Last week, the U.S. Court of Appeals for the Federal Circuit issued an order in Chemours Company FC, LLC v. Daikin Industries, Ltd., Nos. 20-1289, -1290 (July 22, 2021), reversing the Board’s obviousness determination.
Chemours owns U.S. Patent Nos. 7,122,609 and 8,076,431. The ’609 and ’431 patents relate to insulating communication cables by pulling wires through melted polymer. The claims recite a specific melt flow rate range of the polymer as “about 30±3 g/10 min.”
Daikin filed two IPR petitions challenging certain claims in the ’609 and ’431 patents. The Board found all challenged claims unpatentable as obvious in view of a patent to Kaulbach. Kaulbach discloses a melt flow rate of 15 g/10 min or greater, with a preferred embodiment of 24 g/10 min. According to the Board, a POSA would have been motivated to increase the preferred melt flow rate in Kaulbach to be within the claimed range. The Board also analyzed objective indicia of nonobviousness and found no nexus between the claimed invention and the alleged commercial success. Lastly, the Board determined that Chemour’s evidence of commercial success was weak. Chemours appealed.
On appeal, the Federal Circuit reversed the Board’s determination. The Court explained that the Board ignored “the express disclosure in Kaulbach that teaches away from the claimed invention.” In particular, the Court concluded that the Board did not provide adequate reasoning why a POSA would have found it obvious to increase Kaulbach’s melt flow rate to the claimed range, particularly in view of Kaulbach’s caution against increasing melt flow rate. Reviewing the Board’s analysis of objective indicia of nonobviousness, the Court held the Board improperly analyzed commercial success by considering nexus to the claimed invention on a limitation-by-limitation basis and concluding that the prior art disclosed all features of the claims. The Court explained, “the separate disclosure of individual limitations, where the invention is a unique combination of three interdependent properties, does not negate a nexus.” The Court further held that the Board erred in concluding that gross sales figures alone, absent market share data, are insufficient to establish commercial success. Finally, the Court determined that the Board misapplied the “blocking patents” doctrine. Specifically, the Board characterized the challenged patents themselves as blocking patents in its analysis of commercial success. As the Court explained, “the challenged patent, which covers the claimed invention at issue, cannot act as a blocking patent.”