Court Opinion

ID: 4541987
Source: CourtListenerOpinion
Date Created: 2020-06-17 16:00:51.608909+00
Date Added: 2024-06-11T12:47:07.876294
License: Public Domain

Case: 19-1838   Document: 66     Page: 1   Filed: 06/17/2020

        NOTE: This disposition is nonprecedential.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
             ______________________

            2019-1838, 2019-1839, 2019-1840
                ______________________

     Appeals from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in Nos. IPR2016-
 01901, IPR2016-01903, IPR2016-01905.
                  ______________________

                 Decided: June 17, 2020
                 ______________________

    EDWARD R. REINES, Weil, Gotshal & Manges LLP, Red-
 wood Shores, CA, for appellant. Also represented by
 AMANDA BRANCH; RICHARD EISZNER, MELISSA LARUE
 HOTZE, DOUGLAS WAYNE MCCLELLAN, Houston, TX;
 ELIZABETH WEISWASSER, New York, NY.

    HERBERT D. HART, III, McAndrews, Held & Malloy,
Case: 19-1838     Document: 66    Page: 2    Filed: 06/17/2020

 2     LIQUIDPOWER SPECIALTY PRODUCTS   v. BAKER HUGHES, A GE
                                                    COMPANY

 Ltd., Chicago, IL, for appellee. Also represented by AARON
 BARKOFF, PETER LISH, BEN MAHON, GEORGE WHEELER.
                   ______________________

     Before PROST, Chief Judge, MAYER and LOURIE, Circuit
                           Judges.
 PROST, Chief Judge.
     For reasons analogous to those expressed in
 LiquidPower Specialty Products Inc. v. Baker Hughes, 749
 F. App’x 965 (Fed. Cir. 2018) (“LiquidPower 2018”), we con-
 clude that the Patent Trial and Appeal Board (“Board”)
 erred by reaching its obviousness conclusion without con-
 sidering the evidence of secondary considerations proffered
 by LiquidPower Specialty Products Inc. (“LSPI”). 1 Accord-
 ingly, we vacate the Board’s obviousness determination
 and remand for further proceedings.
     Baker Hughes concedes that the Board’s “treatment of
 nexus [in this case] was substantially identical” to such
 treatment in LiquidPower 2018. Appellee’s Br. 6. Baker
 Hughes argues, however, that any error in this case was

      1  Like in LiquidPower 2018, “we need not determine
 whether the presumption [of nexus] applies because there
 was extensive direct evidence of nexus and arguments re-
 lated thereto presented by LSPI.” LiquidPower 2018, 749
 F. App’x at 968. We acknowledge that some of the objective
 evidence—such as the evidence of commercial success of
 LSPI’s drag reducing agent—relates to a drag reducing
 agent product, while the claims recite methods for intro-
 ducing a drag reducing agent into a pipeline. However, in
 appropriate circumstances, patentees can prove, through
 direct evidence, a nexus between a method claim and a
 product. For reasons analogous to those discussed in
 LiquidPower 2018, we conclude that those circumstances
 are met here. See id. at 968–69.
Case: 19-1838     Document: 66      Page: 3    Filed: 06/17/2020

 LIQUIDPOWER SPECIALTY PRODUCTS     v. BAKER HUGHES, A GE     3
 COMPANY

 harmless because, unlike in LiquidPower 2018, here the
 “Board explicitly rejected LSPI’s ‘conventional wisdom’ ar-
 gument which forms the basis for much, if not all, of LSPI’s
 objective evidence.” Id. at 7. Specifically, the Board re-
 jected LSPI’s argument that, at the time of invention, “[t]he
 prevailing wisdom of a person of ordinary skill” was that
 “drag reducing agents (‘DRAs’) were not effective in heavy
 crude oil.” Appellant’s Br. 3; see also Baker Hughes v.
 LiquidPower Specialty Prods. Inc., No. IPR2016-01901, Pa-
 per 65, at 25–27 (PTAB Apr. 4, 2018) (“Final Written Deci-
 sion”). The Board instead concluded that LSPI’s “evidence
 indicates that drag reduction with traditional DRAs was
 not particularly efficient, but extant.” See, e.g., Final Writ-
 ten Decision, at 25–27.
     We disagree with Baker Hughes that this finding by
 the Board obviates any need to vacate and remand for fur-
 ther proceedings. Although we agree with Baker Hughes
 that the Board’s finding might cut against the persuasive
 force of LSPI’s evidence of secondary considerations, the
 applicability of this finding is for the Board to consider in
 the first instance.
     The parties dispute the appropriate scope of the re-
 mand. As an initial matter, we agree with LSPI that all
 relevant evidence must be considered before any legal con-
 clusion of obviousness can be reached. Stratoflex, Inc. v.
 Aeroquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983). And
 we agree with LSPI that the burden of persuasion on the
 ultimate question of obviousness remains at all times with
 the patent challenger. Id. at 1534.
     LSPI additionally contends that we should instruct the
 Board to revisit “all facets of the obviousness inquiry,” in-
 cluding without limitation the Board’s analysis on whether
 there was a motivation to combine, whether there was a
 reasonable expectation of success, whether the proposed
 combination is based on hindsight, and whether LSPI’s in-
 vention yielded a predictable result. Appellant’s Br. 59.
Case: 19-1838    Document: 66      Page: 4   Filed: 06/17/2020

 4   LIQUIDPOWER SPECIALTY PRODUCTS    v. BAKER HUGHES, A GE
                                                    COMPANY

 Baker Hughes counters that any remand should be limited
 to “weighing the objective indicia evidence.” Appellee’s Br.
 57. We agree with Baker Hughes.
                VACATED AND REMANDED
                           COSTS
     Costs to appellant.