than it is dependent on insulation of individual wires. …The claim language concerning the final jacketing step does not require that the jacket be insulating at all. And it is clear from the Belden patent and at least CA ’046 that the jacketing step serves a function not dependent on adding insulation. The evident function is to hold the assembly together to form a cable, and hold its components in place, whether or not the component conductors are insulated.”

Based thereon, the CAFC concludes that the Board erred in determining that Berk-Tek had not proven the obviousness of the methods of claims 5 and 6 of the ’503 patent by a preponderance of the evidence.

C. Berk-Tek’s Declaration was permissible

Belden asserted that Berk-Tek’s filing of the Baxter declaration violated 37 C.F.R. § 42.23(b), which states that “[a] reply may only respond to arguments raised in the corresponding opposition or patent owner response.” To this, the Court noted that each of the points that Mr. Baxter made in his declaration responds to a statement made in Mr. Clark’s declaration.

Belden also asserted that the later filed declaration was relied upon by the Board to make the finding of a prima facie case of obviousness. The Court noted however, that sufficient evidence was submitted in the original petition by Berk-Tek and there was no such reliance by the Board to make the initial finding of prima facie obviousness.

Finally, the Court notes that: “if the petitioner submits a new expert declaration with its Reply, the patent owner can respond in multiple ways. It can cross-examine the expert and move to file observations on the cross-examination. It can move to exclude the declaration. It can dispute the substance of the declaration at oral hearing before the Board. It can move for permission to submit a surreply responding to the declaration’s contents. And it can request that the Board waive or suspend a regulation that the patent owner believes impairs its opportunity to respond to the declaration. The options are not mutually exclusive.”

Based thereon, the Court affirmed the Board’s denial of Belden’s motion to exclude.
Take Away

The CAFC emphasizes that the review of obviousness considerations requires looking to whether a skilled artisan “would have” motivation to modify the prior art to reach the claimed invention. The general rationale of the prior art should be considered to apply to different characterizations which appear in the claim.

The Court supports the ability of the PTAB to allow for the filing of an untimely declaration noting that the rules governing an Inter Partes Review proceeding provide ample opportunity for a party to reply.

Full Opinion

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