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Claims to Electrical Steel Composition Found Obvious

September 19, 2001
Bosch, Michele C.

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Last Month at the Federal Circuit - October 2001

Judges: Bryson (author), Newman, and Rader

In In re Inland Steel Co., No. 00-1143 (Fed. Cir. Sept. 19, 2001), the Federal Circuit affirmed the Board’s rejection on reexamination of nine claims of U.S. Patent No. 4,421,574 (“the ‘574 patent”) as obvious under 35 U.S.C. § 103.

The ‘574 patent issued in 1983. In 1991, Inland Steel Company (“Inland”) sued USX Corporation (“USX”) and LTV Steel Company, Inc. (“LTV”), alleging infringement of the ‘574 patent. While that lawsuit was pending, USX and LTV filed requests for reexamination of the ‘574 patent, which were granted by the PTO, resulting in the district court staying the lawsuit pending outcome of the reexamination proceeding. During reexamination, the Examiner rejected all claims of the ‘574 patent as anticipated or obvious. Inland cancelled some claims and appealed the remaining claims to the Board. The Board sustained the Examiner’s rejections under § 103 based on a variety of prior art combinations.

The appealed claims are directed to a method of producing cold-rolled electrical steel that has improved magnetic properties. In general, cold-rolled steel is produced by forming molten steel into thick slabs and then converting the slabs into thinner strips by a series of hot-rolling steps. The thin strips are then cooled to room temperature and reduced to nearly their final thickness by a series of cold-rolling steps. During the processing that follows hot rolling, the steel strip is conventionally subjected to an annealing operation in which the steel is heated and then slowly cooled. That annealing step may be performed either (1) between the hot- and cold-rolling steps, (2) between stages of multiple cold-rolling steps, or (3) after the completion of cold rolling.

The ‘574 patent addressed problems with prior art techniques by adding antimony during the preparation of the steel, which improved the magnetic properties of the steel. The appealed claims were more specifically directed to a process for using antimony in making steel and precluded any annealing step during the period after hot rolling but before the completion of cold rolling. By excluding annealing during that time, the claimed process achieves improvements in the magnetic properties of the produced steel.

The Board found, and Inland conceded, that the primary reference taught all of the process and compositional limitations of the claims of the ‘574 patent, except for the addition of antimony. A secondary reference, however, had used a hot-band anneal and added antimony. Inland argued before the Board that the secondary reference only taught that antimony improves magnetic properties in combination with the hot-band anneal. The Board disagreed and upheld the Examiner’s rejection.

On appeal, Inland argued that the Board had erred in concluding that the secondary reference taught the use of antimony in the absence of hot-band annealing and, therefore, that there was no motivation to combine the teachings of the primary reference, which precludes annealing, with the secondary reference, which requires annealing. The Board, recognizing that the secondary reference did focus on the combined use of annealing and antimony, found it nonetheless teaches antimony use in the absence of an annealing step. Substantial evidence supports the Board’s interpretation of the secondary reference, leading the Court to conclude that the combined use of an annealing step and antimony focus of the secondary reference does not negate its additional teaching that antimony use is effective even in nonannealed steel.

Inland next argued that one skilled in the art would not have been motivated to combine the cited references because the results reported in the secondary reference for antimony use alone are not as favorable as those achieved by the primary reference, i.e., there is no demonstrated improvement in magnetic properties. The Court disagreed, finding that both of the references focus on the same problem that the ‘574 patent addresses—enhancing the magnetic properties of electrical steel; and that both come from the same field of art—the composition of steel with good magnetic properties.

Inland also contended that even if one of skill in the art contemplated combining the cited references, there would be no reason to expect that the combination would succeed in producing improved magnetic properties in electrical steel. Inland argued that because there were differences in the steel formulations, making it unreasonable to assume the results would be transferable, the combination at most suggested a path of inquiry for an inventor to try. The Court disagreed and found that since the ranges of the components of the formulations of both references overlap, as well as overlap with the claimed ranges of the ‘574 patent components, one skilled in the art would reasonably expect success from combining the references.

Inland sought to show that the particular levels of antimony used in the ‘574 claims achieved unexpected results, i.e., a dramatic improvement in magnetic properties that a person of skill in the art would not have anticipated. Inland presented two arguments, one directed to an alleged critical range of the ‘574 patent claims and the other directed to the alleged leveling off of the favorable effect of antimony on magnetic properties at higher concentrations. The Board concluded, however, that insufficient data had been presented to prove unexpected results. The Federal Circuit deferred to the Board’s weighing of the evidence, couching the question as whether an examination of the record as a whole (taking into consideration evidence that both justifies and detracts from the agency’s decision) would provide a reasonable mind with an adequate basis to support the Board’s conclusion.

The Court also agreed with the Board that the proffered commercial success, even when combined with other objective indicia of nonobviousness, was insufficient to overcome the strong prima facie obviousness case.