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Not so Fast: Federal Circuit Reiterates Limitations on Anticipation

In a rare reversal of a Board IPR decision, the Federal Circuit in Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co. Ltd., No. 2016-1900 (March 14, 2017) (Judges Lourie, Moore, and Taranto), distinguished between an anticipatory reference that explicitly discloses multiple possible combinations and a reference that fails to disclose all claim elements even if a person of ordinary skill in the art would envision the missing element upon reading the reference.

Nidec owns U.S. Patent No. 7,208,895 (the “’895 patent”), which discloses a system for controlling torque of an electromagnetic motor.  Motor control values are expressed either relative to a stationary frame of reference or a rotating frame of reference.  The former is a value calculated relative to the stator, and the latter is a value calculated relative to the rotor.

Nidec’s claim 12, from which claim 21 depends, requires, inter alia, an “IQdr demand”, which the Board construed as “a current demand that includes Q- and d-axis current demands”.  The q-axis and d-axis components together are used to express a signal in the rotating frame of reference.  The parties did not challenge this construction on appeal.  The patent’s specification confirms that the IQdr demand must be a signal in the rotating frame of reference, and both parties advocated this position during the IPR proceedings.

The Board instituted IPR2014-01122 of claim 21 on January 21, 2015 as anticipated by U.S. Patent No. 5,569,995 (“Kusaka”) under 35 U.S.C. § 102(b).  Kusaka is a Toyota patent that discloses a motor control system that has three inputs that are in the rotating frame reference, and three outputs that are expressed in the stationary frame of reference.  The Board, in its Final Written Decision, did not take into account that the outputs from Kusaka were expressed in the stationary frame of reference when it found that the Kusaka outputs, as a set, were an IQdr demand.

In support of its Final Decision, the Board relied on Kennametal, Inc. v. Ingersoll Cutting Tool Co., 780 F.3d 1376, 1381 (Fed. Cir. 2015).  “[A] reference can anticipate a claim even if it ‘does not expressly spell out’ all the limitations arranged or combined as in the claim, if a person of skill in the art, reading the reference, would ‘at once envisage’ the claimed arrangement or combination.’” Final Written Decision at 15.  The Federal Circuit distinguished Kennametal, however, as Kennametal listed fifteen combinations, and so a personal of ordinary skill in the art could “immediately envisage” the claimed combination, because the possible combination was disclosed explicitly in the anticipatory reference.   Kusaka did not explicitly disclose an IQdr demand in a rotating frame of reference, nor did it list it as a possibility.  Kennametal cannot be used as an alternative to inherent anticipation.  If a reference does not explicitly or inherently disclose each and every claim element, even if a person of ordinary skill in the art would immediately envision the missing claim element upon reading the reference, the reference cannot anticipate the claim.

This opinion provides useful guidance for PTAB practitioners.  Petitioners alleging anticipation should clearly identify where each element is disclosed expressly or inherently in the reference.  Where an element is missing, Petitioners should consider whether to allege obviousness in view of that reference and possible secondary references.  If Petitioner’s are relying on a Kennametal theory, they should provide expert testimony that the reference discloses the claimed combination and that a person of skill in the art would readily envisage that combination.  For patent owners, it is imperative to identify specific limitations that are not disclosed in the reference, whether expressly or inherently, or why the claimed combination would not be readily apparent in view of the reference.