In Smith & Nephew, Inc. v. Arthrocare Corp., Appeal No. IPR2016-00918 (Fed. Cir. Aug. 21, 2019), the Federal Circuit affirmed the Patent Trial and Appeal Board’s decision in an IPR to invalidate patent claims on the basis of obviousness, determining that the Board did not violate the Administrative Procedure Act (APA) by describing the motivation to combine the teachings of the prior art in different language than that used in the petition.  Additionally, the court affirmed the Board’s claim construction as reasonable and found that subjecting a pre-AIA patent to inter partes review was constitutional when the patent issued after the passage of the AIA.  The decision suggests that, when the same passage in a prior art reference is relied upon by both a petitioner and the Board to find a motivation to combine references, a mere difference in how that passage is characterized is unlikely to be considered a change in theories in contravention of the APA.

The patent at issue is directed to a surgical suture anchor used to reattach soft tissue to bone.  The challenged claim recited “ a rigid support integral with the anchor body to define a single-piece component.”  The primary reference discloses nearly all claim features but does not expressly describe a “single-piece component,” so a secondary reference directed to a bone anchor was relied upon in the petition and considered by the Board for this claim feature.  The secondary reference includes a passage that describes two different manners of manufacturing the bone anchor: (1) by casting an anchor body and posts together, and (2) by casting or forming the anchor body and inserting the posts later.  The latter manufacturing option is introduced in the secondary reference by the adverb “alternatively.”  Based on this passage, the petitioner characterized the secondary reference as disclosing single-piece casting as “well-known,” “accepted,” and “simple.”  In the final written decision, the Board described this passage as suggesting that the first manufacturing option was “primary” and “preferred” because of the word “alternatively.”  Both the petitioner and the Board relied upon this passage to find a motivation to combine references.

On appeal, the patent owner argued that the Board’s characterization of the passage in the secondary reference amounted to a new theory of motivation to combine in violation of the APA’s procedural requirements for formal administrative adjudications.  However, because the parties had disputed the meaning of the passage throughout the trial and because the Board provided notice and an opportunity to address the portion of the reference relied upon by the Board, the court found no APA violation.

In light of this decision, practitioners should not expect that their procedural rights under the APA limit the language or approaches that the Board may use to analyze sections of prior art references that have been thoroughly debated by the parties.  Instead, practitioners would be wise to anticipate and argue against all viable descriptions and characterizations of prior art references cited to provide a motivation to combine, even when not explicitly set forth by the opposing party.