Kennametal, Inc. v. Ingersoll Cutting Tool Co., 2014–1350.

Citation114 U.S.P.Q.2d 1250,780 F.3d 1376
Decision Date25 March 2015
Docket NumberNo. 2014–1350.,2014–1350.
PartiesKENNAMETAL, INC., Appellant v. INGERSOLL CUTTING TOOL COMPANY, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Steven Moore, Kilpatrick Townsend & Stockton LLP, San Francisco, CA, argued for appellant. Also represented by J. Jason Link, N. Dean Powell, Winston–Salem, NC.

Nanda Alapati, Womble, Carlyle, Sandridge & Rice, PLLC, Tysons Corner, VA, argued for appellee. Also represented by David Ryan Crowe, Greensboro, NC; Ian A. Calvert, Winston–Salem, NC.

Before PROST, Chief Judge, NEWMAN, and LINN, Circuit Judges.

Opinion

LINN, Circuit Judge.

Kennametal, Inc. (Kennametal) appeals the decision of the Patent Trial and Appeal Board (the “Board”) in an inter partes reexamination of U.S. Patent No. 7,244,519 (the “'519 patent”) in which the Board: (a) entered a new anticipation ground of rejection asserted by Ingersoll Cutting Tool Co. (Ingersoll) against certain of the pending claims; and (b) affirmed the Examiner's obviousness rejection of certain remaining claims. See Ingersoll Cutting Tool Co. v. TDY Indus., Reexamination Ctrl. No. 95/001,417, available at 2013 WL 6039030 (P.T.A.B. Nov. 12, 2013) (Board Decision on Rehearing); Ingersoll, available at 2013 WL 3294868 (P.T.A.B. May 6, 2013) (Initial Board Decision). Because substantial evidence supports the Board's determinations of anticipation and obviousness and because we see no error in the Board's legal conclusion of obviousness, we affirm.

I. Background
A. The '519 Patent

The '519 patent was filed in 2004 and issued in 2007. The '519 patent relates to cutting tools containing ruthenium as a binder that are coated using physical vapor deposition (“PVD”). See, e.g., '519 patent Title; id. Abstract. The patent explains that cemented carbide cutting tools are generally useful. Id. col. 1 ll. 15–19. These tools are made by consolidating hard particles and a binder to form a compact, which is then sintered to form a tool blank from which a variety of tools can be formed. Id. col. 1 ll. 19–26. Cobalt is often used in the binder. Id. col. 1 ll. 48–50.

According to the '519 patent, it was unusual to include ruthenium with cobalt in the binder, and, in those instances when a cobalt-ruthenium binder was used, no one had coated the tools using PVD. Id. col. 1 ll. 54–56, col. 2 ll. 58–61. The patent suggests that the reason cobalt-ruthenium binders were not coated by PVD was because the use of cobalt in a binder tends to create cobalt structures on the surface—a process known as “cobalt capping.” Id. col. 3 ll. 6–10; id. col. 3 ll. 38–40. This problem is supposedly exacerbated when ruthenium is included in the binder. Id. col. 3 ll. 13–15. According to the patent, PVD coating—which is done at a lower temperature than other methods of coating, such as chemical vapor deposition—is not hot enough to re-melt the surface of the binder, so coatings applied via PVD do not adhere well to binders that produce cobalt capping.Id. col. 3 ll. 33–36. Additionally, PVD coatings, as the patent describes, can be too thin to compensate for the cobalt capping effect. Id. col. 3 ll. 36–37.

The inventors assigned their interests in the invention claimed in the '519 patent to TDY Industries, Inc. (“TDY”) at the time the application for the patent was filed. '519 patent Assignee. In 2010, TDY sued Ingersoll for infringement of the '519 patent. TDY Indus. Inc. v. Ingersoll Cutting Tool Co., No. 2:10–cv–00790–CB (W.D.Pa., filed June 10, 2010). After the suit was filed, TDY assigned the '519 patent to Kennametal. Ingersoll successfully petitioned the Patent and Trademark Office (the Patent Office) for inter partes reexamination of the '519 patent, and the district court, in turn, stayed the litigation.

B. Proceedings at the Patent Office

Ingersoll submitted a request for inter partes reexamination, claiming that some of the original claims were anticipated under 35 U.S.C. § 102(b) and all of the claims were obvious under § 103(a). The Examiner did not adopt any of Ingersoll's proposed anticipation rejections but did reject all of the pending claims as obvious. In response, the patentee amended the existing claims and filed numerous new claims. Pending claim 1 is representative, and recites as amended:

1. A cutting tool, comprising:
a cemented carbide substrate, wherein the substrate comprises hard particles and a binder, and the binder comprises ruthenium; and
at least one physical vapor deposition coating on at least a portion of the substrate.

Ingersoll again proposed both anticipation and obviousness rejections. The Examiner refused to adopt the anticipation rejections but did reject all of the claims as obvious. Kennametal appealed the rejections, and Ingersoll cross-appealed the Examiner's refusal to adopt its proposed anticipation rejections.

In the Initial Board Decision, the Board found that the Examiner erred in not adopting Ingersoll's proposed rejection of pending claims 1–4, 9–18, 23, 24, 27–31, 35, 36, 45, 46, 49, 50, 58, 83, 85 and 89 as anticipated by U.S. Patent No. 6,554,548 to Grab (“Grab”). Initial Board Decision, at *3–5.

The Board found that claim 5 of Grab expressly described the majority of the elements recited in pending claim 1 of the '519 patent. Id. at *3–5. Claim 5 of Grab and its parent, claim 1, recite:

1. A coated cutting insert comprising:
a rake face and a flank face, a cutting edge at the juncture of the rake face and the flank face;
the cutting insert having a hard refractory coating and a substrate wherein the coating is adherently bonded to the substrate;
the substrate comprising a tungsten carbide-based material comprising a bulk composition of at least about 70 weight percent tungsten and carbon, between about 3 weight percent and about 12 weight percent cobalt, and at least 0.09 weight percent chromium;
the cobalt and the chromium forming a binder alloy:
wherein the binder alloy content being enriched in a surface zone of binder alloy enrichment beginning near and extending inwardly from a peripheral surface of the substrate; and
wherein the bulk composition of the substrate further comprises tantalum in an amount up to about 10 weight percent, niobium in an amount up to about 6 weight percent, and titanium in an amount up to about 10 weight percent.
5. The coated cutting insert of claim 1 wherein the binder alloy further includes one or more of tungsten, iron, nickel, ruthenium, and rhenium.

The Board noted that claim 5 of Grab specifically recites five metals, one of which was ruthenium. Initial Board Decision, at *4. Claim 5 also recites a “coating,” but, the Board acknowledged, does not state that the coating is applied via PVD. Id. The Board noted, however, that the specification of Grab discloses PVD as one of three contemplated methods of coating. Id. Specifically, Grab states:

Generally speaking, one or more of the coating layers of the coating schemes are applied by chemical vapor deposition (CVD) and moderate temperature chemical vapor deposition (MTCVD).
However, applicants also contemplate that one or more layers of a coating scheme may be applied by physical vapor deposition (PVD).

Grab col. 4 ll. 56–61. The Board also found that claim 5's recitation of a “coating” was “a specific hook back into the Grab disclosure for the further description of how that coating is applied.” Initial Board Decision, at *5. The Board found that the description of coating by PVD was not negated by the fact that CVD and MTCVD were “characterized by Grab as preferred.” Id. at *4. The combination of one of five metals with one of three coatings leads to only fifteen possibilities, which, according to the Board, was a sufficiently definite and limited class so that each member of the class was anticipated by Grab. Id. at *4–5. The Board stated that Ingersoll provided evidence that claims 2–4, 9–18, 23, 24, 27–31, 35, 36, 45, 46, 49, 50, 58, 83, 85 and 89 were also anticipated, and neither the Examiner nor the Patent Owner distinguished these claims from claim 1. Therefore, the Board ruled that these claims were also anticipated by Grab. Id. at *5.

Because the Board found these claims anticipated, it refused to consider whether these claims were also obvious. Id. at *7. The Board separately found claims “5–8, 19–22, 23, 24, 25, 26, 56, 57, 59, 86, and 901 obvious over Grab in view of additionally cited prior art. Id.

Regarding obviousness, the Board affirmed the Examiner's rejections of: claims 33, 34, 37–44, 47, 48 and 84 as obvious over U.S. Patent No. 6,214,247 to Leverenz (“Leverenz”); claims 24, 25, 26, 49–52, 56, 57, 59, 86–90 and 93 as obvious over Leverenz in view of other prior art; and claims 2–14, 16–23, 27, 31, 33–48, 58, 84 and 85, [w]ith respect to the dependent claims not already addressed,”2 as obvious over Leverenz in view of T.L. Shing, et al., The effect of ruthenium additions on the hardness, toughness and grain size of WC–Co, 19 Int'l J. Refractory Metals & Hard Materials 41 (2001). The Board rejected Kennametal's assertion that these claims provided unexpected results because it found that the unexpected results lacked a nexus to the limitations recited in the claims. Id. at *7–8.

The Board denied Kennametal's request for a rehearing, finding that although Grab appeared not to have applied coatings by PVD, it still anticipated this usage. Board Decision on Rehearing, at *3. It also found that Grab's teachings, especially in view of the art at the time, would have avoided a cobalt capping problem and were therefore enabling. Id. at *4.

II. Discussion

Kennametal appeals all the Board's rejections. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4).

A. Standard of Review

Anticipation under 35 U.S.C. § 102 is a question of fact, while obviousness under § 103 is a question of law based on underlying findings of fact. Flo Healthcare Solutions, LLC v. Kappos, 697 F.3d 1367, 1375 (Fed.Cir.2012) (citing cases). We review the Board's factual findings for substantial evidence and its legal conclusions...

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