The Federal Circuit reversed a Patent Trial and Appeal Board (PTAB) invalidity decision last week that had found a patent for a molasses-based, road deicing agent obvious over earlier patents on sugar-related inventions.  The Federal Circuit panel of Judges Pauline Newman, Raymond C. Clevenger and Kathleen M. O’Malley concluded that the U.S. Patent and Trademark Office (USPTO) finding of invalidity during reexamination proceedings was faulty because the USPTO had failed to set forth a prima facie case explaining why a person of ordinary skill in the art would have been motivated to combine references from disparate technological fields.  In Re Natural Alternatives, LLC (Fed. Cir. No. 2015-1911, August 31, 2016).

Univar, Inc., a licensee of U.S. Patent No. 6,080,330 owned by Natural Alternatives, LLC., filed three reexamination requests in 2011, seeking review of the licensed patent. The reexamination proceedings were consolidated, and the examiner found the claims drawn to a deicing composition comprising 25-99% desugared sugar beet molasses obvious in light of an earlier Polish patent combined with certain secondary prior art references.  Natural Alternatives appealed the reexamination decision to the PTAB but the board affirmed the examiner’s position, and the patent owner then appealed to the Court of  Appeals for the Federal Circuit.

In a decision handed down on August 31, 2016, the Federal Circuit disagreed with the PTAB’s reasoning.  First, the panel found the PTAB’s reliance on a 1990 Polish Patent No. PL 164018 to Zdzislaw (“Zdzislaw”) was misplaced because it did not teach the use of “desugared” molasses.  The process described in the Polish patent retained approximately 50% of the sugar in the molasses, while the patent at issue described processes for removal of most of the sugar.  Second, the Federal Circuit panel found one of the secondary references to be so far afield of the invention that a skilled artisan would not have motivated to combine it with Zdzislaw.  Finally, the panel found the examiner and the PTAB had improperly ignored the patent owner’s evidence of commercial success.

In particular, the decision criticized the PTAB’s reliance on U.S. Patent No. 5,639,319 to Daly (“Daly”); alone or together with a journal article titled “Winter is Hell,” published July 1997 in Public Works (“Public Works”).  The Daly patent was directed to the use of desugared sugar beet molasses (DSBM) as tire ballast, which served the unrelated purpose of stabilizing and balancing tires.  The Federal Circuit panel agreed with the patent owner that a person having ordinary skill in the art would not have found Daly to be reasonably pertinent to the problem of deicing road surfaces.

The Natural Alternatives decision reiterated that the “analogous arts test” governs the question of whether a skilled artisan would have looked to an unrelated prior art reference. “Under this test, ‘a reference is either in the field of the applicant’s endeavor or is reasonably pertinent to the problem of which the inventor was concerned in order to rely on [that] reference as a basis for rejection.’”

The Federal Circuit panel gave short shrift to the USPTO’s attempt to combine the references under the first prong of this test, i.e., same field of endeavor:

The PTO, in an attempt to salvage the Board’s decision, argues that both Daly and the ’330 patent are in the same general field, namely, the transportation industry. . . .  Daly teaches the use of DSBM as ballast for the purpose of balancing tires. The ’330 patent teaches, in contrast, DSBM as part of a mixture to deice road surfaces.

The decision further found that the USPTO also failed the second prong (reasonable pertinence to the problem at hand).   The panel again noted that Daly taught the use of DSBM in “a wheel having a pneumatic tire filled with liquid molasses as ballast,” and the PTAB ignored the fact that Daly and the ’330 patent were directed to substantially different problems.  The decision further reiterated that it was the burden of the examiner to set forth a prima facie case explaining why a person of ordinary skill in the art would have been motivated to combine references in disparate technological fields.  “To satisfy this burden, the Board must explain why a person of ordinary skill in the art would have found the prior art to be “reasonably pertinent to the problem of which the inventor was concerned.”

Finally, the Natural Alternatives decision found that the patent owner had also made a persuasive showing of nonobviousness based on secondary indicia, including industry praise, commercial success and licensing:

A review of the objective indicia confirms that the Board’s obviousness conclusion is contradicted by unrebutted, real world evidence of nonobviousness.  Natural’s evidence included several letters from various municipalities approving the purchase of GEOMELT® and extolling the advantages of GEOMELT® over traditional rock salt. . . .  The evidence further encompasses no less than fourteen declarations from customers of GEOMELT®, and the declarations of two licensees of GEOMELT®. See J.A. 1115-68. These declarations attest to the many benefits of DSBM in lowering the freezing point of the deicing mixture, reducing corrosiveness, protecting the environment, and reducing overall cost of deicing road surfaces.

The Federal Circuit panel was unpersuaded by the PTAB’s argument that the patent owner had failed to establish a nexus between commercial success and the claimed product:

Here, the PTO does not dispute that GEOMELT® is an embodiment of the claimed invention. Appellee Br. at 36-37. The PTO’s arguments on the lack of a nexus thus rise and fall with its arguments that the claimed invention has no advantages over the prior art. As discussed above, however, the prior art merely taught the use of molasses in general, not DSBM in particular, to deice road surfaces. The PTO does not address the fact that DSBM was previously considered a waste product, but can now be used in a deicing mixture with great efficacy, low environmental impact, and high cost effectiveness. Thus, we reject the Board’s conclusions regarding lack of nexus, and we conclude that the unrebutted objective indicia in the record confirm that the claimed invention would not have been obvious.