In Re: Baker Hughes Inc.

• Decision Date: 14 June 2000
• Citation: 215 F.3d 1297
• Parties: (Fed. Cir. 2000) IN RE BAKER HUGHES INCORPORATED 99-1463 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1297

215 F.3d 1297 (Fed. Cir. 2000)

IN RE BAKER HUGHES INCORPORATED

99-1463

United States Court of Appeals for the Federal Circuit

DECIDED: June 14, 2000

Appealed from: Patent & Trademark Office Board of Patent Appeals & Interferences

Kenneth Solomon, Howell & Haferkamp, L.C., of St. Louis, Missouri, argued for appellant.

Kristin L. Yohannan, Associate Solicitor, Office of the Solicitor, Arlington, Virginia, argued for appellee. With her on the brief were Albin F. Drost, Acting Solicitor; John M. Whealan, Acting Deputy Solicitor; and Kevin G. Baer, Associate Solicitor. Of counsel was Nancy C. Slutter, Acting Deputy Solicitor.

Before MAYER, Chief Circuit Judge, PLAGER, and LOURIE, Circuit Judges.

LOURIE, Circuit Judge.

Baker Hughes Inc. appeals from the decision of the United States Patent and Trademark Office Board of Patent Appeals and Interferences holding, in a merged reexamination proceeding involving U.S. Patent 5,074,991, that claims 1-9, 17-25, 35, and 42-45 are unpatentable under 35 U.S.C. 103 (1994). See Ex parte Petrolite Corp., Paper Nos. 31 and 41 (BPAI Aug. 5, 1997). Because the Board erred in concluding that the appealed claims would have been obvious to one of ordinary skill in the art, we reverse.

BACKGROUND

The patent at issue in this appeal was initially assigned to Petrolite Corporation. Baker Hughes filed a third-party request for reexamination of the patent in 1994, arguing that U.S. Patent 4,368,059 (Doerges et al.) raised a substantial new question concerning the patentability of claims 1- 9. The Patent and Trademark Office ("PTO") agreed and granted the Baker Hughes request. That reexamination was subsequently merged with another reexamination proceeding brought by a different party. Baker Hughes later became the owner of the `991 patent when it acquired Petrolite and thus became the defender of the patent in the reexamination proceeding rather than an attacker.

The invention claimed by the patent involves hydrogen sulfide contamination. Hydrogen sulfide is a toxic gas found naturally in crude oil, derivative products such as petroleum residua and fuel oils, and waste water associated with crude oil production. See `991 patent, col. 1, l. 19 to col. 2, l. 2. Hydrogen sulfide vapors are slowly emitted from these liquids at all stages of production, transport, and storage. If uncontrolled, they pose a serious health problem. See id. The claims at issue are directed to processes and compositions for controlling these emissions. Claims 1-9 are process claims. Independent claim 1, from which claims 2-9 depend, reads in pertinent part as follows:

1. A process of inhibiting the liberation of hydrogen sulfide gas from a material comprising water or a hydrocarbon containing dissolved hydrogen sulfide comprising adding to said material a sufficient amount of the following diaminomethane compound to inhibit hydrogen sulfide gas evolution. . . .

Id. at col. 7, ll. 7-12.

Claims 17-25 and 35 are related composition claims. Independent claim 17, from which claims 18-25 and 35 depend, reads in pertinent part as follows:

17. A composition comprising

a. a material comprising water or a hydrocarbon, and

b. a sufficient amount of the following diaminomethane compound to inhibit hydrogen sulfide gas liberation. . . .

Id. at col. 8, ll. 34-38.

Claims 42-45, which were added during the reexamination proceeding, are also composition claims. Claim 42, from which claims 43-45 depend, reads in pertinent part as follows:

42. A composition comprising:

a. a liquid hydrocarbon material, and

b. a sufficient amount of the following diaminomethane compound to inhibit hydrogen sulfide gas liberation. . . .

Feb. 8, 1995 Response to Office Action at 2-3 (adding claims 42-45).

The two references upon which the Board relied in rejecting the claims at issue were the Doerges reference and U.S. Patent 4,244,703 (Kaspaul). The parties do not dispute what these references teach one of ordinary skill in the art.

The Doerges reference teaches a process for removing hydrogen sulfide and other acid gases from natural gas (a gaseous hydrocarbon) by "scrubbing" the natural gas with an absorbent liquid containing an organic solvent and an organic base such as a diaminomethane. See Doerges, col. 1, ll. 49 to col. 2, l. 28. Specifically, the absorbent liquid is circulated through a vertical column from the top to the bottom. See id. at col. 4, ll. 35-41. The natural gas is then pumped into the bottom of the column. See id. As the natural gas vapors rise to the top of the column, the hydrogen sulfide is absorbed by the absorbent liquid. See id. The natural gas then exits the top of the column with less hydrogen sulfide in it. See id.

The second reference, Kaspaul, teaches adding a diaminomethane compound to hydrocarbon fuels to improve fuel economy. See Kaspaul, col. 2, ll. 50-60. It does not teach inhibiting the liberation of hydrogen sulfide from a hydrocarbon. It does not refer to hydrogen sulfide at all.

The Board held that process claims 1-9 and composition claims 17-25 would have been obvious over the Doerges reference. The Board held that the broadest reasonable interpretation of the term "hydrocarbon" included both gases and liquids in light of references in the written description to both gaseous and liquid hydrocarbons. See Petrolite, slip op. at 15, 21-27. The Board also held that the process of claim 1 would have been obvious over the Doerges reference because the amount of diaminomethane in the absorbent liquid in the column was sufficient to inhibit the evolution of hydrogen sulfide. See id. at 19. With regard to composition claim 17, the Board found that the process disclosed in the Doerges reference resulted in "a mixture containing a hydrocarbon gas, methanol, and a particular amount of the claimed diaminomethane compound . . . [T]he Doerges reference describes the composition recited in claim 17." Id. at 32. The Board held that "the complete description of the claimed composition is the ultimate of obviousness." Id. The Board concluded that dependent claims 2-8 and 18-25 would have been obvious for the same reason.

The Board also concluded that composition claims 17-25, 35, and 42-45 would have been obvious over the Kaspaul reference. The Board construed independent claims 17 and 42 as not requiring the presence of hydrogen sulfide in the compositions. See id. at 37. The Board concluded that the compositions of claims 17 and 42 would have been obvious over the Kaspaul reference because the amount of diaminomethane described in that reference would effectively inhibit the evolution of hydrogen sulfide. See id. at 36-37. The Board concluded that dependent claims 18-25, 35, and 43-45 would have been obvious for the same reason.

Baker Hughes timely appealed to this court. We have jurisdiction pursuant to 28 U.S.C. 1295(a)(4)(A) (1994).

DISCUSSION

We review the Board's legal conclusion of obviousness without formal deference, see 5 U.S.C. 706 (1994), and the Board's findings of fact for substantial evidence because they are "on the record of an agency hearing provided by statute," In re Gartside, 203 F.3d 1305, 1315, 53 USPQ2d 1769, 1775 (Fed. Cir. 2000); see also 5 U.S.C. 706(2)(E) (1994); 35 U.S.C. 7(b), 144 (1994).

Baker Hughes argues that the Board erred in construing the term "hydrocarbon" (found in all of the claims at issue) to include gases, and attempts to distinguish the Doerges reference by arguing that (1) Doerges addresses gaseous hydrocarbons, not liquid hydrocarbons; (2) Doerges teaches how to separate hydrogen sulfide from a hydrocarbon rather than how to inhibit their separation; and (3) in Doerges the diaminomethane and hydrocarbon are not "added" together, they only "contact" each other. Baker Hughes argues that the Board also erred in construing claims 17 and 42 not to require the presence of hydrogen sulfide in the composition, and distinguishes the Kaspaul reference by arguing that it does not involve hydrogen sulfide.

The Director¹ responds that construing the term "hydrocarbon" to include gases provides the broadest reasonable construction of the term and that Doerges therefore essentially describes the subject matter of claims 1-9 and 17-25. The Director also argues that claims 17 and 42 do not require the presence of hydrogen sulfide and that the Kaspaul reference therefore essentially describes the subject matter of claims 17-25, 35, and 42-45. While this analysis suggests anticipation rather than obviousness, the rejections are under section 103. The Director also argues that Baker Hughes is "quasi-estopped" from arguing the validity of claims 1-9 over the Doerges reference because, when it requested reexamination of the `991 patent, it argued that those claims were unpatentable over the Doerges reference.

Section 103(a) of the patent statute provides as follows:

A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.

35 U.S.C. 103(a) (1994). Whether an invention satisfies the section 103 nonobviousness requirement is a question of law with subsidiary factual inquiries. See Graham v. John Deere Co., 383 U.S. 1, 17, 148 USPQ 459, 467 (1966). These inquiries include the scope and content of the prior art, the differences between the prior art and the claims at issue, the level of ordinary skill in the pertinent art, and any objective indicia of nonobviousness. See id. Although the PTO gives claims the broadest reasonable interpretation consistent with the written description, see In re Cortright, 165 F.3d 1353, 1358, 49...