Trials@uspto.gov 571.272.7822 Paper No. Entered: June, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD NESTLÉ USA, INC., Petitioner, v. STEUBEN FOODS, INC., Patent Owner. Case IPR2015-00195 Before MICHAEL P. TIERNEY, BEVERLY M. BUNTING, and CHRISTOPHER G. PAULRAJ, Administrative Patent Judges. PAULRAJ, Administrative Patent Judge. DECISION Institution of Inter Partes Review 37 C.F.R. 42.108
I. INTRODUCTION Nestlé USA, Inc. ( Petitioner ) filed a Petition requesting an inter partes review of claims 1 10, 14, 16 21, 25, 27, 29, and 32 36 of U.S. Patent No. 6,475,435 B1 (Ex. 1001, the 435 patent ). Paper 1 ( Pet. ). Steuben Foods, Inc. ( Patent Owner ) filed a Preliminary Response to the Petition. Papers 22, 30 ( Prelim. Resp. ). We have jurisdiction under 35 U.S.C. 314, which provides that an inter partes review may not be instituted unless... there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition. 35 U.S.C. 314(a). Upon considering the Petition and Preliminary Response, we determine that Petitioner has shown a reasonable likelihood that it would prevail in showing the unpatentability of claims 1 10, 14, 16 21, 25, 27, 29, and 32 36. Accordingly, we institute an inter partes review of those claims. A. Related Proceedings The parties identify several related matters, including the pending litigation in the U.S. District Court for the Western District of New York: Steuben Foods, Inc. v. Nestle, USA, No. 1:13-cv-00892 (filed Sept. 3, 2013). Pet. 58 59; Paper 8, 2 3. The 435 patent was challenged in IPR2014-00043 (terminated). Pet. 58 59; Paper 8, 2 3; GEA Process Eng., Inc. v. Steuben Foods, Inc., Case IPR2014-00043 (PTAB Dec. 23, 2014) (Paper 114). The 435 patent is also the subject of ex parte reexamination proceedings (control nos. 90/012,135 and 90/013,458), which have been merged and are currently ongoing. 2
B. The 435 Patent (Ex. 1001) The 435 patent issued from an application filed on June 11, 1999, and claims the benefit of the filing date of a provisional application filed on February 2, 1999. Ex. 1001, [22], [60], 1:6 7. The 435 patent is directed to an apparatus and method for providing sterilization zones in an aseptic packaging sterilization tunnel that surrounds a plurality of containers with pressurized gas. Id. at 1:12 14, 3:30 31. The sterilization tunnel comprises a plurality of sterile zones created by a plurality of partitions and a plurality of hot sterile air supply sources (e.g., conduits). Id. at 2:46 48, 3:20. In particular, the 435 patent describes a first sterilization zone that includes an activation and drying apparatus, a second sterilization zone that includes the main product filler apparatus and lid sterilization and heat sealing apparatus, a third sterilization zone that includes a bottle discharge apparatus, and a fourth sterilization zone that includes an interior bottle sterilization apparatus. Id. at 9:29 39. The aseptic sterilant used in the apparatus may be hydrogen peroxide with a concentration of less than about 35%. Id. at 2:23 24, 5:2 4. The sterile zones provide a plurality of sterilant concentration levels within the sterilization tunnel. Id. at 2:48 50, 3:20 21, 16:52. For example, the 435 patent provides an embodiment wherein the sterilant concentration is highest at about 1000 parts per million (ppm) in the bottle sterilizer zone. Id. at 9:38 39, 9:51 10:2. In contrast, the sterilant concentration is the lowest, less than 0.5 ppm and typically about 0.1 ppm, in the filling zone, thereby preventing unwanted high levels of sterilant to enter the food product during filling. Id. at 9:59 66. In addition, the sterile zones have a plurality of gas flow rates within the sterilization tunnel, wherein gas flow is in the direction 3
primarily on an Agreement entered into as of January 28, 2013, which related to Petitioner s purchase of certain Line 8 Equipment from GEA ( the Line 8 Agreement ). 3 Ex. 2046. As noted by the Patent Owner (Prelim. Resp. 6), the privity requirement seeks to protect patent owners from harassment via successive petitions by the same or related parties, to prevent parties from having a second bite at the apple, and to protect the integrity of both the USPTO and Federal Courts by assuring that all issues are promptly raised and vetted. Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) ( Trial Practice Guide ). However, a core function of the privity requirement is also to ensure proper application of the statutory estoppel provisions. Id. Accordingly, whether the nonparty (i.e., Nestlé) can be said to have had a full and fair opportunity to litigate the prior litigation that gave rise to the statutory bar is also a concern under 315(b). Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc., Case IPR2014-01288, slip op. at 13 (PTAB Feb. 20, 2015) (Paper 13) (quoting Taylor v. Sturgell, 553 U.S. 880, 894 (2008)); see also Aspex Eyewear, Inc. v. Zenni Optical, Inc., 713 F.3d 1377, 1382 (Fed. Cir. 2013) ( A full and fair opportunity to litigate is 3 GEA was sued by Patent Owner for infringement of the 435 patent in the United States District Court for the Western District of New York on September 24, 2012. Steuben Foods, Inc. v. GEA Process Eng g, Inc., No. 1:12-cv-00904-WMS-HKS ( the 904 case ); Ex. 2031. On October 9, 2013, GEA filed a petition for an inter partes review challenging the 435 patent, IPR2014-00043. On December 23, 2014, the Board terminated IPR2014-00043 and other related inter partes reviews based on GEA s failure to identify a related entity, GEA Procomac S.p.A., as a real-party-ininterest in those proceedings. GEA Process Eng., Inc. v. Steuben Foods, Inc., Case IPR2014-00043 (PTAB Dec. 23, 2014) (Paper 114). 7
the touchstone of any preclusion analysis. ). Thus, a proper privity analysis considers both the need to protect the patent owner from undue harassment and whether the petitioner had a full and fair opportunity to litigate the prior litigation. We agree with Patent Owner (Prelim. Resp. 6) that the notion of privity is more expansive and encompasses parties that do not necessarily need to be identified in the Petition as real parties-in-interest. 77 Fed. Reg. at 48,759. Privity is a flexible and equitable doctrine rooted in common law. Id. The privity inquiry seeks to determine whether the relationship between the purported privy and the relevant party is sufficiently close such that both should be bound by the trial outcome and related estoppels. Id. Whether a party who is not a named participant in a given proceeding nonetheless constitutes a real party-in-interest or privy to that proceeding is a highly fact-dependent question. Id. In Taylor v. Sturgell, the Supreme Court identified a non-exhaustive list of six categories under which nonparty preclusion based on a privity relationship may be found. 550 U.S. at 893 95. Patent Owner s arguments focus on two of these categories in alleging that GEA and Petitioner are privies: (1) that there exists a pre-existing substantive legal relationship between them; and (2) that Petitioner assumed control, or at least had the opportunity to control, the prior district court litigation and inter partes review proceedings. Prelim. Resp. 7 8. As explained below, we do not find a sufficient basis for a privity relationship under either category. Before addressing these categories, however, we first address an issue as to the proper timeframe during which privity must exist in order to trigger the statutory bar under 315(b). 8
1. Privity When the Complaint was Filed Against GEA Patent Owner argues that GEA and Petitioner need not have been in privity at the time the complaint against GEA was filed in the 904 case, i.e., September 2012. Prelim. Resp. 12 15. Patent Owner argues that privity between GEA and Petitioner was created as a result of the January 2013 Line 8 Agreement. Prelim. Resp. 25 28; Paper 14, 1 3 ( PO Sur-Reply ). Specifically, Patent Owner contends that the Agreement reflects a relationship between GEA and Petitioner that is sufficiently close that it would be fair to impose estoppel effects between the parties. Prelim. Resp. 5. Indeed, the event that Patent Owner alleges created privity (entering into the Line 8 Agreement) indisputably occurred after the complaint of alleged infringement was served on GEA. Generally, the Board has considered the relationship between those alleged to be in privity at the time of service of the complaint. See, e.g., Synopsis, Inc. v. Mentor Graphics Corp., Case IPR2012-00042, slip op. at 12 14 (PTAB Feb. 19, 2014) (Paper 60, Final Written Decision); Chi Mei Innolux Corp. v. Semiconductor Energy Laboratory Co., LTD., Case IPR2013-00028, slip op. at 69 (PTAB Mar. 21, 2013) (Paper 14, Decision to Institute); ABB Tech., Ltd. v. IPCO, LLC, Case IPR2014-00147, slip op. at 9 10 (PTAB May 23, 2014) (Paper 11, Decision to Institute). With regard to a time bar under 35 U.S.C. 315(b), the Board has considered the relationship between those alleged to be in privity after service of the complaint in limited circumstances. See VMware, Inc. v. Good Tech. Software, Inc., Case IPR2014-01324 (PTAB Feb. 20, 2015) (Paper 28, Decision Denying Institution of Inter Partes Review) ( VMware ) (cited by Patent Owner at Prelim. Resp. 14). 9
VMware is a non-precedential decision and, therefore, not binding upon us. Furthermore, we find the facts in VMware to be distinguishable from the case at hand. In VMware, the petitioner acquired AirWatch as a wholly owned subsidiary. VMware at 2. Petitioner (VMware) admitted that the acquisition put VMware and Airwatch in privity. Id. at 2 3. The Board held that institution of inter partes review was prohibited by 35 U.S.C. 315(b) because Airwatch had been served with a complaint alleging infringement more than a year prior to the filing of the petition at issue. Id. at 2 4. Although VMware was a nonparty to the complaint against Airwatch, because AirWatch became a wholly owned subsidiary of VMware, and because VMware admitted the acquisition put AirWatch and VMware in privity, it was appropriate to attribute Air Watch s opportunity to litigate to VMware. Here, in contrast, Petitioner did not acquire GEA as a wholly owned subsidiary (or vice versa), nor does Petitioner admit that it was in privity with GEA at any point in time. For the reasons that follow, however, even upon considering the relationship between Petitioner and GEA after service of the complaint, we determine that the record does not establish privity. 2. Privity Based on Substantive Legal Relationship Patent Owner asserts that Petitioner and GEA have a relationship that extends well beyond mere collaboration between two separate and distinct entities and well beyond a typical supplier customer relationship. Prelim. Resp. 20. In support, Patent Owner relies upon the large amount of sales from GEA to Petitioner of allegedly infringing equipment and the large revenue derived by Petitioner from allegedly infringing production using GEA equipment. Id. at 21 22. Patent Owner also relies upon cooperation 10
between Petitioner and GEA on legal strategy vis-à-vis the Steuben patents, which was allegedly manifest in GEA s apparent sharing of Patent Owner s confidential infringement contentions with Petitioner in connection with the Petition filed in this proceeding, and Petitioner s admission that it has been communicating with GEA in connection with the now terminated GEA IPRs. Id. at 22 24. The Line 8 Agreement provides that, in the event of a Steuben Claim on the Line 8 Equipment, Petitioner and GEA Ex. 2046, 2. We are unpersuaded that Petitioner and GEA have the type of substantive legal relationship that amounts to privity. Patent Owner s privity claim is primarily based on Petitioner s purchase of allegedly infringing equipment from GEA, and is not based on any other type of corporate relationship or joint ownership as to the entities. However, a manufacturer or seller of a product who is sued for patent infringement typically is not in privity with a party, otherwise unrelated, who does no more than purchase and use the product. Transclean Corp. v. Jiffy Lube Int l, Inc., 474 F.3d 1298, 1306 (Fed. Cir. 2007). Moreover, although it appears that Petitioner and GEA had an obligation to share legal strategies and cooperate with respect to any infringement claim made by Patent Owner on the Line 8 Equipment, i.e., a Steuben Claim, we do not find such information-sharing and cooperation to be sufficient for a privity relationship here. Indeed, that type of coordination is typical for parties in a joint defense group, and as 11
noted in our Trial Practice Guide, a party will not be considered a privy based solely on participation in such a group. 77 Fed. Reg. at 48,760. Here, although Petitioner and GEA were not formally codefendants in the same district court litigation, they nonetheless entered into a separate joint defense/community of interest agreement in connection with their obligations under the Line 8 Agreement. Ex. 2046, 2. There is no indication, however, that GEA is obligated to follow any particular strategy dictated by Petitioner, or vice versa, in any of the proceedings. 4 Nor is there any indication that Petitioner financed the district court litigation or prior GEA inter partes reviews, or that GEA is financing this proceeding. To the contrary, the Line 8 Agreement expressly states that Id. Patent Owner further asserts that the indemnification provisions of the Line 8 Agreement gave rise to a privity relationship between Petitioner and GEA. In particular, the Line 8 Agreement provides that GEA and Petitioner 4 Patent Owner asserts that [d]istrict courts have found that the provision of direct or indirect assistance in IPR proceedings is sufficient to impose a preclusion effect on the non-ipr-petitioner party. Prelim. Resp. 24 (citing Evolutionary Intelligence, LLC v. Sprint Nextel Corp., Case No. 13-cv-4513, 2014 WL 819277, at *5 (N.D. Cal. Feb. 28, 2014)). In Evolutionary Intelligence, however, the court specifically recognized that Sprint is neither a real party in interest in nor privy to the IPR, and thus 315(e)(2) does not apply. Id. at *6. As such, we decline to follow the court s dicta that mere communication on strategy can trigger a statutory estoppel provision. 12
agree to asserts, based on this provision, that 13. Id. at 3. Patent Owner in the event the district court awards damages based on a royalty per bottle. Prelim. Resp. 5. Patent Owner contends that indemnification is a type of substantive legal relationship that appropriately results in a finding of privity even in the absence of control, and that privity should be applied in PTAB proceedings to avoid the anomalous result that an indemnitor who is cooperating closely with a petitioner-indemnitee can make the deliberate decision not to join the earlier review proceeding and instead attempt to have a second bite at the apple in the event the indemnitee s petition proves unsuccessful. Id. at 11 (citing 77 Fed. Reg. at 48,759). We are not persuaded by these arguments. Typically, indemnity is the obligation of a single party to be fully or primarily liable for damages, such as in the insurance/subrogation context, so that the indemnitor steps into the shoes of the indemnitee. The portion of the Line 8 Agreement identified by Patent Owner as an indemnification provision differs from the typical understanding of indemnity in two significant respects. First, refers to. Indeed, the Agreement 2046, 3. Second, the potential liability is not an obligation; rather, Petitioner and GEA by mutual agreement. Further, in Taylor, the Supreme Court held that nonparty preclusion may be justified based on a variety of pre-existing substantive legal Ex.
relationship[s] between the person to be bound and a party to the judgment, and that [q]ualifying relationships include, but are not limited to, preceding and succeeding owners of property, bailee and bailor, and assignee and assignor. 553 U.S. at 894. We find the indemnification relationship between Petitioner and GEA to be significantly different from the type of legal relationships recognized in Taylor, each of which involved a transfer of property interests. Indeed, the Supreme Court noted that [t]hese exceptions originated as much from the needs of property law as from the values of preclusion by judgment. Id. (citing 18A C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure 4448, 329 (2d ed. 2002)); see also Apple Inc. v. Achates Reference Publishing, Inc., Case IPR2013-00081, slip op. at 13 16 (PTAB June 3, 2013) (Paper 21) ( Indemnification is not one of the substantive legal relationships cited in Taylor (e.g., assignee-assignor), and is significantly different from those relationships, which involve successive interests in property. ). Patent Owner argues that the relationship between GEA and Petitioner is akin to the common law doctrine of vouching. Prelim. Resp. 10. However, under the common law practice of vouching, a defendant (indemnitee) seeking indemnification from a third party indemnitor must serve notice upon the indemnitor to assume the defense. See, e.g., SCAC Transport (USA) Inc. v. S.S. Danaos, 845 F.2d 1157, 1161 62 (2d Cir. 1988); see also Restatement (Second) of Judgments 57 (1982) (indemnitor precluded from relitigating issues determined in an action against indemnitee only where the indemnitor is given reasonable notice of the action and an opportunity to assume or participate in its defense ). As explained below, the record here does not reflect that Petitioner had any opportunity to assume 14
or significantly participate in GEA s defense in the district court litigation. Consequently, Patent Owner s argument regarding indemnification is not persuasive. 3. Privity Based on Assumed Control or Opportunity to Control As an additional basis for privity, Patent Owner asserts that Petitioner and GEA contractually share control over the ultimate disposition of the inter partes review proceedings and the 904 case. 5 Prelim. Resp. 25. Patent Owner relies upon two provisions in the Line 8 Agreement to support this assertion. First, the Line 8 Agreement provides that Agreement provides that Ex. 2046, 2. Second, the Line 8 Id. at 3. We do not find that either provision establishes the type of control that rises to a level sufficient to establish privity on these facts. Control may be found if a person had the opportunity to present proofs and argument... even though he was not a formal party to the litigation. Taylor, 553 U.S. at 895 (citation omitted). We recognize that actual assumption of control of 5 Because it is the filing of the complaint alleging infringement of the patent that triggers the 1-year statutory period under 315(b), we focus our analysis on Petitioner s ability to control the 904 case and not the prior GEA inter partes review. In any event, there is no evidence that Petitioner could have exercised control over either proceeding to any significant extent. 15
the lawsuit is not necessary for a finding of privity; the opportunity, or legal right, to assume control is sufficient. Aruze Gaming, Case IPR2014-01288, Paper 13 at 14. Nonetheless, we find that the Line 8 Agreement only provided a limited role, if any, for Petitioner to play in the 904 case. By its terms, the Line 8 Agreement only relates to any Steuben Claim made with respect to Line 8 Equipment, and, thus, does not cover infringement allegations against any other product lines. Petitioner states that the Line 8 Agreement did not pertain to its prior purchase of lines 1-6 from GEA, which it asserts were the lines accused in the 904 case. Paper 24, 1 2 ( Pet. Reply to Prelim. Resp. ). Patent Owner has not identified any evidentiary support for its contention that the district court complaint against GEA alleging infringement of the Unibloc or ECOSpin systems... including without limitation the Fillstar bottling machine triggered a Steuben Claim. Prelim. Resp. 26. Indeed, Petitioner s purchase of the Line 8 Equipment did not even occur until months after the district court complaint against GEA was filed. Moreover, even if a Steuben Claim was made at some point during the GEA litigation, there is insufficient evidence to conclude that Petitioner had the power to call the shots with respect to GEA s defenses to any significant degree. Gonzalez v. Banco Central Corp., 27 F.3d 751, 758 (1st Cir. 1994). With respect to the settlement provision, the Line 8 Agreement specifically contemplates that GEA may settle a case without Petitioner s consent, albeit Ex. 2046, 2. In such a case,. Furthermore, the 16
Agreement does not permit Petitioner to direct GEA with regard to appeal; rather,. As such, Patent Owner has not demonstrated that Petitioner had the right or opportunity to present proofs and argument at least before the district court in the 904 case, and, thus, cannot be said to have had a full and fair opportunity to have litigated that case. Taylor, 553 U.S. at 892, 895. 4. Conclusion Regarding 315(b) Patent Owner has not provided a sufficient factual basis upon which to conclude, based on the current record, that Petitioner and GEA are privies. We, therefore, conclude that the Petition is not time barred under 315(b) based on the district court complaint filed in the 904 case by Patent Owner against GEA. B. Claim Construction In an inter partes review, the Board interprets claim terms in an unexpired patent according to the broadest reasonable construction in light of the specification of the patent in which they appear. See 37 C.F.R. 42.100(b); In re Cuozzo Speed Techs., LLC, 778 F.3d 1271, 1279 81 (Fed. Cir. 2015). Under that standard, and absent any special definitions, we give claim terms their ordinary and customary meaning, as would be understood by one of ordinary skill in the art at the time of the invention. See In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). Any special definitions for claim terms must be set forth with reasonable clarity, deliberateness, and precision. See In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994). 17
Having considered the evidence of record, for purposes of this decision, we see no need to expressly construe any claim terms at this stage of the proceeding. C. Obviousness Based on Scholle, Chambers, the FDA Regulations, Biewendt, Kelbrick, Elliott, Akai, and Kodera Petitioner contends that claims 1 10, 14, 16 21, 25, 27, 29, and 32 36 would have been obvious under 35 U.S.C. 103(a) over Scholle in view of one or more of Chambers, the FDA Regulations, Biewendt, Kelbrick, Elliott, Akai, and Kodera. Pet. 19 38. As support, Petitioner submits the testimony of Dr. Dennis Heldman. Ex. 1004 53 96. Based on the current record, we determine that Petitioner has established a reasonable likelihood that it would prevail in showing that the combination of Scholle, Chambers, the FDA Regulations, Biewendt, Kelbrick, Elliott, Akai, and Kodera renders the challenged claims obvious. 1. Claim 1 Petitioner demonstrates sufficiently that Scholle discloses the claim elements of an apparatus with a sterilization tunnel for surrounding a plurality of containers with pressurized gas and a plurality of zones within the sterilization tunnel recited in independent claim 1. Pet. 19 20 (citing Ex. 1005, [54], 1:54 55, 1:57 62, 1:67 22, 4:39 41). Petitioner further asserts that the requirement of maintaining a sterilant concentration ratio of at least about 5 to 1 in the plurality of zones would have been obvious. Id. at 20 23. Specifically, Petitioner asserts that, using partitions and pressure differentials, the apparatus of Scholle is configured to prevent hydrogen peroxide from migrating from the sterilizing compartment to the drying and filling compartments, and, thus, the sterilant 18
concentration in the sterilization compartment of Scholle is necessarily different from the concentration in the drying and filling compartments. Id. at 20 (citing Ex. 1004 55; Ex. 1005, 6:36 41). Furthermore, relying upon the testimony of its Declarant, Dr. Heldman, Petitioner points to Scholle s teaching of using a 30 % solution of hydrogen peroxide in water (i.e., 300,000 ppm) as a sterilant (id. at 21 (citing Ex. 1004 56; Ex. 1005, 5:18 22)), and asserts that a person of ordinary skill in the art would understand that to ensure consistent sterilization and residual peroxide levels, the concentration of applied sterilant must necessarily be maintained. Id. Petitioner argues that Chambers discloses that [m]any aseptic packaging systems use H 2 O 2 at concentrations of 30 to 35% and 80 to 90 C for 3 to 5 sec... followed by hot air (60 to 125 C) to sterilize packaging materials. Id. (citing Ex. 1014, 17). Further, Petitioner asserts that the FDA limits the residual concentration of hydrogen peroxide to not more than 0.5 ppm after packaging. Id. (citing Ex. 1013, 1). Based on these teachings, Petitioner argues that it would have been obvious in view of Chambers and/or the FDA Regulations to limit residual hydrogen peroxide and, by extension, to maintain a particular sterilant concentration ratio between the 30 percent applied hydrogen peroxide and the residue in filled and capped containers. Id. In its Preliminary Response, Patent Owner argues that the Petition fails to establish that the combined prior art system would necessarily include sterilant concentration levels in the plurality of zones [] maintained at a ratio of at least about 5 to 1. Prelim. Resp. 32. More particularly, Patent Owner asserts that the sterilant concentration in the sterilization zone 19
is a function of, inter alia, the manner in which the sterilant is atomized and vaporized. Id. at 35. Patent Owner asserts that Petitioner s expert s opinion is unsupported by analysis explaining how the percentage of hydrogen peroxide in an aqueous solution, i.e., 30% in Scholle, translates into the concentration of hydrogen peroxide in the sterilization zone after it has been sprayed, atomized, vaporized, mixed with carrier gases, and injected into the sterilization zone of the Scholle apparatus. Id. at 34 35. Patent Owner further contends that Petitioner has not demonstrated that the concentration in the filling zone must necessarily be 0.5 ppm or below because such a concentration is not inherent in a system which is designed to meet FDA approval. Id. at 38 39. While we recognize that atomizing hydrogen peroxide may result in varying concentrations (Ex. 1004 51, Ex. 1008, 1:24 28), the grounds upon which we institute are based on obviousness, not anticipation. Petitioner s obviousness contentions do not require that the hydrogen peroxide concentration in the sterilization zones must necessarily be maintained at the exact same concentration in which it existed in the aqueous solution. As such, Petitioner has demonstrated persuasively that a skilled artisan would have reason to maintain a sufficiently high concentration in the sterilization zone and sufficiently low concentration in the filling zone such that the 5 to 1 ratio requirement would be satisfied. Even assuming some variation, we are not persuaded that the concentration in the sterilization zones of Scholle after atomization would drop to a level such that the 5 to 1 ratio would not have been met. Dr. Heldman asserts that a sterilant concentration ratio of 300,000 ppm to 0.5 ppm (600,000 to 1) could be maintained in the apparatus of Scholle. Ex. 1004 58. 20
Based on the record currently before us, we are persuaded that Petitioner has demonstrated sufficiently that a person of ordinary skill in the art would have found it obvious to maintain sterilant concentration levels within the plurality of zones of Scholle s apparatus at a ratio of at least about 5 to 1. In particular, a skilled artisan would have found it obvious to maintain a high sterilant concentration within the sterilization zone in order to ensure consistent and thorough sterilization of the containers. Furthermore, we agree that a person of ordinary skill in the art would have been motivated to minimize hydrogen peroxide concentrations in the filler zone to ensure compliance with the FDA Regulations, which specify that [n]o use of hydrogen peroxide solution in the sterilization of food packaging material shall be considered to be in compliance if more than 0.5 [ppm] of hydrogen peroxide can be determined in distilled water packaged under production conditions.... Ex. 1013, 1. As discussed above, Scholle teaches using pressure differentials and partitions to control the flow of sterilant gas between the different compartments of the apparatus. Accordingly, on this record, modifying the Scholle apparatus to meet the claimed ratio would have amounted to no more than the obvious optimization of known, result-effective parameters. See In re Aller, 220 F.2d 454, 456 (CCPA 1955). We, thus, determine that that the record before us establishes a reasonable likelihood that Petitioner will prevail with respect to claim 1 based on this challenge. 2. Claims 2 10, 14, 16 21, 25, 27, 29, and 32 36 We have also considered Petitioner s arguments and evidence with regard to claims 2 10, 14, 16 21, 25, 27, 29, and 32 36. Pet. 23 38. 21
Petitioner relies upon the same teachings of Scholle in combination with the FDA Regulations and Chambers to satisfy the requirement of a 5 to 1 sterilant concentration ratio recited in independent claims 4, 17, and 33. Id. at 29, 32, 35. For the reasons discussed above, we determine that the maintenance of such a ratio, as required by these claims, would have amounted to no more than the obvious optimization of known, resulteffective parameters. We determine that the record before us establishes a reasonable likelihood that Petitioner will prevail with respect to claims 2 10, 14, 16 21, 25, 27, 29, and 32 36 based on the combination of Scholle with the reliedupon secondary references. D. Anticipation by Biewendt Petitioner contends that claims 1 10, 14, 16 21, 25, 27, 29, and 32 36 are anticipated under 35 U.S.C. 102(b) by Biewendt. 1. Overview of Biewendt Biewendt describes an aseptic filling and sealing plant for bottles used to contain ultra heat treated (UHT) milk that was developed by Robert Bosch GmbH. Ex. 1024, 1. Biewendt teaches that the Bosch plant includes a bottle sterilizing machine wherein the bottles are sprayed with hydrogen peroxide. Id. at 4 5. The Bosch system is described as having a housing in which the sterilized bottles are transported, filled and sealed, which is encapsulated from the atmosphere and sterilized under defined conditions. Id. at 18. The housing is pressurized with sterile air. Id. Biewendt illustrates the housing as having several connected components, including the [b]ottle sterilizing machine, [a]septic tunnel, [a]septic filling machine, and [a]septic sealing machine. Id. at 2. 22
2. Analysis Based on the foregoing teachings, Petitioner demonstrates sufficiently that Biewendt discloses the claim elements of an apparatus with a sterilization tunnel for surrounding a plurality of containers with pressurized gas and a plurality of zones within the sterilization tunnel recited in independent claim 1. Pet. 39 40. Petitioner further asserts that the Biewendt teaches that the hydrogen peroxide to be sprayed is stored at a minimum concentration of 33% i.e., 330,000 ppm and [t]he requirement of a minimum concentration H 2 O 2 implicitly requires maintaining the concentration at the specified level. Pet. 41 (citing Ex. 1004 100; Ex. 1024, 5, 11). According to Petitioner, testing of the filled bottled in Biewendt using test strips accurate to 1 ppm did not show any residual hydrogen peroxide. Id. Based on these teachings, Petitioner contends that the sterilant concentration ration between the sterilization machine and the filling machine of Biewendt is at least about 330,000 ppm to 1 ppm, which is at least about 5 to 1. Id. at 42. Petitioner s arguments do not persuade us that Biewendt discloses that the plurality of zones are maintained at a ratio of at least about 5 to 1. Petitioner relies upon Biewendt s disclosure of a 33% concentration of hydrogen peroxide before it is sprayed necessarily results in a 330,000 ppm concentration in the sterilization machine. Patent Owner argues persuasively that neither Petitioner nor its Declarant points to any evidence or analysis explaining how the percentage of hydrogen peroxide in an aqueous solution, i.e., 33% in Biewendt, translates into the concentration of hydrogen peroxide in the sterilization zone after it has been sprayed, atomized, vaporized, mixed with carrier gases, and injected into the 23
sterilization zone of the Biewendt apparatus. Prelim. Resp. 35. As recognized by Dr. Heldman, the process of atomizing hydrogen peroxide may result in varying concentrations. Ex. 1004 51 (citing Ex. 1008, 1:51 2:3). As such, Petitioner has not demonstrated sufficiently that the concentration of hydrogen peroxide would remain unchanged at 33% (330,000 ppm) after being atomized and sprayed into the sterilization machine such that the 5 to 1 ratio would inherently be met. Inherent anticipation may not be established by probabilities or possibilities. In re Montgomery, 677 F.3d 1375, 1380 (Fed. Cir. 2012). We, therefore, determine that Petitioner has not demonstrated a reasonable likelihood of prevailing with respect to its assertion that Biewendt anticipates claims 1 10, 14, 16 21, 25, 27, 29, and 32 36. E. Obviousness Based on Biewendt, Chambers, the FDA Regulations, Buchner, ZFL, Scholle, Kelbrick, Akai, Kodera, and Elliott Petitioner also contends that claims 1 10, 14, 16 21, 25, 27, 29, and 32 36 would also have been obvious under 35 U.S.C. 103(a) over Biewendt in view of one or more of Chambers, the FDA Regulations, Buchner, ZFL, Scholle, Kelbrick, Akai, Kodera, and Elliott. Pet. 39 58. Petitioner submits the testimony of Dr. Heldman as support for this challenge as well. Ex. 1004 97 139. Based on the current record, we determine that Petitioner has also established a reasonable likelihood that it would prevail in showing that the combination of Biewendt, Chambers, the FDA Regulations, Buchner, ZFL, Scholle, Kelbrick, Akai, Kodera, and Elliott renders the challenged claims obvious. 24
1. Claim 1 For the reasons discussed above with respect the anticipation ground based on Biewendt, Petitioner demonstrates sufficiently that Biewendt discloses the claim element of an apparatus with a sterilization tunnel for surrounding a plurality of containers with pressurized gas and a plurality of zones within the sterilization tunnel recited in independent claim 1. Pet. 39 40. Petitioner argues that it would have been obvious to provide Biewendt with the partitions of Scholle in order to provide the advantages of (1) reducing or eliminating the transfer of hydrogen peroxide from a sterilization zone to a filling zone, and/or (2) preventing contamination in the various sterilization zones. Pet. 40, 45 (citing Ex. 1005, 6:25 43). Petitioner also asserts that [e]ven without Biewendt s disclosure regarding sterilant concentrations, a concentration ratio of at least about 5 to 1 between the applied and residual sterilant levels would have been obvious in view of Chambers and/or the FDA Regulations. Id. at 42. Patent Owner reiterates its argument concerning the requirement that the sterilant concentration levels in the plurality of zones [] maintained at a ratio of at least about 5 to 1. Prelim. Resp. 33. For the reasons provided above with respect to the obviousness challenge based on Scholle, we are likewise persuaded by Petitioner s argument that a person of ordinary skill in the art would have found it obvious to maintain sterilant concentration levels within the plurality of zones of Biewendt s disclosed apparatus at a ratio of at least about 5 to 1. Although Petitioner has not demonstrated that Biewendt inherently satisfies the claim requirement, modifying Biewendt to 25
meet the claimed ratio would have amounted to no more than the obvious optimization of known, result-effective parameters. Aller, 220 F.2d at 456. We, thus, determine that that the record before us establishes a reasonable likelihood that Petitioner will prevail with respect to claim 1 based on this obviousness challenge. 2. Claims 2 10, 14, 16 21, 25, 27, 29, and 32 36 We have also considered Petitioner s arguments and evidence with regard to claims 2 10, 14, 16 21, 25, 27, 29, and 32 36. Pet. 43 58. Petitioner relies upon the same teachings of Biewendt in combination with the FDA Regulations and Chambers as rendering obvious the requirement of a 5 to 1 sterilant concentration ratio recited in independent claims 4, 17, and 33. Id. at 50, 53, 56. For the reasons discussed above, we determine that the maintenance of such a ratio as required by these claims would have amounted to no more than the obvious optimization of known, resulteffective parameters. We determine that the record before us establishes a reasonable likelihood that Petitioner will prevail with respect to claims 2 10, 14, 16 21, 25, 27, 29, and 32 36 based on the combination of Biewendt with the reliedupon secondary references. III. CONCLUSION We conclude that Petitioner has demonstrated a reasonable likelihood of prevailing on its assertion that claims 1 10, 14, 16 21, 25, 27, 29, and 32 36 of the 435 patent are unpatentable. At this stage of the proceeding, the Board has not made a final determination as to the construction of any claim term or the patentability of any challenged claim. 26
IV. ORDER In consideration of the foregoing, it is hereby: ORDERED that pursuant to 35 U.S.C. 314(a), an inter partes review is hereby instituted on the following grounds: I. Claims 1 10, 14, 16 21, 25, 27, 29, and 32 36 as obvious over the combination of Scholle, Chambers, the FDA Regulations, Biewendt, Kelbrick, Elliott, Akai, and Kodera; II. Claims 1 10, 14, 16 21, 25, 27, 29, and 32 36 as obvious over the combination of Biewendt, Chambers, the FDA Regulations, Buchner, ZFL, Scholle, Kelbrick, Akai, Kodera, and Elliott. FURTHER ORDERED that no other proposed grounds of unpatentability are authorized. FURTHER ORDERED that pursuant to 35 U.S.C. 314(c) and 37 C.F.R. 42.4, notice is hereby given of the institution of a trial commencing on the entry date of this decision. 27
For PETITIONER: Thomas Jenkins Virginia Carron FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP Tom.jenkins@finnegan.com Virginia.carron@finnegan.com For PATENT OWNER: Greg H. Gardella Scott McKeown Ruby Natnithithadha OBLON, MCCLELLAND, MAIER & NEUSTADT, L.L.P CPDocketGardella@oblon.com cpdocketmckeown@oblon.com cpdocketrjn@oblon.com 28