Court Opinion

ID: 9386652
Source: CourtListenerOpinion
Date Created: 2023-04-13 15:00:43.513544+00
Date Added: 2024-06-11T17:18:07.899683
License: Public Domain

Case: 20-2001      Document: 139           Page: 1        Filed: 04/13/2023

         NOTE: This disposition is nonprecedential.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 HOLDINGS, LLC, FKA BAKER
         HUGHES, A GE COMPANY, LLC,
                   Appellee

   KATHERINE K. VIDAL, UNDER SECRETARY OF
   COMMERCE FOR INTELLECTUAL PROPERTY
     AND DIRECTOR OF THE UNITED STATES
       PATENT AND TRADEMARK OFFICE,
                   Intervenor
             ______________________

                      2020-2001, 2022-1248
                     ______________________

     Appeals from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. IPR2016-
 00734.

                -------------------------------------------------

  LIQUIDPOWER SPECIALTY PRODUCTS INC., FKA
     LUBRIZOL SPECIALTY PRODUCTS, INC.,
                  Appellant
Case: 20-2001   Document: 139     Page: 2   Filed: 04/13/2023

 2                      LIQUIDPOWER SPECIALTY PRODUCTS v.
                                  BAKER HUGHES HOLDINGS

                             v.

     BAKER HUGHES HOLDINGS, LLC, FKA BAKER
           HUGHES, A GE COMPANY, LLC,
                     Appellee

     KATHERINE K. VIDAL, UNDER SECRETARY OF
     COMMERCE FOR INTELLECTUAL PROPERTY
       AND DIRECTOR OF THE UNITED STATES
         PATENT AND TRADEMARK OFFICE,
                     Intervenor
               ______________________

  2021-2283, 2021-2284, 2021-2285, 2022-1152, 2022-1153,
                        2022-1155
                 ______________________

     Appeals from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in Nos. IPR2016-
 00734, IPR2016-01901, IPR2016-01903, IPR2016-01905.
                  ______________________

                  Decided: April 13, 2023
                  ______________________

     EDWARD R. REINES, Weil, Gotshal & Manges LLP, Red-
 wood Shores, CA, argued for appellant. Also represented
 by ELIZABETH WEISWASSER, New York, NY; ZACHARY TRIPP,
 Washington, DC.

     PETER LISH, McAndrews, Held & Malloy, Ltd., Chicago,
 IL, argued for appellee. Also represented by HERBERT D.
 HART, III, BEN MAHON.

     DANIEL KAZHDAN, Office of the Solicitor, United States
 Patent and Trademark Office, Alexandria, VA, for interve-
 nor. Also represented by MARY L. KELLY, THOMAS W.
 KRAUSE, FARHEENA YASMEEN RASHEED.
Case: 20-2001    Document: 139      Page: 3    Filed: 04/13/2023

 LIQUIDPOWER SPECIALTY PRODUCTS    v.                        3
 BAKER HUGHES HOLDINGS

                   ______________________

     Before LOURIE, REYNA, and CHEN, Circuit Judges.
 LOURIE, Circuit Judge.
     LiquidPower Specialty Products Inc. (“LSPI”) appeals
 from two final written decisions on inter partes review by
 the United States Patent and Trademark Office Patent
 Trial and Appeal Board (“the Board”) holding that claims
 8–10 of U.S. Patent 8,022,118 (the “’118 patent”), claims
 1–5 of U.S. Patent 8,450,249 (the “’249 patent”), claim 3 of
 U.S. Patent 8,426,498 (the “’498 patent”), and claims 1–9
 of U.S. Patent 8,450,250 (the “’250 patent”) are unpatenta-
 ble as obvious. See Baker Hughes v. LiquidPower Specialty
 Prods. Inc., Case No. IPR2016-00734, Paper No. 93, J.A.
 1–31 (P.T.A.B. Nov. 14, 2019) (“’118 Patent Decision”);
 Baker Hughes v. LiquidPower Specialty Prods. Inc., Case
 Nos. IPR2016-01901, IPR2016-01903, IPR2016-01905, Pa-
 per No. 79, J.A. 8759–8790 (Apr. 30, 2021) (“’249 Patent, et
 al. Decision”). We consolidated these appeals for oral argu-
 ment and we decide both of them in this opinion. We af-
 firm.
                        BACKGROUND
     The patents in suit are owned by LSPI and are directed
 to a drag reducing agent (“DRA”) that reduces friction, or
 drag, when heavy crude oils are transported through a
 pipeline. Heavy, asphaltenic crude (“HAC”) is typically dif-
 ficult to transport by pipeline due to drag, and historically,
 undesirable steps were taken to transport HAC such as
 adding diluents, heating the oils to reduce viscosity, or
 transporting the oils by rails or truck rather than pipeline.
 The claims at issue are method claims that recite introduc-
 ing a polymer having a heteroatom, i.e., an atom other than
 carbon or hydrogen, into a pipeline at a desired molecular
 weight and concentration to reduce the drag of the HAC.
 LSPI markets ExtremePower® products that embody the
 claimed methods.
Case: 20-2001    Document: 139      Page: 4    Filed: 04/13/2023

 4                        LIQUIDPOWER SPECIALTY PRODUCTS v.
                                    BAKER HUGHES HOLDINGS

      These cases have been before us previously. Baker
 Hughes Holdings, LLC (“Baker Hughes”) petitioned for in-
 ter partes review, arguing that several claims of the patents
 in suit were unpatentable as obvious over various prior art
 references. In its original decisions, the Board held that all
 of the challenged claims would have been obvious over the
 asserted prior art. On appeal from the Board’s holding
 with respect to the ’118 patent, we found that substantial
 evidence supported the Board’s findings that (1) the prior
 art disclosed all claim limitations, and (2) that a person of
 ordinary skill would have been motivated to combine the
 prior art references with a reasonable expectation of suc-
 cess. See LiquidPower Specialty Prods. Inc. v. Baker
 Hughes, 749 F. App’x 965, 969 (Fed. Cir. 2018). However,
 we held that the Board erred by not considering the objec-
 tive indicia evidence, and we vacated and remanded the
 Board’s decision so that it could consider such evidence. Id.
 Similarly, on appeal from the Board’s holdings with respect
 to the ’249, ’498, and ’250 patents, we vacated and re-
 manded the Board’s decision in light of its failure to con-
 sider the objective indicia evidence. See LiquidPower
 Specialty Prods. Inc. v. Baker Hughes, 810 F. App’x 905,
 906–07 (Fed. Cir. 2020).
      On remand, the Board issued two final written deci-
 sions holding that the challenged claims were unpatenta-
 ble as obvious. In those decisions, the Board addressed
 LSPI’s objective indicia evidence and found it to be entitled
 to little weight. Specifically, the Board found that the evi-
 dence of long-felt need, failure of others, unexpected re-
 sults, industry praise, commercial success, copying, and
 acquiescence, when considered and weighed with the
 strong and substantial evidence of the factors favoring ob-
 viousness, supported a conclusion that the challenged
 claims would have been obvious.
     LSPI appealed the two Board decisions to this court.
 However, following the Supreme Court’s decision in United
 States v. Arthrex, Inc., we remanded the case for the limited
Case: 20-2001    Document: 139      Page: 5    Filed: 04/13/2023

 LIQUIDPOWER SPECIALTY PRODUCTS    v.                        5
 BAKER HUGHES HOLDINGS

 purpose of allowing LSPI the opportunity to request direc-
 tor rehearing of the final written decision. 141 S. Ct. 1970
 (2021).    LSPI then filed that request, and Andrew
 Hirshfeld, the Commissioner for Patents, performing the
 duties of the director, denied that request. LSPI then filed
 an additional notice of appeal. We have jurisdiction under
 28 U.S.C. §§ 1295(a)(4)(A).
                         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 nonobvious-
 ness.” Id. (citing Graham v. John Deere Co., 383 U.S. 1,
 17–18 (1966)). These are questions of fact. Id. Objective
 indicia include long-felt but unresolved need, failure of oth-
 ers, skepticism of experts, unexpected results, industry
 praise, commercial success, copying, and acquiescence. See
 Ruiz v. A.B. Chance Co., 234 F.3d 654, 660, 667–68 (Fed.
 Cir. 2000).
     LSPI argues that the Board misunderstood our man-
 date to preclude it from evaluating on remand, in light of
 the objective indicia evidence, whether there was a motiva-
 tion to combine the prior art with a reasonable expectation
 of success. LSPI further adds that our mandate did not set
 in stone the Board’s prior findings, but instead that we
 merely determined that substantial evidence existed to
 support those findings.
     LSPI also argues that the Board improperly disre-
 garded the evidence of skepticism, unexpected results, and
 long-felt need on the ground that although the evidence
Case: 20-2001    Document: 139      Page: 6    Filed: 04/13/2023

 6                        LIQUIDPOWER SPECIALTY PRODUCTS v.
                                    BAKER HUGHES HOLDINGS

 showed that LSPI’s invention worked better than the prior
 art, the patents in suit did not claim the degree of improve-
 ment. LSPI adds that the Board improperly discounted
 highly probative evidence of competitors’ failures because
 they occurred after ExtremePower was released to the pub-
 lic. LSPI further argues that the Board improperly disre-
 garded evidence of acquiescence, industry praise, and
 ExtremePower’s commercial success. Lastly, LSPI argues
 that the Board improperly applied what it refers to as a
 “knockdown” approach where it weighed the objective indi-
 cia against its erroneous prima facie factual findings relat-
 ing to the other three Graham factors.
     Baker Hughes responds that the Board’s findings were
 supported by substantial evidence and that it did not im-
 properly apply any “knockdown” approach. Baker Hughes
 further argues that the Board properly considered LSPI’s
 objective indicia evidence before concluding that the evi-
 dence was unpersuasive.
     We agree with Baker Hughes. The Board found, after
 a thorough review of all the evidence, that the objective in-
 dicia evidence, when weighed with the substantial evi-
 dence from the other three Graham factors, supported a
 conclusion that the challenged claims would have been ob-
 vious. Moreover, our remand was clearly limited to weigh-
 ing the objective indicia evidence; it was not an opportunity
 for LSPI to reargue all aspects of the obviousness inquiry.
     The Board found there was no long-felt need, and no
 failure of others. It accorded little weight to the alleged
 commercial success, and it found that the stipulated in-
 junction against an industry competitor may have been en-
 tered into principally to avoid further litigation rather than
 out of respect for the validity of the patents. Other asser-
 tions of objective indicia were not given persuasive weight
 in the obviousness analysis.
     The Board’s analysis was proper and its factual find-
 ings concerning objective indicia and application of the
Case: 20-2001    Document: 139      Page: 7    Filed: 04/13/2023

 LIQUIDPOWER SPECIALTY PRODUCTS    v.                        7
 BAKER HUGHES HOLDINGS

 other three Graham factors were supported by substantial
 evidence. The Board’s obviousness analysis of the prior
 art’s disclosures and motivation to combine the prior art
 with a reasonable expectation of success was consistent
 with its previous analysis that we found supported by sub-
 stantial evidence. The Board further complied with our in-
 structions on remand to consider the objective indicia
 evidence and whether that evidence impacted the obvious-
 ness of the asserted claims. See ’118 Patent Decision at 29
 (“Having considered the parties’ arguments and evidence,
 we evaluate all of the evidence together to make a final de-
 termination of obviousness.”); ’249 Patent, et al. Decision at
 8788 (“[W]e determine that the evidence of long-felt need,
 failure of others, unexpected results, industry praise, com-
 mercial success, copying, and acquiescence, when consid-
 ered and weighed with the strong and substantial evidence
 as to the other three Graham factors, supports a conclusion
 that [the challenged claims] would have been obvious.”).
 The Board’s findings were supported by substantial evi-
 dence. Thus, we affirm the Board’s holding that the as-
 serted claims in the patents in suit would have been
 obvious over the prior art.
                         CONCLUSION
      We have considered LSPI’s remaining arguments but
 find them unpersuasive. For the foregoing reasons, the de-
 cision of the Board is affirmed.
                         AFFIRMED