Claim Construction: Sweeping Reasonableness Under the Rug

by Dennis Crouch

Hitachi Metals v. Alliance of Rare-Earth Permanent Magnet Industry (Fed. Cir. 2017) (nonprecedential decision)

Rare-earth magnets are the strongest commercially available permanent magnets.  Hitachi’s U.S. Patent Nos. 6,491,765 and 6,537,385 are directed to important commercial methods of pulverizing an alloy in order to prepare a powder then used to make the magnets.

Hitachi had previously brought a USITC action against a host of industry players to stop importation of infringing magnets into the United States. Those actions settled for undisclosed royalty amounts [EarthMagnetSettlementA], but a group of the ITC-losers then filed for inter partes review (IPR) – after forming the aforementioned “Alliance.”  The Board granted the IPR request (on behalf of the Director) and eventually found the challenged claims obvious over a combination of prior art references (with one claim also anticipated).

In the non-precedential appellate opinion, the Federal Circuit has largely affirmed, but reversed on one particular claim – finding that the court had misconstrued claim 4 of the ’765 patent.

As compared with Claim 1, Claim 4 only adds a limitation within a “pulverization step” that “the alloy is finely pulverized in a high-speed flow of … oxygen.”  The problem though was that although Claim 1 identified two separate pulverization steps (a first and a second) plus sub-steps of pulveration, Claim 4 did not identify which one to associate with high-speed flow of oxygen.  In the appeal, the Federal Circuit dove into the written description – finding that:

We agree with Hitachi that claim 4 requires the use of a high-speed flow of gas comprising oxygen for the first sub-step of claim 1—the fine pulverization—rather than the umbrella “second pulverization step.”

The reasoning for this approach lies in the written description where exemplary processes described the step-by-step process of pulverization.  The change in claim construction meant that the obviousness case was also pulverized.  On remand, the PTAB will get a chance to determine validity under this new construction.

For me, the most interesting aspect of the opinion is its complete lack of discussion of the Broadest Reasonable Interpretation standard for claim construction.  The approach taken by the court here looks more like an in-court analysis looking for the best interpretation of the claims.  However, Federal Circuit precedent requires in this situation application of the broadest reasonable interpretation of the claims.  The lack of specificity in spelling-out which pulverization step is applicable should at least prompt a consideration as to whether the PTAB’s construction was reasonable.

[The image above comes from TMNT episode with the Pulverizer.]