Lack of Express Reasoning on Prior Art Radiation Detection Dooms PTAB Ruling at CAFC

Today, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a ruling in American Science and Engineering, Inc. v. Stewart vacating a final written decision by the Patent Trial and Appeal Board (PTAB) that invalidated several of American Science and Engineering’s (AS&E) patent claims covering inspection systems using pencil-beam radiation sources. The appellate court faulted the PTAB for not properly articulating how the asserted prior art’s scatter detectors can detect radiation from the claimed pencil-beam configuration.

Prior Art Reference Was Silent on Perpendicular Configuration of Pencil-Beam Sources

After AS&E filed a patent infringement lawsuit in the District of Massachusetts against Viken Detection Corp., the defendant filed a petition for inter partes review (IPR) in September 2021 challenging claims from AS&E’s U.S. Patent No. 7400701, Backscatter Inspection Portal. Claim 1 of the ‘701 patent discloses an inspection system including first and second pencil-beam radiation sources arranged in a perpendicular configuration, and a plurality of scatter detectors disposed to detect radiation scattered from both the first and second beams. In its final written decision, the PTAB ruled that challenged claims of the ‘701 patent were invalid for anticipation or obviousness based on prior art arguments involving U.S. Patent No. 7672422 (“Seppi”).

On appeal, AS&E argued that the PTAB’s anticipation and obviousness findings were not based on substantial evidence because the Board’s ruling failed to establish that Seppi’s scatter detectors can detect scattered radiation from two perpendicular pencil-beam sources. Agreeing with this argument, the Federal Circuit noted that the system taught by Seppi includes additional detectors for detecting backscattered radiation, but that Seppi is silent as to whether the detected radiation is coming from multiple pencil-beam sources.

The PTAB found that Seppi’s additional detectors could detect backscatter radiation from multiple pencil beam sources also disclosed by Seppi because those sources are cycled such that only one source is on at a time. However, the CAFC determined that the Board’s ruling never expressly found that Seppi’s additional detectors detect radiation when the pencil-beam sources are in a perpendicular arrangement.

PTAB Rulings Must Provide Express Reasoning, Not ‘Citation Within a Citation’

U.S. Patent and Trademark Office (USPTO) Acting Director Coke Morgan Stewart, acting as intervenor following the withdrawal of Viken Detection from appellate proceedings, argued that the PTAB found that Seppi taught detection of backscatter radiation from substantially perpendicular beams by necessary implication because AS&E’s ‘701 patent acknowledges that radiation scatters from an object in all directions. However, the Federal Circuit found that the PTAB made no findings about this disclosure on scattered radiation that would allow the appellate court to discern the path of the Board’s reasoning.

Separately, Stewart argued that the PTAB’s decision cites to Viken Detection’s IPR petition, which itself cites Viken’s expert testimony that without shielding, Seppi’s additional detectors would detect radiation scattered from all sources. The Federal Circuit also nixed this theory, noting that this “citation within a citation” amounted to a reasoned justification that the agency itself has not given, which provides the appellate court with no basis to discern the Board’s reasoning as required by case law including Power Integrations v. Lee (2015) and In re: Warsaw Orthopedic (2016).

Because Seppi was the prior art reference underpinning the PTAB’s finding of anticipation under 35 U.S.C. § 102, the Federal Circuit vacated this finding and remanded for further explanation of the Board’s finding that Seppi’s additional detectors detect radiation from the claimed perpendicular pencil-beam configuration. For the same reasons, the Federal Circuit also vacated and remanded the PTAB’s finding of obviousness under 35 U.S.C. § 103.