Tell Me Why: A conclusion of obviousness based on routine optimization must be supported by articulated reasoning

Cindy Chen and John M. Wang | October 16, 2017

In re Stepan Company

August 25, 2017

Before Lourie, Moore, and O’Malley. Opinion by Moore. Dissent by Lourie.

Summary

The Federal Circuit vacated a Patent Trial and Appeal Board panel’s finding of obviousness based on routine optimization, for failing to articulate some rational underpinning as to “why” routine optimization would have made the claimed invention obvious.

Details

The present decision follows the ex parte appeal of U.S. Patent Application No. 12/456, 567 (“567 application”) to the Federal Circuit.

The applicant, Stepan Company, specializes in the production of surfactants for use in a range of products, from detergents, shampoos, and cosmetics to agricultural herbicides and industrial lubricants. One of Stepan Company’s claims to fame is its ties to The Coca-Cola Company. Stepan Company is the only company in the U.S. with authorization from the Drug Enforcement Agency to import coca leaves. Coca leaves are a source of cocaine. The leaves are processed to extract the ingredients for making Coca-Cola’s soft drinks, while the drug is extracted and sold to pharmaceutical companies for medicinal purposes.

The invention claimed in the 567 application is far less trippy. The claims at issue on appeal are directed to a glyphosate salt-containing concentrate for use in herbicides. Claim 1 reads, in part, as follows

 1.  An ultra-high load, aqueous glyphosate salt-containing concentrate comprising:

a.  water;

b.  glyphosate salt in solution in the water in an amount greater than about 39 weight percent of acid equivalent, based on the weight of the concentrate…

c.  a surfactant system in an amount ranging from about 1 to about 20 weight percent, based on the weight of the concentrate, comprising:

i. from about 10 to about 60 weight percent, based on the weight of the surfactant system, of one or more dialkoxylated alkylamines;

ii.  from about 5 to about 30 weight percent, based on the weight of the surfactant system, of one or more water miscible solubilizers; and

iii. from about 30 to about 75 weight percent, based on the weight of the surfactant system, of one or more amino oxides;

said concentrate having a cloud point above at least 70°C or no cloud point when the concentrate is heated to its boiling point.

By way of background, glyphosate is the active ingredient in herbicides, and surfactants are added to facilitate the adherence of glyphosate to plants. Better adherence enhances penetration of glyphosate into the plants.

The herbicidal concentrate is produced by first reacting the acid form of glyphosate with a base to produce the glyphosate salt, and then adding the surfactant to the salt. The reaction to produce the salt is exothermic, and raises the temperature of the reaction mixture. Above a certain temperature, the addition of the surfactant would cause the salt solution to turn cloudy due to reduced solubility, and subsequent agglomeration, of the surfactant. The temperature at which this clouding occurs is the “cloud point”. Once the cloud point is reached, the salt solution must be cooled before the surfactant could be added, thus prolonging the production process. As such, the higher the “cloud point” of a solution, the more continuously the surfactant could be added to the glyphosate salt, and the more efficient the production process becomes.

Against this background, the inventors of the 567 application discovered that their formulation for a glyphosate salt concentrate resulted in a high enough cloud point—at least 70°C, or no cloud points at all (meaning that the concentrate boils as a clear liquid)—to allow continuous production.

During examination, the Examiner rejected claim 1 as being obvious over Pallas et al. (US2003/0087664). The teachings of Pallas are directed to a pesticide/herbicide composition, and contained a broad disclosure corresponding to each category of ingredients recited in claim 1, as well as the relative amounts of the glyphosate salt and the surfactant system. Pallas discloses stable pesticide emulsions and other liquid concentrates of water soluble pesticides such as glyphosate. The highly loaded glyphosate compositions may contain cationic and nonionic surfactants having a cloud point of at least about 50 °C and ideally 60 °C or more. Furthermore, the Examiner found that Pallas teaches preferred surfactants including dialkoxylated alkylamines and amine oxides among other preferred surfactants. Pallas also teaches a surfactant system which may optionally contain glycols such as polypropylene glycol. Furthermore, Pallas discloses over 150 examples, and none of examples in Pallas include all three surfactants recited in claim 1 of the 567 application.

The Examiner admitted that Pallas did not teach the relative amounts of the individual ingredients of the surfactant system, or a cloud point of at least 70°C. Instead, the Examiner took the position that “it is routine optimization to select and adjust the surfactants to this range since Pallas teaches the surfactant component comprises any combination of surfactants…Therefore, optimizing the formulation so as to achieve a cloud point higher than 60 degrees Celsius is suggested by the teachings of Pallas et al.”

Stepan Company appealed. Their main arguments were that (i) Pallas’ broad disclosures would have required the person skilled in the art to select one specific combination out of thousands of possibilities; and (ii) Pallas’ examples of surfactant systems that were closest to the claimed invention contained only two of the three required ingredients, and the examples were all comparative, having failed the cloud point requirement of at least 60°C.

The Patent Trial and Appeal Board nevertheless affirmed the Examiner’s rejection, adopting the Examiner’s positions almost entirely. The Board agreed with the Examiner that mere routine optimization of Pallas’ teachings would have led the person skilled in the art to the formulation claimed in the 567 application, and that Stepan Company had not presented evidence either to the contrary, or of the criticality of the claimed combination.

The Federal Circuit was unimpressed with the Board’s decision, finding that the Board “failed to adequately articulate its reasoning, erroneously rejected relevant evidence of nonobviousness, and improperly shifted to Stepan the burden of proving patentability”.

First, the Federal Circuit found that the Board’s “routine optimization” determination lacked a “rational underpinning”:

Missing from the Board’s analysis is an explanation as to why it would have been routine optimization to arrive at the claimed invention. Similar to cases in which the Board found claimed inventions would have been “intuitive” or “common sense”, the Board must provide some rational underpinning explaining why a person of ordinary skill in the art would have arrived at the claimed invention through routine optimization.

Next, the Federal Circuit faulted the Board for failing to evaluate whether based on Pallas’ teachings, the person skilled in the art could have selected the claimed surfactant system with a reasonable expectation of success:

“[T]o have a reasonable expectation of success, one must be motivated to do more than merely to vary all parameters or try each of numerous possible choices until one possibly arrived at a successful result.”…Reciting Pallas’ teachings that “any combination” of surfactants may be used and that a cloud point above 60°C is desired fails to illuminate why a skilled artisan would have selected the claimed combination of surfactants and reasonably expected a cloud point above at least 70°C.

Finally, having found that the Board failed to establish a prima facie case of obviousness for the above reasons, the Federal Circuit determined that the Board had shifted the burden of proving patentability prematurely to Stepan Company.

Dissent

Dissenting, Judge Lourie would have found that Pallas “almost anticipates” claim 1. Judge Lourie considered the claims of the 567 application to be very broad, and the claimed invention to be obvious over the similarly broad disclosure of Pallas. More particularly, Judge Lourie noted that claim 1 of the 567 application was so broad as to include compositions that may not have a cloud point above at least 70 °C. The claim was not narrowly drawn to, for example, a method of achieving a 70 °C or more cloud point by means of specifically defined materials.

Further, according to Judge Lourie, the limitation of a cloud point above at least 70 °C was not a component of the composition claim. Since “a 70°C cloud point is not a component of this composition claim; it is a result, or a property”, “discovery of a new property or result does not make a claim to what is essentially disclosed by the prior art nonobvious”.

The Federal Circuit’s decision seems to accomplish more in reprimanding the Board than in adding anything significant to the law of nonobviousness.

The Federal Circuit laid out two rationales that the Examiner and the Board could have relied in making the obviousness determination: (i) finding routine optimization, and/or (ii) finding “a motivation to combine the claimed surfactants with a reasonable expectation of successfully achieving a cloud point above at least 70°C”. In choosing the “routine optimization” rationale, neither the Examiner nor the Board applied the existing standard that “where the general conditions of a claim are disclosed in the prior art, it is not inventive to discover the optimum or workable ranges by routine experimentation” (MPEP 2144.05(II)). Instead, the Board used “routine optimization” to gloss over the fact that the cited reference of Pallas nowhere taught the specific combination of surfactants in the specific relative amounts. This seems to have drawn the ire of the Federal Circuit.

On appeal, the PTO attempted to recast the obviousness rejection, with more factual evidence, based on the “motivation to combine with a reasonable expectation of success” rationale. Specifically, on appeal, the PTO argued that substantial evidence supported the finding of routine optimization. For example, according to the PTO, Pallas presented hundreds of examples of tests that could be easily conducted in a short period of time, so as to constitute evidence of routine optimization. However, the Federal Circuit rejected the PTO’s argument as “post hoc rationalization for agency action”, leaving it to the Board to assess the argument on remand.

Takeaway

 When an Examiner bases a finding of obviousness on “routine optimization”, consider whether the prior art has in fact disclosed something that could be optimized, and if not, consider challenging the obviousness rejection for lacking a “rational underpinning”.

During patent prosecution, Applicants should try to argue that the Examiner fails to prove a prima facie case of obviousness before taking on high burden themselves of proving unexpected results or criticality of a claimed range.

Full Opinion

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