Federal Circuit: PTO Can’t Shift Burden of Proof of Patentability to Applicant
September 21 2017
In In re Stepan Co., 2017 U.S. App. LEXIS 16246, decided August 25, 2017 the Federal Circuit Court of Appeals made it very clear that during patent prosecution, the burden of proving patent ability lies with the PTO examiner.
The patent applicant was Stepan Co., who filed a patent application for formulas of an herbicide. The herbicide was a composition of a glyphosate salt and a surfactant system. The claims required the formula to have a cloud point above 70ºC or no cloud point. The cloud point is the temperature at which a liquid turns cloudy because its components are separating. The herbicide formulas had to have a cloud point above 70ºC to prevent the surfactants from separating.
The PTO examiner rejected all of Stephan Co.’s claims on the grounds that they were obvious over the prior art. The prior art did not have the same cloud point or the same components, but the examiner stated that the claims were obvious because a person skilled in the art would have achieved the claimed parameters by “routine optimization” of the formula. The examiner also found that, based on general statements in the prior art references, the skilled artisan would have been motivated to create the claimed formula.
On appeal to the Patent Trial and Appeal Board, the PTAB affirmed the examiner’s conclusion that all of Stepan Co.’s claims were obvious. The PTAB held that Stepan Co. had not rebutted the prima facie case of obviousness established by the examiner. The PTAB said that Stepan Co. had not produced evidence that a skilled artisan would not have achieved a cloud point above 70ºC by routine optimization. The PTAB did not consider Stepan Co.’s evidence that the prior art references disclosed compositions that had a cloud point of 60ºC (and therefore taught away from compositions that could be used at a higher temperature). In addition, the PTAB found that Stepan Co. did not show that a cloud point above 70ºC was critical to the compositions or that it yielded unexpected results.
On appeal, the Federal Circuit vacated the PTAB’s decision. The court explained that in order to make a finding of obviousness, the PTO must show “that a skilled artisan would have been motivated to combine the teachings of the prior art … and that the skilled artisan would have had a reasonable expectation of success.” These are questions of fact reviewed by the appellate court for substantial evidence.
The Federal Circuit found that the PTAB had made several errors: it did not articulate its reasoning for its finding of obviousness; it rejected Stephan Co.’s evidence of non-obviousness; and it shifted the burden of proof of patentability to the applicant.
First, the Federal Circuit held that PTAB had to explain why “routine optimization” would have produced the claimed composition. The PTAB’s conclusion was not sufficient. According to the court:
“Stating that a person of ordinary skill in the art would have arrived at the claimed invention through routine optimization falls short of the standard. Missing from the Board’s analysis is an explanation as to why it would have been routine optimization to arrive at the claimed invention. . . . [T]he Board must provide some rational underpinning explaining why a person of ordinary person in the art would have arrived at the claimed invention through routine optimization.”
Second, the PTAB did not set forth why the skilled artisan would have had a reasonable expectation of success in modifying the prior art. The PTO has to show that a skilled artisan “must be motivated to do more than merely vary to all parameters or try each of numerous possible choices until one possibly arrived at a successful result.”
Third, the PTAB ignored Stepan Co.’s evidence that the prior art disclosed failures that were relevant. These failures showed why a skilled artisan would not have had a reasonable expectation of success in modifying the prior art references.
Fourth, the PTAB shifted the burden of patentability to Stepan Co. “The PTO bears the burden of establishing a prima facie case of obviousness…. ‘Only if this burden is met does the burden of coming forward with rebuttal argument or evidence shift to the applicant.’” The Board improperly required Stepan Co. to demonstrate why the cloud point was a critical element of the claimed composition.
Because of the PTAB’s errors, the Federal Circuit vacated the decision and remanded the case for further proceedings.