Fed Circuit Watch: PTAB Decisions Questioned in Light of SAS and Aqua Products

103 Aqua Products fed circuit watch IPR obviousness patent SAS

On June 19, 2018, the Court of Appeals for the Federal Circuit issued Sirona Dental Systs. GmbH v. Institut Straumann AG.[1]  The case is important because two other recent court decisions – SAS and Aqua Products – affected certain details of this case that ultimately affected how the Fed Circuit ruled.  In SAS, the U.S. Supreme Court held that all claims brought forth in the IPR petition be reviewed by the PTAB.[2]  In Aqua Products, the Fed Circuit held that the burden of proving unpatentability of a claim lies with the petitioner.[3]

The facts are as follows.

Source: U.S. Patent No. 6,319,006, Nov. 20, 2001, to Franz Scherer

Sirona owns U.S. Patent No. 6,319,006 (‘006), for “Method for producing a drill assistance device for a tooth implant.”  Claim 1 recites:

  1. Method for producing a drill assistance device for a tooth implant in a person’s jaw, comprising the following process steps:

taking an x-ray picture of the jaw and compiling a corresponding measured data record,

carrying out a three-dimensional optical measuring of the visible surfaces of the jaw and of the teeth and compiling a corresponding measured data record,

correlating the measured data records from the x-ray picture and from the measured data records of the three-dimensional optical measuring,

determinating the optimal bore hold for the implant, based on the x-ray picture, and

determinating a pilot hole in a drill template relative to surfaces of the neighboring teeth based on the x-ray picture and optical measurement.

Straumann filed an IPR petition seeking review of the ‘006 patent claims.  The claims and grounds are summarized below.

Claims Grounds Decision
1-4, 9-10 Unpatentable as anticipated under §102 by U.S. Patent No. 5,562,448 (Mushabec) No institution
1-4, 9-10 Unpatentable as anticipated under §102 by Fortin reference Review instituted
1-10 Unpatentable as obvious under §103 by DE Patent No. 195 10 294 (Bannuscher) and U.S. Patent No. 5,842,858 (Truppe) No institution
1-10 Unpatentable as obvious under §103 by Fortin and Truppe references Review instituted

Subsequent to institution, Sirona filed a motion to amend the claims under 37 C.F.R. §42.121.  Straumann opposed, arguing that the substitute claims were obvious over Mushabec, U.S. Patent No. 5,725,376 (Poirer), the Willer reference, and U.S. Patent No. 5,967,777 (Klein), and obvious over Mushabec, PCT Publication No. WO 95/28688 (Swaelens), and Klein.

The PTAB held that claims 1-8 were obvious over Bannuscher and Truppe.  However, claims 9-10 were not unpatentable since Straumann did not demonstrate that claims 9-10 were obvious.  Further, the PTAB denied Sirona’s motion to amend, finding that Sirona failed to meet its burden to demonstrate the proposed substitute claims were not obvious over Bannuscher and Truppe in view of Klein and Poirer.  Sirona appealed the denial of its motion to amend, and claims 1-8 being unpatentable.  Straumann appealed claims 9-10 being patentable.

The Fed Circuit panel was composed of Chief Judge Prost and Judges Moore and Stoll, with Judge Moore writing for the panel.  As a preliminary matter, PTAB decisions are overturned by the Fed Circuit in accordance with the Administrative Procedures Act (APA),[4] were the PTAB decision is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”[5]

In determining patentability of claims 1-8, the panel found nothing capricious in the PTAB’s factual findings that claims 1-8 were obvious over Bannuscher and Truppe.  First, there was substantial evidence that supported the PTAB’s finding that Bannuscher digitally inputs structures from plaster model for correlation, and not just simple jaw movements.  Second, substantial evidence supported Truppe disclosed “carrying out a three-dimensional optical measuring of the visible surfaces of the jaw and teeth.”  Sirona did not even dispute this disclosure.  Together, a person skilled in the art (POSITA) would have been motivated to combine Bannuscher and Truppe to arrive at the ‘006 invention.  Judge Moore determined that the PTAB would violate the APA if it made its own theory of obviousness based on the Bannuscher geometry data – if that data was not originally presented in Straumann’s IPR petition.  This, Judge Moore determined, was contrary to SAS, in which a proceeding must be in accordance with the petition itself.  She quoted:

Nothing suggests the Director enjoys a license to depart from the petition and institute a different inter partes review of his own design.”[6]  It would thus not be proper for the Board to deviate from the grounds in the petition and raise its own obviousness theory.[7]

Nonetheless, the Fed Circuit panel still found claims 1-8 unpatentable as obvious because the Bannuscher geometry data was supported by the petition.  As noted:

We conclude that the Board did not deviate from the grounds in the petition by relying upon the geometry data and citing for support the same portions of Bannuscher that the petition cited . . . The Board simply used the term “geometry data” to refer to the digitized plaster models that were expressly cited in the petition.  Because the petition provided Sirona notice and opportunity to address the portions of Bannuscher relied on by the Board, the Board’s reliance on these portions of Bannuscher did not violate the APA and is not inconsistent with SAS.[8]

Therefore, the panel affirmed the PTAB’s finding that claims 1-8 were obvious.

In deciding the Sirona’s appeal of the denial of its motion to amend, the panel found the PTAB’s decision was incongruous with Aqua Products.  Judge Moore wrote:

The Board erred when it denied Sirona’s contingent motion to amend.  Sirona challenged the Board’s denial on multiple grounds.  It argued that the Board improperly placed the burden on Sirona to prove that the proposed substitute claims were patentable . . . . [However, it is t]he petitioner bears the burden of proving that the proposed amended claims are unpatentable.[9]

The panel vacated the decision to deny the motion to amend, and remanded the case back to the PTAB consistent with Aqua Products.

As to Straumann’s assertion that claims 9-10 were unpatentable, and the PTAB erred in its finding, the panel simply noted that in opposing Sirona’s motion to amend, it added additional references to its argument of unpatentability that were not originally asserted in the IPR petition.  While Poirer contains disclosures directed to limitations of claim 9, it was not in the petition in combination with Bannuscher and Truppe.  The panel affirmed the PTAB’s patentability finding as to claims 9-10.

In summary, the Fed Circuit panel affirmed claims 1-8 of the ‘006 patent were unpatentable, and claims 9-10 were patentable, vacated the denial of Sirona’s motion to amend, and remanded for further proceedings.  To be certain, the PTAB was not egregious in its decision.  The PTAB case was decided before Aqua Products, while SAS was decided while Sirona was pending before the Fed Circuit.  However, the case proceedings must still conform to the new case law.  The remanded proceedings may return back to the Fed Circuit on appeal at a future date.


[1] ___F.3d___ (Fed. Cir. 2018) (slip op.).

[2] See SAS Inst., Inc. v. Iancu, 584 U.S.___, 138 S. Ct. 1348, 1356 (2018).

[3] See Aqua Prods., Inc. v. Matal, 872 F.3d 1290, 1324-25 (Fed. Cir. 2017) (en banc).

[4] See 5 U.S.C. §701, §702, §703, §704, §705 and §706.

[5] See EmeraChem Holdings, LLC v. Volkswagen Grp. of Am., Inc., 859 F.3d 1341, 1345 (Fed. Cir. 2017).

[6] See SAS, 138 S. Ct. at 1356.

[7] See Sirona, supra (slip op. at 9-10).

[8] Id. (slip op. at 10-11).

[9] Id. (slip op. at 12-13).