Syntroleum Corporationv.Neste Oil Oyj

Patent Trial and Appeal Board

Jun 5, 2015

11477921 (P.T.A.B. Jun. 5, 2015)

Trials@uspto.gov Paper 48
571-272-7822 Date: June 5, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

REG SYNTHETIC FUELS LLC,
Petitioner,

v.

NESTE OIL OYJ,
Patent Owner.
____________

Case IPR2014-00192
Patent No. 8,278,492 B2
____________

Before SHERIDAN K. SNEDDEN, CHRISTOPHER L. CRUMBLEY, and
JON B. TORNQUIST, Administrative Patent Judges.

CRUMBLEY, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 318 and 37 C.F.R. § 42.73

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I. INTRODUCTION
On November 22, 2013, REG Synthetic Fuels, LLC (“REG”)1 filed a
Petition requesting inter partes review of claims 1–24 of U.S. Patent No.
8,278,492 B2 (Ex. 1001, “the ’492 patent”). Paper 5. REG subsequently
filed an Amended Petition on December 13, 2013. Paper 16, “Pet.” The
owner of the ’492 patent, Neste Oil Oyj (“Neste”), filed a Notice of Election
on March 7, 2014, waiving a preliminary response. Paper 17. In a June 6,
2014, Decision on Institution of Inter Partes Review (Paper 18, “Dec.”), we
instituted trial on claims 1–24 based on the following grounds:
1. Whether claims 1–3, 5–21, 23 and 24 are unpatentable under
35 U.S.C. § 103(a) as having been obvious over Jakkula,2 Monnier I,3
and Gunstone;4
2. Whether claim 4 is unpatentable under 35 U.S.C. § 103(a) as having
been obvious over Jakkula, Monnier I, Gunstone, and Toeneboehn;5
3. Whether claims 5, 6, 20, and 21 are unpatentable under 35 U.S.C.
§ 103(a) as having been obvious over Jakkula, Monnier I, Gunstone,
and Oldřich;6 and

1 The originally-named Petitioner in this case was Syntroleum Corporation.
Pet. 1. On June 24, 2014, Petitioner filed updated Mandatory Notices
informing the Board that REG had acquired Syntroleum Corporation. Paper
20. REG also informed the Board that it had filed with the Office a Power
of Attorney for the ’492 patent, retaining the same counsel that previously
represented Syntroleum. Id. The Board updated the caption of this
proceeding accordingly. For clarity, in this Decision we will refer to both
Petitioner entities as “REG.”
2 Ex. 1004, EP Pub. App. 1396531 A2 (Mar. 10, 2004).
3 Ex. 1005, U.S. Patent 5,705,722 (Jan. 6, 1998).
4 Ex. 1006, Frank D. Gunstone et al., THE LIPID HANDBOOK (2d ed. 1994).
5 Ex. 1007, U.S. Patent 5,298,639 (Mar. 29, 1994).
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4. Whether claim 22 is unpatentable under 35 U.S.C. § 103(a) as having
been obvious over Jakkula, Monnier I, Gunstone, and Monnier II.7
Dec. 16.
Following institution, Neste filed a Patent Owner Response to the
Petition (Paper 26, “PO Resp.”), and REG filed a Reply (Paper 31, “Pet.
Reply”). Neste also filed a contingent Motion to Amend pursuant to
37 C.F.R. § 42.121 (Paper 25, “Mot.”), to which REG filed an Opposition
(Paper 30, “Mot. Opp.”), and REG filed a Reply (Paper 34, “Mot. Reply”).
REG supported its Petition with the Declaration of Dr. Edward L.
Sughrue II (Ex. 1002, “first Sughrue Declaration”), and submitted a Second
Declaration of Dr. Sughrue (Ex. 1043, “second Sughrue Declaration”) with
its Reply and Opposition to the Motion to Amend. Cross-examination of Dr.
Sughrue was taken during two depositions. Exs. 2020, 2033.
With its Patent Owner Response and Motion to Amend, Neste filed
the Declaration of Dr. Bruce C. Gates. Ex. 2001, “first Gates Declaration.”
Neste filed a Second Declaration of Dr. Gates with its Reply on its Motion to
Amend (Ex. 2032, “second Gates Declaration”), and REG took the cross-
examination of Dr. Gates during two depositions. Exs. 1065, 1079. REG

6 Ex. 1008, CZ Patent 283575 (Mar. 5, 1998). An English translation of
Oldřich was submitted as Ex. 1009.
7 Ex. 1013, U.S. Appln 08/269,090 (abandoned application to which
Monnier I claims priority; pursuant to 37 C.F.R. § 1.14(a)(1)(iv), Monnier II
became publicly available as of Monnier I’s date of publication, Jan. 6,
1998).
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filed a Motion for Observations Regarding Cross-Examination on Dr.
Gates’s second deposition (Paper 41), and REG filed a Response (Paper 43).
Oral hearing was requested by both parties and was held on February
9, 2015. A transcript of the oral hearing is included in the record. Paper 47,
“Tr.”
We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
Decision, issued pursuant to 35 U.S.C. § 318(a) and 37 C.F.R. § 42.73,
addresses issues and arguments raised during trial. For the reasons
discussed below, we determine that REG has met its burden to prove, by a
preponderance of the evidence, that claims 1–24 of the ’492 patent are
unpatentable. We also determine that Neste has met its burden on its
Motion to Amend regarding entry of proposed substitute claims 25–28, and
thus, we grant the Motion to Amend.
A. The ’492 Patent
The ’492 patent is directed to a process for the manufacture of diesel
range hydrocarbons from bio oils and fats, commonly called “biodiesel.”
Ex. 1001, Abstract; 1:6–14. In particular, the ’492 patent discloses a two-
step process in which a feed stream of biological origin, diluted with a
hydrocarbon, is first hydrodeoxygenated, and then isomerized. Id. at 5:42–
47. As the ’492 patent notes, deoxygenation of a triglyceride, such as the
ones found in bio-oil feedstocks, proceeds along one of two reaction
pathways: deoxygenation through hydrogenolysis, which results in a
hydrocarbon having the same number of carbon atoms as the fatty acid; and
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deoxygenation through decarboxylation or decarbonylation, which results in
a hydrocarbon having one fewer carbon atom than the fatty acid feedstock.
Id. at 2:51–58. The latter reaction pathways are depicted below:

Reaction pathway (A) depicts deoxygenation via decarboxylation, while
reaction pathways (B1) and (B2) depict deoxygenation via decarbonylation.
Id. at 3:1–5.
According to the ’492 patent, deoxygenation via hydrogenolysis
requires a large amount of hydrogen, and releases a significant amount of
heat that must be dissipated. Id. at 4:32–35. The inventors seek to avoid
these problems by selectively favoring the decarboxylation/decarbonylation
reaction pathways by “spiking” the feed stream with sulfur.8 Id. at 8:36–45.
The addition of 50–20000 w-ppm sulfur to the feed is said to result in
significant reduction of hydrogen consumption, especially when the feed
comprises C12–C16 fatty acids. Id. at 5:63–6:5.

8 The ’492 patent refers to “sulphur.” We use the more common American
English spelling of “sulfur,” but both spellings refer to the same element
having the symbol S.
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B. Illustrative Claims
Of the challenged claims, only claim 1 is independent, while claims
2–24 depend, directly or indirectly, from claim 1. Claim 1 is illustrative of
the claimed subject matter of the ’492 patent and is reproduced as follows:
1. A process for the manufacture of diesel range hydrocarbons,
wherein total feed comprising fresh feed is hydrotreated in a
hydrotreating step to form a hydrotreated product, and the
hydrotreated product is isomerised in an isomerisation step
to form diesel range hydrocarbons, and wherein the fresh
feed comprises at least 20% by weight of triglyceride C12–
C16 fatty acids, C12–C16 fatty acid esters, C12–C16 fatty acids,
or combinations thereof,
wherein at least one inorganic or organic sulphur compound or
a refinery gas and/or liquid stream containing sulphur
compounds is added to the total feed or fresh feed to give a
total feed comprising 100–10,000 w-ppm sulphur calculated
as elemental sulphur,
wherein during the hydrotreating step, the pressure is in the
range of 2–15 MPa, and the temperature is between 200 and
400° C., and
wherein during the isomerisation step, the pressure is in the
range of 2–15 MPa, and the temperature is between 200 and
500° C.

Ex. 1001, 15:2–21.
In its Motion to Amend, Neste proposed substitute claims 25–28, of
which claim 25 is independent and a substitute for claim 1, if found
unpatentable. Claims 26–28 are proposed as substitutes for dependent
claims 14, 16, and 17, respectively. Proposed claim 25 reads as follows,
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with underlined material indicating language added to, and brackets
indicating language removed from, original claim 1:
25. A process for the manufacture of diesel range hydrocarbons,
wherein total feed comprising fresh feed is hydrotreated in a
hydrotreating step to form a hydrotreated product, and the
hydrotreated product is isomerised in an isomerisation step
to form diesel range hydrocarbons, and wherein the fresh
feed is of biological origin and comprises at least [[20]] 40%
by weight of triglyceride C12–C16 fatty acids, C12–C16 fatty
acid esters, C12–C16 fatty acids, or combinations thereof,
wherein at least one inorganic or organic sulphur compound or
a refinery gas and/or liquid stream containing sulphur
compounds is added to the total feed or fresh feed to give a
total feed comprising [100-10,000] 5,000-8,000 w-ppm
sulphur calculated as elemental sulphur,
wherein the total feed comprises fresh feed and additionally at
least one diluting agent, and the diluting agent is selected
from hydrocarbons and recycled products of the process or
mixtures thereof and the diluting agent/fresh feed-ratio is 5-
30:1,
wherein an isomerisation catalyst comprising a metal selected
from Pt and Pd is used in the isomerisation step,
wherein during the hydrotreating step, the pressure is in the
range of 2–15 MPa, and the temperature is between 200 and
400° C., and
wherein during the isomerisation step, the pressure is in the
range of 2–15 MPa, and the temperature is between 200 and
500° C.
Mot. 1–2.
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II. DISCUSSION
A. Claim Construction
For purposes of our Decision to Institute, we analyzed each claim
term in light of its broadest reasonable interpretation, as understood by one
of ordinary skill in the art and as consistent with the specification of the ’492
patent, and determined that resolution of the issues presented in the Petition
did not require explicit construction of any claim terms. Dec. 6–7 (citing
37 C.F.R. § 42.100(b)); see also In re Cuozzo Speed Techs., LLC, 778 F.3d
1271, 1281–82 (Fed. Cir. 2015) (“Congress implicitly adopted the broadest
reasonable interpretation standard in enacting the AIA,” and “the standard
was properly adopted by PTO regulation.”).
As discussed below, the parties’ dispute during trial focused on
whether a person of ordinary skill in the art would have had reason to
combine the prior art references, not on the presence or absence of any
particular claim element or the particular construction thereof. Nor do
Neste’s proposed substitute claims introduce new terminology that requires
construction. No explicit constructions are required, therefore, in order to
resolve the issues pending before the Board. See Vivid Techs., Inc. v. Am.
Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999) (“[O]nly those terms
need be construed that are in controversy, and only to the extent necessary to
resolve the controversy.”).
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B. Patentability of Original Claims 1–24
In our Decision to Institute, we found persuasive REG’s analysis of
how the elements of claims 1–24 are taught by the disclosures of Jakkula,
Monnier I, Gunstone, and the other various secondary references. Dec. 9.
Neste’s Response does not address this analysis of the claim elements, but
rather focuses on whether a person of ordinary skill in the art would have
had reason to combine the disclosures of Jakkula and Monnier I. PO
Resp. 20. At oral argument, both parties agreed that there is no dispute that
the individual components of the challenged claims were known in the art.
Tr. 6, 22. On this basis, we reconfirm our findings from the Decision to
Institute, and conclude that REG has established, by a preponderance of the
evidence, that each element of challenged claims 1–24 is taught by the cited
prior art.
We, therefore, turn to the question of whether REG has articulated
sufficient reason to combine Jakkula and Monnier I.
1. Proposed Reason to Combine the References
Jakkula discloses a process for converting a biological starting
material such as vegetable oil or animal fat into a hydrocarbon suitable for
use as diesel fuel. Ex. 1004 ¶¶ 1, 13. The process comprises two steps: a
hydrodeoxygenation (HDO) step followed by a hydroisomerization (HI)
step. Id. ¶ 16. HDO is performed using a nickel-molybdenum on alumina
catalyst at a pressure between 20–150 bar and a temperature between 200–
500 ºC. Id. ¶ 20. In the second HI step, Jakkula discloses using, for
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example, a platinum or palladium catalyst at a pressure of 20–150 bar and a
temperature of 200–500 ºC. Id. ¶¶ 30–31.
Monnier I discloses an HDO process that, like Jakkula, hydrotreats a
biological feedstock using a nickel-molybdenum on alumina catalyst. Ex.
1005, 3:61–64. Monnier I teaches presulfiding the catalyst, and then spiking
the feed stream with 1000 w-ppm sulfur to “avoid loss of sulphided active
sites on the catalyst surface and maintain catalyst activity.” Id. at 4:1–18.
REG argues that Jakkula and Monnier I disclose “essentially
identical” processes. Pet. 14. Given Monnier I’s disclosure that a sulfur
spike can avoid a loss of catalyst activity, REG contends that a person of
ordinary skill in the art would have had reason to modify the process of
Jakkula using the sulfur spike taught in Monnier I. Id. Dr. Sughrue supports
this rationale, testifying that “[t]ypical hydrotreatment catalysts need to be in
a sulfide state to remain active,” and that due to the low sulfur content of
bio-based feedstocks, it was known that sulfur should be added to the
feedstock to keep the catalyst in its sulfided state. Ex. 1002 ¶ 59. Dr.
Sughrue cites Monnier I, as well as Laurent II,9 as supporting this
knowledge in the art. Id. ¶¶ 60–63.

9 Ex. 1011, Etienne Laurent & Bernard Delmon, Study of the
Hydrodeoxygenation of Carbonyl, Carboxylic and Guaiacyl Groups Over
Sulfide CoMo/γ-Al2O3 and NiMo/γ-Al2O3 Catalyst. II. Influence of Water,
Ammonia and Hydrogen Sulfide, 109 Applied Catalysis A: General 97, 99
(1994) (“Laurent II”) (“if sulfided catalysts are going to be used for . . .
hydrotreatment, it is generally accepted that a source of sulfur . . . will be
required for keeping the sulfide phases active over long periods.”)
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Dr. Sughrue provides an additional rationale for combining the
processes of Jakkula and Monnier I, testifying that the prior art recognized
that the presence of sulfur in a feedstock promotes decarboxylation during
HDO reactions, leading to decreased hydrogen consumption. Id. ¶ 49.
Laurent II, for example, discloses that “[t]he presence of hydrogen sulfide,
whatever the amount, causes an increase of the selectivity towards
decarboxylated products.” Ex. 1011, 107. Dr. Sughrue testifies that Table 4
of Laurent II discloses that between 2000 w-ppm and 7900 w-ppm sulfur
resulted in decarboxylation selectivity of 44–57%, depending on the catalyst
used. Ex. 1002 ¶ 53. In a similar vein, Dr. Sughrue cites Ferrari,10 which
tested sulfur concentrations between 1266 w-ppm and 18,992 w-ppm, and
concluded that the highest selectivity for decarboxylation was found at 4431
w-ppm sulfur. Id. ¶¶ 54–57 (citing Ex. 1012, 90, Fig. 5).
2. Whether the Prior Art Teaches Away from Adding Sulfur
In response, Neste focuses on a distinction between the processes
disclosed in Jakkula and Monnier I (as well as the other prior art suggesting
the desirability of a sulfur spike): whereas Monnier I and the other
references pertain to HDO processes alone, Jakkula discloses an HDO step
followed by an HI step. PO Resp. 21–22. According to Neste, Jakkula in
fact “teaches away from adding sulfur to the feed in a hydrotreating process

10 Ex. 1012, M. Ferrari et al., Influence of the Hydrogen Sulfide Partial
Pressure on the Hydrodeoxygenation Reactions Over Sulfided
CoMo/Carbon Catalysts, 1999 Hydrotreatment & Hydrocracking Oil
Fractions 85 (B. Delmon et al. eds.).
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when the product of that process is fed to a downstream hydroisomerization
process carried out with a noble metal-containing catalyst.” Id. at 21.
“[W]hen the prior art teaches away from combining certain known
elements, discovery of a successful means of combining them is more likely
to be nonobvious.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 416 (2007).
A reference teaches away if it would discourage a person of ordinary skill in
the art from following the path set out in the reference, or lead in a direction
divergent from the path that was taken by the applicant. In re Gurley, 27
F.3d 551, 553 (Fed. Cir. 1994). “[I]n weighing the suggestive power of each
reference, [we] must consider the degree to which one reference might
accurately discredit another.” In re Young, 927 F.2d 588, 591 (Fed. Cir.
1991).
Neste analogizes the case at hand to the one addressed by the Supreme
Court in United States v. Adams, 383 U.S. 39 (1966). PO Resp. 39. In
Adams, the prior art disclosed the use of zinc anodes in batteries, and also
suggested the substitution of magnesium for zinc. 383 U.S. at 46. Despite
these teachings, the Court found that the claimed water-activated battery—
which used a magnesium anode—was nonobvious. Id. at 51. The Court
noted that the prior art taught that water-activated batteries “were successful
only when combined with electrolytes detrimental to the use of magnesium,”
and therefore a person of ordinary skill in the art would have been deterred
from using magnesium in a water-activated battery. Id. at 52.
In the present case, Jakkula discloses that “nitrogen, sulphur and
phosphorus . . . are known catalyst poisons and inhibitors inevitably
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reducing the service life of the catalyst and necessitating frequent
regenerations thereof.” Ex. 1004 ¶ 6. Jakkula characterizes its HI catalyst
as “very expensive and extremely sensitive to catalyst poisons,” and thus
emphasizes “protection of the isomerization catalyst.” Id. ¶¶ 10, 64. As an
optional embodiment, Jakkula proposes purifying the product of the HDO
step using a stripping step, to remove impurities as completely as possible
prior to the HI step. Id. ¶ 26.
Neste argues, therefore, that Jakkula explicitly discourages the use of
sulfur in its two-step process. PO Resp. 23. In addition, Neste points out
that each of the prior art references cited by REG as disclosing the addition
of sulfur are one-step HDO processes, which are not followed by an HI step.
Id. at 33. As such, these references are not faced with the need to protect the
expensive HI catalyst from poisons.
Neste’s declarant, Dr. Gates, testifies that the prior art recognized that
HI catalysts were extremely sensitive to poisoning by sulfur. Ex. 2001
¶¶ 42–49. York,11 for example, is cited as warning against exposing
platinum catalysts to as little as 30 w-ppm sulfur. Ex. 2013, 676, Fig. 8.

11 Ex. 2013, Andrew P. E. York, et al., Comparative Effect of Organosulfur
Compounds on Catalysts for the n-Heptane Isomerization Reaction at
Medium Pressure: Mo2C-Oxygen-Modified, MoO3-Carbon-Modified, Pt/γ-
Al2O3, and Pt/β-Zeolite Catalysts, 35 INDUS. & ENG’G CHEMISTRY RES. 672–
82 (1996).
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Biswas12 notes that “[s]ulfur contents of less than 1 ppm are commonly
required,” because the presence of sulfur reduces the expected life of
Pt/Al2O3 catalysts. Ex. 2007, 234.
For these reasons, Neste argues, a person of ordinary skill in the art
would have understood that any sulfur added to the HDO step of Jakkula
would need to be removed prior to the HI step. PO Resp. 25. As such,
adding sulfur would “add risk” to Jakkula’s process, thereby discouraging
the skilled artisan given the “several million dollar” expense of replacing a
poisoned HI catalyst. Id. at 25, 37.
Dr. Sughrue responds by arguing that Dr. Gates’s testimony focuses
on particularly sensitive catalysts, and ignores that, at the time of the
invention, there were catalysts known to be more tolerant of sulfur.
Ex. 1043 ¶¶ 34–53. REG argues that other references disclose HI catalysts
that do not exhibit detrimental effects when exposed to sulfur, such as
Raulo13 (1000 w-ppm sulfur) and Prada14 (10,000 w-ppm sulfur). Pet. Reply
3.
REG also contends that, even if HI catalysts could not tolerate high
levels of sulfur, HDO processes were known at the time of invention that
reduced the level of sulfur to below 10 w-ppm. Id. at 10. Alternatively,
REG argues, purification steps could be included between the HDO and HI

12 Ex. 2007, J. Biswas, et al., The Role of Deposited Poisons and Crystallite
Surface Structure in the Activity and Selectivity of Reforming Catalysts,
30(2) CATALYSIS REVIEWS: SCI. & ENG’G 161–247 (1988).
13 Ex. 1023, U.S. Patent 6,399,845 B1 (June 4, 2002).
14 Ex. 1059, U.S. Patent 5,612,273 (Mar. 18, 1997).
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steps of Jakkula to remove sulfur if HI catalyst poisoning was a concern. Id.
at 10–11. Indeed, Jakkula itself discloses an optional stripping step, in order
to reduce the level of sulfur in the stream prior to the HI step. Ex. 1004
¶ 26.
3. Conclusion
We conclude that the evidence of record establishes that a person of
ordinary skill in the art would have had reason to combine Jakkula and
Monnier I, and would not have been discouraged from doing so. Monnier I
and Laurent II disclose that spiking a biological feedstock with sulfur
prevents loss of HDO catalyst activity. Ex. 1005, 4:1–18; Ex. 1011, 99.
Furthermore, we find that the prior art recognized an additional advantage of
adding sulfur to an HDO feedstock, namely increased selectivity of the
decarboxylation reaction pathway and consequent reduction of hydrogen
consumption. Ex. 1011, 107; Ex. 1012, 90, Fig. 5. Notably, this is the same
benefit of added sulfur recognized by the ’492 patent. Ex. 1001, 8:36–45.
In addition, Laurent II discloses that maximum decarboxylation
selectivity was reached at an H2S concentration of 49 mmol/L, which Dr.
Sughrue credibly testifies corresponds to approximately 2000 w-ppm. Ex.
1011, 107, Table 4; Ex. 1002 ¶ 52. Similarly, Ferrari discloses that
decarboxylation selectivity reaches a maximum at approximately 35 kPa
H2S partial pressure, which converts to 4431 w-ppm sulfur according to Dr.
Sughrue. Ex. 1012, 90, Fig. 5; Ex. 1002 ¶¶ 55–56. Indeed, Dr. Sughrue and
Dr. Gates agree on this point. Ex. 2001 ¶ 94; Ex. 1002 ¶¶ 56–57 (Sughrue:
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“The decarboxylation selectivity as measured by Ferrari increased . . . to at
least about 32–33% at 35 kPa H2S (4431 wppm sulfur) . . . . [A]s the
hydrogen sulfide partial pressure increases beyond these values, the
selectivity for decarboxylation decreases from the maxima.”). In view of
these disclosures, a person of ordinary skill in the art would have had reason
to add between 2000–4431 w-ppm sulfur to the HDO feedstock of Jakkula,
within the ranges of dependent claims 7 (1000–8000 w-ppm) and 22 (2000–
5000 w-ppm).
We are not convinced by Neste’s arguments that Jakkula, or the prior
art in general, teaches away from the use of sulfur. We find that HI catalysts
capable of tolerating high sulfur levels, including up to 10,000 w-ppm, were
known in the art at the time of the invention. Ex. 1059, 7:36–43.
Alternatively, if using an HI catalyst that was not sulfur-tolerant, a person of
ordinary skill in the art would have known that a purification step, such as
the stripping step disclosed by Jakkula, could be used between the HDO and
HI processes. Ex. 1004 ¶ 26.
Aside from these findings, we also note that Neste’s arguments
regarding teaching away may best be characterized as economic ones. In
other words, Neste argues that a person of ordinary skill in the art would
have recognized that the use of sulfur, even at the low levels that can be
obtained via stripping, decreases the life expectancy of the HI catalyst over
the long term. PO Resp. 27, 38–39. Because of the high cost of replacing
an HI catalyst, therefore, Neste concludes that the skilled artisan would have
avoided the addition of sulfur entirely. Id. Such economic concerns,
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however, are not sufficient bases for a conclusion of teaching away. See
Orthopedic Equip. Co., Inc. v. United States, 702 F.2d 1005, 1013 (Fed. Cir.
1983). As stated by the Federal Circuit:
The combination of these two inventions does not make good
economic sense, but there is no mismatch between their
technologies. . . . [T]he fact that the two disclosed apparatus
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.
Id.
In other words, we recognize that engineering necessarily involves
design choices, which may increase the costs of performing a process. If a
modification, however, leads to some increase in functionality or yield—
such as increased decarboxylation selectivity and resultant decreased
hydrogen consumption—a skilled artisan may consider the increased costs to
be justified. The fact that the use of added sulfur may result in higher costs
of HI catalyst over the long run is not sufficient reason to conclude that a
person of ordinary skill in the art would have been discouraged from adding
sulfur.
For the foregoing reasons, REG has proven by a preponderance of the
evidence that the prior art teaches all elements of challenged claims 1–24,
and that a person of ordinary skill in the art would have had reason to
combine the disclosures. Furthermore, we conclude that such a combination
would have been within the level of ordinary skill in the art, as evidenced by
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the prior art of record. We, therefore, conclude that claims 1–24 would have
been obvious at the time of the invention, and thus are unpatentable under
35 U.S.C. § 103.
C. Patentability of Proposed Substitute Claims
In an inter partes review, amended claims are not added to the patent
as of right, but rather must be proposed as a part of a motion to amend.
35 U.S.C. § 316(d). As moving party, the patent owner bears the burden of
proof to establish that it is entitled to the relief requested; namely, addition
of the proposed claims to the patent. 37 C.F.R. § 42.20(c). A patent owner
must meet the requirements of 37 C.F.R. § 42.121, and demonstrate the
patentability of the proposed substitute claims.
The parties do not dispute that Neste has satisfied the requirements of
37 C.F.R. § 42.121, including: 1) the amendment is responsive to a ground
of unpatentability; 2) the amendment does not enlarge the scope of the
claims or introduce new matter; 3) the Motion proposes a reasonable number
of substitute claims; and 4) the Motion sets forth the support for the
proposed claims in the original disclosure. Based on our review of the
Motion, we agree that these requirements have been met.
Regarding the patentability of the proposed substitute claims, the
amendments do not introduce new terminology that requires construction.
See Idle Free Systems, Inc. v. Bergstrom, Inc., Case IPR2012-00027, slip op.
at 7 (PTAB June 11, 2013) (Paper 26, “Idle Free”) (informative). Proposed
claim 25 is a substitute for original claim 1 and incorporates claim 1’s
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limitations, as well as the limitations of original dependent claims 6, 10, 18,
and 18. The claim also adds a new limitation not found in the original
claims, that the total feed comprises 5000–8000 w-ppm sulfur. Mot. 2.
We, therefore, turn to the question of whether Neste has met its
burden of proof to establish that claims 25–28 are patentable. While not
required to prove that the claims are patentable over every item of prior art
known to a person of ordinary skill, Neste is required to explain why the
claims are patentable over the prior art of record. Idle Free, slip op. at 7. In
addition, Neste’s duty of candor to the Office requires that it discuss any
relevant prior art not of record but known to it. See 37 C.F.R. § 42.11; Idle
Free, slip op. at 7.
REG argues that the Motion should be denied, as it allegedly fails to
address all relevant prior art known to Neste. Mot. Opp. 2 (citing ScentAir
Tech., Inc. v. Prolitec, Inc., Case IPR2013-00179, slip. op. at 27–30 (PTAB
June 26, 2014) (Paper 60, “ScentAir”)). REG identifies three references in
particular: Raulo and Prada, both of which were discussed above in section
II.B.2, and Plantenga.15 Id. at 3–5. REG identifies the first two references’
disclosure of sulfur-tolerant HI catalysts as being relevant to the
patentability of proposed claim 25. Plantenga is cited as disclosing a process
that can reduce sulfur in a feedstock from 12,000 w-ppm to near 6 w-ppm.

15 Ex. 1064, F. L. Plantenga, et al., “NEBULA”: A Hydroprocessing
Catalyst with Breakthrough Activity, 145 STUDIES IN SURFACE SCI. &
CATALYSIS 407–410 (2003).
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In ScentAir, the record established that Patent Owner was aware of at
least one reference which disclosed the precise limitation that was added to
the proposed substitute claim to distinguish it from the prior art. See
ScentAir, slip op. at 30. In addition, the panel in ScentAir noted that Patent
Owner’s Motion to Amend expressly stated that prior to the challenged
patent, “no one had invented” a product having the newly added limitation, a
statement directly contradicted by the prior art of which Patent Owner was
aware. Id. at 28. In the case at hand, however, the three references cited by
REG are relevant to Neste’s teaching away argument, not any issue newly
raised by the Motion to Amend. As Neste points out, REG does not allege
that any of the proposed substitute claims are unpatentable over a
combination of references that includes Raulo, Prada, or Plantenga. We
consider the present case to be distinguishable from that of ScentAir, and
decline to deny the Motion for failing to address all relevant prior art.
1. Neste’s Arguments that Claim 25 is Patentable
Neste concedes that the individual elements of claim 25 were known
in the art. Mot. 12. Nevertheless, the claim as a whole is said to be
patentable because, according to Neste, the combination of those elements
would have run counter to prevailing wisdom in the art at the time of the
invention. Id. Dr. Gates testifies to the following: the use of sulfur is not
required for HDO processes (Ex. 2001 ¶ 18); that even if purified, the result
of a sulfided HDO process would necessarily contain some sulfur (id. ¶¶ 50–
51); and low levels of sulfur cause deactivation of HI catalysts, which are
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expensive and require plant downtime to replace (id. ¶¶ 42–49). These
arguments, however, do not distinguish the proposed substitute claims over
the prior art, for the same reasons that they do not distinguish the original
claims over the prior art.
Neste also directs our attention to the new limitation added to claim
25, which requires 5000–8000 w-ppm sulfur. Mot. 13. Neste contends that
this limitation distinguishes over the known prior art, even if the art can be
said to suggest the use of a sulfided feedstock in a process comprising both
an HDO and HI step. Id. Dr. Gates testifies that a person of ordinary skill
“would have been aware of the need to limit a hydroisomerization catalyst’s
exposure to sulfur, and would not have chosen to add more sulfur than was
necessary and then incur a large expense to go back and remove it.”
Ex. 2032 ¶ 74.
Neste addresses the two rationales for modifying Jakkula set forth in
the Petition. First, Monnier I and Monnier II disclose the addition of sulfur
to biological feedstocks to maintain the HDO catalyst in a sulfide state.
According to Monnier I, 1000 w-ppm sulfur is sufficient to avoid loss of
sulfided catalyst. Ex. 1005, 4:14–17. Monnier II discloses a broader range
of 200–3000 w-ppm sulfur, but as Neste notes, the reference does not
disclose any advantage to using more than 1000 w-ppm sulfur. Ex. 1013, 5.
Neste asserts that even if motivated by the Monnier references to add sulfur
to the process of Jakkula, a skilled artisan would have used the minimum
amount of sulfur necessary to achieve the benefits disclosed in Monnier,
namely 1000 w-ppm. Mot. 13.
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REG does not seriously contest Neste’s arguments regarding the
Monnier references, or assert that they would have provided reason to add
5000–8000 w-ppm sulfur to the process of Jakkula. Rather, the parties’
dispute during trial focused on the Laurent and Ferrari references, which are
discussed below.
Ferrari
Ferrari reports the results of experiments studying the effect of
varying concentrations of sulfur on HDO catalyst activity. Ex. 1012, 86. In
particular, Table 3 and Figure 5 of Ferrari report the effect of hydrogen
sulfide partial pressure (sulfur concentration) on decarboxylation selectivity.
Id. at 90–91. Dr. Gates testifies that Ferrari discloses a maximum
decarboxylation selectivity of approximately 32% at 35 kPa partial pressure,
which Dr. Sughrue converts to 4431 w-ppm sulfur. Ex. 2001 ¶ 94 (citing
Ex. 1002 ¶ 56). After this point, Ferrari reports that decarboxylation
selectivity decreases with increasing sulfur concentration. Ex. 1012, Fig. 5.
Neste argues that a person of ordinary skill in the art would have had no
reason to use 5000–8000 w-ppm sulfur in the process of Jakkula, given that
Ferrari reports that such a concentration would lead to decreased
decarboxylation selectivity. Mot. 15.
REG characterizes Ferrari as disclosing that the highest selectivity for
decarboxylation occurs “near 5,000 ppm sulfur.” Mot. Opp. 8. Dr. Sughrue
concedes, however, that beyond about 4431 w-ppm sulfur, “the selectivity
for decarboxylation decreases from the maxima.” Ex. 1002 ¶ 57. The
claimed range of 5000–8000 w-ppm is characterized by Dr. Sughrue as “a
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prime range for investigation.” Ex. 1043 ¶ 130. Neither Dr. Sughrue nor
REG explain why this is so; it is not clear why the skilled artisan, seeking to
increase decarboxylation selectivity, would have “investigated” a range of
sulfur concentration already reported by Ferrari to lead to decreased
selectivity. On this record, we find sufficient evidence to conclude that a
person of ordinary skill would not have been motivated by Ferrari to use a
sulfur concentration of 5000–8000 w-ppm sulfur.
Laurent I
Neste argues that the Laurent references—Laurent I16 and
Laurent II—have limited real-world applicability, as they studied the effects
of sulfur on model compounds rather than actual feedstocks. Mot. 13–14.
Dr. Gates testifies that Laurent I, though acknowledging the benefit of
decarboxylation selectivity, does not give any reason to select a sulfur
concentration between 5000 and 8000 w-ppm. Ex. 2032 ¶ 20. This is due to
the fact that, as Dr. Sughrue calculates, all reactions of Laurent I were run
using approximately 2000 w-ppm sulfur. Ex. 1002 ¶ 50.
Notwithstanding this fact, REG argues that Laurent I would have
given a person of ordinary skill in the art motivation to “test and optimize
the level of sulfur for a given biological feedstock” because of the disclosed
benefits of decarboxylation selectivity. Mot. Opp. 8. In particular, Laurent I

16 Ex. 1010, Etienne Laurent & Bernard Delmon, Study of the
Hydrodeoxygenation of Carbonyl, Carboxylic and Guaiacyl Groups over
Sulfided CoMo/γ-Al2O3 and NiMo/γ-Al2O3 Catalysts. I. Catalytic Reaction
Schemes, 109 Applied Catalysis A 77–96 (1994).
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discloses that increased decarboxylation results in relatively low hydrogen
consumption, limiting the cost of the refining operation. Ex. 1010, 78.
Dr. Sughrue testifies that optimization of the sulfur concentration would
have been within the level of ordinary skill in the art exemplified by the
Laurent and Ferrari references. Ex. 1002 ¶ 126.
“[W]here the general conditions of a claim are disclosed in the prior
art, it is not inventive to discover the optimum or workable ranges by routine
experimentation.” In re Aller, 220 F.2d 454, 456 (CCPA 1955). In order for
routine optimization of reaction conditions to be considered obvious,
however, the art must first recognize that the conditions are result-effective
variables. In re Antonie, 559 F.2d 618, 620 (CCPA 1977). In the case at
hand, we do not find that Laurent I discloses that sulfur concentration is a
result-effective variable leading to increased decarboxylation selectivity.
Indeed, Laurent I does not recognize sulfur concentration as a variable at all;
as Dr. Sughrue acknowledges, all reactions were run using the same
concentration of approximately 2000 w-ppm sulfur. Ex. 1010, 81, Table 1;
Ex. 1002 ¶ 50.
Even if it were disclosed to be a result-effective variable, we do not
find that increasing the sulfur concentration from 2000 w-ppm to 5000–8000
w-ppm—2.5 to 4 times that disclosed—would have been considered
“routine optimization” at the time of the invention. As discussed above,
although such an increase in concentration would have been considered
technologically feasible by one of ordinary skill, the prior art reflects
practical and economic considerations that would have counseled against
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increasing sulfur concentration beyond what was necessary to achieve
beneficial effects. In our view, more than doubling the concentration of
sulfur when faced with these considerations would not have been “routine.”
Laurent II
Neste argues that while Laurent II generally states that “hydrogen
sulfide, whatever the amount, causes an increase of the selectivity towards
decarboxylated products,” the reference does not provide a reason to add
5000–8000 w-ppm sulfur to a feedstock. Mot. 14. In particular, Neste
points to Table 4 of Laurent II, which discloses that maximum
decarboxylation selectivity is reached at about 2000 w-ppm sulfur. Id.
(citing Ex. 1011, 107). A person of ordinary skill, it is argued, would have
had no reason to use more than 2000 w-ppm sulfur, based on these results.
Id.
REG contends that because Laurent II reports maximum
decarboxylation selectivity in the range of 2000–7900 w-ppm sulfur, a
person of ordinary skill in the art would have had reason to “test and
explore” sulfur levels within this range to find the optimal level. Mot. Opp.
10–11. This, in combination with the disclosure of Jakkula, would have
resulted in a process using the claimed 5000–8000 w-ppm sulfur. Id.
Again, we fail to find REG’s routine optimization argument
persuasive. In contrast to Laurent I, Laurent II does disclose that sulfur
concentration is a variable; however, Laurent II’s results show that
decarboxylation selectivity only increases with sulfur content to about 2000
w-ppm, after which selectivity plateaus. Ex. 1011, Table 4 (reporting
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similar results for 49, 98, and 196 mmol/L sulfur). Beyond 2000 w-ppm,
therefore, Laurent II teaches that sulfur concentration ceases to be result-
effective. A person of ordinary skill in the art would have had no reason to
optimize above about 2000 w-ppm sulfur, because Laurent II discloses no
effect on decarboxylation selectivity beyond that point.17
REG raises another, related argument regarding Laurent II. Table 4 of
the reference, in addition to reporting decarboxylation selectivity, also
reports kDES, the rate constant for the HDO reaction converting DES (di-
ethyldecanedioate) at various levels of sulfur. Ex. 1011, 107, Table 4.
According to Dr. Sughrue, these results indicate that the activity of the HDO
catalyst continues to increase above 2000 w-ppm sulfur, and is still
increasing at 8000 w-ppm. Ex. 1043 ¶ 125. Dr. Sughrue testifies that this
increased activity has the benefit of requiring less catalyst to be used to
deoxygenate the feedstock. Id. REG contends that this benefit provides
another reason for the person of ordinary skill to use sulfur concentrations in
the claimed 5000–8000 w-ppm range. Mot. Opp. 11.
We are not convinced by REG’s rate constant argument. First, REG
does not direct us to any evidence in the record, other than the testimony of
Dr. Sughrue, that establishes that increasing the rate constant of the
conversion reaction was recognized in the art to be beneficial. This is in
stark contrast to decarboxylation selectivity, which is described by several

17 Furthermore, as discussed above with respect to Laurent I, we do not find
such a significant increase in sulfur concentration—from 2000 to 5000–8000
w-ppm—to be “routine.”
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references as decreasing hydrogen consumption and, therefore, processing
cost. We are, therefore, left with only Dr. Sughrue’s statement that an
“increase in rate constant is important because a higher activity allows for
less catalyst to be used to deoxygenate the feedstock.” Ex. 1043 ¶ 125. Dr.
Sughrue cites no support for such an assertion, and we accord it little weight.
See 37 C.F.R. § 42.65(a) (“Expert testimony that does not disclose the
underlying facts or data on which the opinion is based is entitled to little or
no weight.”).
Second, we note that Table 4 of Laurent II reports, along with kDES,
the rate constants k4MA and kGUA, pertaining to the HDO conversion of 4-
methylacetophenone and guaiacol, respectively. Ex. 1011, 107. While kDES
is shown to increase with sulfur concentration, k4MA decreases and kGUA is
unaffected by sulfur concentration. Id. REG provides no evidence or
argument establishing why a person of ordinary skill in the art would have
considered only the kDES rate constant in determining the benefit of increased
sulfur concentration.
Finally, we note that although Laurent II is cited to establish a reason
to combine references in both the Petition and Opposition to the Motion to
Amend, Laurent II’s rate constant results were never mentioned as part of
the Petition or Dr. Sughrue’s first Declaration. The Petition describes
Laurent II as finding that increased sulfur concentration “led to increased
decarboxylation.” Pet. 32. Similarly, Dr. Sughrue testifies that Laurent
shows that “decarboxylation of fatty acids and fatty acid esters in a
hydrotreating process is promoted by the inclusion of sulfur, and that such
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decarboxylation adventitiously decreases hydrogen consumption.” Ex. 1002
¶ 58. Although Petitioners are not prohibited from raising new arguments to
respond to a Motion to Amend, as noted above Laurent II was cited for a
similar proposition in both sets of briefing: that the reference provided
reason to add a particular concentration of sulfur to an HDO stream.
Compare Ex. 1002 ¶ 132 (claim 22’s range of 2000–5000 w-ppm sulfur)
with Ex. 1043 ¶ 93 (claim 25’s range of 5000–8000 w-ppm sulfur). The fact
that neither REG nor Dr. Sughrue initially raised Laurent II’s rate constant
results smacks of hindsight reasoning.
For these reasons, we do not find that a person of ordinary skill in the
art would have had reason to use 5000–8000 w-ppm sulfur in the process of
Jakkula, based on either the decarboxylation selectivity or rate constant
results reported in Laurent II.
2. Conclusion Regarding Patentability of Claim 25
Based on the record before us, we conclude that Neste has carried its
burden of demonstrating that claim 25 is patentable over the prior art of
record. We concluded above, in discussing the original claims, that a person
of ordinary skill in the art would have had reason to combine Jakkula and
Monnier I to add sulfur to the feedstock of an HDO process that is followed
by an HI step, because the prior art suggests that concentrations of 2000 or
4431 w-ppm have beneficial effects on catalyst activation and
decarboxylation selectivity. A person of ordinary skill would, therefore,
weigh the possible deleterious effects of sulfur on the HI catalyst, against the
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possible benefits.
The question of whether a person of ordinary skill in the art would
have had reason to add an even higher concentration of sulfur—in the range
of 5000–8000 w-ppm—is an altogether different one. The record before us
does not establish persuasively that there was any art-recognized benefit to
using a concentration of sulfur over 4431 w-ppm. Absent any indication of
a benefit to be obtained from adding even greater amounts of sulfur, the
skilled artisan would have no reason to make the modifications to Jakkula
necessary to result in the claimed invention. Such modifications would
involve catalyst replacement costs, additional processing steps such as
stripping, or catalyst substitutions18 that—although not prohibitive if the
prior art suggested a benefit might be obtained—would not be undertaken if
the person of ordinary skill saw no benefit to making them.
For these reasons, we conclude that Neste has established sufficiently
that there was no reason to modify the prior art to arrive at the process of
claim 25.

18 For example, although REG correctly notes that Prada discloses an HI
catalyst that can tolerate up to 10,000 w-ppm sulfur (Mot. Opp. 4; Ex, 1059,
7:36–38), there would be no reason to modify Jakkula to use the Prada
catalyst unless the prior art suggested some gain would result from using
such high sulfur levels. As discussed above, the art of record reflects that
decarboxylation selectivity reaches a maximum at, at most, 4431 w-ppm.
We also note that REG has not set forth a proposed ground of
unpatentability based on the combination of Prada with Jakkula.
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3. Dependent Claims
Proposed substitute claims 26–28 correspond to original claims 14,
16, and 17, but are rewritten to depend from proposed substitute claim 25.
This is the proper technique for maintaining claim dependencies from an
amended independent claim. See Toyota Motor Corp. v. Am. Vehicular Scis.
LLC, Case IPR2013-00419, slip op. at 2 (PTAB Mar. 7, 2014) (Paper 32)
(discussing prohibition on “amending in place”).
Because we conclude above that claim 25 is patentable, we reach the
same conclusion with respect to its dependent claims. Neste has established
by a preponderance of the evidence that claims 26–28 are patentable over
the prior art of record.
III. CONCLUSION
We conclude that REG has demonstrated, by a preponderance of the
evidence, that claims 1–24 of the ’492 patent are unpatentable under
35 U.S.C. § 103, as having been obvious over combinations of Jakkula,
Monnier I, Gunstone, Toeneboehn, Oldřich, and Monnier II, as follows:
Claims 1–3, 5–21, 23 and 24: Jakkula, Monnier I, and Gunstone;
Claim 4: Jakkula, Monnier I, Gunstone, and Toeneboehn;
Claims 5, 6, 20, and 21: Jakkula, Monnier I, Gunstone, and Oldřich;
Claim 22: Jakkula, Monnier I, Gunstone, and Monnier II.
In addition, we conclude that Neste has demonstrated, by a
preponderance of the evidence, that proposed substitute claims 25–28 are
patentable over the prior art, and that it is entitled to entry of the proposed
substitute claims. We, therefore, grant Neste’s Motion to Amend Claims.
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IV. ORDER
Accordingly, it is
ORDERED that claims 1–24 of U.S. Patent No. 8,278,492 B2 are
unpatentable;
FURTHER ORDERED that Patent Owner’s Motion to Amend is
granted as to proposed substitute claims 25–28;
FURTHER ORDERED that, pursuant to 35 U.S.C. § 318(b), upon
expiration of the time for appeal of this decision, or the termination of any
such appeal, a certificate shall issue canceling claims 1–24 and incorporating
claims 25–28 in U.S. Patent No. 8,278,492 B2; and
FURTHER ORDERED that, because this is a final decision, parties to
the proceeding seeking judicial review of the decision must comply with the
notice and service requirements of 37 C.F.R. § 90.2.
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For Petitioner:
Joseph P. Meara
Jeanne M. Gills
Foley & Lardner LLP
jmeara@foley.com
jmgills@foley.com

For Patent Owner:
Michael J. Flibbert
Maureen D. Queler
Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP
michael.flibbert@finnegan.com
maureen.queler@finnegan.com