by Dennis Crouch
In re PepperBall Tech. (Fed. Cir. 2012) (non-precedential opinion)
In a non-precedential opinion, the Federal Circuit has affirmed a BPAI reexamination determination that PepperBall's patents are invalid as obvious. In reading the opinion, Hal Wegner wrote that the case serves as a "good teaching example of what will often be a futile appeal in future Inter Partes Review proceedings under the 'substantial evidence' standard of review." I agree with Hal that the low substantial evidence threshold required to sustain BPAI factual findings will make those difficult to overturn on appeal. However, as I discuss below, this case fails to be a good teaching example becaues it conflates review of the Board's factual findings with what should be de novo review of the ultimate question of obviousness.
The conclusion of obviousness (or non-obviousness) is a question of law that is reviewed de novo on appeal. However, substantial deference is given to the underlying factual determinations made by the Board. Those factual determinations will be upheld on appeal so long as supported by "substantial evidence." Thus, even if the appellate panel does not agree with the Board's factual finding, it can (and must) uphold the Board's factual finding so long as there is "more than a scintilla" of evidence in support. Although the Federal Circuit correctly recited the doctrine, my reading of the decision is that the court improperly applied the law and instead gave deference to the Board's legal conclusion of obviousness. In the end this may well be harmless error so long as the ultimate conclusion of obviousness is actually correct.
PepperBall Tech's invention relates to paintballs filled with peppery powder. A key feature of some claims was that the paintballs are only partially filled – 60% to 95% full. When stuffed over 95%, the powder clumps up and does not form a nice cloud around the victim's eyes. One prior art reference suggested adding weight to paintballs to optimize flight path. The Board held that the prior art's weight agent "was similar to PepperBall's modifying the fill percentage [and therefore] that it would have been obvious to modify the fill levels in a projectile within the recited range…"
On appeal, the Federal Circuit voiced some reticence with the Board's analysis – writing that "[t]his court in the first instance might not have reached the same conclusion as the Board on the similarity of PepperBall's differing fill levels and [the prior art's] weighting agent" because of the differing purposes explained above. The court went on to state that it, nevertheless, "does find substantial evidence to support the Board's finding of obviousness." That conclusion was based upon the court's own separate factual finding that the claimed range of 60% to 95% was "so broad in this context that a person of ordinary skill in the art likely would have tried fill levels within this range during routine experimentation."
The problem here, is that the Board's finding of obviousness is not supposed to be reviewed for substantial evidence, but instead reconsidered de novo on appeal. In the appeal, factual findings such as the similarity between the invention and the prior art need merely be supported by substantial evidence, but the appellate court must apply the much higher de novo standard when looking at the ultimate question of whether the invention obviousness. In reality, I have little faith in the current structure for determining obviousness. However, we do at least have a defined structure and procedure that the appellate court should follow.