NOTE: This disposition is nonprecedential.

 

United States Court of Appeals 

for the Federal Circuit ______________________ 

LIQUIDPOWER SPECIALTY PRODUCTS INC., FKA

LUBRIZOL SPECIALTY PRODUCTS, INC.,

Appellant

v.

BAKER HUGHES, A GE COMPANY, LLC, FKA 

BAKER HUGHES INCORPORATED,

Appellee

______________________ 

2018-1141

______________________ 

Appeal from the United States Patent and Trademark 

Office, Patent Trial and Appeal Board in No. IPR2016-

00734.

______________________ 

Decided: October 18, 2018

______________________ 

EDWARD R. REINES, Weil, Gotshal & Manges LLP, 

Redwood Shores, CA, argued for appellant. Also represented by DOUGLAS WAYNE MCCLELLAN, Houston, TX; 

ELIZABETH WEISWASSER, New York, NY. 

 HERBERT D. HART, III, McAndrews, Held & Malloy, 

Ltd., Chicago, IL, argued for appellee. Also represented 

by AARON BARKOFF, PETER LISH, GEORGE WHEELER. 
2 LIQUIDPOWER SPECIALTY PRODUCTS v. BAKER HUGHES

 ______________________ 

Before PROST, Chief Judge, MOORE and HUGHES, Circuit 

Judges.

MOORE, Circuit Judge. 

LiquidPower Specialty Products Inc. (“LSPI”) appeals 

the final written decision on inter partes review of the 

Patent Trial and Appeal Board holding claims 8–10 of 

U.S. Patent No. 8,022,118 unpatentable for obviousness

over U.S. Patent No. 6,015,779 (“Eaton”), a publication 

titled “The Chemistry of Alberta Oil Sands, Bitumens and 

Heavy Oils” (“Strausz”), and U.S. Patent No. 4,983,186 

(“Naiman”).1 Because the Board erred by failing to weigh

LSPI’s objective evidence of nonobviousness, we vacate

and remand. 

BACKGROUND

The ’118 patent relates to high molecular weight drag 

reducing polymers for use in heavy, asphaltenic crude oil 

(“HAC”). ’118 patent at 1:8–12. Independent claim 10 is 

illustrative and recites: 

10. A method comprising:

introducing a drag reducing polymer having a solubility parameter of at least about 17 MPa1/2, into 

a pipeline, such that the friction loss associated 

with the turbulent flow through the pipeline is reduced by suppressing the growth of turbulent eddies, into a liquid hydrocarbon having an 

asphaltene content of at least 3 weight percent 

and an API gravity of less than about 26° to 

thereby produce a treated liquid hydrocarbon 

wherein the viscosity of the treated liquid hydro-

 

1 Liquid Power does not appeal the Board’s decision 

holding claims 1–7 and 11 unpatentable on other grounds. 
LIQUIDPOWER SPECIALTY PRODUCTS v. BAKER HUGHES 3

carbon is not less than the viscosity of the liquid 

hydrocarbon prior to treatment with the drag reducing polymer;

wherein the drag reducing polymer has a solubility parameter within 4 MPa1/2 of the solubility parameter of the liquid hydrocarbon and the drag 

reducing polymer comprises at least about 25,000 

repeating units, and wherein a plurality of the repeating units comprise a heteroatom, wherein the 

heteroatom is selected from the group consisting 

of an oxygen atom, a nitrogen atom, a sulfur atom 

and/or a phosphorus atom and wherein the drag 

reducing polymer has a weight average molecular 

weight of at least 1×106 g/mol and

the drag reducing polymer is added to the liquid 

hydrocarbon in the range from about 0.1 to about 

500 ppmw.

Baker Hughes, a GE Company, LLC, petitioned for inter partes review, arguing claims 8–10 would have been 

obvious over Eaton in view of Strausz and Naiman. The 

Board held that the claims would have been obvious in 

light of this combination. It found a person of ordinary 

skill in the art would have determined which of Naiman’s 

polymers would be soluble in Eaton’s Bow River crude oil 

based on their known solubility parameters and then

would have used Naiman’s polymerization process to 

prepare that polymer. It found substituting Eaton’s 

polymers with Naiman’s would have been a substitution 

of one known drag reducing polymer for another with the 

predictable result of reducing drag in a pipeline. It declined to consider LSPI’s objective evidence of nonobviousness because it found that LSPI did not establish a 

nexus to the claimed invention. 

LSPI timely appealed. We have jurisdiction under 28 

U.S.C. § 1295(a)(4)(A).
4 LIQUIDPOWER SPECIALTY PRODUCTS v. BAKER HUGHES

DISCUSSION

We review the Board’s legal determinations de novo 

and its factual findings for substantial evidence. In re 

Van Os, 844 F.3d 1359, 1360 (Fed. Cir. 2017). Obviousness is a question of law based on underlying facts. Arctic 

Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 

1350, 1358 (Fed. Cir. 2017). The obviousness inquiry 

requires consideration of the four Graham factors: “(1) the 

scope and content of the prior art; (2) the differences 

between the claims and the prior art; (3) the level of 

ordinary skill in the art; and (4) objective considerations 

of nonobviousness.” Id. These are questions of fact. Id.

A.

LSPI argues the Board’s finding that the combination 

of Eaton, Strausz, and Naiman discloses “introducing a 

drag reducing polymer . . . into a pipeline, such that the 

friction loss associated with the turbulent flow through 

the pipeline is reduced by suppressing the growth of 

turbulent eddies, into” HAC (“the drag reduction limitation”) is not supported by substantial evidence. The 

Board relied on Naiman’s disclosure that its polymers are 

drag reducing and testimony establishing that Naiman 

discloses polymers that would have been soluble in 

Eaton’s Bow River crude oil, a type of HAC, to find that 

Naiman’s polymers would have reduced drag in HAC. 

J.A. 1614 at 2:18–24; J.A. 1616 at 5:21–52; J.A. 2371–73 

at ¶¶ 54–57. We hold that substantial evidence supports 

this finding. 

B.

LSPI argues the Board’s finding that there would 

have been a motivation to replace Eaton’s polymers with 

Naiman’s polymers to reduce drag in Bow River crude oil 

with a reasonable expectation of success is not supported 

by substantial evidence. It argues Naiman’s polymers 

would have poisoned the catalyst used during Eaton’s 
LIQUIDPOWER SPECIALTY PRODUCTS v. BAKER HUGHES 5

polymerization process. This argument is unpersuasive 

because the Board found that a person of ordinary skill in 

the art would have used Naiman’s polymerization process, 

not Eaton’s, to prepare the polymer. The Board relied on 

the testimony of Baker Hughes’ expert, Dr. Epps, who 

testified that a person of ordinary skill in the art would 

have understood that Naiman’s polymerization process 

was less limited and less expensive compared to Eaton’s, 

would have considered Naiman’s polymers an advantageous replacement, and would have expected Naiman’s 

polymers to be an effective drag reducing agent in Bow 

River crude oil. J.A. 1665–67 at ¶¶ 108–111; J.A. 1671 at 

¶ 121. We hold that substantial evidence supports this

finding.

C.

“The objective indicia of non-obviousness play an important role as a guard against the statutorily proscribed 

hindsight reasoning in the obviousness analysis.” WBIP, 

LLC v. Kohler Co., 829 F.3d 1317, 1328 (Fed. Cir. 2016). 

As one of the four Graham factors, objective indicia must 

be considered in every case where present. Arctic Cat, 

876 F.3d at 1358. 

LSPI argues multiple objective indicia support nonobviousness, including long-felt but unsolved need, failure of 

others, skepticism of experts, unexpected results, industry 

praise, commercial success, copying, and acquiescence to 

an injunction. The Board declined to consider LSPI’s 

objective evidence because it found that LSPI did not 

establish it was entitled to a presumption of nexus. The 

Board’s reasoning is not entirely clear, but we need not 

determine whether the presumption applies because there 

was extensive direct evidence of nexus and arguments 

related thereto presented by LSPI. J.A. 876–99. To the 

extent that the Board made a fact finding that LSPI failed 

to establish nexus for its objective evidence, we conclude 
6 LIQUIDPOWER SPECIALTY PRODUCTS v. BAKER HUGHES

that this fact finding is not supported by substantial 

evidence. 

For example, LSPI submitted ample support establishing nexus for its objective evidence related to the 

commercial products of LSPI, Baker Hughes, and 

Flowchem. For LSPI’s product ExtremePower, it submitted evidence of commercial success driven by the claimed 

features of the ’118 patent, including its ability to reduce 

drag in HAC. J.A. 883–84; J.A. 2865–82. It also submitted evidence that ExtremePower was recognized in the 

industry as a pioneering technological breakthrough. 

J.A. 882–83; J.A. 2864–65. There is no evidence in the 

record that this commercial success or industry praise

was due to any unclaimed features of the product. LSPI

also submitted evidence detailing how its competitors 

copied drag reducing agents from the ’118 patent to 

develop their own products that practice the claimed 

methods. J.A. 884–99; J.A. 2882–86. By tying the evidence to these commercial products that are designed and 

marketed to reduce drag in the flow of HAC through a 

pipeline, LSPI has put forth enough evidence to establish 

a nexus to the claimed invention. J.A. 884, 896; 

J.A. 2881–85.

LSPI also submitted evidence that there was a longfelt but unsolved need for improvements to the transportation of heavy crude oils through a pipeline. J.A. 876–79; 

J.A. 2859–61. It submitted evidence that competitors 

Baker Hughes and Flowchem recognized this problem but 

failed to develop a drag-reducing agent that was effective 

in heavy crude oils. J.A. 879–80; J.A. 2861–63. It submitted evidence that, prior to the ’118 patent, those in the 

industry, including Baker Hughes, were skeptical that 

heavy crude oils could be drag reduced. J.A. 880–81; 

J.A. 2863–64. It submitted evidence that the ’118 patent 

produced unexpected results and industry praise. 

J.A. 881–82; J.A. 2864–65. Finally, it submitted evidence 

that Flowchem entered into a stipulated injunction ac-
LIQUIDPOWER SPECIALTY PRODUCTS v. BAKER HUGHES 7

knowledging that claims 8–10 of the ’118 patent are valid 

and enforceable. J.A. 899; J.A. 3744–51. The Board

therefore erred by failing to consider the objective evidence in its obviousness determination.

We have considered LSPI’s other arguments and find 

them unpersuasive.

CONCLUSION

Substantial evidence supports the Board’s findings 

that the prior art discloses the drag reduction limitation 

and that a person of ordinary skill in the art would have 

been motivated to combine the prior art with a reasonable 

expectation of success. But because substantial evidence 

does not support the Board’s finding that LSPI failed to 

establish nexus, the Board erred in not weighing LSPI’s 

objective evidence of nonobviousness. Accordingly, we 

vacate its decision and remand. On remand, it is up to 

the Board to consider the amount of weight to give this 

evidence.

VACATED AND REMANDED

COSTS

No costs.