Rovalma, S.A. v. Bohler-Edelstahl GMBH & Co. KG

• Decision Date: 11 May 2017
• Docket Number: 2016-2233
• Citation: 856 F.3d 1019
• Parties: ROVALMA, S.A., Appellant v. BOHLER–EDELSTAHL GMBH & CO. KG, Appellee
• Court: U.S. Court of Appeals — Federal Circuit

856 F.3d 1019

ROVALMA, S.A., Appellant

v.BOHLER–EDELSTAHL GMBH & CO. KG, Appellee

2016-2233

United States Court of Appeals, Federal Circuit.

Decided: May 11, 2017

Marc Wade Vander Tuig , Senniger Powers LLP, St. Louis, MO, argued for appellant. Also represented by Robert M. Evans, Jr., John R. Schroeder .

Maxwell James Petersen , Lewis Brisbois Bisgaard & Smith, LLP, Chicago, IL, argued for appellee. Also represented by Thomas A. Dougherty , Denver, CO.

Before Wallach, Taranto, and Stoll, Circuit Judges.

Taranto, Circuit Judge.

Rovalma, S.A. owns U.S. Patent No. 8,557,056, which describes and claims methods for making steels with certain desired thermal conductivities. In October 2014, Böhler-Edelstahl GmbH & Co. KG (Böhler) petitioned the Patent Trial and Appeal Board for an inter partes review of claims 1–4 of the '056 patent. The Board instituted a review based on Böhler's construction of the claims at issue. In its final written decision, however, the Board rejected Böhler's construction and adopted Rovalma's construction instead. Böhler had not submitted arguments or evidence for unpatentability based on Rovalma's construction. Nevertheless, the Board determined that Rovalma's own submissions demonstrated that the claims, construed as Rovalma urged, would have been obvious to a relevant skilled artisan over the same prior art that Böhler invoked.

Rovalma appeals. It argues both that substantial evidence does not support the Board's determination and that the Board committed prejudicial procedural errors in relying on Rovalma's own submissions when determining that the claims would have been obvious under Rovalma's construction. We conclude that the Board did not set forth its reasoning in sufficient detail for us to determine what inferences it drew from Rovalma's submissions. We therefore cannot determine whether the Board's decision was substantively supported and procedurally proper. We vacate the Board's decision and remand for further proceedings.

I

The '056 patent addresses hot-work steels. It is undisputed that hot-work steels are used at high temperatures and that the ability to conduct and thereby remove heat—thermal conductivity—is important for such steels. According to the patent, hot-work steels disclosed in the prior art had thermal conductivities of approximately 16–37 W/mK (Watts per meter-Kelvin), which were inadequate for certain applications. '056 patent, col. 1, lines 50–52; col. 4, lines 11–14. The patent claims processes for "setting" the thermal conductivity of a hot-work steel at room temperature to more than 42 W/mK (higher in the dependent claims). Id. , col. 21, line 59 through col. 22, line 64. The '056 patent discloses an allegedly inventive process that, to achieve such higher thermal conductivities, focuses on carbides (metal-carbon compounds) in the steel's matrix, or lattice, structure. Id. , col. 4, lines 35–63.

The summary of the invention states that "an internal structure of the steel is metallurgically created in a defined manner such that the carbidic constituents thereof have a defined electron and phonon density and/or the crystal structure thereof has a mean free length of the path for the phonon and electron flow that is determined by specifically created lattice defects." Id. , col. 4, lines 37–43. Alternatively, the internal structure may have "in its carbidic constituents an increased electron and phonon density and/or which has as a result of a low defect con-tent in the crystal structure of the carbides and of the metallic matrix surrounding them an increased mean free length of the path for the phonon and electron flow." Id. , col. 4, lines 54–58.

The patent includes four claims. Claim 1 recites:

1. A process for setting a thermal conductivity of a hot-work steel, which comprises the steps of:

providing a hot-work steel, including carbidic constituents and, by weight, 2–10% Mo+W+V [molybdenum + tungsten + vanadium];

metallurgically creating an internal structure of the steel in a defined manner such that carbidic constituents thereof have at least one of a defined electron and phonon density and a crystal structure thereof having a mean free length of a path for a phonon and electron flow being determined by specifically created lattice defects;

selecting:

a) a surface fraction and thermal conductivity of the carbidic constituents and a particular surface fraction and thermal conductivity of a matrix material containing the carbidic constituents; or

b) a volume fraction and thermal conductivity of the carbidic constituents and thermal conductivity of the matrix material containing the carbidic constituents; and

setting the thermal conductivity of the steel at room temperature to more than 42 W/mK.

Id. , col. 21, line 59 through col. 22, line 14.

Claims 2 and 3, which depend on claim 1, require setting the thermal conductivities of the steel to more than 48 and 55 W/mK respectively. '056 patent, col. 22, lines 15–20. Claim 4, an independent claim, is similar to claim 1, but contains some different language in the "creating" step, including a reference to a "metallic matrix" surrounding the carbides. Id. , col. 22, lines 21–64.

In October 2014, Böhler petitioned for inter partes review of all four claims of the '056 patent under 35 U.S.C. §§ 311 –312. In its Petition, Böhler argued that the claims should be construed to cover the specific chemical compositions described in the specification, whether or not created according to the process steps—"providing," "creating," "selecting," and "setting"—recited in the claims. See Petition for Inter Partes Review 4–20, Böhler-Edelstahl GmbH & Co. KG v. Rovalma, S.A. , No. IPR2015-00150 (P.T.A.B. Oct. 24, 2014), Paper No. 1 (Petition). Böhler argued that the claims, so construed, would have been obvious over various prior-art references that disclosed those compositions, including European Patent No. EP 0,787,813 (EP '813). Petition 20–59. Böhler did not address whether the asserted prior-art references disclosed the "providing," "creating," "selecting," and "setting" steps of the '056 patent's claims. See id. Nor did Böhler address whether those steps would have been obvious to one of ordinary skill in the art. See id.

In April 2015, the Board, acting as the delegate of the Patent and Trademark Office's Director, 37 C.F.R. § 42.4(a), instituted a review of the challenged claims under 35 U.S.C. § 314. See Institution Decision, Böhler-Edelstahl GmbH & Co. KG v. Rovalma, S.A. , No. IPR2015-00150, 2015 WL 1871000 (P.T.A.B. Apr. 22, 2015). In its decision to institute, the Board adopted Böhler's proposed claim construction. Id. at *3–8. Applying that construction, the Board concluded that Böhler had established a reasonable likelihood of prevailing on its assertion that the challenged claims would have been obvious over the asserted prior-art references. Id. at *8–9.

After the review was instituted, Rovalma, in its Patent Owner's Response, argued against the claim construction that the Board had relied on in instituting the review. Patent Owner Response 19–51, B öhler-Edelstahl , No. IPR2015-00150 (P.T.A.B. Aug. 14, 2015), Paper No. 25. Rovalma argued that the claims should be construed to require performance of the processes recited in the claims, not simply to cover the compositions described in the specification. As background for its proposed claim construction—according to Rovalma's statement at oral argument in this court, to counteract an enablement-based objection to its proposed construction—Rovalma submitted additional evidence and argument regarding thermoprocessing.

Rovalma argued that a person of ordinary skill in the art at the time of the invention, given the specification, would have been able to predict the formation of certain carbides based on particular heat treatments. Id. at 4. Rovalma also argued that a person of ordinary skill would have been able to use software tools, such as Thermo-Calc, to carry out the needed calculations. Id. at 4–5. In addition, Rovalma argued, based on H. Bayati & R. Elliott, Influence of Matrix Structure on Physical Properties of an Alloyed Ductile Cast Iron , 15 Materials Sci. & Tech. 265 (1999), that the thermal conductivity of a steel depends on lattice defects and impurities. Patent Owner Response 7. The passage of Bayati and Elliott cited by Rovalma states that matrix structure and thermal processing also affect thermal conductivity. See, e.g. , Bayati & Elliot, supra , at 265 ("Matrix structure is shown to play a significant role in determining the thermal conductivity of the ductile iron."); id. ("Heat transport also depends on lattice defects, microstructure, impurities, and the processing of the metal or alloy.").

In its Petitioner's Reply, Böhler repeated its contention that the claims should be construed to cover chemical compositions, not processes. Petitioner's Reply 5–21, Böhler-Edelstahl , No. IPR2015-00150 (P.T.A.B. Nov. 11, 2015), Paper No. 30. It did not argue, in the alternative, that the claims would have been obvious under Rovalma's proposed claim construction. Nor did it address Rovalma's thermoprocessing submissions, except to argue that Rovalma's extrinsic evidence was irrelevant to the proper construction of the claims. See id. at 7–8.

At the oral argument, the Board extensively questioned Rovalma's counsel about the effect of its thermoprocessing submissions on the patentability of the claims under the claim construction urged by Rovalma. See Record of Oral Hearing 53–87, 94–95, Böhler-Edelstahl , No. IPR2015–00150 (P.T.A.B. Mar. 30, 2016), Paper No. 41. In particular, the Board asked Rovalma to discuss the notion that it would have been obvious to create steel with the claimed thermal conductivities in light of the prior-art references advanced by Böhler because: (a) those references disclosed the chemical compositions described in the '056 patent specification; and (b) Rovalma's submissions showed that a person of ordinary skill in the art would have known how to...