Alliance of Rare-Earth Permanent Magnet Industryv.Hitachi Metals, Ltd.

Patent Trial and Appeal Board

Feb 8, 2016

09851423 (P.T.A.B. Feb. 8, 2016)

Trials@uspto.gov Paper No. 37
Tel: 571-272-7822 Filed: February 8, 2016

UNITED STATES PATENT AND TRADEMARK OFFICE
_______________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
_______________
ALLIANCE OF RARE-EARTH PERMANENT MAGNET INDUSTRY,
Petitioner,

v.

HITACHI METALS, LTD.,
Patent Owner.
_______________

Case IPR2014-01266
Patent 6,491,765 B2
_______________

Before MICHAEL P. TIERNEY, MICHELLE R. OSINSKI, and
JO-ANNE M. KOKOSKI, Administrative Patent Judges.

OSINSKI, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 318(a) and 37 C.F.R. § 42.73
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I. INTRODUCTION
A. Background
Alliance of Rare-Earth Permanent Magnet Industry (“Petitioner”)
filed a Corrected Petition (Paper 13, “Pet.”) requesting an inter partes
review of claims 1–4, 11, 12, and 14–16 of U.S. Patent No. 6,491,765 B2
(Ex. 1001, “the ’765 patent”). On February 13, 2015, pursuant to 35 U.S.C.
§ 314, we instituted an inter partes review of claims 1–4, 11, 12, and 14–16
on the following grounds of unpatentability asserted by Petitioner:
Reference Basis Claims
Ohashi1 and Hasegawa2 § 103(a) 1–4 and 14–16
Ohashi, Hasegawa, and Yamamoto3 § 103(a) 11 and 12
Ohashi, Hasegawa, and Kishimoto4 § 103(a) 15
Decision to Institute (Paper 17, “Dec. Inst.”), 22.
Hitachi Metals, Ltd. (“Patent Owner”) filed a Patent Owner Response
(Paper 26, “PO Resp.”), and Petitioner filed a Reply (Paper 29, “Pet.
Reply”).
Petitioner relies on the Declaration of John Ormerod Ph.D. in support
of its Petition (Ex. 1002). Patent Owner relies on the Declaration of Laura
H. Lewis (Ex. 2002) in support of its Response. Petitioner refers to the

1 Ohashi et al., US 4,992,234 (issued Feb. 12, 1991) (“Ohashi,” Ex. 1004).
2 Hasegawa, JP 1993-283217 (published Oct. 29, 1993) (“Hasegawa,” Ex.
1009 and Ex. 1005 (English translation)). Hasegawa is a Japanese language
document. Unless indicated otherwise, all citations to Hasegawa in this
decision will refer to its certified English language translation.
3 Yamamoto et al., US 5,383,978 (issued Jan. 24, 1995) (“Yamamoto,” Ex.
1007).
4 Kishimoto et al., US 5,485,224 (issued Jan. 23, 1996) (“Kishimoto,” Ex.
1008).
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deposition testimony of Dr. Lewis (Ex. 1012). Patent Owner refers to the
deposition testimony of Dr. Ormerod (Ex. 2004).
We heard oral argument on November 6, 2015. A transcript is entered
in the record as Paper 36 (“Tr.”).
We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
Decision is issued pursuant to 35 U.S.C. § 318(a) and 37 C.F.R. § 42.73.
We determine Petitioner has shown by a preponderance of the
evidence that claims 1–4, 11, 12, and 14–16 of the ’765 patent are
unpatentable under 35 U.S.C. § 103(a).
B. Related Proceedings
Petitioner represents that the ’765 patent was asserted in International
Trade Commission Investigation No. 337-TA-855, which was terminated
before adjudication of any validity issues. Pet. 5.
Patent Owner represents that Inter Partes Review No. IPR2014-01265
of U.S. Patent No. 6,537,385 B2 (“the ’385 patent”)5 also is related to this
proceeding. Paper 12, 2.
C. The ’765 Patent
The ’765 patent relates to methods for manufacturing neodymium-
iron-boron magnets, referred to as R—Fe—B type rare earth magnets.
Ex. 1001, Abstr., 1:6–8, 1:15–18. The method includes a first step of
coarsely pulverizing a material alloy to a size on the order of several
hundred micrometers or less using a hydrogen embrittlement apparatus, and
a second step of finely pulverizing the material alloy to an average particle

5 The ’385 patent is a divisional of the ’765 patent. Ex. 1001.
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size on the order of several micrometers with, for example, a jet mill. Id. at
1:24–34.
During the second pulverization step, super-fine powder that is rich in
the rare earth element (R) (i.e., powder having a particle size of 1 µm or
less) is produced. Id. at 2:18–22. These R-rich super-fine powder particles
oxidize easily as compared to other particles, such that “oxidation of the rare
earth element vigorously proceeds during the manufacturing process steps.”
Id. at 2:28–30. The rare earth element, thus, is consumed by reacting with
oxygen, and “the production amount of the R2T14B crystal phase as the
major phase decreases.” Id. at 2:31–32. The result is a reduction in the
coercive force and remanent flux density of the resultant magnet, and
deterioration of the squareness of the demagnetization curve. Id. at 2:33–36.
In an effort to improve and stabilize the magnet properties even when
a material alloy including an R-rich phase is used, the ’765 patent describes
the additional step of “removing at least part of fine powder having a particle
size of 1.0 µm or less to adjust the particle quantity of the fine powder
having a particle size of 1.0 µm or less to 10% or less of the particle quantity
of the entire powder.” Id. at 3:5–10.
Table I of the ’765 patent is reproduced below.

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As reported in Table I above, oxygen increases, and coercive force
iHc and residual magnetic flux density Br deteriorate, as the percentage of
super-fine powder in the entire powder increases. Id. at 11:29–38. When
the percentage of super-fine powder is 10.0% or less, excellent magnetic
properties, including a coercive force iHc of 900 kA/m or more and a
residual magnetic flux density Br of 1.35 T or more, are obtained. Id. at
11:39–44.
In a preferred embodiment, the molten material alloy is cooled by a
strip casting method, which is a rapid cooling method. Id. at 1:38–39, 3:55–
56. In a preferred embodiment, the material alloy is obtained by cooling a
molten material alloy at a cooling rate in a range between 102° C/sec and
104° C/sec. Id. at 1:45–47, 3:51–54. Alloys prepared by rapid cooling
methods, as compared to ingot casting methods (in which a molten alloy is
poured into a mold and cooled comparatively slowly), have a fine structure,
are small in grain size, have a wide area of grain boundaries, and have a
good dispersion of the R-rich phase. Id. at 1:37–39, 1:64–2:4. Although the
preferred embodiment is applied to a rapidly solidified alloy produced by a
strip casting method, it also is applicable to an alloy produced by an ingot
method. Id. at 12:24–29.
D. Illustrative Claim
Claim 1 is illustrative of the claimed subject matter and is reproduced
below.
1. A method for manufacturing alloy powder for R—Fe—B rare
earth magnets, comprising a first pulverization step of coarsely
pulverizing a material alloy for rare earth magnets and a second
pulverization step of finely pulverizing the material alloy,
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wherein said first pulverization step comprises a step of
pulverizing the material alloy by a hydrogen pulverization
method, and
said second pulverization step comprises a step of
removing at least part of fine powder having a particle size of 1.0
um or less to adjust the particle quantity of the fine powder
having a particle size of 1.0 um or less to 10% or less of the
particle quantity of the entire powder.
Ex. 1001, 13:21–33.
II. DISCUSSION
A. Claim Construction
In an inter partes review, claim terms in an unexpired patent are
interpreted according to their broadest reasonable construction in light of the
specification of the patent in which they appear. 37 C.F.R. § 100(b); see In
re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1278 (Fed. Cir. 2015) (“We
conclude that Congress implicitly approved the broadest reasonable
interpretation standard in enacting the AIA.”), cert. granted sub nom.
Cuozzo Speed Techs. LLC v. Lee, 84 U.S.L.W. 3218 (Jan. 15, 2016) (No. 15-
446). Claim terms are given their ordinary and customary meaning as
understood by one of ordinary skill in the art in the context of the entire
disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
2007).
In the Decision to Institute, we interpreted “particle quantity” as
“amount of particles,” without considering whether any particular common
metrics should be excluded. Dec. Inst. 7. The parties do not dispute this
interpretation in the Patent Owner Response or in the Petitioner Reply. We
adopt the above claim construction based on our previous analysis, and see
no reason to deviate from that construction for purposes of this Decision.
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B. Level of Ordinary Skill in the Art
Petitioner sets forth a level of ordinary skill in the art in terms of
academic qualifications (i.e., a bachelor’s or master’s degree in materials
science, metallurgical engineering, or physics) and a corresponding
number of years of “work or research experience in the field of rare-earth
magnets.” Ex. 1002 ¶ 28. In particular, Petitioner states that if the
academic qualifications are a bachelor’s degree, the corresponding
number of years of work or research experience is identified as two to
four years, and if the academic qualifications are a master’s degree, then
the corresponding number of years of work or research experience is
identified as one to two years. Id.
Patent Owner disagrees with respect to the corresponding number
of years of work or research experience that are necessary to be a person
of ordinary skill in the art. In particular, Patent Owner proffers that a
person of ordinary skill in the art would hold either (a) a bachelor’s
degree in the same fields identified by Petitioner, but only one to two
years of additional work or research experience; or (b) a master’s degree
in the same fields identified by Petitioner, but only one year of additional
work or research experience. PO Resp. 3 (citing Ex. 2002 ¶ 60). Patent
Owner submits that this level of ordinary skill was arrived at by
considering “the specific problems and technical hurdles involved in rare
earth magnets; the evolution and sophistication of manufacturing rare
earth magnets; and the educational level of a person working in the rare
earth magnet industry at the time of the invention.” Id. (citing Ex. 2002
¶¶ 62–65; Envtl. Designs, Ltd. v. Union Oil Co., 713 F.2d 693, 696 (Fed.
Cir. 1983)). Although Patent Owner and Petitioner disagree on the years
of experience possessed by a person of ordinary skill in the art, neither
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party provides a sufficient and credible explanation as to how the alleged
difference in years of experience impacts this proceeding.
To determine the level of ordinary skill in the art in this case, we
consider the type of problems encountered in the art, the prior art
solutions to those problems, and the sophistication of the technology.
Custom Accessories, Inc. v. Jeffrey-Allan Indus. Inc., 807 F.2d 955, 962
(Fed. Cir. 1986). We are also guided by the level of ordinary skill in the
art as reflected by the prior art of record. Okajima v. Bourdeau, 261 F.3d
1350, 1355 (Fed. Cir. 2001).
The ’765 patent indicates that the material alloy can be produced
by ingot casting or rapid cooling methods typified by strip casting and
centrifugal casting (Ex. 1001, 1:36–41, 12:24–29), and refers to a
“known strip casting method” (Id. at 5:37–38). The prior art of record
also describes differences between the resulting alloy obtained by ingot
casting methods and the resulting alloy obtained by strip casting
methods. See, e.g., Ex. 1007, 1:15–2:3. Thus, a skilled artisan would
have some knowledge of strip casting methods and how such methods
would affect the resulting alloy as compared to an alloy produced by
ingot casting methods. The prior art of record also describes various
mechanical pulverization techniques, as well as a hydrogen pulverization
process. See, e.g., Ex. 1005 ¶ 2. The prior art of record also compares
the resulting fine powder of the hydrogen pulverization process to that
produced by mechanical pulverization. Id. A skilled artisan, therefore,
would also need some knowledge of hydrogen pulverization methods and
how they differ from mechanical pulverization. We acknowledge the
sophistication of the rare earth magnet technology, but consider that one
of ordinary skill in the art would be aware of all the pertinent prior art.
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Based on all of the evidence, we conclude that a person of ordinary
skill in the art at the time of the ’765 patent, through education or
experience, would have knowledge of various methods to produce the
material alloy (e.g., ingot casting and strip casting) and various
pulverization techniques (e.g., mechanical pulverization and hydrogen
pulverization), and would have knowledge of the differences between the
methods and techniques, as the resulting material alloys.
C. Obviousness of Claims 1–4, 14, and 16 over Ohashi and
Hasegawa
1. Overview of Ohashi
Ohashi discloses a method for the preparation of a permanent magnet
composed of a rare earth element, iron, and boron. Ex. 1004, 1:6–16.
Ohashi discloses rough pulverization of an alloy ingot via various types of
pulverizing machines, such as stamp mills, jaw crushers, Braun mills, and
the like, and fine pulverization via jet mills, ball mills, and the like. Id. at
4:38–46. Ohashi recognizes that “a magnetic alloy powder containing
extremely fine particles are highly susceptible to the oxidation by the
atmospheric oxygen,” (id. at 3:41–43), and discloses that “the alloy under
pulverization is strictly prevented against oxidation by the atmospheric
oxygen by conducting the pulverization in an atmosphere of a non-oxidizing
or inert gas such as nitrogen, argon and the like” (id. at 4:46–50).
Ohashi further discloses “particle size classification of the alloy
powder for compression molding into a powder compact to be sintered, by
which particles having a finer particle diameter . . . are removed so as to
effectively prevent oxidation of the too fine particles.” Id. at Abstr. Ohashi
discloses that particle classification can be conducted using “screens of an
appropriate mesh opening, rotative force, air stream and the like as well as a
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combination of these different principles.” Id. at 5:1–4. Ohashi discloses
removing particles having a diameter smaller than 2 µm from the alloy
powder. Id. at 2:45–46, 4:19–22, 4:64–67. Ohashi also discloses that “[i]t is
important that the volume fraction of the fine particles having a diameter
smaller than 2 µm in the alloy powder after the particle size classification
does not exceed 1% or, preferably, 0.5%.” Id. at 5:50–53.
2. Overview of Hasegawa
Hasegawa discloses that the alloy used to make rare-earth magnets is
generally obtained by conventional powder metallurgy. Ex. 1005 ¶ 2.
Hasegawa further discloses that melted cast ingots of rare-earth magnets
have a multi-phase crystal structure including the main phase R2Fe14B, and
an Nd-rich (i.e., rare earth-rich) phase. Id. ¶ 3. In Hasegawa, melted cast
ingot is pulverized using mechanical pulverization techniques or a method
that “involves causing hydrogen to be absorbed into the melted cast ingot of
a rare-earth-iron-boron based magnet and allowing disintegration to occur to
produce a coarse powder.” Id. Hydrogen pulverization can produce
pulverized powder in about one-fourth of the time of mechanical
pulverization and can also cause the rare-earth rich phase to be more easily
pulverized. Id. After coarse pulverization by mechanical or hydrogen
pulverization, the powder is then finely pulverized using a jet mill. Id.
Hasegawa further discloses that the rare earth-rich phase oxidizes
more readily than the main phase, and that if the rare earth-rich phase is
excessively pulverized, a magnet obtained from such a fine powder may
include excessive oxide phase and lack good magnetic properties. Id. To
combat this known problem, Hasegawa discloses that wind power is used to
remove R-rich phase fine powder during a particle classification step
following pulverization. Id. ¶ 4; Ex. 1002 ¶ 66. The remaining powder
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having lower concentrations of rare earth is compacted compressively,
sintered, and heat-treated. Ex. 1005 ¶ 4. The method allows rare earth-iron-
boron magnets of high coercivity and high energy product to be obtained by
using “classifiers that employ wind power to remove Nd-rich phase [(i.e.,
rare earth rich phase)] that includes large quantities of oxygen due to
excessive pulverization and thus improve sinterability and reduce the oxide
phase that is present at the grain boundaries.” Id. ¶ 5.
3. Obviousness of Claims 1–4, 14, and 16
a. Claim 1
Petitioner alleges that independent claim 1 would have been obvious
over Ohashi and Hasegawa. Pet. 15–20. Petitioner relies on Ohashi for
every element of independent claim 1, except for the recitation that the “first
pulverization step comprises a step of pulverizing the material alloy by a
hydrogen pulverization method.” Id. at 17 (emphasis added). Petitioner
argues that Hasegawa “teaches coarse pulverization using hydrogen
treatment or pulverization to more easily crush a material alloy.” Id. (citing
Ex. 1005, Abstr., ¶¶ 2–6; Ex. 1002 ¶¶ 66, 70–71). Patent Owner does not
dispute that Ohashi teaches every element of independent claim 1 except for
the first pulverization step comprising a step of pulverizing the material
alloy by a hydrogen pulverization method, nor that Hasegawa teaches
hydrogen pulverization. See PO Resp. 5–12.
Petitioner argues that “[o]ne of ordinary skill would have been
motivated to combine Ohashi and Hasegawa because both Ohashi and
Hasegawa are in the same field of making [R—Fe—B] magnets using
known and standard processes such as jet milling and classification to
coarsely and finely pulverize a material alloy into fine powder.” Pet. 16
(emphasis omitted). Petitioner also provides expert testimony that:
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Because hydrogen pulverization taught by Hasegawa was a well-
known and common technique for coarse pulverization in a non-
oxidizing gas environment to crush more easily an [R—Fe—B]
material alloy, one of ordinary skill would have been motivated
to use the hydrogen pulverization technique disclosed in
Hasegawa to improve the coarse pulverization of an [R—Fe—
B] material alloy taught by Ohashi that suggests using a non-
oxidizing gas . . . . Moreover, one of ordinary skill would have
been motivated to combine these prior art teachings of Ohashi
and Hasegawa according to known methods to yield predictable
results. Such a modification also would have been obvious
because it would have involved the use of known process of
hydrogen pulverization to improve a similar method of coarsely
pulverizing an [R—Fe—B] material alloy.
Ex. 1002 ¶ 71 (cited at Pet. 17) (citations omitted).
Patent Owner counters that simply because references relate to the
same technical field, this alone is not a demonstration of the obviousness of
their combination. PO Resp. 7 (citing Ex Parte Bogwardt, 2012-009099, 3
(PTAB Oct. 14, 2014)). Petitioner’s rationale underlying the obviousness of
the combination of Ohashi and Hasegawa does not rest on the references
being in the same technical field, but rather is based, at least in part, on
hydrogen pulverization being able to more easily crush the material alloy, as
well as the combination of known prior elements to achieve a predictable
result. See Pet. 17 (citing Ex. 1002 ¶ 71).
Patent Owner also counters that Petitioner’s challenge rests on a faulty
premise that Hasegawa’s hydrogen pulverization is a “similar method” to
Ohashi’s mechanical pulverization. PO Resp. 5, 7. Patent Owner argues
that hydrogen pulverization involves “hydrogen chemically react[ing] with
the R—Fe—B material alloy to form hydrides which in turn cause the alloy
to crack and crumble or ‘decrepitate.’” Id. at 7–8. Patent Owner argues that
mechanical pulverization, on the other hand, “involves the direct contact
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between a crushing apparatus and the alloy to be crushed, resulting in
random pulverization of the alloy.” Id. at 8. Although there can be no doubt
that mechanical pulverization is different than chemical pulverization,
simply because there are differences between two references is insufficient
to establish that such references teach away from any combination thereof.
See In re Beattie, 974 F.2d 1309, 1312–13 (Fed. Cir. 1992). Petitioner’s
reasoning to utilize hydrogen pulverization in place of mechanical
pulverization to more easily crush the material alloy, and that the
combination of known prior art elements achieves a predictable result, is not
negated by the differences between mechanical and chemical pulverization.
To the extent Patent Owner is arguing that the utilization of hydrogen
pulverization in place of mechanical pulverization is not predictable (See Tr.
40:20–41:2 (citing Ex. 2002 ¶ 90)), Patent Owner has merely pointed out
that one of ordinary skill in the art would have to account for differences
between the two pulverization mechanisms. Patent Owner, however, has not
explained persuasively that such an accounting for differences between the
two pulverization mechanisms would have been beyond the capability of
one of ordinary skill in the art. See KSR Int'l Co. v. Teleflex Inc., 550 U.S.
398, 421 (2007) (“A person of ordinary skill is also a person of ordinary
creativity, not an automaton.”). Although Patent Owner argues that “if you
make a change in any part of this total process, then you are going to have to
look and investigate to see do you need to make compensations in other
parts of the process as well . . .[a]nd that simply is going to be beyond what
one of ordinary skill in the art would be able to do here” (Tr. 62:20–25),
Patent Owner again only points to expert testimony that explains that one
would need to change the composition of the alloy to compensate for
differences between the pulverization mechanisms (Id. at 63:1–6 (citing Ex.
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2002 ¶ 90)), not that such changes would have been beyond the level of
ordinary skill in the art. Moreover, as described above, we have concluded
that a person of ordinary skill in the art at the time of the ’765 patent would
have knowledge of the differences between mechanical and hydrogen
pulverization techniques, and the resulting material alloys.
Patent Owner further counters that Ohashi specifically seeks to avoid
conducting pulverization in an atmosphere of an oxidizing or non-inert gas.
PO Resp. 9 (citing Ex. 1004, 4:45–50). Patent Owner elaborates that
“hydrogen gas functions as an oxidizing gas in the specific context of
hydrogen pulverization” and is a non-inert gas in direct contrast to the non-
oxidizing or inert gas desired in Ohashi. Id. at 10.
The word “oxidize” means “[1] To combine with oxygen; make into
an oxide. [2] To increase the positive charge or valence of (an element) by
removing electrons.” American Heritage Dictionary, Houghton Mifflin
Company (2000, 2003), available at
http://literature.proquestlearning.com/home.do (last visited Feb. 3, 2016)
(Ex. 3001). We determine that, considering the context of the patent, it is
more likely than not than Ohashi’s reference to a “non-oxidizing gas” refers
to a gas that does not cause an element to combine with oxygen or be made
into an oxide (in accordance with the first definition cited above), rather than
a gas that does not increase the positive charge or valence of an element by
removing electrons (in accordance with the second cited definition). Our
determination is based on Ohashi’s statements that “a magnetic alloy powder
containing extremely fine particles are highly susceptible to the oxidation by
the atmospheric oxygen” (Ex. 1004, 3:41–43 (emphasis added)), “the
adverse influences due to the increased oxygen content in the alloy powder
can be overcome when the alloy powder does not contain extremely fine
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particles” (id. at 3:45–48 (emphasis added)), “fine particles in a powder of
neodymimum-iron-boron magnet alloys are rapidly oxidized by the
atmospheric oxygen already in the course of pulverization in a non-oxidizing
atmosphere and there-after to greatly increase the oxygen content in the
alloy powder” (id. at 3:51–56 (emphasis added)), “a great improvement
could be obtained in the magnetic properties of the permanent magnets as a
result of the decrease in the oxygen content of the alloy powder” (id. at
3:61–64 (emphasis added)), “it is essential that the alloy under pulverization
is strictly prevented against oxidation by the atmospheric oxygen” (id. at
4:45–47 (emphasis added)), and “Table 1 . . . shows the oxygen contents and
the magnetic properties of the thus obtained sintered permanent magnets”
(id. at 7:19–21 (emphasis added)). These statements demonstrate that
Ohashi is concerned with the oxygen content of the alloy, rather than
whether the alloy has undergone a removal of electrons.
Petitioner has shown sufficiently that the hydrogen gas of the
hydrogen pulverization method is a non-oxidizing gas in that it does not
cause an element of the magnet alloy to combine with oxygen or be made
into an oxide. Pet. Reply 4–5 (citing Ex. 1012, 77:9–13). The hydrogen
pulverization method of Hawegawa, therefore, is in accordance with
Ohashi’s teachings of conducting the pulverization in an atmosphere of a
non-oxidizing or inert gas.6 Accordingly, we are not persuaded that

6 We agree with Patent Owner that the hydrogen gas of Hasegawa’s
hydrogen pulverization method “is certainly a non-inert gas.” PO Resp. 9.
We determine, however, that Ohashi requires the pulverization be conducted
in the atmosphere of a non-oxidizing gas or inert gas, but not necessarily
both. Because we have found the hydrogen gas of Hasegawa’s hydrogen
pulverization method to be a non-oxidizing gas, it is immaterial whether or
not it is inert.
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modification of Ohashi to utilize a hydrogen pulverization method as taught
by Hasegawa is contrary to the teachings of Ohashi.
Patent Owner also contends that “unexpected results, reflected in
Table 1 of the ’765 Patent, provides probative evidence of non-
obviousness.” PO Resp. 6; see also id. at 12–21 (setting forth arguments
regarding evidence of secondary considerations such as unexpected results).
More particularly, Patent Owner argues that “the inventors unexpectedly
discovered that the magnetic properties of a final magnet do not start to
significantly deteriorate until the magnet powder comprises more than 10%
superfine powder.” Id. at 15 (citing Ex. 1001, 10:60–11:10). In addition,
Patent Owner argues that this 10% threshold refers to particles having a size
of 1 µm or less and that the “retention of particles, including in the range
from 1 µm to 2 µm, contributes to the unexpected results of Table 1.” Id. at
16 (citing Ex. 1001, 3:62–64, 4:21–23, 8:64–66, claim 14).
We agree with Patent Owner that when secondary considerations are
present, they must be considered with respect to the determination of
obviousness. See Stratoflex v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed.
Cir. 1983) (“[E]vidence rising out of the so-called ‘secondary
considerations’ must always when presented be considered en route to a
determination of obviousness.”).
Patent Owner fails to provide a credible and sufficient explanation as
to how the evidence of asserted unexpected results (i.e., a lack of significant
deterioration of magnetic properties) is commensurate in scope with the
claims. In order to establish unexpected results for a claimed invention,
objective evidence of non-obviousness must be commensurate in scope with
the claims which the evidence is offered to support. In re Clemens, 622 F.2d
1029, 1035–36 (CCPA 1980). Furthermore, to show unexpected results the
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claimed invention must be compared with the closest prior art. In re
Fracallossi, 681 F.2d 792, 794 (CCPA 1982); In re Reuter, 670 F.2d 1015,
1023 (CCPA 1981); In re Fenn, 639 F.2d 762, 765 (CCPA 1981).
To the extent that Patent Owner is arguing that the 10% threshold of
fine powder might account for the asserted unexpected results (PO Resp.
15–16), the step of adjusting the particle quantity of the fine powder having
a particle size of 1 µm or less to 10% or less was already described in
Ohashi. Patent Owner fails to provide comparative data showing
unexpected results with respect to the improved magnetic properties of its
claimed invention vis-à-vis the disclosure of Ohashi. In other words, Patent
Owner fails to establish that improved magnetic properties are due to
features recited in claim 1 and not present in Ohashi.
To the extent that Patent Owner is arguing that retention of particles in
the range of 1 µm to 2 µm might account for the asserted unexpected results
(PO Resp. 16, 20), this feature is not claimed. The only feature that Patent
Owner points to as distinguishing the claimed invention from Ohashi’s prior
art method for manufacturing alloy powder for rare earth magnets is the use
of hydrogen pulverization in place of Ohashi’s mechanical pulverization (PO
Resp. 5–21); however, Patent Owner has not presented sufficient and
credible evidence that the feature of hydrogen pulverization contributes to
the unexpected results. On this record Patent Owner fails to provide
sufficient and credible evidence that its alleged unexpected result is
commensurate in scope with the claims. Consequently, we are not
persuaded by Patent Owner’s contentions in relation to unexpected results.
We have also considered Patent Owner’s argument that Ohashi
teaches away from using more than 1% of sub-2 µm powder in the final
magnet powder. PO Resp. 18. In particular, Patent Owner argues that
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Ohashi “warned of the dangers of producing magnets using powder
containing fine particles of smaller than 2 µm.” Id. at 17 (citing Ex. 1004,
3:34–65). Further, Patent Owner argues that Ohashi “specifically wants to
‘ensure substantial absence of fine particles having a diameter smaller than 2
µm’ in the magnet powder.” Id. at 18 (citing Ex. 1004, 5:37–39). Patent
Owner’s argument fails to take into account the actual language of claim 1,
which does not require that a certain amount of sub-2 µm powder be
retained, but rather requires that “the particle quantity of the fine powder
having a particle size of 1.0 µm or less [be adjusted] to 10% or less of the
particle quantity of the entire powder.” Ex. 1001, 13:32–34. That is, the
claim sets only an upper limit on the amount of fine powder having a
particle size of 1.0 µm or less (i.e., 10%), but no lower limit. Ohashi’s
teaching of eliminating sub-2 µm powder would not lead a person of
ordinary skill in the art away from the claimed language of reducing sub-1
µm powder to less than 10% (which would encompass 0% as there is no
lower limit), so the teachings of Ohashi and the claim language are entirely
consistent. See In re Haruna, 249 F.3d 1327, 1335 (Fed. Cir. 2001) (quoting
Tec Air, Inc. v. Denso Mfg. Mich., Inc., 192 F.3d 1353, 1360 (Fed. Cir.
1999)) (“A reference may be said to teach away when a person of ordinary
skill, upon reading the reference, . . . would be led in a direction divergent
from the path that was taken by the applicant.”).
In considering the entirety of the record, we are persuaded that a
person of ordinary skill in the art would have been motivated to modify
Ohashi’s method for the preparation of a permanent magnet of a magnetic
alloy comprising a rare earth element, iron, and boron to incorporate
Hasegawa’s hydrogen pulverization technique in place of Ohashi’s
mechanical pulverization techniques in order to be able to more easily crush
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the material alloy. Pet. 17 (citing Ex. 1004, 4:45–50; Ex. 1005 ¶¶ 2–6,
Abstract); Pet. Reply 3 (quoting Ex. 1005 ¶ 2) (“hydrogen pulverization can
produce pulverized rare-earth alloy material in ‘one-fourth of the time
required with mechanical pulverization,’ which ‘reduces pulverization time
and improves pulverization yield and pulverization efficiency.’”); Ex. 1002
¶¶ 66, 70–71.
We are also persuaded that there would have been a reasonable
expectation of success in modifying Ohashi to incorporate Hasegawa’s
hydrogen pulverization technique in place of Ohashi’s mechanical
pulverization techniques. Ex. 1002 ¶ 71 (explaining that hydrogen
pulverization “was a well-known and common technique for coarse
pulverization” and would have involved only the use of known method to
achieve predictable results); Pet. Reply 3 (quoting Ex. 1005 ¶ 2 (“by 1992
hydrogen pulverization ‘was generally used as the method for the
manufacture of rare-earth-iron-boron based magnet powder.’”); see DyStar
Textilfarben GmbH & Co. Deutschland KG v. C. H. Patrick Co., 464 F.3d
1356, 1360 (Fed. Cir. 2006) (“consider[ing] whether a person of ordinary
skill in the art would have been motivated to combine to the prior art to
achieve the claimed invention and whether there would have been a
reasonable expectation of success in doing so” in determining whether a
claimed invention would have been obvious). Petitioner has presented
sound reasoning with rational underpinnings in urging that an ordinarily
skilled artisan would have utilized Hasegawa’s hydrogen pulverization
technique with Ohashi’s method of producing a permanent magnet alloy in
order to be able to more easily crush the material alloy. After considering
Petitioner’s and Patent Owner’s positions, as well as their supporting
evidence, we conclude that Petitioner has demonstrated, by a preponderance
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of the evidence, that independent claim 1 of the ’765 patent would have been
obvious over the combined teachings of Ohashi and Hasegawa under 35
U.S.C. § 103(a).
b. Claims 2, 3, 14, and 16
Patent Owner directs no credible arguments specifically to any of
dependent claims 2, 3, 14, and 16 with regard to the challenge for
obviousness over Ohashi and Hasegawa. Instead, Patent Owner argues the
purported deficiencies of Ohashi and Hasegawa that it argued with respect to
independent claim 1. PO Resp. 21. For the same reasons as described
above, we are not persuaded of any deficiencies in the combination of
Ohashi and Hasegawa in Petitioner’s challenge.
Claim 2 depends from claim 1, and further recites that “the average
concentration of the rare earth element contained in the fine powder having a
particle size of 1.0 µm or less is greater than the average concentration of the
rare earth element contained in the entire powder.” Ex. 1001, 13:35–39.
Petitioner contends that Ohashi teaches that “excessive pulverization of R—
Fe—B alloys produces R-rich superfine powder having particles 1 µm or
less.” Pet. 21 (citing Ex. 1004, 1:57–63, 2:28–60, 3:3–10, 4:37–41, 4:64–
5:10, 5:50–53; Ex. 1001, 2:19–22; Ex. 1002 ¶¶ 39–41, 46, 54, 78–80).
Petitioner also presents expert testimony that
in Ohashi, one of ordinary skill would recognize that the particles
finer than 2 µm or less remaining in the powder after
classification necessarily are R-rich and naturally and inherently
have an average rare earth concentration greater than the average
rare earth concentration in the entire powder containing other
non-rare earth elements such as the main R2Fe14B phase.
Ex. 1002 ¶ 78 (citing Ex. 1001, 1:46–63; Ex. 1002 ¶¶ 39–41) (cited at
Pet. 22).
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Patent Owner does not dispute this conclusion of Petitioner’s expert.
See PO Resp. 21. We credit Dr. Ormerod’s testimony that Ohashi inherently
discloses that the concentration of rare earth element contained in powders
having a particle size of 2 µm or less is greater than the average
concentration of rare earth element contained in the entire powder.
Claim 3 depends from claims 1 or 2, and further recites that “in said
pulverization step, the alloy is finely pulverized in a high-speed flow of
gas.” Ex. 1001, 13:40–42. Petitioner contends that Ohashi teaches that
“coarse powder is ‘finely pulverized in a jet mill with a jet stream of
nitrogen gas.’” Pet. 22 (quoting Ex. 1004, 6:45–48). Petitioner explains that
Ohashi teaches that “classification can use ‘air stream and the like.’” Id. at
23 (quoting Ex. 1004, 5:1–4; Ex. 1002 ¶ 81).
Claim 14 recites depends from claim 1 and further requires that “the
average particle size of the powder obtained in said second pulverization
step is in a range between 2 µm to 10 µm.” Ex. 1001, 14:25–27. Petitioner
contends that Ohashi teaches that “the ‘alloy powder as pulverized have an
average particle diameter in the range from 3 µm to 10 µm and contain at
least 90% by volume.’” Pet. 24 (quoting Ex. 1004, 4:58–60; Ex. 1002 ¶ 83).
Claim 16 recites “preparing alloy powder for R—Fe—B rare earth
magnets by the method of claim 1; and compacting the alloy powder for R—
Fe—B rare earth magnets to produce a permanent magnet.” Ex. 1001,
14:31–36. Petitioner contends that Ohashi teaches that “the ‘obtained alloy
powder after particle size classification to remove too fine particles was
compression-molded in a metal mold’ in making a permanent magnet.” Pet.
23–24 (quoting Ex. 1004, 6:66–7:9; Ex. 1002 ¶¶ 85–86).
We credit Dr. Ormerod’s testimony that Ohashi teaches the limitations
of dependent claims 2, 3, 14, and 16 and are persuaded that Petitioner
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presents sufficient evidence, as outlined above, to support a conclusion that
the combination of Ohashi and Hasegawa renders obvious the subject matter
of dependent claims 2, 3, 14, and 16. After considering Petitioner’s and
Patent Owner’s positions, as well as their supporting evidence, we conclude
that Petitioner has demonstrated, by a preponderance of the evidence, that
dependent claims 2, 3, 14, and 16 of the ’765 patent would have been
obvious over the combination of Ohashi and Hasegawa under 35 U.S.C.
§ 103(a).
c. Claim 4
Claim 4 recites “[t]he method of claim 3, wherein the gas [i.e., the
high-speed flow of gas in which the alloy is finely pulverized] comprises
oxygen.” Ex. 1001, 13:43–44. Petitioner asserts that “[d]uring fine
pulverization, Ohashi discloses that ‘[a]pplicable methods for the particle
size classification’ include ‘air stream and the like.’” Pet. 22–23 (quoting
Ex. 1002 ¶ 82; Ex. 1004, 4:68–5:3). Petitioner further provides expert
testimony that “oxygen . . . cannot be entirely removed from the jet milling
and classification processes as understood by one of ordinary skill.” Ex.
1002 ¶ 82). Petitioner asserts “any other gas present in the milling chamber
will also begin to move at high speed” when “a high-speed flow of gas is
emitted from nozzles into the milling chamber.” Pet Reply. 16 (citing Ex.
1012, 112:15–22).
Patent Owner first argues the purported deficiencies of Ohashi and
Hasegawa that it argued with respect to independent claim 1. PO Resp. 21.
For the same reasons as described above, we are not persuaded of any
deficiencies in the combination of Ohashi and Hasegawa in Petitioner’s
challenge.
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Patent Owner next argues that Ohashi’s “particle size classification” is
after the fine pulverization, such that the disclosed air stream of Ohashi “is
not a high-speed flow of gas for finely pulverizing the alloy,” but “an air
stream used for particle classification.” PO Resp. 23–24. Patent Owner’s
argument implies that fine pulverization is completed prior to particle size
classification. The Specification’s statements that “[t]he alloys may be
finely pulverized using a jet mill” and “[i]n a preferred embodiment, a
classifier is provided following the jet mill for classifying a powder output
from the jet mill” (Ex. 1001, 3:46–49) appear to support Patent Owner’s
interpretation that fine pulverization occurs in a jet mill and is finished
before particle size classification occurs in a classifier.
Petitioner responds that “the process of removing fine powder (the
cyclone classification step) is included in the claimed “second pulverization
step” such that “‘pulverizing’ encompasses both the process of milling the
alloy powder in the jet mill chamber and the process of classifying the
powder in the jet mill’s cyclone.” Pet. Reply 17. The Specification’s
statements that “[t]he method for manufacturing alloy powder for R—Fe—B
type rare earth magnets . . . includes . . . a second pulverization step of finely
pulverizing the material alloy, wherein . . . the second pulverization step
comprises a step of removing at least part of fine powder” (id. at 2:66–3:7
(emphasis added)); that “before a fine pulverization step is finished, at least
part of R-rich super-fine powder, i.e., powder having a particle size of 1 µm
or less, is removed to adjust the particle quantity of the R-rich super-fine
powder to 10% or less of the particle quantity of the entire powder” (id. at
4:58–62) (emphasis added); and that “[a]s the example of the present
invention, in the fine pulverization process using the jet mill and the cyclone
classifier connected to each other, the pressure of the gas in the cyclone
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classifier was controlled to change the amount of super-fine powder
contained in the collected powder” (id. at 10:46–50 (emphasis added)),
appear to support Petitioner’s interpretation that fine pulverization comprises
both the milling that occurs in the jet mill and the particle classification that
occurs in the cyclone. Based on the above portions of the Specification, we
determine the broadest reasonable interpretation consistent with the
Specification is that the second pulverization step of finely pulverizing the
material alloy is not completed after milling in the jet mill, but rather
includes both a first sub-step of milling and a second sub-step of particle
classification.
We are not persuaded that Patent Owner’s argument (i.e., that Ohashi
lacks the second pulverization step of finely pulverizing the material alloy in
a high speed flow of gas that comprises oxygen) is based on the claim
language being given the broadest reasonable interpretation in light of the
Specification. Because we have determined that particle classification is
part of finely pulverizing the material alloy in a high-speed flow of gas,
Petitioner’s reliance on Ohashi’s particle size classification including an air
stream (Pet. 22–23 (quoting Ex. 1002 ¶ 82; Ex. 1004, 4:68–5:3)) is sufficient
to meet the language of claim 4.
As to Patent Owner’s additional argument that the only carrier gas
disclosed for Ohashi’s air-stream particle size classifier is nitrogen (PO
Resp. 24 (citing Ex. 1004, 6:54–62)), we are not persuaded that this
reference to nitrogen as the carrier gas in “Example 1” negates Ohashi’s
previous disclosure of an “air stream,” which one of ordinary skill in the art
would recognize comprises some amount of oxygen. See Pet. Reply 18
(citing Ex. 1002 ¶ 82).
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We have also considered Patent Owner’s arguments that “stating that
‘some amount of oxygen [] cannot be entirely removed from the jet milling
[] process[]’ is not the same as finely pulverizing an alloy in a high-speed
flow of gas comprising oxygen” (PO Resp. 25 (citing Ex. 1002 ¶ 82)), and
that Ohashi teaches away from finely pulverizing the alloy in a high-speed
flow of gas comprising oxygen because “[a] person of ordinary skill reading
Ohashi would be led away from the ’765 Patent, which finely pulverizes the
alloy in a high-speed flow of gas comprising oxygen to intentionally coat the
surfaces of the powder with a thin oxide layer.” Id. at 26, 28 (citing Ex.
2002 ¶ 100). These arguments, however, are not persuasive considering that
our determination is based on the express disclosure of Ohashi’s air stream
for particle classification as opposed to relying on any residual oxygen in the
jet mill of Ohashi or Hasegawa and/or the modification of Ohashi.
We credit Dr. Ormerod’s testimony that Ohashi teaches the limitations
of dependent claim 4 and are persuaded that Petitioner presents sufficient
evidence, as outlined above, to support a conclusion that the combination of
Ohashi and Hasegawa renders obvious the subject matter of dependent claim
4. After considering Petitioner’s and Patent Owner’s positions, as well as
their supporting evidence, we conclude that Petitioner has demonstrated, by
a preponderance of the evidence, that dependent claim 4 of the ’765 patent
would have been obvious over the combined teachings of Ohashi and
Hasegawa under 35 U.S.C. § 103(a).
D. Obviousness of Claims 11 and 12 over Ohashi, Hasegawa, and
Yamamoto
1. Overview of Yamamoto
Yamamoto discloses that “[p]ermanent magnet alloy ingots are
generally produced by a metal mold casting method consisting in casting
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molten alloy in a metal mold.” Ex. 1007, 1:15–17. Yamamoto also
discloses a method for producing a rare earth metal magnet alloy by “a strip
casting system combined with a twin roll, a single roll, a twin belt or the
like.” Id. at 1:59–61. Yamamoto suggests that “an ingot produced by this
method has a composition more uniform than that obtained with the metal
mold casting method,” but that sufficient improvement has not yet been
seen. Id. at 1:62–2:3. Yamamoto further discloses “melting a rare earth
metal-iron alloy to obtain a molten alloy and solidifying the molten alloy
uniformly at a cooling rate of 10 to 1000° C./sec.” Id. at 2:34–36.
2. Obviousness of Claims 11 and 12
Petitioner alleges that claims 11 and 12 would have been obvious over
the combination of Ohashi, Hasegawa, and Yamamoto. Pet. 24–26. Claim
11 depends from claim 1 and further recites “the step of producing the alloy
for rare earth magnets by cooling a melt of the alloy at a cooling rate in the
range between 102°C./sec and 104°C./sec.” Ex. 1001, 14:16–19. Claim 12
depends from claim 11 and further requires that “the melt of the alloy is
cooled by a strip casting method. Id. at 14:20–21. Petitioner argues that
Yamamoto teaches “a rapid cooling (strip cast) method in making a material
alloy more uniformly for making powders of an R—Fe—B magnet.” Pet.
24, 26 (citing Ex. 1007, Abstr., 1:8–14, 2:32–37, 6:16–29, Fig. 1). Petitioner
argues that Yamamoto “teaches rapid cooling in the claimed range to
solidify the molten alloy more uniformly.” Id. at 26 (citing Ex. 100, Abstr.,
2:32–37; Ex. 1002 ¶¶ 90–92).
Patent Owner argues the purported deficiencies of Ohashi and
Hasegawa that it argued with respect to independent claim 1. PO Resp. 21.
For the same reasons as described above, we are not persuaded of any
deficiencies in the combination of Ohashi and Hasegawa in Petitioner’s
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challenge. Patent Owner does not dispute that Ohashi and Hasegawa teach
every element of claims 11 and 12 except for the alloy being cooled at a
cooling rate in the claimed range (claim 11) or being cooled by a strip
casting method (claim 12), nor that Yamamoto teaches the claimed cooling
rate range and cooling by a strip casting method. PO Resp. 28–45.
Petitioner further argues that “[o]ne of ordinary skill would have been
motivated to use a material alloy formed by the rapid cooling method taught
by Yamamoto with the pulverization techniques taught by Ohashi and
Hasegawa in order to pulverize an [R—Fe—B] alloy more uniformly.” Pet.
24 (citing Ex. 1002 ¶¶ 87–89) (emphasis omitted). Petitioner also alleges
that the rapid cooling (strip cast) method of Yamamoto, and the ingot
method of Ohashi and Hasegawa, “are well known and interchangeable to
one of ordinary skill.” Id. (citing Ex. 1001, 1:35–45; Ex. 1002 ¶¶ 42–43,
87–89). Petitioner provides expert testimony that “one of ordinary skill
would have been motivated to combine these prior art teachings of Ohashi,
Hasegawa, and Yamamoto according to known methods to yield predictable
results. Such a modification also would have been obvious because it would
have involved the use of known techniques to improve a similar method.”
Ex. 1002 ¶ 92 (cited at Pet. 26).
Patent Owner counters that one of ordinary skill in the art would not
have been motivated to combine the teachings of Ohashi, Hasegawa, and
Yamamoto to arrive at the claimed invention. PO Resp. 28–45. Patent
Owner does not appear to dispute Petitioner’s contention that strip casting
would result in a more uniform alloy. In particular, Patent Owner
acknowledges that utilizing a strip casting method generates an alloy with
the R-rich phase distributed uniformly along the boundaries of columnar
R2Fe14B grains having a mean width of about 5–25 µm, as compared to an
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alloy generated by ingot casting, which results in randomly dispersed
regions of R-rich phase and α-Fe dendrites with columnar R2Fe14B grains
having a mean width of about 50–150 µm. Id. at 31–32 (citing Ex. 2009,
476).
Patent Owner, however, does dispute that generating a more uniform
alloy would motivate a person of ordinary skill in the art to utilize a strip
casting method in connection with the pulverization process of Ohashi as
modified by Hasegawa. PO Resp. 28–45. Patent Owner contends that the
more uniform composition of a strip cast alloy, as compared to an ingot cast
alloy, would result in a smaller average particle size and a powder
distribution that is relatively uniform in particle size and shape during
hydrogen pulverization. Id. at 33 (citing Ex. 2002 ¶ 108; Ex. 2010, 3277,
Fig. 6; Ex. 1001, 2:18–23, 8:66–9:3). Patent Owner recognizes that “finely
milled R2Fe14B phase particles [on the order of 1–5 µm] improve the density
of the magnet, thereby positively impacting the magnetic resonance and
coercivity as well as the mechanical integrity of the final magnet” (id. at 38
(citing Ex. 2002 ¶ 112)), but explains that more finely milled particles would
then have to be removed as part of Ohashi’s particle removal step, thereby
resulting in a significantly diminished yield (id. at 30–31, 35–37). Patent
Owner argues that Petitioner “ignores the[] consequences of changing
Ohashi’s recipe” (id. at 40) and “did not take into account the effect of an
increased amount of superfine powder from the ‘more uniform material
alloy’ on Ohashi’s or Hasegawa’s removal classification teachings” (id. at
41).
Petitioner, however, has supported its conclusion of obviousness
based on the interchangeability of ingot casting and strip casting and the
combination of prior art elements according to known methods to yield a
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predictable result. Pet. 24, 26 (citing Ex. 1002 ¶ 92). Petitioner has shown,
and Patent Owner has not disputed, that the claimed elements are known in
the art, albeit not combined in a single reference, and are used for their
known purpose. Id. at 25–26. We are persuaded that Petitioner has shown
sufficiently that a person of ordinary skill in the art would have known how
to combine Yamamoto’s strip casting method having a cooling rate in the
claimed range with the pulverization technique of Ohashi as modified by
Hasegawa using known methods. See Ex. 1002 ¶ 43 (“Rare earth elements
. . . are collected and are melted together to form a cast alloy using known
techniques to one of ordinary skill such as the ingot cast method or a strip
cast method.”); see also Ex. 1001, 1:36–45, 12: 24–29 (referring to material
alloy being produced by two types of methods—ingot casting and rapid
cooling—and stating that the present invention was applicable to both an
ingot method and a rapid cooling method); Ex. 1002 ¶ 87 (“The ingot or
strip cast methods are interchangeable to those skilled in the art.”).
Petitioner has also shown that a person of ordinary skill in the art would
have recognized the results of the combination to be predictable. Ex. 1002
¶ 92; Pet. Reply 24 (“[A] person of ordinary skill would have known how to
mitigate the reduction in yield that [Patent Owner] suggests would be
inherently present in the modified Ohashi process.”).
Patent Owner argues that “magnet manufacturing is a far more
complicated process than the Petitioner’s arguments make it out to be,” and
that “if you make a change in any part of this total process, then you are
going to have to . . . investigate to see do you need to make compensations
in other parts of the process as well. And that simply is going to be beyond
what one of ordinary skill in the art would be able to do.” Tr. 62:9–11, 20–
25. Patent Owner further argues that the difference in the level of ordinary
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skill proffered by Patent Owner and Petitioner will affect whether the skilled
artisan is able to modify the rare-earth magnet manufacturing process while
taking into account critical parameters. See id. at 64:3–13. Patent Owner
also argues that “fine-tuning or optimization of [the subject matter of the
’765 patent] is going far beyond that of the level of ordinary skill of both of
what [Patent Owner’s expert] and of what [Petitioner’s expert] have
defined.” Id. at 65:25–66:2.
Although Patent Owner argues that fine-tuning the magnet-making
process to achieve desired characteristics is beyond the level of ordinary
skill, Patent Owner has not explained persuasively that the combination of
Yamamoto’s strip casting at particular cooling rates with the pulverization
techniques of Ohashi as modified by Hasegawa would have been
unpredictable to one of ordinary skill in the art. That is, one of skill in the
art would have understood that changing the method of producing the alloy
would affect the resulting alloy (as described above), even if one of skill in
the art would not have known exactly how to fine-tune the magnet making
process to achieve the same alloy. Moreover, given the only slight
differences between the levels of ordinary skill proffered by Petitioner and
Patent Owner, we are not persuaded that having slightly fewer number of
years of experience of work and research in the field of rare earth magnets
(as proffered by Patent Owner) would significantly change what would be
predictable to a person of ordinary skill in the art, considering that the
person of ordinary skill is a hypothetical person aware of all of the pertinent
prior art. The parties fail to provide a credible explanation on this record as
to how the alleged difference in experience levels for a person of ordinary
skill in the art would alter our analysis of the record.
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Patent Owner also argues that one with ordinary skill in the art, for
various considerations, such as diminished yield, would not have
implemented a strip casting method having cooling rates in the claimed
range in connection with the pulverization technique of Ohashi as modified
by Hasegawa. PO Resp. 28–42. Whether implementation of Yamamoto’s
strip casting method makes commercial sense does not control the
obviousness determination. Patent Owner has not provided persuasive
reasoning or evidence to support its contention that one of skill believed
there to be some technological incompatibility that prevented the
combination of Yamamoto’s strip casting method having cooling rates in the
claimed range with the pulverization technique of Ohashi as modified by
Hasegawa; that the combination was unpredictable in some way; or that one
with ordinary skill in the art would not have known how to use Yamamoto’s
strip casting method with the pulverization technique of Ohashi as modified
by Hasegawa. See Orthopedic Equip. Co. v. United States, 702 F.2d 1005,
1013 (Fed. Cir. 1983) (“[T]he fact that the two [prior art disclosures] would
not be combined by businessmen for economic reasons is not the same as
saying that it could not be done because skilled persons in the art felt that
there was some technological incompatibility that prevented their
combination. Only the latter fact is telling on the issue of
nonobviousness.”).
We appreciate Patent Owner’s argument that “an invention ‘composed
of several elements is not proved obvious merely by demonstrating that each
of its elements was, independently, known in the prior art.” PO Resp. 40
(citing KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)). Petitioner,
however, has set forth a sufficient rationale to arrive at what is claimed.
Specifically, Petitioner has demonstrated that the claims represent the
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combination of prior art elements according to known methods to yield a
predictable result. See KSR, 550 U.S. at 416 (“The combination of familiar
elements according to known methods is likely to be obvious when it does
no more than yield predictable results.”). This is itself a sufficient reason
with rational underpinning to support a conclusion of obviousness. This is
especially true where the evidence supports that consideration of design
incentives, such as the provision of a “lower cost, more productive [process]
better suited for higher volume manufacturing” would have led one of
ordinary skill to pursue the predictable combination of elements. Pet. Reply
24 (citing Ex. 2003, 109:10–20).
Patent Owner also argues that “one of the purposes of Ohashi is ‘to
effectively prevent oxidation of the too fine particles’” (PO Resp. 43 (citing
Ex. 1004, Abstr.)), and that “[h]ydrogen pulverizing a strip cast alloy,
however, increases the likelihood of oxidation of the pulverized particles (id.
at 44 (citing Ex. 2014, 3:1–21; Ex. 1001, 2:5–7; Ex. 1005, Abstr., ¶ 3)).
Patent Owner continues that “[g]iven this increased likelihood of oxidation
when coarsely pulverizing a strip cast alloy via hydrogen pulverization,
modifying Ohashi to use Yamamoto’s strip cast alloy and Hasegawa’s
hydrogen pulverization would render Ohashi unsatisfactory for its intended
purpose of preventing oxidation.” Id. at 45 (citing Ex. 2002 ¶ 113).
We disagree with Patent Owner. The use of strip casting to produce
an alloy for producing an R—Fe—B type rare earth magnet and the use of
hydrogen pulverization to coarsely pulverize the alloy to produce an R—
Fe—B type rare earth magnet is not inconsistent with Ohashi’s described
purpose of “the preparation of an alloy-type permanent magnet mainly
composed of a rare earth element, . . . iron and boron having outstandingly
high stability against otherwise possible changes in the magnetic properties
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in the lapse of years for service.” Ex. 1004, 1:10–15. Modifying Ohashi in
accordance with the teachings of Hasegawa and Yamamoto would not
impede the broad intended purpose of Ohashi. Like Ohashi, both Hasegawa
and Yamamoto are directed to methods of producing rare earth magnets. In
addition, Ohashi contemplates removal of fine powder to address concerns
that even conducting the pulverization in an atmosphere of a non-oxidizing
or inert gas “is still insufficient so that oxidation of the alloy powder
proceeds faster or slower throughout the processes of pulverization,
transportation, storage and subsequent processing resulting in a decrease or
poor reproducibility of the magnetic properties of the permanent magnets
prepared from the alloy powder.” Id. at 1:64–2:2.
In considering the entirety of the record, we are persuaded that a
person of ordinary skill in the art would have combined the teachings of
Ohashi and Hasegawa with the teachings of Yamamoto according to known
methods to yield a predictable result. We credit Dr. Ormerod’s testimony
that the claimed elements were known in the art and were used for their
known purposes (Ex. 1002 ¶¶ 90–94), that a person of ordinary skill in the
art could have combined the known elements by known methods (id. ¶ 87),
and that one of ordinary skill would have recognized the results of the
combination to be predictable (id. ¶ 92). We also credit the evidence
supporting that consideration of design incentives, such as the provision of a
“lower cost, more productive [process] better suited for higher volume
manufacturing” would have led one of ordinary skill to pursue the
predictable combination of elements. Pet. Reply 24 (citing Ex. 2003,
109:10–20).
Petitioner has presented sound reasoning with rational underpinnings
in urging that an ordinarily skilled artisan would have utilized Yamamoto’s
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strip casting method having cooling rates in the claimed range in connection
with the pulverization technique of Ohashi as modified by Hasegawa. After
considering Petitioner’s and Patent Owner’s positions, as well as their
supporting evidence, we conclude that Petitioner has demonstrated, by a
preponderance of the evidence, that dependent claims 11 and 12 of the ’765
patent would have been obvious over the combined teachings of Ohashi,
Hasegawa, and Yamamoto under 35 U.S.C. § 103(a).
E. Obviousness of Claim 15 over Ohashi, Hasegawa, and Kishimoto
1. Overview of Kishimoto
Kishimoto discloses “a process for producing rare earth iron-based
sintered permanent magnets of high performance, which predominantly
comprise one or more rare earth metals, boron, and iron . . . and to a powder
mixture for use in compaction to produce rare earth iron sintered permanent
magnets by such a process.” Ex. 1008, 1:5–10. Kishimoto further discloses
the addition of “a small proportion of a lubricant . . . to the powder in order
to ensure mobility of the alloy powder during compaction and facilitate mold
release.” Id. at 2:35–39. Kishimoto explains that if the mobility of the alloy
powder is insufficient, “friction between the powder and the mold . . . may
cause flaws, delaminations, or cracks to occur on the surface of the die or
green compact,” or may inhibit rotation of the powder that is “required to
align the readily magnetizable axes of individual particles of the alloy
powder along the direction of the applied magnetic field so as to develop
magnetic anisotropy.” Id. at 2:40–48.
2. Obviousness of Claim 15
Patent Owner directs no credible arguments specifically to dependent
claim 15 with regard to the challenge for obviousness over Ohashi,
Hasegawa, and Kishimoto. Instead, Patent Owner argues the purported
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deficiencies of Ohashi and Hasegawa that it argued with respect to
independent claim 1, stating that Kishimoto does not make up for these
deficiencies. PO Resp. 22. For the same reasons as described above, we are
not persuaded of any deficiencies in the combination of Ohashi and
Hasegawa in Petitioner’s challenge.
Claim 15 depends from claim 1 and further recites “the step of adding
a lubricant to the powder obtained in said pulverization step.” Ex. 1001,
14:28–30. Petitioner alleges that claim 15 would have been obvious over the
combination of Ohashi, Hasegawa, and Kishimoto. Pet. 26–28. Petitioner
relies on the combination of Ohashi and Hasegawa for every element of
claim 15, except for the recitation of “adding a lubricant to the powder
obtained in said pulverization step.” Id. at 27–28 (emphasis added).
Petitioner argues that Kishimoto teaches that “before compaction ‘a small
proportion of a lubricant is normally added to the powder in order to ensure
mobility of the alloy powder during compaction and facilitate mold
release.’” Id. at 27 (quoting Ex. 1008, 2:35–40). Petitioner argues that
“[o]ne of ordinary skill would have been motivated to add a lubricant taught
by Kishimoto to the fine alloy powder taught in Ohashi and Hasegawa in
order to ensure the mobility of the alloy powder and assist in compaction.”
Id.; Ex. 1002 ¶ 95.
We credit Dr. Ormerod’s testimony that Kishimoto teaches the
limitations of dependent claim 15 and that one of skill in the art would have
been motivated to modify the method of Ohashi and Hasegawa to add a
lubricant as taught by Kishimoto, as outlined above. We are persuaded that
Petitioner presents sufficient evidence, as outlined above, to support a
conclusion that the combination of Ohashi, Hasegawa, and Kishimoto
renders obvious the subject matter of dependent claim 15. After considering
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Petitioner’s and Patent Owner’s positions, as well as their supporting
evidence, we conclude that Petitioner has demonstrated, by a preponderance
of the evidence, that dependent claim 15 of the ’765 patent would have been
obvious over the combination of Ohashi, Hasegawa, and Kishimoto under
35 U.S.C. § 103(a).
III. CONCLUSION
We determine Petitioner has established, by a preponderance of the
evidence, that claims 1–4, 14, and 16 are unpatentable under 35 U.S.C.
§ 103(a) as obvious over the combination of Ohashi and Hasegawa; claims
11 and 12 are unpatentable under 35 U.S.C. § 103(a) as obvious over the
combination of Ohashi, Hasegawa, and Yamamoto; and claim 15 is
unpatentable under 35 U.S.C. § 103(a) as obvious over the combination of
Ohashi, Hasegawa, and Kishimoto.
IV. ORDER
For the reasons given, it is
ORDERED that claims 1–4, 11, 12, and 14–16 of the ’765 patent have
been shown by a preponderance of the evidence to be unpatentable.
This is a Final Written Decision. Parties to this proceeding seeking
judicial review of our decision must comply with the notice and service
requirements of 37 C.F.R. § 90.2.
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Patent 6,491,765 B2

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FOR PETITIONER:

Michael S. Connor
Haiou Qin
Christopher B. Kelly
H. James Abe
ALSTON & BIRD LLP
mike.connor@alston.com
haiou.qin@alston.com
chris.kelly@alston.com
james.abe@alston.com

FOR PATENT OWNER:

Mehran Arjomand
Robert J. Hollingshead
Curt Lowry
Akira Irie
MORRISON & FOERSTER LLP
marjomand@mofo.com
rhollingshead@mofo.com
clowry@mofo.com
airie@mofo.com