United States: Board Decisions In Cases Where The Facts Are Largely Undisputed May Not Be Subject To A Substantial Evidence Standard Of Review

In Smith & Nephew, Inc. v. Rea, No. 12-1343 (Fed. Cir. July 9, 2013), the Federal Circuit reversed the Board's obviousness decision holding that certain claims of U.S. Patent No. 7,128,744 ("the '744 patent") would not have been obvious.

The '744 patent claims priority to a provisional application filed on September 13, 1999, and is owned by Synthes (U.S.A.) ("Synthes"), a medical device company. The '744 patent is directed to a plate system for repairing bone fractures. The system is attached to fractured bones by bone anchors or screws inserted through holes in a plate and then into the bone. The system includes a shaft portion with anchor holes and a head portion with anchor holes that are conically tapered from the top surface to the bottom surface. The '744 patent also describes two types of prior art screws. The first type is compression or nonlocking screws with threaded shafts but unthreaded heads that typically pass through unthreaded holes. Compression or nonlocking screws draw the bone and plate together for quicker healing. The second type is locking screws with threaded shafts and threaded heads that screw into both the plate and the bone to stabilize their relative positions. All of the holes in the claims-at-issue are at least partially threaded so that physicians can optionally use locking screws or nonlocking bone screws.

In 2009, Smith & Nephew, Inc. ("Smith & Nephew") requested reexamination of the '744 patent. On reexamination, the PTO rejected all fifty-five claims as obvious based on numerous prior art references, including a 1997 article by N.P. Haas ("the Haas article") and Synthes devices from the 1990s ("the Synthes devices").

The Haas article disclosed a plate with only conically tapered, threaded holes in the shaft and head portions of the plate. The Synthes devices included (1) a plate with unthreaded holes for fractures in the femur; (2) a Distal Radius Plate ("DRP") for wrist fractures with all anchor holes partially threaded and designed for use with either locking or nonlocking screws; and (3) a Locking Reconstruction Plate ("LRP") for jaw fractures with anchor holes having threaded lower portions and unthreaded, conically flared upper portions that allowed for countersunk screws.

According to the examiner, combining the Haas article with any of the references cited taught the claimed invention. The examiner also adopted Smith & Nephew's argument that there was a motivation to combine the references because having all screw holes threaded would provide the option of using either locking screws for stability or compression screws to quicken healing. Synthes then appealed to the Board.

On appeal, the Board reversed the rejections of twenty-four claims, concluding that it would not have been obvious to modify the prior art to have only threaded holes in the plate's head portions. According to the Board, the prior art did not teach the use of only conical, partially threaded holes in a bone plate because those holes could not be used with nonlocking screws to provide compression. And although the '744 patent stated that the partially threaded holes of the Synthes devices could be used with nonlocking screws to obtain compression, that admission was not fatal to Synthes's case because the Synthes devices' plate holes were not fully conical from the top surface to the bottom surface of the plate. Regarding the Haas article, the Board found that the holes were both threaded and fully conical, but that one of ordinary skill would not have used a nonlocking screw with the disclosure in the Haas article for two reasons. First, there was no evidence that conical, partially threaded holes could be used with nonlocking screws. Second, using a nonlocking screw with that disclosure would result in an inadequately countersunk screw. Following the Board's reversal, Smith & Nephew appealed.

On appeal, the Federal Circuit reversed the Board's decision on the twenty-four claims, finding several flaws with the Board's analysis. First, the Court held that the Board erred in distinguishing between the '744 patent and the prior art on the ground that it would not have been obvious to use a nonlocking screw in a threaded hole to provide compression. Here, the Court held that the claims-at-issue did not require that the screws provide compression.

Second, the Court held that the Board erred in its conclusion regarding countersunk screw features. Nothing in the Haas article, the Court determined, limited the size of the described features or indicated that the geometries could not be made larger to adequately countersink screws. And even if countersinking were not an option, a person of ordinary skill could simply choose an appropriately shaped screw that would sit within the holes without protruding.

Third, the Court found improper the Board's finding that partially threaded holes in the prior art that were only partly conical could not accept nonlocking screws. By the '744 patent's own admission, partially threaded holes, regardless of their shape, were compatible with nonlocking screws because a person of skill could change a hole's geometry to fit any nonlocking screw and achieve compression.

Fourth, the Court held that the Board erred in not considering the DRP and LRP devices on the ground that the examiner had not relied on them as a basis for the rejections. On this point, the Federal Circuit determined that the examiner incorporated by reference Smith & Nephew's arguments, including its discussion of the DRP and LRP devices. The Court also found unpersuasive Synthes's attempt to distinguish the prior art by arguing that the references were not used with weight-bearing bones and therefore used holes with only minimal threading.

Although recognizing that the substantial evidence standard of review required it to defer to the Board's findings, the Court nonetheless determined that the facts of the case were largely undisputed, while the decision was the result of analytical errors. To the extent that Synthes intended to create a factual dispute through an expert declaration that it submitted, the Court found the declaration contrary to the '744 patent's specification and held that "[e]xpert opinions that are contrary to admissions in the specification do not create a factual isssue." Slip op. at 15 n.6 (citing Pharmastem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342, 1361-62 (Fed. Cir. 2007)).

The Court also addressed whether it would have been obvious to combine the prior art. On this issue, the Court held that the evidence did not indicate that the available choices in the prior art would produce a surprising result or involve anything more than a choice among designs already known. According to the Court, the claims-at-issue entailed "an improvement that is no 'more than the predictable use of prior art elements according to their established functions.'" Id. at 17 (quoting KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007)).

Finally, the Court addressed Synthes's argument that achieving compression with nonlocking screws in conically tapered, partially threaded holes was previously unknown and would have been inoperable. According to Synthes, this objective became possible only through the use of specialized screws. In rejecting the argument, the Court held that "[t]he problem with Synthes's argument is that it is contending that a standard non-locking screw would be inoperative to obtain compression in a threaded hole, while at the same time claiming that it managed to achieve exactly that objective, all through the deus ex machina of a 'specialized screw'" that was an unclaimed and undisclosed feature in the '744 patent. Id.

Accordingly, the Court reversed the Board's decision, holding that the examiner correctly ruled that the disputed claims would have been obvious.

Judges: Dyk, Bryson (author), Wallach

[Appealed from Board]

This article previously appeared in Last Month at the Federal Circuit, August 2013

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