Redline Detection, LLC v. Star Envirotech, Inc.

• Decision Date: 31 December 2015
• Docket Number: No. 2015–1047.,2015–1047.
• Citation: 811 F.3d 435
• Parties: REDLINE DETECTION, LLC, Appellant v. STAR ENVIROTECH, INC., Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

811 F.3d 435

REDLINE DETECTION, LLC, Appellant

v.STAR ENVIROTECH, INC., Appellee.

No. 2015–1047.

United States Court of Appeals, Federal Circuit.

Dec. 31, 2015.

Matthew Newboles, Stetina, Brunda, Garred & Brucker, Aliso Viejo, CA, argued for appellant. Also represented by Gregory Clarkson, Lowell Anderson.

Brenton R. Babcock, Knobbe, Martens, Olson & Bear, LLP, Irvine, CA, argued for appellee. Also represented by Jared C. Bunker, Edward A. Schlatter.

Jeremiah Helm, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor. Also represented by Joseph Matal, Jamie Lynne Simpson, Scott Weidenfeller, Thomas W. Krause.

Before LOURIE, WALLACH, and HUGHES, Circuit Judges.

WALLACH, Circuit Judge.

Appellant Redline Detection, LLC ("Redline") appeals the inter partes review ("IPR") decision of the United States Patent and Trademark Office's ("USPTO" or "the Office") Patent Trial and Appeal Board ("the PTAB" or "the Board"), which denied Redline's motion to submit supplemental information under 37 C.F.R. § 42.123(a) (2012) and found Redline failed to show that claims 9 and 10 of U.S. Patent No. 6,526,808 (the "'808 patent") would have been obvious. See Redline Detection, LLC v. Star Envirotech, Inc., IPR2013–00106, 2014 WL 2995050 (P.T.A.B. June 30, 2014) (J.A. 36–75) ("Final Decision"). For the reasons set forth below, we affirm.

BACKGROUND

I. The '808 Patent

Appellee Star Envirotech, Inc. ("STAR") owns the '808 patent, which relates to methods of generating smoke for use in volatile and explosive environments. Specifically, the '808 patent describes methods for generating smoke that "enables the presence and location of leaks in a fluid system (e.g. the evaporative or brake system of a motor vehicle) to be accurately and visually detected depending upon rate of the air flow through the fluid system under test and whether smoke escapes from the system." '808 patent col. 1 ll. 12–16. A partial schematic of the smoke-generating apparatus is depicted below.

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Id. fig.1.

This apparatus "includes a sealed chamber 6 which contains a non-toxic oil supply 8. An air inlet tube 10 projects upwardly from the bottom of chamber 6 and extends above the oil supply 8." Id. col. 3 ll. 25–28. "An inlet orifice 12 is formed in the air inlet tube 10 so as to lie within the oil supply 8 immediately above the bottom of chamber 6. A resistor heating grid (e.g.coil) 14 extends laterally across the sealed chamber 6...." Id. col. 3 ll. 30–34. The "fluid baffle 18" contains "a smoke outlet orifice 20" that "extends laterally across the sealed chamber 6 above the heating grid 14." Id. col. 3 ll. 35–38.

Alternative embodiments allow for the use of nitrogen ("N₂") or carbon dioxide ("CO₂") gas in place of air for testing high-pressure systems (e.g., air brakes) with high operating temperatures without the risk of an explosion. Id. col. 6 ll. 63–67. "A mixture of air [or inert gas] and oil is then blown upwardly and outwardly from the air inlet tube 10 towards and into contact with the heating grid [14], whereby the[ ] oil is instantaneously vaporized into smoke." Id. col. 3 ll. 47–50. The resulting "smoke travels through the outlet orifice 20[ ] in fluid baffle 18 for receipt by the smoke outlet line 2." Id. col. 3 11. 50–52. This smoke is carried by the smoke supply line 4 "to the fluid system to be tested so that the integrity of the system may be visually inspected for leaks depending upon the absence or presence of smoke escaping therefrom." Id. col. 3 ll. 52–56.

II. Prior Art

The prior art discloses various methods to generate smoke—e.g., combusting smoke-producing fluid with a heating element, vaporizing mixtures of oil and CO2 gas, and vaporizing small droplets of oil dispersed in a stream of inert gas. Each of these methods advance smoke generating technology, but these methods are not suitable for leak testing closed systems that have volatile hydrocarbons. The ' 808 patent generates smoke that can be used to test closed and potentially explosive systems for leaks.

A. Gilliam

U.S. Patent No. 5,107,698 ("Gilliam") describes methods and devices for detecting leaks in fluid systems via smoke. J.A. 972–82. Figure 3 of Gilliam is depicted below.

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Gilliam fig.3.

"Smoke-generating assembly 35 includes [air] pump 15, thermistor

8, spike-protecting diode 9, switch 10, and ceramic heating element 11. A smoke-producing fluid is poured into chamber 20 through filler port 6." Id. col. 6 ll. 20–23. Smoke is circulated throughout the system by air pump 15. If heating element 11 becomes "submerged, vaporization is prevented and the fluid is merely heated and eventually reaches it boihng point." Id. col. 6 ll. 38–41. When the heating element 11 becomes sufficiently hot, the smoke-producing fluid vaporizes within chamber 40. The generated smoke then passes through "conduit 22 into the vacuum system connected thereto for leak testing purposes." Id. col 8 ll. 11–13. Thus, the "[s]moke generating fluid should preferably be non-flammable and non-toxic." Id. col. 5 ll. 67–68.

Because temperature control of the heating element is important to this prior art, Gilliam discloses several preferred embodiments for controlling temperature. See, e.g., id. col. 7 ll. 1–4, 14–18, 26–28. Additionally, the "spark-arrestor 3 prevents sparks or even flames from entering a vehicle's engine, thereby causing an explosion. Flames could be generated ... if a flammable fluid mixture was inadvertently created in chamber 20." Id. col. 7 ll. 55–59.

B. Stoyle

Great Britain Patent No. 1,240,867 ("Stoyle") (J.A. 1004–08) describes an apparatus for "heating [ ] oil or other mixtures of oil and [CO₂

], oil and water, or oil, [CO₂ ] and water to produce smoke or mist ... for testing ventilation systems or for theatrical effects." Stoyle p. 1 ll. 11–17. Figure 3 of Stoyle is depicted below.

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Id. fig.3.

"The fluid inlet means 14 are connected to a generator capable of producing a foam of oil and [CO2] gas. The oil/gas mixture is forced into the space 7 and, passing through the gaps between the knurlings, eventually reaches the outlet means 10, where it emerges in the form of a mist or smoke." Id. p. 2 ll. 101–08. This allows for "a relatively large contact area for heating the oil/gas mixture[,] ... [making] the heating very uniform and easy to control." Id. p. 2 ll. 109–11, 118–19. Additionally, this apparatus permits the "production of oil smokes and mists with a relatively lower proportion of gas in the mixture by comparison with other types of heater[s]." Id. p. 3 ll. 15–18.

C. Pauley

Great Britain Patent No. 640,266 ("Pauley") (J.A. 1010–15) describes an apparatus for generating an opaque fog, for use in theatrical work, that is "sufficiently heavy in weight by comparison with the surrounding air," Pauley p. 2 ll. 20–22, such that the fog can " ‘lay’ conveniently without quickly melting or drifting away," id. p. 2 ll. 51–52. Figure 1 of Pauley is depicted below.

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Id. fig.1.

"[G]lycerine, oil or other suitable liquid is sprayed in atomised form by means of a jet of [CO2

or N2 gas] under pressure on to a surface sufficiently heated as to cause an immediate vaporisation of the liquid." Id. p. 1 ll. 26–31. This "vapour ... [is] propelled along ... [and] cooled again by the expanding gas." Id. p. 1 ll. 31–34. The cooled liquid condenses to form a heavy fog or mist. Id. p. 2 11. 37–38. Using inert gas to propel and cool the vaporized liquid is advantageous "because its presence greatly reduces any tendency to ignition of the vapour should the liquid medium be one of an inflammable nature." Id. p. 2 ll. 42–47.

D. 1999 Website

Applications for the Smoke Generator, published on the Internet in 1999, disclose potential uses of smoke generators sold by third party, Corona Integrated Technologies, Inc. J.A. 1038–41 ("the 1999 Website"). The 1999 Website discloses that smoke generators produce a non-hazardous, thermal fog, which could be used for leak testing. J.A. 1039–40. In particular, the 1999 Website explains that "[o]ur smoke machines have been used to detect leaks in a broad range of systems, including asbestos enclosures, flues and chimneys, luggage holds of aircraft and ships, freight containers, vehicles and drainage and fire sprinkler systems." J.A. 1039.

III. Proceedings

In January 2013, Redline filed a corrected IPR Petition with the PTAB, requesting review of claims 9 and 10 of the '808 patent.¹ This IPR was instituted on July 1, 2013. On July 30, 2013, Redline filed a Motion for Supplemental Disclosure of New Exhibits, requesting submission of four pieces of evidence. In August 2013, the PTAB denied Redline's request to submit supplemental information and expunged the submitted evidence from the record. The PTAB subsequently issued its Final Decision on June 30, 2014, finding Redline failed to prove by a preponderance of the evidence that claims 9 and 10 of the '808 patent would have been: (1) obvious over Gilliam and Stoyle; and (2) obvious over Gilliam, Pauley, and the 1999 Website. Redline timely appealed. Pursuant to 35 U.S.C. § 143 (2012), the Director of the USPTO intervened in March 2015. This court has jurisdiction to review the PTAB's Final Decision under 28 U.S.C. § 1295(a)(4)(A) (2012) and 35 U.S.C. § 141(c) (2012).

DISCUSSION

I. USPTO's Interpretation of its Regulations Accords With Law

On appeal, Redline argues the PTAB erred in denying its motion to submit supplemental information for three reasons. First, Redline argues the regulatory history of 37 C.F.R. § 42.123 demonstrates the USPTO has already incorporated its statutory mandate into the three tier scheme of subsections (a) through (c) of that regulation and, thus, the PTAB cannot "mix and match" these requirements at its discretion. Second, Redline argues the plain language of § 42.123(a) precludes the imposition of any additional criteria beyond the plain language of the regulation. Finally, Redline argues the PTAB's decision was arbitrary and capricious because Petitioners in other IPR...