Federal Circuit Cultivates Criteria for Obviousness Rejection: Rational Underpinning and Articulation Required to Establish Routine Optimization and a Reasonable Expectation of Success

The Federal Circuit vacated and remanded the Patent Trial and Appeal Board’s (PTAB) decision in In re Stepan Co., No. 2016-1811 (Fed. Cir. Aug. 25, 2017), because the PTAB “failed to adequately articulate its reasoning, erroneously rejected relevant evidence of nonobviousness, and improperly shifted to Stepan the burden of proving patentability.”

Stepan’s patent application is directed to herbicidal formulations containing glyphosate salt with a surfactant system. In affirming the examiner’s obviousness rejection, the PTAB found, among other things, (1) that Stepan failed to provide evidence that it would not have been routine optimization for a skilled artisan to select and adjust the claimed surfactants to achieve a cloud point above 70°C; and (2) that Stepan failed to establish the criticality of its claimed ranges.

The Federal Circuit vacated and remanded, explaining that the PTAB did not articulate ”why it would have been routine optimization to arrive at the claimed invention,” failed to articulate why a POSA would have a reasonable expectation of success, and erroneously ignored Stepan’s submitted evidence of nonobviousness. In light of those shortcomings, the Federal Circuit noted that the PTAB failed to establish a prima facie case of obviousness and erred in shifting the burden to Stepan to show the criticality of the cloud point limitation.

Judge Lourie dissented, reasoning that the broad claims of Stepan’s application would have been obvious, and that, where there is a single asserted reference, there does not need to be an express finding of a reasonable expectation of success for those skilled in the art to make a conventional modification and to look for improvements in some parameter.