Last week, the Federal Circuit issued its opinion in US Synthetic Corp. v. International Trade Commission, a patent case we have been following because it attracted an amicus brief. In the opinion, the Federal Circuit reviewed a determination by the International Trade Commission that claims of a patent asserted by US Synthetic Corp. are patent ineligible and that certain intervening companies, who defend the ITC’s judgment in this appeal, failed to prove lack of enablement of those claims. In an opinion authored by Judge Chen that was joined by Judges Dyk and Stoll, the Federal Circuit reversed the part of the judgment related to eligibility, affirmed the part of the judgment related to enablement, and remanded the case to the ITC. This is our opinion summary.
Judge Chen presented the facts of the case:
US Synthetic Corp. (USS) filed a complaint with the United States International Trade Commission [ITC] . . . alleging that Intervenors, among others, violated 19 U.S.C. § 1337 . . . based upon the importation [and sale] . . . of certain products that infringe . . . USS’s patent. The ’502 patent claims a certain type of composition known as a polycrystalline diamond compact. . . . The [ITC] instituted an investigation, and the adminisrtative law judge . . . determined [certain] claims . . . were infringed, not invalid . . . and that USS satisfied the economic prong of the domestic industry requirement. . . . The ALJ . . . determined that the asserted claims are patent ineligible because they violate the abstract idea-exception . . . . The [ITC] . . . affirmed the ALJ’s determinations that the asserted claims are patent ineligible under [35 U.S.C.] § 101 and that Respondents failed to prove a lack of enablement under § 112.
The ’502 patent is . . . . [a] polycrystalline diamond compact (PDC), a composition made of a polycrystalline diamond table . . . bonded to a substrate. . . . PDCs ‘are utilized in . . .’ drilling tools and machining equipment. . . . As the ’502 patent discloses, USS found a way to manufacture a PDC that exhibits ‘a high-degree of diamond-to-diamond bonding’ and also contains a reduced amount of metal catalyst without leaching the diamond table. . . . To define and describe its manufactured compositions possessing these advantages, USS measured several different parameters of its PDCs, such as dimensional information . . . and certain material properties. . . . As the patent specification further explains, USS tested and measured its manufactured PDCs for coercivity, specific magnetic saturation, and specific permeability. . . . The [ITC] instituted the underlying investigation in December 2020. Throughout the investigation, Respondents challenged the asserted claims as being directed primarily to a patent-ineligible natural phenomenon. . . . [T]he ALJ concluded that the asserted claims are patent ineligible as directed to an abstract idea. . . . The ALJ . . . determined that the recited magnetic properties . . . [were] merely unintended ‘results or effects [of the manufacturing process] and thus abstract. . . .’ USS petitioned for [ITC] review on these determinations, and . . . affirmed . . . . The [ITC] . . . determined that the ‘claims are directed to the abstract idea of PDCs that achieve . . . desired magnetic results, which the specifications posit may be derived from enhanced diamond-to-diamond bonding. . . .’ USS appealed the [ITC’s] § 101 determination as to the asserted claims of the ‘502 patent. We have jurisdiction under 28 U.S.C. § 1295(a)(6).
Judge Chen began his analysis by explaining that the panel reviews the ITC’s “final determinations under the standards of the Administrative Procedure Act,” reviewing “factual findings for substantial evidence” and “legal determinations de novo.”
First, he addressed the analytical framework for patent ineligibility, explaining that the Supreme Court excludes “certain categories of subject matter, including abstract ideas.” To “determine whether claimed subject matter is patent ineligible as an abstract idea,” Judge Chen explained, the panel would use the “two-step framework” enumerated by the Supreme Court. During step one, he explained, the panel would “determine whether the claims at issue are directed to a patent-ineligible concept.” If “the claims are not directed to an abstract idea . . . the inquiry ends.”
Applying this framework, Judge Chen “conclude[d] that the asserted claims of the ‘502 patent are not directed to an abstract idea,” but are instead “directed to a specific, non-abstract composition of matter—a PDC—that is defined by its constituent elements.” Those elements, he explained, were the PDC’s defined “dimensional information . . . and quantified material properties . . . whereby the material properties correlate to the diamond table’s structure and thereby further inform a skilled artisan about what the claimed PDC is.”
Judge Chen found several errors in the ITC’s analysis. For example, he said, it erred “when it concluded that the asserted claims are directed to the ‘abstract idea of PDC’s that achieve . . . desired magnetic . . . results, which the specifications posit may be derived from enhanced diamond-to-diamond bonding.'” The specification, he explained “expressly provides the correlation between the claimed magnetic properties and the physical characteristics of the PDC composition.” Judge Chen explained how the patent “described correlations” that are “concrete and meaningful,” not “merely speculative,” because “the properties further define the structural characteristics of the claimed product.” He pointed out that, “[c]ontrary to the ITC’s argument,” the recited material properties and structure of the PDC need not be a “perfect proxy.” As a result, he concluded, “[t]he disclosed relationship . . . is sufficient . . . where we are trying to ascertain as a matter of law whether a patent claim is directed to a specific implementation of an idea or merely just the idea itself.”
Next, Judge Chen discussed the Intervenors alternative basis to support the ITC’s judgment, that the ITC erred because the “asserted claims are not enabled as a matter of law.” In this regard, he explained that “[e]nablement is a question of law based on underlying factual findings.” He also explained that a patent “is enabling if ‘at the time of filing the application one skilled in the art, having read the specification, could practice the invention without “undue experimentation.”‘”
On appeal, Judge Chen explained, the Intervenors claimed that the ITC “overlooked at least two critical factual aspects of the record.” First, he explained, they argued the ITC’s finding that “some experimentation might be required to make the claimed PDCs” was a “loose and generalized” determination “tantamount to unpredictability,” which supported a conclusion “that the asserted claims are not enabled.” Judge Chen rejected this argument because “decontextualized words are not grounds to disturb” the ITC’s “express, separate findings on enablement.”
Second, Judge Chen addressed the assertion that the “recited ‘unleached portion’ in the asserted claims demonstrates a lack of enablement because that element ‘broadly claims every process that does not include leaching.'” Though he noted the argument was “forfeited” because it “was never presented to the ALJ or [ITC],” he nevertheless concluded that “the claimed PDC is not a process claim, and the recitation of the ‘unleached portion’ simply distinguishes the claimed PDC from leached diamond tables.” Moreover, Judge Chen reasoned, Supreme Court precedent reinforced the idea “that a specification may call for a reasonable amount of experimentation to make and use a patented invention,” and “[w]hat is reasonable in any case will depend on the nature of the invention and the underlying art.'” Thus, Judge Chen found “no error” with the ITC’s conclusion that the Intervenors “failed to prove a lack of enablement.”
As a result of the Judge Chen’s analysis, the Federal Circuit reversed the ITC’s judgment “that the asserted claims of the ‘502 patent are ineligible under § 102” and affirmed its judgment that the Intervenors “failed to prove the asserted claims are not enabled.” The court remanded the case for further proceedings.