Under Dickinson v. Zurko courts (specifically, the Federal Circuit) should defer to factual determinations by administrative agencies like the U.S. Patent and Trademark Office unless they are not supported by substantial evidence, pursuant to the provisions of the Administrative Procedure Act (codified at 5 U.S.C. § 706). Such deference is not plenary, and when the Office (or more specifically, the Patent Trial and Appeal Board) renders a decision that does not sufficiently show its reasoning regarding relevant facts to support its findings the court should, at a minimum, vacate the decision and remand with the benefit of the Court's thinking on the matter. Such was the case in the Federal Circuit's recent decision in American Science and Engineering, Inc. v. Stewart (nonprecedential).
The case arose in an inter partes review proceeding brought by Petitioner Viken Detection Corp., challenging the claims of American Science's U.S. Patent No. 7,400,701 on anticipation grounds over U.S. Patent No. 7,672,422 and for obviousness over the combination of the '422 patent and U.S. Patent Nos. 6,459,764 or 6,459,764. The '701 patent was directed to an inspection system wherein an object was subjected to "multiple sources of penetrating radiation"; Claim 1 was set forth in the opinion as being representative:
1. An inspection system for inspecting an object characterized by motion in a direction with respect to the inspection system, the system comprising:
a. a first pencil-beam source for providing a first beam of penetrating radiation of specified cross-section directed in a first beam direction substantially transverse to the direction of motion of the object;
b. a second pencil-beam source for providing a second beam of penetrating radiation of specified cross-section substantially coplanar with, and substantially perpendicular to, the first beam of penetrating radiation, directed in a second beam direction, and temporally interspersed with the first beam of penetrating radiation;
c. a plurality of scatter detectors each scatter detector of which is disposed so as to detect radiation scattered from both the first beam and the second beam by any scattering material within the inspected object and for generating a scattered radiation signal; and
d. a controller for creating an image of the scattering material based solely on the scattered radiation signal.
(wherein the italicized language denotes claim elements relevant to the issues between the parties).
The PTAB found claims 1-4 and 10-13 to be anticipated by the '422 patent and claims 5-9 to be obvious under combinations of the asserted prior art. Although Viken withdrew from this appeal before briefing had concluded, the Acting Director intervened as appellee and filed a brief responsive to American Science's appeal.
The Federal Circuit vacated and remanded, in an opinion by Chief Judge Moore joined by Judges Linn and Cunningham. The Court agreed with American Science's argument that the Board erred because it did not find that the "scatter detectors [disclosed in the '422 patent] can detect scattered radiation from two perpendicular pencil beam sources" as required by the '701 challenged patent claims. The panel found that the '701 patent disclosed "substantially perpendicular" pencil beam sources that were surrounded by "a plurality of scatter detectors disposed to detect radiation scattered from the perpendicular beams." The '422 patent, on the other hand, teaches "additional detectors" but "is silent as to whether the additional detectors detect radiation from multiple pencil beam sources"; this configuration is illustrated by this drawing reproduced in the opinion:
While the panel recognized that the Board found the additional detectors were "capable of detecting backscatter radiation from both pencil beams because [the '422 patent] discloses cycling pencil beam sources such that only one source is turned on at a time," in the panel's opinion the Board "never expressly found [the '422 patent's] additional detectors detect radiation from both pencil beams when the beams are in a 'substantially perpendicular' arrangement" as claimed, and thus did not satisfy the requirements for anticipation that "every limitation in the claim was identically shown in the single reference" under Gechter v. Davidson, 116 F.3d 1454, 1460 (Fed. Cir. 1997). The Acting Director responded to this assertion of Board error by arguing that "the '701 patent repeatedly acknowledges that radiation scatters from an object in all directions so the additional detectors detect at least some radiation from all of [the '422 patent's] pencil beam sources." But the Court considered that the Board "made no findings about the '701 patent's disclosure of how radiation scatters that allow [the panel] to discern the path of [the Board's] reasoning," which contravenes the rubric enunciated in In re Nuvasive, Inc., 842 F.3d 1376, 1383 (Fed. Cir. 2016), that "[t]he PTAB's own explanation must suffice for us to see that the agency has done its job and must be capable of being 'reasonably . . . discerned' from a relatively concise PTAB discussion." The Court also rejected the Acting Director's argument that the Petition and Viken's expert witness's testimony supported its determination that the '422 patent's "additional detectors would detect radiation scattered from all sources." The opinion characterizes this argument as comprising "a citation within citation" that does not allow the Court to determine whether the Board's bases for its opinion followed the "proper path" because it amounted to "conclusory assertions and lack of explanation or reasoning." The panel thus vacated the Board's decision because "the Board has failed to provide us with reasoning that is reviewable on appeal for its finding that [the '422 patent's] additional detectors detect scattered radiation from substantially perpendicular pencil beams" as required to support its finding that claims 1-4 and 10-13 of the '701 patent were anticipated by the '422 patent disclosure. Without analysis the Court also vacated and remanded the Board's determination that claims 5-9 of the '701 patent were obvious, based on the same failure by the Board to explain its reasoning regarding the '422 patent disclosure.
American Science and Engineering, Inc. v. Stewart (Fed. Cir. 2025)
Nonprecedential disposition
Panel: Chief Judge Moore and Circuit Judges Linn and Cunningham
Opinion by Chief Judge Moore
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