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

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
HITACHI METALS, LTD.,
Appellant
v.
ALLIANCE OF RARE-EARTH PERMANENT
MAGNET INDUSTRY,
Appellee
______________________
2016-1824, 2016-1825
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2014-01265, IPR2014-01266.
______________________
Decided: July 6, 2017
______________________
MARC A. HEARRON, Morrison & Foerster LLP, Wash-
ington, DC, argued for appellant. Also represented by
BRIAN ROBERT MATSUI, SETH W. LLOYD; MEHRAN
ARJOMAND, Los Angeles, CA.
KIRK T. BRADLEY, Alston & Bird LLP, Charlotte, NC,
argued for appellee. Also represented by MICHAEL S.
CONNOR; CHRISTOPHER BRANTLEY KELLY, Atlanta, GA.
______________________
2 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
Before LOURIE, TARANTO, and CHEN, Circuit Judges.
LOURIE, Circuit Judge.
Hitachi Metals, Ltd. (“Hitachi”) appeals from final
written decisions of the U.S. Patent and Trademark Office
(“the PTO”) Patent Trial and Appeal Board (“the Board”)
in two inter partes reviews (“IPRs”), concluding that
claims 1, 5, and 6 of U.S. Patent 6,537,385 (“the ’385
patent”) and claims 1–4, 11, 12, and 14–16 of U.S. Patent
6,491,765 (“the ’765 patent”) would have been obvious at
the time of their respective inventions and that claim 1 of
the ’385 patent was anticipated. See All. of Rare-Earth
Permanent Magnet Indus., IPR 2014-01265, 2016 Pat.
App. LEXIS 1082, at *41 (P.T.A.B. Feb. 8, 2016) (“’385
Decision”); All. of Rare-Earth Permanent Magnet Indus.,
IPR 2014-01266, 2016 Pat. App. LEXIS 1083, at *56
(P.T.A.B. Feb. 8, 2016) (“’765 Decision”). For the reasons
set forth below, we affirm in part and vacate and remand
in part.
BACKGROUND
Hitachi owns the ’385 and ’765 patents (together, “the
challenged patents”), which have almost identical written
descriptions and are directed to a process for manufactur-
ing a powder used to produce rare-earth magnets. See,
e.g., ’765 patent col. 1 ll. 7–9. 1 Claim 1 of the ’385 patent
is representative and reads as follows:
A method for manufacturing alloy powder for R–
Fe–B rare earth magnets, comprising a first pul-
verization step of coarsely pulverizing an R–Fe–B
1 Because the challenged patents have almost iden-
tical written descriptions, we will refer only to the ’765
patent written description for simplicity when discussing
either patent.
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 3
alloy for rare earth magnets produced by a rapid
cooling method and a second pulverization step of
finely pulverizing the material alloy,
wherein said second pulverization step
comprises a step of removing at least
part of the powder in which the concen-
tration of rare earth element is greater
than the average concentration of rare
earth element contained in the entire
powder.
’385 patent col. 13 ll. 19–37. The “R–Fe–B” designation
refers to a mixture of a rare earth element (R), iron (Fe),
and boron (B). Dependent claim 5 requires the further
step of cooling “a molten material alloy at a cooling rate in
a range between 102 oC./sec and 104 oC./sec.” Id. col. 14 ll.
1–4. Dependent claim 6 requires that the molten materi-
al alloy be cooled by a “strip casting method.” Id. col. 14
ll. 5–6.
Claim 1 of the ’765 patent is representative and reads
as follows:
A method for manufacturing alloy powder for R–
Fe–B rare earth magnets, comprising a first pul-
verization step of coarsely pulverizing a material
alloy for rare earth magnets and a second pulveri-
zation step of finely pulverizing the material alloy,
wherein said first pulverization step com-
prises 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 µm
or less to adjust the particle quantity of
the fine powder having a particle size of
4 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
1.0 µm or less to 10% or less of the par-
ticle quantity of the entire powder.
’765 patent col. 13 ll. 21–33. Dependent claim 3 requires
that the fine pulverization step be performed “in a high-
speed flow of gas,” which dependent claim 4 requires to be
“oxygen.” Id. col. 13 ll. 39–43. Dependent claims 11 and
12 resemble claims 5 and 6, respectively, of the ’385
patent, as discussed above. Id. col. 14 ll. 16–21.
The Alliance of Rare-Earth Permanent Magnet Indus-
try (“the Alliance”) filed requests for IPR of the challenged
patents, which the PTO granted. The Board concluded
that claims 1, 5, and 16 of the ’385 patent and claims 1–4,
11, 12, and 14–16 of the ’765 patent would have been
obvious over various combinations of: (1) Japanese Patent
1993-283217 to Hasegawa (“Hasegawa”); (2) U.S. Patent
4,992,234 to Ohashi et al. (“Ohashi”); (3) U.S. Patent
5,383,978 to Yamamoto et al. (“Yamamoto”); and (4)
Shuixiao He, Rare Earth Permanent Magnet Milling
Equipment – Jet Mill Closed Loop System, 21 MAGNETIC
MATERIALS AND PARTS, 48–51 (Oct. 1990) (“He”). The
Board also concluded that claim 1 of the ’385 patent was
anticipated by He.
I. ’385 Patent
The Board concluded that claims 1, 5, and 6 of the
’385 patent would have been obvious over either Hasega-
wa, Ohashi, or He and Yamamoto, and that claim 1 was
anticipated by He. In making its obviousness determina-
tions, the Board relied on Hasegawa, Ohashi, and He for
teaching every element of claim 1 except the “rapid cool-
ing method,” for which it relied on Yamamoto. Hitachi
did not dispute those findings. Hitachi argued only that
one of ordinary skill in the art would not have been moti-
vated to combine those references.
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 5
A. Obviousness over Ohashi/Hasegawa and Yamamoto
The Board, crediting the Alliance’s arguments, found
that one of ordinary skill would have been motivated to
combine Ohashi or Hasegawa with Yamamoto because it
was understood that Yamamoto’s rapid cooling method
produces a more uniform alloy, so one of ordinary skill
would have been motivated to combine the references “in
order to pulverize a more uniform R–Fe–B material
alloy.” ’385 Decision, 2016 Pat. App. LEXIS 1082, at *16–
17, *21–22. Hitachi did not dispute that Yamamoto’s
rapid cooling method would result in a more uniform
alloy, but rather argued that one of ordinary skill would
not have been motivated to pulverize a more uniform
alloy because the consequence would have been a 50% or
more reduction in yield. See id. at *18–19.
The Board rejected Hitachi’s arguments, explaining
that, even if Hitachi were correct that the combination
would have resulted in a significantly diminished yield,
such commercial considerations “do[] not control the
obviousness determination,” especially since the claims do
not require a certain minimum yield. Id. at *21. Instead,
the Board relied on the Alliance’s evidence that the
claimed steps were each known in the art and used for
their known purpose and that the result of the combina-
tion would have been predictable. Id. at *21, *27–28. The
Board found that a skilled artisan would have known how
to combine the references because the ingot (Ohashi and
Hasegawa) and strip casting (Yamamoto) methods were
“interchangeable to those skilled in the art.” Id. at *13,
*27. Furthermore, the Board found that “design incen-
tives,” such as “lower cost [and a] more productive [pro-
cess] better suited for higher volume manufacturing,”
would have led one of ordinary skill to pursue the combi-
nation. Id. at *21–22, *27–28.
Hitachi did not dispute that Yamamoto teaches the
limitations of claims 5 and 6 of the ’385 patent, and the
6 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
Board concluded that those claims would also have been
obvious over Ohashi or Hasegawa and Yamamoto for the
same reasons as claim 1.
B. Obviousness over He and Yamamoto
The Board also concluded that claims 5 and 6 would
have been obvious over He and Yamamoto. The Board
relied on He for teaching every limitation except for the
cooling rate range of claim 5 and the “strip casting meth-
od” of claim 6, for which it relied on Yamamoto. Hitachi
did not dispute that the references teach those limita-
tions, but rather argued that there would not have been a
motivation to combine them. The Board rejected the
Alliance’s argument that one of ordinary skill would have
been motived to combine He with Yamamoto’s cooling rate
because Yamamoto’s method would result in a more
uniform alloy. Id. at *38–39. The Board found that the
Alliance’s evidence was lacking because it did not explain
how Yamamoto’s particular cooling rate would differ from
He’s disclosed “quick quenching,” Joint Appendix (“J.A.”)
705. ’385 Decision, 2016 Pat. App. LEXIS 1082, at *38.
However, the Board found persuasive the Alliance’s
evidence that the claims encompass nothing more than
the “combination of prior art elements according to known
methods to yield a predictable result.” Id. at *39–40.
Thus, the Board concluded that claims 5 and 6 would
have been obvious over He and Yamamoto.
C. Anticipation by He
The Board found that He anticipated claim 1. The
dispute before the Board focused on whether He’s dis-
closed “quick quenching,” J.A. 705, constitutes the
claimed “rapid cooling method,” ’385 patent col. 13 l. 22.
Thus, the Board first construed “rapid cooling method.”
’385 Decision, 2016 Pat. App. LEXIS 1082, at *10–11.
Hitachi argued that a skilled artisan would have inter-
preted He’s disclosed “quick quenching” method to be a
“super-rapid cooling,” rather than a “rapid cooling,”
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 7
method. Specifically, Hitachi argued, one of ordinary skill
would have interpreted “quick quenching” as referring to
“melt spinning,” a super-rapid cooling method that em-
ploys cooling rates “in excess of 106 K s-1,” because strip
casting methods were not known in 1990. Id. at *32–33.
Hitachi argued that the written description defines the
range of cooling rates covered by the term “rapid cooling”
as being between 102–104 oC./sec and thus He does not
disclose the “rapid cooling method” as properly construed.
The Board rejected Hitachi’s construction based on
principles of claim differentiation—it found that, because
dependent claim 5 recites “a cooling rate in a range be-
tween 102 oC./sec and 104 oC./sec,” claim 1’s recitation of
“rapid cooling method” must “encompass a broader range
of cooling rates” and thus does not “necessarily exclude
super-rapid cooling methods.” Id. at *10–11. Under that
construction, the Board found that He’s disclosed “quick
quenching” constitutes the claimed “rapid cooling method”
and that claim 1 was anticipated by He. Id. at *34.
II. ’765 Patent
A. Obviousness over Ohashi and Hasegawa
The Board concluded that claims 1–4, 14, and 16 of
the ’765 patent would have been obvious over Ohashi and
Hasegawa. In making its obviousness determination, the
Board relied on Ohashi for teaching every element of
claim 1, except the requirement that the “first pulveriza-
tion step comprises a step of pulverizing the material
alloy by a hydrogen pulverization method,” ’765 patent
col. 13 ll. 26–28 (emphasis added), for which it relied on
Hasegawa. Hitachi did not dispute those findings, but
rather argued only that one of ordinary skill in the art
would not have been motivated to combine the references.
The Board found that one of ordinary skill would have
been motived to employ Hasegawa’s hydrogen pulveriza-
tion method to “improve the coarse pulverization” taught
8 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
by Ohashi because the Alliance’s evidence shows that
hydrogen pulverization “more easily crush[es] the materi-
al alloy.” ’765 Decision, 2016 Pat. App. LEXIS 1083, at
*16–18. The Board credited the Alliance’s evidence that
hydrogen pulverization allows the process to occur “in
one-fourth of the time required by [Ohashi’s] mechanical
pulverization” and that it also “improves pulverization
yield and pulverization efficiency.” Id. at *29, *30 (inter-
nal quotation marks omitted). Further, the Board found
that one of ordinary skill would have had a reasonable
expectation of success in combining the references, which
disclose “well-known and common technique[s],” and that
the results would have been predictable. Id. at *29.
As for dependent claims 2, 3, 14, and 16, Hitachi
made no additional arguments and the Board concluded
that those claims would have been obvious over Ohashi
and Hasegawa for the same reasons as claim 1. Id. at
*31.
Hitachi did, however, assert separate arguments re-
lating to the Board’s obviousness determination of claim
4, which depends from claim 3 and requires that the
“pulverization step” be conducted “in a high-speed flow of
gas” (claim 3), “wherein the gas comprises oxygen” (claim
4). ’765 patent col. 13 ll. 39–43. Hitachi argued that
Ohashi teaches the use of a high-speed flow of gas (i.e., an
“air stream,” J.A. 699) for particle classification only, not
for finely pulverizing the alloy, as required by claim 4.
The Board rejected that argument, determining that
claim 1, from which claim 4 depends, comprises two
pulverization steps: (1) a first pulverization step of coarse
pulverization; and (2) a second pulverization step, which
in turn comprises the two “sub-step[s]” of (i) fine pulveri-
zation, a.k.a. “milling,” and (ii) particle classification, i.e.
removal of particles having a particular size. ’765 Deci-
sion, 2016 Pat. App. LEXIS 1083, at *37. The Board
concluded that the two sub-steps constitute one continu-
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 9
ous process under the umbrella “second pulverization
step”—thus, a reference teaching the second sub-step
necessarily teaches the umbrella “second pulverization
step.” Id. at *35–37. And the Board interpreted claim 4
as requiring a high-speed flow of oxygen for the umbrella
step, not the first sub-step. Id. at *37–38. Under that
interpretation, the Board found that Ohashi teaches
“pulverization” using a “high-speed flow of [oxygen] gas,”
as recited in claim 4, because it teaches using an “air
stream” for particle classification (i.e., the second sub-
step) and an “air stream” necessarily includes some
amount of oxygen gas. Id. at *38.
B. Obviousness over Ohashi, Hasegawa, and Yamamoto
The Board concluded that dependent claims 11 and
12 would have been obvious over Ohashi, Hasegawa, and
Yamamoto. Hitachi again disputed only the combinability
of those references for the same reasons it had previously
articulated. The Board rejected those arguments, finding
a motivation to combine Ohashi and Hasegawa for the
same reasons as for claim 1 of the ’765 patent and a
motivation to combine either Ohashi or Hasegawa with
Yamamoto for the same reasons as for claim 1 of the ’385
patent.
Hitachi timely appealed to this court. We have juris-
diction pursuant to 28 U.S.C. § 1295(a)(4)(A).
DISCUSSION
We review the Board’s legal conclusions de novo and
its factual findings for substantial evidence. In re Gart-
side, 203 F.3d 1305, 1316 (Fed. Cir. 2000). A finding is
supported by substantial evidence if a reasonable mind
might accept the evidence as adequate to support the
conclusion drawn therefrom. Consol. Edison Co. v.
NLRB, 305 U.S. 197, 217 (1938). Obviousness is a ques-
tion of law based on underlying facts. Apple Inc. v. Sam-
sung Elecs. Co., 839 F.3d 1034, 1047 (Fed. Cir. 2016) (en
10 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
banc). What the prior art teaches, whether a person of
ordinary skill in the art would have been motivated to
combine references, and whether a reference teaches
away from the claimed invention are questions of fact. Id.
at 1047–48; In re Mouttet, 686 F.3d 1322, 1330 (Fed. Cir.
2012).
On appeal, Hitachi argues that the Board erred in:
(1) finding a motivation to combine the references in its
obviousness determinations for both of the challenged
patents; (2) construing “rapid cooling method” and find-
ing, under that construction, that He anticipates claim 1
of the ’385 patent; and (3) construing claim 4 of the ’765
patent and thus in its obviousness determination of that
claim. We discuss each of the challenged patents in turn.
I. ’385 Patent
A. Obviousness over Ohashi or Hasegawa and Yamamoto
The Board concluded that claims 1, 5, and 6 of the
’385 patent would have been obvious over Hasegawa or
Ohashi in view of Yamamoto.
Hitachi makes almost identical arguments for both of
the combinations relied upon by the Board—namely, that
one of skill in the art would not have been motivated to
combine Ohashi or Hasegawa with Yamamoto because the
results of pulverizing the more uniform alloy produced by
Yamamoto’s rapid cooling method would be a 50% or more
reduction in yield and a lower quality magnet.
Hitachi argues that the Board erred in dismissing its
evidence regarding the potentially lower yield as a “com-
mercial [consideration that] does not control the obvious-
ness determination.” ’385 Decision, 2016 Pat. App. LEXIS
1082, at *20. Hitachi notes the apparent contradiction
between that reasoning and the Board’s subsequent
finding that one of skill in the art would be motivated to
combine the references due to “design incentives,” such as
“lower cost [and a] more productive [process] better suited
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 11
for higher volume manufacturing.” Id. at *21–22, *27,
*28. Hitachi also disputes the Board’s findings that all of
the claims would have been obvious because they “repre-
sent the combination of prior art elements according to
known methods to yield a predictable result.” See, e.g., id.
at *21 (citing KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398,
416 (2007)). Hitachi argues that those findings are mere-
ly “boilerplate” recitations that state a conclusion, not a
reason to combine the references.
The Alliance responds that the factual findings un-
derpinning the Board’s obviousness determinations were
supported by substantial evidence.
We conclude that the Board did not err in determining
that claims 1, 5, and 6 of the ’385 patent would have been
obvious over Ohashi or Hasegawa in view of Yamamoto.
We do agree with Hitachi that the Board applied internal-
ly inconsistent reasoning in rejecting Hitachi’s evidence
on the basis that “commercial [considerations] do[] not
control the obviousness determination,” id. at *20, while
also finding that one of skill in the art would have been
motivated to combine the references due to “design incen-
tives,” id. at *21. If the Board’s analysis had stopped
there, we might remand for further analysis that is not
internally inconsistent.
However, the Board made additional findings to sup-
port its obviousness determinations, including that one of
skill in the art would have known to mitigate the alleged
reduction in yield by adjusting the jet mill settings during
pulverization. See, e.g., id. at *19, *28 (citing expert
testimony that “a person of ordinary skill would have
known to adjust basic, fundamental jet milling settings to
accommodate the uniform particle size and shape distri-
bution of the strip cast alloy” (internal quotation marks
and brackets omitted)). That finding was supported by
substantial record evidence. See J.A. 788.
12 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
Hitachi points to countervailing testimony by the
same expert that, while a skilled artisan would have
known to adjust the settings, they would not have known
how to do so, as the “multi-parameter compositional
experimentation” required would be beyond the capabili-
ties of one of ordinary skill. J.A. 972. However, we do not
“reweigh evidence on appeal.” In re NTP, Inc., 654 F.3d
1279, 1292 (Fed. Cir. 2011). We must accept the Board’s
finding so long as a “reasonable mind might accept [the
evidence upon which it relied] as adequate to support [its]
conclusion.” Consol. Edison Co., 305 U.S. at 217. The
Board reviewed the competing evidence and made a
factual determination that a skilled artisan would not
have been demotivated by the potential reduction in yield.
We see no error in that finding, which was a reasonable
interpretation of the record evidence.
In light of the foregoing, the Board found that the
claims were directed to nothing more than a “combination
of prior art elements according to known methods to yield
a predictable result.” ’385 Decision, 2016 Pat. App.
LEXIS 1082, at *21, *24. The Supreme Court has advised
that a combination of known elements is likely to be
obvious when it yields predictable results. KSR, 550 U.S.
at 416. And substantial evidence supports the Board’s
findings that the prior art elements were well-known, one
of ordinary skill would have known how to combine them,
and the results of so doing would have been predictable.
See ’385 Decision, 2016 Pat. App. LEXIS 1082, at *18, *20,
*27, *39.
B. Obviousness over He and Yamamoto
The Board found that claims 5 and 6 would have also
been obvious over He and Yamamoto. As for those claims,
Hitachi repeats several of its arguments regarding the
Board’s determinations of obviousness over Ohashi or
Hasegawa and Yamamoto. Namely, Hitachi disputes the
Board’s finding that the claims are directed to nothing
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 13
more than the “combination of prior art elements accord-
ing to known methods to yield a predictable result.” Id. at
*39–40. Hitachi argues that such findings are merely
boilerplate recitations that state a conclusion, not a
reason to combine the references. Furthermore, Hitachi
challenges the credibility of the Alliance’s expert declara-
tion, relied upon by the Board, as making bald assertions
that lack evidentiary support.
We affirm the Board’s conclusion that claims 5 and 6
would have been obvious over He and Yamamoto for the
reasons discussed above regarding the obviousness of
claim 1, 5, and 6 over Ohashi/Hasegawa and Yamamoto.
We see no legal error in the Board’s analysis, and we do
not reweigh evidence on appeal.
C. Anticipation by He
The Board found that He anticipated claim 1. On ap-
peal, Hitachi challenges the Board’s construction of “rapid
cooling method,” arguing, as it did before the Board, that
one of ordinary skill would have understood “rapid cooling
method” to be distinct from “super rapid cooling.” Hitachi
asserts that, at the time of the invention, one of ordinary
skill would have recognized three categories of methods
for preparing alloys for sintered rare-earth magnets:
(1) traditional cooling methods, such as ingot casting;
(2) rapid cooling methods, such as strip casting; and
(3) super-rapid cooling methods, such as melt spinning.
Hitachi submitted evidence—expert testimony and other
printed publications—indicating that one of ordinary skill
would have understood the three categories to be distinct,
such that “rapid cooling” refers to a method that is faster
than ingot casting, but not so fast that it enters the do-
main of super-rapid cooling. Hitachi argues that the
written description defines the range of cooling rates
covered by the term because it states: “In the rapid cool-
ing method, the molten alloy is cooled at a rate in the
range between 102 oC./sec and 104 oC./sec.” ’385 patent
14 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
col. 1 ll. 46–47. In contrast, Hitachi argues, super rapid
cooling methods were understood by those of skill in the
art as exceeding 106 degrees per second. Therefore,
Hitachi argues, one of skill in the art would have under-
stood He’s disclosed “quick quenching” to be a “super
rapid cooling” method rather than the claimed “rapid
cooling method” and thus He did not anticipate claim 1.
The Alliance responds that the Board correctly con-
strued “rapid cooling method.” The Alliance argues that
the written description provides a clear definition of the
term when it describes rapid cooling as “typified by a strip
casting method,” wherein “a molten material alloy is put
into contact with a single chill roll, twin chill rolls, a
rotary chill disk, a rotary cylindrical chill mold, or the
like, to be rapidly cooled thereby producing a solidified
alloy thinner than an ingot cast alloy.” Id. col. 1 ll. 39–45.
The Alliance contends that the Board correctly adopted
that definition, finding in it no exclusion of rates in excess
of 106 oC./sec. Furthermore, the Alliance argues, claim 5,
which depends from claim 1, recites “a cooling rate in a
range between 102 and 104 oC./sec,” id. col. 14 l. 4, and
claim 6, which depends from claim 5, specifies that the
rapid cooling method is a “strip casting method,” id. col.
14 l. 6. Thus, the Alliance maintains, claim 1’s recitation
of “rapid cooling method” must encompass rates outside of
the range recited in claim 5 and methods other than the
strip casting recited in claim 6, and therefore claim 1 was
anticipated by He.
We agree with the Alliance that the doctrine of claim
differentiation requires that the scope of “rapid cooling
method” covered by claim 1 be broader than the range
specified in dependent claim 5 (102–104 oC./sec). See id.
col. 14 ll. 1–4. Hitachi argues that, even if claim differen-
tiation requires the range of claim 1 to be slightly broader
than 102–104 oC./sec, it does not require the range to be so
broad as to include rates in excess of 106 degrees per
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 15
second, which one of ordinary skill would understand to
constitute super-rapid cooling.
However, nowhere does the written description accord
with Hitachi’s argument, nor does it anywhere indicate
that “rapid cooling” must exclude cooling at rates in
excess of 106 degrees per second. Rather, the written
description states that “[i]n a preferred embodiment, the
material alloy for rare earth magnets is obtained by
cooling a molten material alloy at a cooling rate in the
range between 102 oC./sec and 104 oC./sec.” Id. col. 3 ll.
51–54 (emphasis added). The patent expressly refers to
the range recited by claim 5 as a “preferred embodiment.”
Id. Thus, “rapid cooling method,” as recited in claim 1,
must encompass a broader range than that recited in
claim 5 and nowhere does the specification cap the range
at 106 degrees per second. Consequently, the Board’s
construction of “rapid cooling method” as not excluding
“super rapid cooling” is supported by the intrinsic record
and we affirm that construction.
Hitachi premises the remainder of its challenges to
the Board’s anticipation finding on its proposed construc-
tion of “rapid cooling method.” Thus, because we affirm
the Board’s construction, we affirm its finding that He
anticipated claim 1. Accordingly, the Board was correct in
concluding that claim 1, as properly construed, was antic-
ipated by He.
II. ’765 Patent
A. Obviousness over Ohashi and Hasegawa
The Board concluded that claims 1–4, 14, and 16 of
the ’765 patent would have been obvious over Ohashi and
Hasegawa. Hitachi challenges the Board’s findings that
one of ordinary skill would have been motivated to employ
Hasegawa’s hydrogen pulverization to “improve the coarse
pulverization” taught by Ohashi because the Alliance’s
evidence shows that hydrogen pulverization “more easily
16 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
crush[es] the material alloy,” and hydrogen pulverization
was a “well-known and common technique” that would
have yielded predictable results when substituted for
Ohashi’s mechanical pulverization. ’765 Decision, 2016
Pat. App. LEXIS 1083, at *16–18, *29 (internal quotation
marks omitted).
Hitachi contends that the Board erred in accepting
the bald assertions of the Alliance’s expert that lacked
supporting evidence. Hitachi points to its evidence that,
in order to substitute Hasegawa’s hydrogen pulverization
for Ohashi’s mechanical pulverization, the solid alloy
must accordingly be changed to the proper microstruc-
ture, but changing the microstructure of the solid alloy
would completely alter Ohashi’s operating principle.
Thus, Hitachi argues, the combination would have re-
quired more than ordinary skill. Furthermore, Hitachi
contends that the Board improperly shifted the burden by
requiring Hitachi to show that the combination would
have been beyond the capability of one of ordinary skill.
The Alliance responds that substantial evidence sup-
ports the Board’s finding of a motivation to combine.
We agree with the Alliance that substantial evidence
supports the Board’s findings for claims 1, 2, 14, and 16.
The Board credited the Alliance’s evidence that one of
ordinary skill would have been motived to employ Haseg-
awa’s hydrogen pulverization to “improve the coarse
pulverization” taught by Ohashi because the Alliance’s
evidence shows that hydrogen pulverization “more easily
crush[es] the material alloy,” id. at *16–18; hydrogen
pulverization allows the process to occur “in one-fourth of
the time required by [Ohashi’s] mechanical pulveriza-
tion,” id. at *29; hydrogen pulverization “improves pulver-
ization yield and pulverization efficiency” over mechanical
pulverization, id. at *29 (internal quotation marks omit-
ted); one of ordinary skill would have had a reasonable
expectation of success in combining the references, which
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 17
disclose “well-known and common technique[s],” id. at
*29; and the results would have been predictable, id. We
conclude that the foregoing constitutes substantial evi-
dence to support the Board’s determination.
Hitachi primarily disputes the credibility of the Alli-
ance’s evidence and presents its own competing evidence.
But we do not reweigh the evidence considered by the
Board and, in this case, we conclude that its interpreta-
tion of the evidence was reasonable.
B. Obviousness of Claim 4
Hitachi separately argues that claim 4 would not have
been obvious over Ohashi and Hasegawa. Hitachi con-
tends that the Board improperly construed claim 4.
Hitachi argues that the specification contradicts the
Board’s construction—i.e., that a high-speed flow of gas
for particle classification, as taught by Ohashi, satisfies
the limitations of claims 3 and 4—because it distinguishes
between the two sub-steps of fine pulverization and
particle classification as separate steps, rather than one
continuous step. Hitachi points to the language of claim
1, which recites that the “second pulverization step of
finely pulverizing the material alloy . . . comprises a step
of removing at least part of the fine powder,” ’765 patent
col. 13 ll. 24–31 (emphasis added), and argues that the
fine pulverization step must be finished before the parti-
cle classification step, otherwise there would be no fine
powder to remove. Furthermore, Hitachi argues, the
written description repeatedly distinguishes the act of
fine pulverization conducted in the milling chamber of the
apparatus from the particle classification performed in
the classifier, and requires a high-speed flow of gas for the
pulverization. Finally, Hitachi argues that Ohashi leads
away from claim 4 by teaching that the pulverization
should be conducted in a “non-oxidizing or inert gas” and
oxygen is indisputably an oxidizing gas.
18 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
The Alliance responds that the Board properly inter-
preted the specification. First, the Alliance argues, claim
1 recites “a second pulverization step of finely pulverizing
the material alloy, . . . wherein said second pulverization
step comprises a step of removing at least part of the fine
powder,” id. col. 13 ll. 24–31 (emphasis added), and thus
indicates that the particle classification (i.e., “remov[al]”)
is part of the “second pulverization step.” Second, the
Alliance contends that the written description repeatedly
describes “fine pulverization” as including a step of re-
moving the fine powder. See, e.g., id. Abstract (“In the
second pulverization step, easily oxidized super-fine
powder . . . is removed . . . ”); id. col. 4 ll. 56–62 (“In the
method according to the present invention, after a mate-
rial alloy . . . is coarsely pulverized and before a fine
pulverization step is finished, at least part of R-rich super-
fine powder . . . is removed. . . .”) (emphasis added).
We agree with Hitachi that the Board misconstrued
claim 4. As an initial matter, the parties seem to agree
that, as recited in claim 1, the fine pulverization and
particle classification are sub-steps of the umbrella “sec-
ond pulverization step.” They disagree only as to whether
claim 4’s requirement of a high-speed flow of gas compris-
ing oxygen pertains to the umbrella step or to the first
sub-step. We agree with Hitachi that claim 4 requires the
use of a high-speed flow of gas comprising oxygen for the
first sub-step of claim 1—the fine pulverization—rather
than the umbrella “second pulverization step.”
The passages of the written description which the Al-
liance cite merely confirm that the particle classification
step is a sub-step of the umbrella “second pulverization
step,” which, as we noted above, the parties do not dis-
pute. The issue is whether claim 4 requires a high-speed
oxygen-containing gas for the umbrella step, or for the
first sub-step. We conclude that it refers to the latter; and
the passages relied on by the Alliance do not contradict
that interpretation.
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 19
The written description explains that “[i]n the second
pulverization step, the alloy is preferably finely pulver-
ized using a high-speed flow of gas” containing oxygen, id.
col. 3 ll. 27–30, and that “[t]he alloys may be finely pul-
verized using a jet mill,” id. col. 3 l. 46. Thus, it is clear
that the high-speed gas is associated with the fine pulver-
ization conducted in the jet mill. And the written descrip-
tion clearly distinguishes the jet milling apparatus from
the particle classifier for performing the two distinct sub-
steps—fine pulverization and particle classification,
respectively. For example, the patent explains that
“when a jet mill is used to perform fine pulverization
under a high-speed flow of inert gas, a gas flow classifi-
er . . . may be provided following the jet mill to enable
effective removal of R-rich super-fine powder . . . . [A] jet
mill is used for the fine pulverization.” Id. col. 5 ll. 23–30
(emphases added). See also, e.g., id. col. 3 ll. 47–50 (“The
alloys may be finely pulverized using a jet mill. In a
preferred embodiment, a classifier is provided following
the jet mill for classifying powder output from the jet
mill.” (emphases added)); id. col. 6 ll. 55–57 (“Next, the
coarsely pulverized powder . . . is finely pulverized (or
milled) with a jet mill. To the jet mill used in this embod-
iment, a cyclone classifier is connected for removal of the
fine powder.” (emphasis added)).
In fact, in every instance where the written descrip-
tion refers to pulverization using a high-speed flow of gas,
it refers to the milling apparatus, i.e., “jet mill” or “pulver-
izer,” rather than the particle “classifier.” See, e.g., id. col.
5 ll. 23–26 (“[W]hen a jet mill is used to perform the fine
pulverization under a high-speed flow of inert gas, a gas
flow classifier . . . may be provided following the jet mill to
enable effective removal of R-rich super-fine powder . . . .”
(emphasis added)); id. col. 6 l. 58–col. 7 l. 13 (discussing
Figure 2, which shows the jet milling chamber, i.e., “pul-
verizer 14,” and the “classifier 16,” and explaining that
the “material [is] pulverized with the pulverizer 14
20 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
[and] . . . classified with the cyclone classifier 16,” wherein
“pulverizer 14 includes . . . nozzle fittings 28 for receiving
nozzles through which an inert gas . . . is jet at high speed”
(emphases added)); id. col. 8 ll. 15–20 (“The material to be
pulverized fed into the pulverizer 14 is rolled up with
high-speed jets of inert gas . . . and swirl[ed] together with
high-speed gas flows inside the pulverizer 14. While
swirling, the particles of material are finely milled by
mutual collision with each other.” (emphases added)); id.
col. 10 l. 47–53 (referring to “the jet mill and the cyclone
classifier connected to each other” and “a high speed flow
gas for the jet mill.” (emphasis added)).
Thus, we reverse the Board’s construction of claim 4
and conclude that it requires a high-speed flow of gas
(claim 3) comprising oxygen (claim 4) for the “fine pulveri-
zation” that occurs in the first sub-step—for example, by
“pulverizer 14” shown in Figure 2. Under the correct
construction, the Board’s obviousness determination as to
claim 4 must therefore be vacated. The Board premised
its finding that Ohashi’s use of an air stream for particle
classification (the second sub-step) taught the limitations
of claim 4 on its interpretation that claim 4 requires a
high-speed flow of gas for the umbrella step and that the
two sub-steps constitute one continuous process under the
umbrella step. Under that interpretation, the Board
found that Ohashi’s disclosure of a high-speed flow of gas
for the second sub-step constituted a teaching of gas for
the entire umbrella step. But the correct construction
precludes such a finding. Ohashi’s use of an air stream
for particle classification only cannot meet the limitation
of claim 4, which requires the use of a high-speed flow of
gas comprising oxygen for fine pulverization.
Therefore, because we reverse the Board’s claim con-
struction, we vacate its obviousness determination as to
claim 4 and remand for further consideration under the
proper construction. We note that, on appeal, Hitachi did
not argue claim 3 separately from claim 1, as it did for
HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH 21
claim 4. However, our conclusion with respect to the
construction of claim 4 necessarily raises a question with
respect to the construction and obviousness of claim 3.
Thus, because we reverse the Board’s construction of
claim 4, we also vacate its obviousness determination as
to claim 3.
We also suggest that, on remand, the Board consider
Hitachi’s argument that Ohashi teaches away from the
invention of claim 4 because Ohashi teaches that the
pulverization should be conducted in a “non-oxidizing or
inert gas,” and oxygen, even under the Board’s definition
of “oxidizing gas,” see, e.g., ’765 Decision, 2016 Pat. App.
LEXIS 1083, at *21–22, is undeniably an oxidizing gas.
In fact, the written description explains that oxygen is
employed to intentionally oxidize the alloy and thus
“control[] . . . the oxygen content of the finely pulverized
alloy powder.” ’765 patent col. 9 ll. 30 (“The finely pulver-
ized powder particles are coated with an oxide layer as
described above.” (emphasis added)).
Although Hitachi raised that argument before the
Board, the Board’s explanation in rejecting it was seem-
ingly non-responsive. See ’765 Decision, 2016 Pat. App.
LEXIS 1083, at *38–39. In fact, the Alliance acknowl-
edged during oral argument that the Board did not ad-
dress Hitachi’s argument and asserted that, if we reverse
the Board’s claim construction, we should remand for the
issue to be decided by the Board. Oral argument at
18:30–19:50, Hitachi Metals, Ltd. v. All. of Rare-Earth
Permanent Magnet Indus., Nos. 16-1824, -1825 (Fed. Cir.
June 8, 2017) (“At APPX53 is where the Board addresses
the argument and doesn’t reach it.”), available
at http://oralarguments.cafc.uscourts.gov/default.aspx?fl=
2016-1824.mp3.
C. Obviousness over Ohashi, Hasegawa, and Yamamoto
The Board concluded that dependent claims 11 and 12
would have been obvious over Ohashi, Hasegawa, and
22 HITACHI METALS, LTD. v. ALLIANCE OF RARE-EARTH
Yamamoto. Hitachi makes the same arguments regard-
ing the combinability of Ohashi and Hasegawa with
Yamamoto that it asserts in connection with the ’385
patent, as discussed above. Thus, we affirm the Board’s
obviousness determinations as to claims 11 and 12 for the
same reasons we stated above.
In sum, we affirm the Board’s conclusion that claims
1, 5, and 6 of the ’385 patent would have been obvious
over Ohashi, Hasegawa, or He and Yamamoto, and that
claim 1 was anticipated by He. We also affirm the Board’s
conclusion that claims 1, 2, 14, and 16 of the ’765 patent
would have been obvious over Ohashi and Hasegawa and
that claims 11 and 12 would have been obvious over
Ohashi, Hasegawa, and Yamamoto. However, we reverse
the Board’s construction of claim 4 of the ’765 patent and
thus vacate its obviousness determination as to claims 3
and 4 and remand for further consideration consistent
with this opinion.
CONCLUSION
We have considered the remaining arguments but
find them to be unpersuasive. For the foregoing reasons,
we affirm-in-part and vacate-in-part the decision of the
Board and remand for further consideration consistent
with this opinion.
AFFIRMED-IN-PART, VACATED-IN-PART, AND
REMANDED
COSTS
No costs