Fed Circuit vacates “prejudicial” ruling in cargo case

The US Court of Appeal for the Federal Circuit has remanded a case to the Patent and Trial Appeal Board (PTAB) after examiners were “plainly prejudicial” to one party.

Federal court judges, including Chief Judge Rader, were ruling on a dispute between FG Products and Randall Manufacturing, both of which make moveable, track-mounted partitions (bulkheads) used for dividing cargo space.

In 2007, Randall challenged an FG patent directed to “moveable bulkheads for partitioning cargo space in a shipping container” under an inter partes review.

The USPTO later rejected a number of claims for being obvious, before the Board of Patent Appeals and Interferences, now the PTAB, reversed the decision on appeal in 2012. It said there was no reason for anyone skilled in the art to combine the cited references.

But on appeal by Randall, the Federal Circuit said on October 30 that the board failed to consider a “wealth of well-documented knowledge that is highly material to evaluating the motivation to combine references to arrive at the claimed invention”.

The Supreme Court has criticised taking a rigid approach to determining obviousness based on individual prior art references, Federal Circuit Judge Taranto explained, preferring instead to assess prior art in a more flexible manner.

According to Taranto, the board’s analysis in this case “ran afoul of that basic mandate”.

“By narrowly focusing on the four prior art references cited by the examiner and ignoring the additional record evidence Randall cited to demonstrate the knowledge and perspective of one of ordinary skill in the art, the board failed to account for critical background information,” the judge said.

This information, Taranto explained, “could easily explain why an ordinarily skilled artisan would have been motivated to combine or modify the cited references to arrive at the claimed inventions”.

For instance, Randall had cited four US patents disclosing bulkheads designed to be lifted and stowed near the ceiling of cargo, three of which describe such stowage for movable, track-mounted panels.

These references constituted “important” evidence of the state of the art, Taranto said, and ignoring them meant the board’s ruling was “plainly prejudicial”.

The PTAB will now review the case.

Scott McKeown, partner at Oblon, Spivak McClelland, Maier & Neustadt LLP, who represents FG, declined to comment.

Mark Remus, partner at Steptoe & Johnson LLP, acting for Randall, could not be reached for comment.