Functional Limitation Not Inherent, but Still Obvious

by Dennis Crouch

In a new decision, the Federal Circuit has ruled that the PTAB erred in its inherency analysis, but ultimately affirmed the claim cancellation after finding the error harmless. Southwire v. Cerro Wire (Fed. Cir. 2017) [Southwire]

Back in 2012, Cerro Wire filed an inter partes reexamination request against Southwire’s U.S. Patent No. 7,557,301.  The slow process apparent here is one reason why this type of reexamination was phased-out and replaced by the more aggressive AIA-Trials.  With reexaminations, the issued patent is sent first to a patent examiner for consideration with any decision then being appealable to the PTAB and eventually to the Federal Circuit.

The prior art is our primary source of evidence as to whether a patent claims a new invention.  The best evidence comes from express teachings in the prior art.  However, the courts also allow for teachings to be derived from the prior art so long as they are “inherent” within the evidence.

Example: Prior art disclosing a automobile wheel might not expressly state that the wheel is made of molecules, but that teaching would be seen as inherent.  Thus, an invention directed toward a “wheel comprising molecules” would be anticipated by the reference. 

Although inherency is sometimes useful, its scope has been limited by the courts only to cases where the proposed inherent element is “necessarily … present” in the prior art. See PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1194–95 (Fed. Cir. 2014).

Here, the patented method is directed toward making electric cable.  Lubricant is added to reduce friction and allow the wires to be more easily pulled into the sheath.  The claims require that the lubricant result in “at least about a 30% reduction” in pulling force. (Note here that the claim is written in Jepson form.)

WirePuller

In its decision, the PTAB (board) used inherency in a particular way – finding first that it would have been obvious to combine the prior art to use the method described;  and then finding that the 30% reduction would have inherently resulted from the combination.  On appeal, the Federal Circuit rejected that analysis – holding that “the Board cited no evidence that a reduction of 30% in the pulling force would necessarily result from the claimed process, which contains no steps that ensure such reduction.”  Rather, as the patentee argued, the 30% reduction serves as a guide for selecting the particular lubricants and arrangements.

We have an error, but as I mentioned, it turns out to be harmless because the Board “made the necessary underlying factual findings to support an obviousness determination.”

In particular, the prior art teaches the “substantially identical” process as that claimed with no claim element differing “in any material way” from the prior art, and the prior art might have produced the claimed “30% reduction” in pulling force.  Keeping that in mind, the court looked back to the CCPA’s 1977 In re Best holding:

Where, as here, the claimed and prior art products are identical or substantially identical, or are produced by identical or substantially identical processes, the PTO can require an applicant to prove that the prior art products do not necessarily or inherently possess the characteristics of his claimed product.

In re Best, 562 F.2d 1252 (C.C.P.A. 1977). In Best, the court noted that inherency would be properly used in this situation for an anticipation decision, but that for obviousness, the PTO can simply find a prima facie obviousness case.

Cancellation affirmed.

39 thoughts on “Functional Limitation Not Inherent, but Still Obvious

  1. OT but too amazingly ingenious to miss: “Allergan said Friday that it transferred all the patents for its billion-dollar eye drug Restasis to the Saint Regis Mohawk Tribe [for $13.75 million], which then granted the drug giant back an exclusive license. Why? Restasis is facing multiple patent challenges, including some under a system known as inter partes review, or IPR. The tribe, Allergan says, holds sovereign immunity against these kinds of legal challenges, and thus is now filing a motion to dismiss the IPR.”
    [But continue to sue on the patent in District Court?]

    1. Bizarre.

      What’s the argument for “sovereign immunity” against an inter partes re-exam of an improvidently granted patent? How is that supposed to work exactly?

        1. … and carrying on the icon comparisons, Malcolm’s giant brain is the same brain as our lovely sarah mcpherson.

          (I will leave it to others to determine just who is insulted with that statement 😉 )

        2. Please Pardon Potential (re)Post….

          … and carrying on the icon comparisons, Malcolm’s giant brain is the same brain as our lovely sarah mcpherson.

          (I will leave it to others to determine just who is insulted with that statement 😉 )

    2. Paul, Indian tribes are going to have land office selling sovereign immunity until the Supreme Court rules in Oil States.

      Perhaps the Cleveland Indians should jump in as well?

      1. I just noticed. The Indians are on a roll. 15 in a row. Wow!

  2. Invention Rights asks a very deep question:

    If blanched peanuts and ruby chocolate combined make a yummy candy bar, why was the inventor the first to combine them?

    Are you asking me why I was the first to teach the combination?

    I can tell you the answer but first I want to confirm that you are asking me.

    And there is no “if”, by the way. These candy bars are scrumptious. Also comes in bite sizes in a hand re-sealable package (patent pending).

  3. Equifax first discovered the vulnerability in late July, though it chose not to publicly announced it until more than a month later. The company was widely criticized for its customer service approach in the aftermath of the hack, as users struggled to understand if their information had been affected. Others expressed frustration that three senior executives sold about $1.7 million in stock in the days following the discovery of the hack. A spokeswoman for Equifax said the men “had no knowledge that an intrusion had occurred at the time.”

    Exhibit #2824 for the corporate death penalty, veil-piercing and lengthy prison terms.

    Oh but wait: “freedom”! Almost forgot.

    1. How would the Chief Financial Officer possibly be made aware than an existential breach had occurred? After all, nobody reports to him, about anything.

      1. “existential….”

        What, me worry? Isn’t all of this just “abstract” anyway?

        😉

        1. Nobody knows what you’re talking about, “anon.”

          But go ahead and try to explain. Connect those dots. You’re probably high enough to try now.

  4. The doctrinal problem with “inherency” in the obviousness context arises when there is strong prima facie case against a broadly recited combination and the only other limitation in the claim is a result or property flowing from that combination that is deemed to be “unexpected.”

    It’s usually the case in that situation that the claim is too broad, i.e., the unexpected result that is recited actually only flows from a much narrower set of structural limitations that should have been recited in the claim but aren’t.

    1. MM, agreed. The claim fails 112(b) to the extent it fails to specify the ingredients necessary to produce the result, the property. Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245, 256 (1928).

      1. You agree…

        …and then turn around and give a COMPLETELY different rational….

        Are you “agreeing” that the Ends justify the Means (seeing as you use such different means) or do you actually disagree, and provide a better argument?

        Why the false harmony?

  5. I forgot to mention this but yesterday a case published (SMARTDOOR HOLDINGS, INC. v. EDMIT INDUSTRIES, INC) where the CAFC seemed to go out of its way to give the PTAB some sugar as inducement for further good behavior:

    The Board did a commendable job in rendering its detailed and thorough opinion. The Board provided detailed findings on the scope and content of Shea and Burke and the reasons one of ordinary skill in the art would have been motivated to combine these references, and carefully and clearly responded to Smartdoor’s contrary arguments, greatly aiding our review on appeal.

  6. I literally giggled at the “key terms” used in this write-up.

  7. Between this and the Millennium Pharma v. Sandoz case, it is clear that courts/the PTAB do not understand “inherency” within the context of obviousness.

    A combination of references, or even a modification to a single reference cannot have an “inherent” property.

    Rather, the question is whether a skilled artisan could have arrived at the claimed invention having the claimed property with a reasonable expectation of success, and without the benefit of hindsight or undue experimentation.

    If the courts keep making decisions where they find inherency in the context of obviousness, I wouldn’t be surprised if we get our first 103 cases before SCOTUS post-KSR.

    Inherency belongs in 102, not 103.

    1. Also, why do I look like the villain from Teenage Mutant Ninja Turtles?

        1. You an anon also have the same self satisfied smirk.

      1. WHY ARE YOU ALL SHADOWLESS MUPPETS?

    2. I think that a factor leading towards this tendency is the lack of rigor applied to the term “prior art.”

      As MaxDrei and I have been discussing, prior art for 102 does NOT mean the same thing as prior art for 103.

      (and also – subtly – poked at Ned, “new” in relation to those differring concepts of “prior art” this becomes different in the different contexts of 102 and 103; with a poke being that the “new” that appears in 101 is not precisely defined to be either of the 102 context or the 103 context, and that some will attempt to use a completely UNDEFINED 101 context as the gateway of judicial overreach.

      1. anon, it all depends of course. If one is claiming a machine and identifies a number of parts, some of which cooperate together and others that having nothing to do with the machine being claimed, just what do you do with these extraneous, irrelevant parts. We, ignore them. That is exactly how the court did it in Rex v. Arkwright.

        So we have the claim to the improved android phone comprising a swipe to unlock feature. We prove commercial success: as soon as we adopted the feature, sales took off. The problem is, the alleged inventor is merely copying the iPhone. Do we give them the patent on the basis of commercial success?

        The only distinction over the prior art is the type of OS. The type of OS is completely irrelevant to the issue of unlocking a phone with a touch screen. It is an extraneous element in the combination that adds nothing.

        1. anon, it all depends of course.

          My comment was not a “it depends” type of question.

          You are either replying with a non sequitur or you do not understand the situation (or both).

    3. the claimed property

      “Properties” are not eligible subject matter.

      Just fyi.

      1. I meant to say “composition having the claimed property”

    4. it is clear that courts/the PTAB do not understand “inherency” within the context of obviousness.

      It’s a moving target because (in part) it’s judge-made doctrine and the issues were never thought about (by the CAFC) too deeply.

      A combination of references, or even a modification to a single reference cannot have an “inherent” property.

      On its face, this proposition is unclear at best. The “inherency” question isn’t concerned with the “references”. The question (at least in the context of compositions) is whether the composition suggested by the references has an inherent property.

      Let’s say references A and B suggest that you can take blanched peanuts and combine them with ruby chocolate and get a delicious candy bar. Later, Innovator tries to claim “A candy bar comprising ruby chocolate and blanched peanuts, wherein said candy bar comprises trophocardomin.” If it turns out that every time you combine ruby chocolate with blanched peanuts you get some tiny amount of this chemical, then that is an inherency problem in the obviousness context.

      Can you possibly get around this with a better claim? Of course.

      1. I was unclear.

        I didn’t mean to say that inherency CANNOT occur within the context of obviousness. Of course, it can.

        I meant to say that doctrinally speaking, inherency should not be the legal test. Inherency is a question of fact that arises within the context of anticipation.

        Obviousness is a matter of law that not only requires that references not only that references COULD be combined to arrive at the claimed invention, but also that a skilled artisan WOULD have combined them.

        W/r/t/ your example about candy bars, even if combining A and B would necessarily result in some chemical, the claim reciting the chemical could still be nonobvious. Why?

        Well, let’s imagine that the chemical was thought to be highly toxic and both references taught removing after creating it. The inventors discovered you could keep the chemical in.

        If you ask, would a skilled artisan modify the reference teaching bleached peanuts in ref A. and combine it with ref. B teaching chocolate and necessarily arrive at the claimed invention, the answer is yes and yes.

        However, if you ask whether a skilled artisan would expect to arrive at the claimed “non-toxic” candy bar having trace amounts of the chemical that had been taught by both references to be toxic, the answer would be no.

        Once you start making judgment calls about what a skilled artisan would have done, it becomes a pretty high hurdle to say, “well no matter what a skilled artisan would have done X, would have necessarily occurred.”

        The only exception I can think of, which some of you are using to prove the rule, is where both the primary and secondary references independently possess an inherent limitation. For Example, if the claim in MM’s example said, wherein the candy bar comprises carbohydrates, then yeah sure, it is “inherent.”

        But even in this case, this should not be the test! Because if something necessarily occurs, then a skilled artisan would more than reasonably expect to obtain it.

        1. As an addendum, another exception would be that the primary reference possesses the inherent limitation and the secondary reference does not contain any teaching that would lead a skilled artisan to modify this limitation, as in Ben’s example below.

        2. W/r/t/ your example about candy bars, even if combining A and B would necessarily result in some chemical, the claim reciting the chemical could still be nonobvious. Why?

          Well, let’s imagine that the chemical was thought to be highly toxic and both references taught removing after creating it. The inventors discovered you could keep the chemical in.

          To be clear, that’s a completely different example from my example.

          The only exception I can think of, which some of you are using to prove the rule, is where both the primary and secondary references independently possess an inherent limitation.

          Right. Except the other “exception” is the example I described, which is a relatively common example.

    5. >>A combination of references, or even a modification to a single reference cannot have an “inherent” property.

      Really? You think the combination of “a six inch diameter steel ball” and “element B” doesn’t inherently have the property of having a mass greater or equal to a six inch steel ball?

      1. What if the reference element B states that the ball is preferably less than 6 inches but can also be 6 inches or more?

    6. This caveat on the doctrine of inherency is very important. As noted in the previous blog post, obviousness is much more than matching up limitations to multiple prior art references. Using inherency to plug the gaps is even more putting the cart before the horse.

      If blanched peanuts and ruby chocolate combined make a yummy candy bar, why was the inventor the first to combine them? The trophocardomin limitation might help explain why, but it also might be a throwaway limitation. Guaranteed there is a battle of the experts as to whether it is necessarily produced. But this is a side show, because trophocardomin or not, the inventor was the first to combine the elements – the question should be if it were obvious why was he first!

      A six inch mercury ball at STP having a density greater than steel could very well be inventive depending on the disclosure, considering it is a liquid. Zeroing in on the density limitation is often a shortcut to avoid actually evaluating the claim as a whole for inventiveness.

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