Alliance of Rare-Earth Permanent Magnet Industryv.HITACHI METALS, LTD.

Patent Trial and Appeal Board

Feb 8, 2016

10190733 (P.T.A.B. Feb. 8, 2016)

Trials@uspto.gov Paper No. 39
Tel: 571.272.7822 Filed: February 8, 2016

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

v.

HITACHI METALS, LTD.,
Patent Owner.
_______________

Case IPR2014-01265
Patent 6,537,385 B2
_______________

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

OSINSKI, Administrative Patent Judge.

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

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I. INTRODUCTION
A. Background
Alliance of Rare-Earth Permanent Magnet Industry (“Petitioner”)
filed a Corrected Petition (Paper 13, “Pet.”) requesting an inter partes
review of claims 1, 5, and 6 of U.S. Patent No. 6,537,385 B2 (Ex. 1001, “the
’385 patent”). On February 13, 2015, pursuant to 35 U.S.C. § 314, we
instituted an inter partes review of claims 1, 5, and 6 on the following
grounds of unpatentability asserted by Petitioner:
Reference Basis Claims
Hasegawa1 and Yamamoto2 § 103(a) 1, 5, and 6
Ohashi3 and Yamamoto § 103(a) 1, 5, and 6
He4 § 102(b) 1
He and Yamamoto § 103(a) 5 and 6
Decision to Institute (Paper 17, “Dec. Inst.”), 6, 19–20.

1 Hasegawa, JP 1993-283217 (published Oct. 29, 1993) (“Hasegawa,” Ex.
1008 and Ex. 1004 (English translation)). Hasegawa is a Japanese language
document. Unless indicated otherwise, all citations to Hasegawa in this
decision will refer to its certified English language translation.
2 Yamamoto et al., US 5,383,978 (issued Jan. 24, 1995) (“Yamamoto,” Ex.
1007).
3 Ohashi et al., US 4,992,234 (issued Feb. 12, 1991) (“Ohashi,” Ex. 1005).
4 Shuixiao He, Rare Earth Permanent Magnet Milling Equipment - Jet Mill
Closed Loop System, 21 MAGNETIC MATERIALS AND PARTS, 48–51 (Oct.
1990) (“He,” Ex. 1009 and Ex. 1006 (English translation)). He is a Chinese
language document. Unless indicated otherwise, all citations to He in this
decision will refer to its certified English language translation.
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Hitachi Metals, Ltd. (“Patent Owner”) filed a Patent Owner Response
(Paper 26, “PO Resp.”), and Petitioner filed a Reply (Paper 31, “Pet.
Reply”).
Petitioner relies on the Declaration of John Ormerod Ph.D. in support
of its Petition (Ex. 1002). Patent Owner relies on the Declaration of Laura
H. Lewis (Ex. 2002) in support of its Response. Petitioner refers to the
deposition testimony of Dr. Lewis (Ex. 1010). Patent Owner refers to the
deposition testimony of Dr. Ormerod (Ex. 2003).
We heard oral argument on November 6, 2015. A transcript is entered
in the record as Paper 38 (“Tr.”).
We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
Decision is issued pursuant to 35 U.S.C. § 318(a) and 37 C.F.R. § 42.73.
We determine Petitioner has shown by a preponderance of the
evidence that claims 1, 5, and 6 of the ’385 patent are unpatentable under 35
U.S.C. § 103(a).
B. Related Proceedings
Petitioner represents that the ’385 patent was asserted in International
Trade Commission Investigation No. 337-TA-855, which was terminated
before adjudication of any validity issues. Pet. 5.
Patent Owner represents that Inter Partes Review No. IPR2014-01266
of U.S. Patent No. 6,491,765 B2 (“the ’765 patent”)5 also is related to this
proceeding. Paper 12, 2.

5 The ’385 patent is a divisional of the ’765 patent. Ex. 1001.
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C. The ’385 Patent
The ’385 patent relates to methods for manufacturing neodymium-
iron-boron magnets, referred to as R—Fe—B type rare earth magnets.
Ex. 1001, Abstr., 1:6–8, 1:15–18. The method includes a first step of
coarsely pulverizing a material alloy to a size on the order of several
hundred micrometers or less using a hydrogen embrittlement apparatus, and
a second step of finely pulverizing the material alloy to an average particle
size on the order of several micrometers with, for example, a jet mill. Id. at
1:24–34.
During the second pulverization step, super-fine powder that is rich in
the rare earth element (R) (i.e., powder having a particle size of 1 µm or
less) is produced. Id. at 2:18–22. These R-rich super-fine powder particles
oxidize easily as compared to other particles such that “oxidation of the rare
earth element vigorously proceeds during the manufacturing process steps.”
Id. at 2:28–30. The rare earth element, thus, is consumed by reacting with
oxygen, and “the production amount of the R2T14B crystal phase as the
major phase decreases.” Id. at 2:31–32. The result is a reduction in the
coercive force and remanent flux density of the resultant magnet, and
deterioration of the squareness of the demagnetization curve. Id. at 2:33–36.
In an effort to improve and stabilize the magnet properties even when
a material alloy including an R-rich phase is used, the ’385 patent describes
the additional step of “removing at least part of [the] powder in which the
concentration of the rare earth element is greater than the average
concentration of the rare earth element contained in the entire powder, to
reduce the average concentration of oxygen bound with the rare earth
element contained in the powder.” Id. at 3:20–26.
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Table I of the ’385 patent is reproduced below.

As reported in Table I above, oxygen increases, and coercive force
iHc and residual magnetic flux density Br deteriorate, as the percentage of
super-fine powder in the entire powder increases. Id. at 11:29–38. When
the percentage of super-fine powder is 10.0% or less, excellent magnetic
properties, including a coercive force iHc of 900 kA/m or more and a
residual magnetic flux density Br of 1.35 T or more, are obtained. Id. at
11:39–44.
In a preferred embodiment, the molten material alloy is cooled by a
strip casting method, which is a rapid cooling method. Id. at 1:38–39, 3:55–
56. In a preferred embodiment, the material alloy is obtained by cooling a
molten material alloy at a cooling rate in a range between 102° C/sec and
104° C/sec. Id. at 1:45–47, 3:51–54. Alloys prepared by rapid cooling
methods, as compared to ingot casting methods (in which a molten alloy is
poured into a mold and cooled comparatively slowly), have a fine structure,
are small in grain size, have a wide area of grain boundaries, and have a
good dispersion of the R-rich phase. Id. at 1:37–39, 1:64–2:4. Although the
preferred embodiment is applied to a rapidly solidified alloy produced by a
strip casting method, it also is applicable to an alloy produced by an ingot
method. Id. at 12:24–29.
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D. Illustrative Claim
Claim 1 is illustrative of the claimed subject matter, and is reproduced
below.
1. A method for manufacturing alloy powder for R—Fe—B
rare earth magnets, comprising a first pulverization step of
coarsely pulverizing an R—Fe—B 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 concentration
of rare earth element is greater than the average concentration of
rare earth element contained in the entire powder.
Ex. 1001, 13:19–30.
II. DISCUSSION
A. Claim Construction
In an inter partes review, claim terms in an unexpired patent are
interpreted according to their broadest reasonable construction in light of the
specification of the patent in which they appear. 37 C.F.R. § 100(b); see In
re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1278 (Fed. Cir. 2015) (“We
conclude that Congress implicitly approved the broadest reasonable
interpretation standard in enacting the AIA.”), cert. granted sub nom.
Cuozzo Speed Techs. LLC v. Lee, 84 U.S.L.W. 3218 (Jan. 15, 2016) (No. 15-
446). Claim terms are given their ordinary and customary meaning as
understood by one of ordinary skill in the art in the context of the entire
disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
2007).
In the Decision to Institute, we interpreted “concentration of rare earth
element” as “the amount of rare earth element in a powder in comparison to
the amount of all the elements in the powder.” Dec. Inst. 7. The parties do
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not dispute this interpretation in the Patent Owner Response or in the
Petitioner Reply. We adopt the above claim construction based on our
previous analysis, and see no reason to deviate from that construction for
purposes of this Decision.
The interpretation of the claim term “rapid cooling method” is
relevant to our analysis for the Final Written Decision. Patent Owner urges
that “one of ordinary skill in the art would understand the ordinary and
customary meaning of ‘rapid cooling method’ to refer to a cooling
mechanism different and faster than ingot casting, but not cooled so fast that
it exceeds rapid cooling and enters the domain of super-rapid cooling.” PO
Resp. 8 (citing Ex. 2002 ¶¶ 81–82). Patent Owner contends that this
proposed interpretation is consistent with the Specification of the ’385
patent, including dependent claims 5 and 6, as well as the ordinary and
customary usage of the term. Id. Patent Owner’s expert points to the
language of the Specification stating that “a rapidly cooled method” is
“typified by a strip casting method and a centrifugal casting method.”
Ex. 2002 ¶ 81 (quoting Ex. 1001, 1:35–40). We conclude that such
language indicates only that strip casting and centrifugal casting are typical
examples of rapid cooling methods or exemplify rapid cooling methods, not
that rapid cooling methods necessarily exclude super-rapid cooling methods.
Petitioner contends that the term “rapid cooling method” should be
construed as a cooling method in which “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.’” Pet. Reply 6 (quoting
Ex. 1001, 1:41–45). Petitioner contends that such a construction comports
with the clear definition set forth in the Specification. Id. at 3. Petitioner
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further argues that the doctrine of claim differentiation supports Petitioner’s
proposed construction in that dependent claim 5 “specifically recites cooling
the alloy material at a rate ‘in the range between 102°C/sec and 104°C/sec’”
such that the rapid cooling method of claim 1 must include cooling rates
outside of this range. Id. at 4 (citing Ex. 1001, 14:1–5). We agree with
Petitioner. The additional language of the Specification stating 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 a range between
102°C./sec and 104°C./sec” (Ex. 1001, 3:51–54), along with the same
language appearing in dependent claim 5, supports that rapid cooling
methods can encompass a broader range of cooling rates such that the
reference to the particular range was necessary to ensure specific protection
directed to a narrower and preferred range of cooling rates.6
We adopt Petitioner’s proposed construction for a “rapid cooling
method” as “a cooling method in which 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.”

6 If the upper limit of rapid cooling methods were understood by those of
ordinary skill in the art to be limited to “something close to 10,000 degrees
Celsius per second” as argued by Patent Owner, reference to such an upper
limit as a preferred embodiment and in dependent claim 5 would appear to
be superfluous. See Tr. 70:8–11. We have also considered the statement in
the Specification that “[i]n the rapid cooling method, the molten alloy is
cooled at a rate in the range between 10[]2°C./sec and 104°C./sec” (Ex. 1001,
1:45–47), but, in the context of the entire Specification, we consider this to
be a statement of a particular cooling rate in accordance with the invention,
rather than an express definition clearly and deliberately limiting the term
“rapid cooling” to a particular cooling rate.
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B. Obviousness of Claims 1, 5, and 6 over Hasegawa and Yamamoto
1. Overview of Hasegawa
Hasegawa discloses that an alloy used to make rare-earth magnets is
generally obtained by conventional powder metallurgy. Ex. 1004 ¶ 2.
Hasegawa further discloses that melted cast ingots of rare-earth magnets
have a multi-phase crystal structure including a main phase R2Fe14B, and an
Nd-rich (i.e., rare earth-rich) phase. Id. ¶ 3. In Hasegawa, melted cast ingot
is pulverized using mechanical pulverization techniques or a method that
“involves causing hydrogen to be absorbed into the melted cast ingot of a
rare-earth-iron-boron based magnet and allowing disintegration to occur to
produce a coarse powder.” Id. Hydrogen pulverization can produce
pulverized powder in about one-fourth of the time of mechanical
pulverization and can also cause the rare-earth rich phase to be more easily
pulverized. Id. After coarse pulverization by mechanical or hydrogen
pulverization, the powder is then finely pulverized using a jet mill. Id.
Hasegawa further discloses that the rare earth-rich phase oxidizes
more readily than the main phase, and that if the rare earth-rich phase is
excessively pulverized, a magnet obtained from such a fine powder may
include excessive oxide phase and lack good magnetic properties. Id. To
combat this known problem, Hasegawa discloses that wind power is used to
remove R-rich phase fine powder during a particle classification step
following pulverization. Id. ¶ 4; Ex. 1002 ¶ 66. The remaining powder
having lower concentrations of rare earth is compacted compressively,
sintered, and heat-treated. Ex. 1004 ¶ 4. The method allows rare earth-iron-
boron magnets of high coercivity and high energy product to be obtained by
using “classifiers that employ wind power to remove Nd-rich phase [(i.e.,
rare earth rich phase)] that includes large quantities of oxygen due to
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excessive pulverization and thus improve sinterability and reduce the oxide
phase that is present at the grain boundaries.” Id. ¶ 5.
2. Overview of Yamamoto
Yamamoto discloses that “[p]ermanent magnet alloy ingots are
generally produced by a metal mold casting method consisting in casting
molten alloy in a metal mold.” Ex. 1007, 1:15–17. Yamamoto also
discloses a method for producing a rare earth metal magnet alloy by “a strip
casting system combined with a twin roll, a single roll, a twin belt or the
like.” Id. at 1:59–61. Yamamoto states that “an ingot produced by this
method has a composition more uniform than that obtained with the metal
mold casting method,” but that sufficient improvement has not yet been
seen. Id. at 1:62–2:3. Yamamoto further discloses “melting a rare earth
metal-iron alloy to obtain a molten alloy and solidifying the molten alloy
uniformly at a cooling rate of 10 to 1000° C./sec.” Id. at 2:34–36.
3. Obviousness of Claims 1, 5, and 6
a. Claim 1
Petitioner alleges that independent claim 1 would have been obvious
over the combination of Hasegawa and Yamamoto. Pet. 17–20. Petitioner
relies on Hasegawa for every element of independent claim 1, except for the
recitation of “an R—Fe—B alloy for rare earth magnets produced by a rapid
cooling method.” Id. at 18 (emphasis added). Petitioner argues that
Yamamoto teaches “a rapid cooling (strip cast) method in making a strip
cast R—Fe—B material alloy more uniformly that is pulverized into magnet
powder.” Id. at 17 (citing Ex. 1007, Abstr., 1:8–14, 2:32–37). Patent Owner
does not dispute that Hasegawa teaches every element of independent claim
1 except for the alloy being produced by a rapid cooling method, nor that
Yamamoto teaches a rapid cooling method. See PO Resp. 9–20.
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Petitioner argues that “[o]ne of ordinary skill would have been
motivated to use the R—Fe—B material alloy formed by the rapid cooling
method taught by Yamamoto with the pulverization techniques taught by
Hasegawa in order to pulverize a more uniform R—Fe—B material alloy.”
Id. (citing Ex. 1002 ¶ 59) (emphasis omitted). Petitioner further argues that
“one of o[r]dinary skill knows that material alloys produced by either the
ingot or strip cast methods produce R-rich superfine powder (particles 1µm
or less), which are removed and taught in Hasegawa.” Id. (citing Ex. 1001,
12:24–29; Ex. 1002 ¶¶ 34–35, 51–52, 59, Illustration 8) (emphasis omitted).
Id. Petitioner also provides expert testimony that “one of ordinary skill
would have been motivated to combine these prior art teachings of
Hasegawa and Yamamoto according to known methods to yield predictable
results. Such a modification would have been obvious because it would
have involved the use of known techniques to improve a similar method.”
Ex. 1002 ¶ 64 (cited at Pet. 18).
Patent Owner counters that one of ordinary skill in the art would not
have been motivated to combine the teachings of Hasegawa and Yamamoto
to arrive at the claimed invention. PO Resp. 10–20. Patent Owner does not
appear to dispute Petitioner’s contention that strip casting would result in a
more uniform alloy. In particular, Patent Owner acknowledges that utilizing
a rapid cooling method generates an alloy with the R-rich phase distributed
uniformly along the boundaries of columnar R2Fe14B grains having a mean
width of about 5–25 µm, as compared to an alloy generated by ingot casting
which results in randomly dispersed regions of R-rich phase and α-Fe
dendrites with columnar R2Fe14B grains having a mean width of about 50–
150 µm. Id. at 11 (citing Ex. 2005, 476).
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Patent Owner, however, does dispute that generating a more uniform
alloy would motivate a person of ordinary skill in the art to utilize a rapid
cooling method in connection with the pulverization process of Hasegawa.
PO Resp. 10–20. Patent Owner elaborates that the more uniform
composition of a strip cast alloy, as compared to an ingot cast alloy, would
result in a smaller average particle size and a powder distribution that is
relatively uniform in particle size and shape during hydrogen pulverization.
Id. at 12–13 (citing Ex. 2002 ¶ 41; Ex. 2006, 4). Patent Owner recognizes
that “finely milled R2Fe14B phase particles [on the order of 1–5 µm] improve
the density of the magnet, thereby positively impacting the magnetic
resonance and coercivity as well as the mechanical integrity of the final
magnet,” but explains that more finely milled particles would then have to
be removed as part of Hasegawa’s particle classification step, thereby
resulting in a significantly diminished yield. Id. at 16–17 (citing Ex. 2002
¶ 93). Patent Owner argues that Petitioner “fail[ed] to consider the[]
consequences of changing Hasegawa’s starting alloy.” Id. at 18.
Petitioner has shown, and Patent Owner has not disputed, that the
claimed elements (i.e., steps) are known in the art, albeit not combined in a
single reference, and are used for their known purpose. Pet. 18–20; see Tr.
77:8–19. We are persuaded that Petitioner has shown that a person of
ordinary skill in the art would have known how to combine Yamamoto’s
rapid cooling method (in place of Hasegawa’s ingot casting method) with
Hasegawa’s pulverization and particle classification technique using known
methods. See Ex. 1002 ¶ 35 (“Rare earth elements . . . are collected and are
melted together to form a cast alloy using known techniques to one of
ordinary skill such as the ingot cast method or a strip cast method.”); see
also Ex. 1001, 1:36–45, 12: 24–29 (referring to material alloy being
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produced by two types of methods—ingot casting and rapid cooling—and
stating that the present invention was applicable to both an ingot method and
a rapid cooling method); Ex. 1002 ¶ 51 (“The ingot or strip cast methods are
interchangeable to those skilled in the art.”). Petitioner has also shown
sufficiently that a person of ordinary skill in the art would have recognized
the results of the combination to be predictable. Ex. 1002 ¶ 64; see also Pet.
Reply 13 (citing Ex. 2011, 2) (“[Petitioner] agrees with [Patent Owner] that
a person of ordinary skill would have known that a hydrogen pulverized
strip cast alloy has a narrower particle size and shape distribution in
comparison to a typical ingot cast alloy. . . . [A] person of ordinary skill
would have known to adjust basic, fundamental jet milling settings to
accommodate the uniform particle size and shape distribution of the strip
cast alloy.”)).
Patent Owner argues that “the problem with the combination is that
the predictable result says that, for example, in the case of the
Hasegawa/Yamamoto combination, you are going to throw out 50 percent of
your powder.” Tr. 77:23–78:2. Patent Owner argues that one with ordinary
skill in the art, for various considerations, such as diminished yield, would
not have implemented a rapid cooling method in connection with
Hasegawa’s pulverization and particle classification techniques. PO Resp.
10–20. Whether implementation of Yamamoto’s rapid cooling method
makes commercial sense does not control the obviousness determination.
The challenged claims are not limited to an industrial scale economically
viable process. Specifically, the claims do not recite a minimum required
yield that would distinguish the prior art teachings. Patent Owner has not
provided persuasive reasoning or evidence to support its contention that one
of skill believed there to be some technological incompatibility that
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prevented the combination of Yamamoto’s rapid cooling method with
Hasegawa’s pulverization and particle classification techniques; that the
combination was unpredictable in some way; or that one with ordinary skill
in the art would not have known how to use Yamamoto’s rapid cooling
method with Hasegawa’s pulverization and particle classification
techniques. See Orthopedic Equip. Co. v. United States, 702 F.2d 1005,
1013 (Fed. Cir. 1983) (“[T]he fact that the two [prior art disclosures] would
not be combined by businessmen for economic reasons is not the same as
saying that it could not be done because skilled persons in the art felt that
there was some technological incompatibility that prevented their
combination. Only the latter fact is telling on the issue of
nonobviousness.”).
We appreciate Patent Owner’s argument that “an invention ‘composed
of several elements is not proved obvious merely by demonstrating that each
of its elements was, independently, known in the prior art.” PO Resp. 19
(citing KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)). Petitioner,
however, has set forth a sufficient rationale to arrive at what is claimed.
Specifically, Petitioner has demonstrated that the claims represent the
combination of prior art elements according to known methods to yield a
predictable result. See KSR, 550 U.S. at 416 (“The combination of familiar
elements according to known methods is likely to be obvious when it does
no more than yield predictable results.”). This is itself a sufficient reason
with rational underpinning to support a conclusion of obviousness. This is
especially true where the evidence supports that consideration of design
incentives, such as the provision of a “lower cost, more productive [process]
better suited for higher volume manufacturing” would have led one of
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ordinary skill to pursue the predictable combination of elements. Pet. Reply
15 (citing Ex. 2003, 109:10–20).
After considering Petitioner’s and Patent Owner’s positions, as well as
their supporting evidence, we conclude that Petitioner has demonstrated, by
a preponderance of the evidence, that independent claim 1 of the ’385 patent
would have been obvious over the combination of Hasegawa and Yamamoto
under 35 U.S.C. § 103(a).
b. Claims 5 and 6
Claim 5 depends from claim 1, and further includes “the step of
producing the R—Fe—B alloy for rare earth magnets by cooling a molten
material alloy at a cooling rate in a range between 102°C./sec and
104°C./sec.” Ex. 1001, 14:1–4. Claim 6 depends from claim 5 and further
recites that “the molten material alloy is cooled by a strip casting method.”
Id. at 14:5–6. With respect to claim 5, Petitioner argues that Yamamoto
teaches solidifying a molten alloy uniformly at a cooling rate of 10 to 1000
°C/second. Pet. 20 (citing Ex. 1007, Abstr., 2: 32–37; Ex. 1002 ¶¶ 59, 71).
With respect to claim 6, Petitioner argues that Yamamoto teaches “ . . . a
system for producing a permanent magnet alloy ingot by a strip casting
method using a single roll.” Id. at 21 (quoting Ex. 1007, 6: 16–29); see also
Ex. 1007, Fig. 1; Ex. 1002 ¶¶ 72–73 (explaining that Yamamoto teaches that
molten alloy is solidified under cooling conditions).
Petitioner provides expert testimony that “one of ordinary skill would
have been motivated to combine these prior art teachings of Hasegawa and
Yamamoto according to known methods to yield predictable results. Such a
modification also would have been obvious because it would have involved
the use of known techniques to improve a similar method.” Ex. 1002 ¶ 71
(cited at Pet. 20).
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Patent Owner does not dispute that Yamamoto teaches the claimed
cooling rate range, nor cooling by a strip casting method. See PO Resp. 9–
20. Patent Owner instead relies on the same argument that one of ordinary
skill in the art would not be motivated to combine the rapid cooling method
of Yamamoto with Hasegawa’s pulverization and particle classification
techniques as it did with respect to claim 1. Id. at 20. For the same reasons
as described above in connection with independent claim 1, we determine
that Petitioner has provided articulated reasoning with rational underpinning
for combining the references based on the combination of prior art elements
according to known methods to yield a predictable result.
After considering Petitioner’s and Patent Owner’s positions, as well as
their supporting evidence, we conclude that Petitioner has demonstrated, by
a preponderance of the evidence, that claims 5 and 6 of the ’385 patent
would have been obvious over the combination of Hasegawa and Yamamoto
under 35 U.S.C. § 103(a).
C. Obviousness of Claims 1, 5, and 6 over Ohashi and Yamamoto
1. Overview of Ohashi
Ohashi discloses a method for the preparation of a permanent magnet
composed of a rare earth element, iron, and boron. Ex. 1005, 1:6–16.
Ohashi discloses rough pulverization of an alloy ingot via various types of
pulverizing machines, such as stamp mills, jaw crushers, Braun mills, and
the like, and fine pulverization via jet mills, ball mills, and the like. Id. at
4:38–46. Ohashi recognizes that “a magnetic alloy powder containing
extremely fine particles are highly susceptible to the oxidation by the
atmospheric oxygen,” (id. at 3:41–43), and discloses that “the alloy under
pulverization is strictly prevented against oxidation by the atmospheric
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oxygen by conducting the pulverization in an atmosphere of a non-oxidizing
or inert gas such as nitrogen, argon and the like” (id. at 4:46–50).
Ohashi further discloses “particle size classification of the alloy
powder for compression molding into a powder compact to be sintered, by
which particles having a finer particle diameter . . . are removed so as to
effectively prevent oxidation of the too fine particles.” Id. at Abstr. Ohashi
discloses that particle classification can be conducted using “screens of an
appropriate mesh opening, rotative force, air stream and the like as well as a
combination of these different principles.” Id. at 5:1–4. Ohashi discloses
removing particles having a diameter smaller than 2 µm from the alloy
powder. Id. at 2:45–46, 4:19–22, 4:64–67. Ohashi also discloses that “[i]t is
important that the volume fraction of the fine particles having a diameter
smaller than 2 µm in the alloy powder after the particle size classification
does not exceed 1% or, preferably, 0.5%.” Id. at 5:50–53.
2. Obviousness of Claims 1, 5, and 6
a. Claim 1
Petitioner alleges that independent claim 1 would have been obvious
over the combined disclosures of Ohashi and Yamamoto. Pet. 21–25.
Petitioner relies on Ohashi for every element of independent claim 1 except
for the recitation of “an R—Fe—B alloy for rare earth magnets produced by
a rapid cooling method.” Id. at 21 (emphasis added). Petitioner relies on the
same teachings in Yamamoto relating to a rapid cooling method and the
same reasoning for combining Ohashi and Yamamoto as that for combining
Hasegawa and Yamamoto as described above. Id. at 21–23 (citing Ex. 1001,
12:24–29, Ex. 1002 ¶¶ 34–35, 51–52, 74, 76–78, Illustration 8). Patent
Owner does not dispute that Ohashi teaches every element of independent
claim 1 except for the alloy being produced by a rapid cooling method, nor
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that Yamamoto teaches a rapid cooling method. PO Resp. 21–29.
Patent Owner again argues that Petitioner fails to weigh the
advantages and disadvantages of using a rapid cooling method to produce a
more uniform alloy and that one of ordinary skill in the art would not utilize
Yamamoto’s strip casting method with the pulverization and particle
classification techniques of Ohashi. Id. at 28–29. For the same reasons as
described above in connection with the challenge based on the combination
of Hasegawa and Yamamoto, Patent Owner’s arguments do not persuasively
rebut Petitioner’s rationale relating to the combination of prior art elements
according to known methods to yield a predictable result in light of design
incentives that would have prompted one of ordinary skill in the art to
pursue the predictable combination. Pet. 23 (citing Ex. 1002 ¶ 78); Pet.
Reply 15 (citing Ex. 2003, 109:10–20).
Petitioner has shown, and Patent Owner has not disputed, that the
claimed elements (i.e., steps) are known in the art, albeit not combined in a
single reference, and are used for their known purpose. Id. at 22–25; see
Tr. 77:8–19. Petitioner has shown sufficiently that a person of ordinary skill
in the art would have known how to combine Yamamoto’s rapid cooling
method with Ohashi’s pulverization and particle classification technique
using known methods. See Ex. 1002 ¶ 35 (“Rare earth elements . . . are
collected and are melted together to form a cast alloy using known
techniques to one of ordinary skill such as the ingot cast method or a strip
cast method.”); see also Ex. 1001, 1:36–45, 12: 24–29 (referring to material
alloy being produced by two types of methods—ingot casting and rapid
cooling—and stating that the present invention was applicable to both an
ingot method and a rapid cooling method); see also Ex. 1002 ¶ 51 (“The
ingot or strip cast methods are interchangeable to those skilled in the art.”).
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Petitioner has also shown sufficiently that a person of ordinary skill in the art
would have recognized the results of the combination to be predictable. Ex.
1002 ¶ 78; see also Pet. Reply 13 (citing Ex. 2011, 2) (“[Petitioner] agrees
with [Patent Owner] that a person of ordinary skill would have known that a
hydrogen pulverized strip cast alloy has a narrower particle size and shape
distribution in comparison to a typical ingot cast alloy. . . . [A] person of
ordinary skill would have known to adjust basic, fundamental jet milling
settings to accommodate the uniform particle size and shape distribution of
the strip cast alloy.”)). Petitioner also provides evidence of design
incentives that would have prompted one of ordinary skill in the art to
pursue the predictable combination. Pet. Reply 15 (citing Ex. 2003, 109:10–
20).
After considering Petitioner’s and Patent Owner’s positions, as well as
their supporting evidence, we conclude that Petitioner has demonstrated, by
a preponderance of the evidence, that independent claim 1 of the ’385 patent
would have been obvious over the combination of Ohashi and Yamamoto
under 35 U.S.C. § 103(a).
b. Claims 5 and 6
With respect to dependent claim 5, Petitioner argues that Yamamoto
teaches solidifying a molten alloy uniformly at a cooling rate of 10 to 1000
°C/second. Pet. 24 (citing Ex. 1007, Abstr., 2: 32–37; Ex. 1002 ¶ 82). With
respect to dependent claim 6, Petitioner argues that Yamamoto teaches “ . . .
a system for producing a permanent magnet alloy ingot by a strip casting
method using a single roll.” Id. at 24–25 (quoting Ex. 1007, 6: 16–29); see
also Ex. 1007, Fig. 1; Ex. 1002 ¶ 83 (explaining that Yamamoto teaches that
molten alloy is solidified under cooling conditions).
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Petitioner provides expert testimony that “one of ordinary skill would
have been motivated to combine these prior art teachings of Ohashi and
Yamamoto according to known methods to yield predictable results. Such a
modification also would have been obvious because it would have involved
the use of known techniques to improve a similar method.” Ex. 1002 ¶ 82
(cited at Pet. 24).
Patent Owner does not dispute that Yamamoto teaches the claimed
cooling rate range, nor cooling by a strip casting method. See PO Resp. 21–
29. Patent Owner, instead, relies on the argument that one of ordinary skill
in the art would not be motivated to combine the rapid cooling method of
Yamamoto with Ohashi’s pulverization and particle classification
techniques. Id. at 29. For the same reasons as described above in
connection with independent claim 1, we determine that Petitioner has
provided articulated reasoning with rational underpinning for combining the
references based on the combination of prior art elements according to
known methods to yield a predictable result.
After considering Petitioner’s and Patent Owner’s positions, as well as
their supporting evidence, we conclude that Petitioner has demonstrated, by
a preponderance of the evidence, that dependent claims 5 and 6 of the ’385
patent would have been obvious over the combined teachings of Ohashi and
Yamamoto under 35 U.S.C. § 103(a).
D. Anticipation of Claim 1 by He
1. Overview of He
He discloses that “crude rare earth permanent magnet materials [can
be] made from smelting method or quick quenching or reduction diffusion.”
Ex. 1006, 49. He further discloses that NdFeB material for rare earth
permanent magnets can be made by crushing ingots into crude granules with
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hydrogen burst processing. Id. He discloses that the crude materials can be
made finer in a milling compartment and then can be transferred to the
separator. Id. He discloses that qualified fine powders can be separated and
enter the cyclone separating device for settling, and ultra-fine powders that
cannot be settled enter a filter with gas and are separated and collected. Id.
at 49–50. He discloses that “[a]s far as rare earth permanent magnet
powders are concerned, the normal ultra fine particles should have a
granularity of less than 1µm and their weight should be about 0.1% of the
qualified powders.” Id.
2. Anticipation of Claim 1
Petitioner alleges that independent claim 1 is anticipated by He. Pet.
25–28. Patent Owner argues only that He fails to disclose a rapid cooling
method. PO Resp. 29–33. Petitioner asserts that He’s reference to quick
quenching meets the claim limitation that the “R—Fe—B alloy for rare earth
magnets [are] produced by a rapid cooling method.” Pet. 26 (citing Ex.
1006, 49; Ex. 1002 ¶ 87). According to Petitioner “quick quenching is rapid
cooling as understood by one of ordi[na]ry skill.” Ex. 1002 ¶ 87.
Patent Owner argues that Petitioner’s conclusory assertion regarding
the equivalence of quick quenching and rapid cooling should be given little
weight and that “the evidence suggests that ‘quick quenching’ does not
encompass strip casting.” PO Resp. 31. In particular, Patent Owner argues
that strip casting was not commercially available as of He’s publication date
and that quick quenching most likely refers to “‘melt spinning’ which has
‘[c]ooling rates in excess of 106 K s-1’ according to Dr. Ormerod’s 1989
publication.” Id. at 31–32 (citing Ex. 2004, 245; Ex. 2013; Ex. 2014, 38).
We need not decide whether quick quenching refers specifically to
strip casting. We need only decide whether quick quenching discloses a
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“rapid cooling method” as that claim term as been construed for purposes of
this proceeding.7 Patent Owner’s first argument that strip casting in
particular was not commercially available as of He’s publication date is not
persuasive evidence that He’s quick quenching cannot be rapid cooling,
because rapid cooling is not limited to strip casting in accordance with our
construction of that term.
Patent Owner’s second argument that He’s quick quenching likely
refers to melt spinning is also not persuasive evidence that He’s quick
quenching cannot be rapid cooling. In support of this argument, Patent
Owner presented evidence that“[m]elt spinning consists of melting the alloy
. . . . The melt . . . is sprayed . . . on to a rotating water cooled copper wheel
or disc. Cooling rates in excess of 106 K s-1 are obtained.” PO Resp. 8
(citing Ex. 2004, 245), 32; Ex. 2002 ¶ 85 (“[M]elt spinning . . . is a process
in which the molten alloy is ejected onto a rapidly spinning wheel to cool at
rates on the order of 105–107 degrees per second and form ribbons of
nanocrystalline material.”). According to Patent Owner, that rate of cooling
is higher “than the maximum cooling rate” described in the ’385 patent. Id.
at 32. As set forth above, however, we do not agree with Patent Owner that
“rapid cooling method” as used in claim 1 is limited to a particular cooling
rate. Instead, we are persuaded that this evidence shows that melt spinning
does meet the “rapid cooling method” limitation as we have construed it,

7 As discussed above, we have determined the broadest reasonable
interpretation of the claim term “rapid cooling method” is “a cooling method
in which 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.” Such a construction does not limit a “rapid cooling
method” to a strip casting method.
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because it describes a molten material being rapidly cooled to produce a
solidified alloy thinner than an ingot cast alloy through contact with a rotary
chill disk.
In addition to the evidence in the record supporting that quick
quenching is melt spinning, and melt spinning is a process that comports
with the construction of a “rapid cooling method” (Ex. 2002 ¶ 85; Ex. 2004,
245), Petitioner also presented expert testimony that He’s reference to quick
quenching would be understood by one of ordinary skill in the art to be rapid
cooling. Pet. Reply 23 (citing Ex. 1002 ¶ 87; Ex. 2003, 114:16–18).
Accordingly, we find sufficient evidence in the record to support that quick
quenching discloses a rapid cooling method in accordance with the broadest
reasonable interpretation of the term “rapid cooling method.”
After considering Petitioner’s and Patent Owner’s positions, as well as
their supporting evidence, we conclude that Petitioner has demonstrated, by
a preponderance of the evidence, that independent claim 1 of the ’385 patent
is anticipated by He under 35 U.S.C. § 102(b).
E. Obviousness of Claims 5 and 6 over He and Yamamoto
With respect to dependent claim 5, Petitioner argues that Yamamoto
teaches solidifying a molten alloy uniformly at a cooling rate of 10 to 1000
°C/second. Pet. 29 (citing Ex. 1007, Abstr., 2: 32–37; Ex. 1002 ¶ 93). With
respect to dependent claim 6, Petitioner argues that Yamamoto teaches “ . . .
a system for producing a permanent magnet alloy ingot by a strip casting
method using a single roll.” Id. (quoting Ex. 1007, 6: 16–29); see also Ex.
1007, Fig. 1; Ex. 1002 ¶ 94 (explaining that Yamamoto teaches that molten
alloy is solidified under cooling conditions).
Petitioner argues that “[o]ne of ordinary skill would have been
motivated to use a material alloy formed by the rapid cooling method taught
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by Yamamoto with the pulverization techniques taught by He that also
teaches a material alloy formed by rapid cooling in order to pulverize a more
uniform material alloy.” Id. at 28 (emphasis omitted). Petitioner also
provides expert testimony that “one of ordinary skill would have been
motivated to combine these prior art teachings of [He] and Yamamoto
according to known methods to yield predictable results. Such a
modification also would have been obvious because it would have involved
the use of known techniques to improve a similar method.” Ex. 1002 ¶ 93
(cited at Pet. 29).8
Patent Owner does not dispute that Yamamoto teaches the claimed
cooling rate range, nor cooling by a strip casting method. See PO Resp. 33–
37. Patent Owner counters that one of ordinary skill in the art would not
have been motivated to combine the teachings of He and Yamamoto to
arrive at the claimed invention for the stated reason of pulverizing a more
uniform alloy. PO Resp. 36–37. In particular, Patent Owner disputes that
modifying He’s quick quenching method to utilize the claimed cooling rate
range of 102°C./sec and 104°C./sec would result in a more uniform alloy.
Patent Owner argues that “replacing He’s ‘quick quenching’ with the slower
cooling methods disclosed in Yamamoto would actually result in a less
homogeneous material alloy.” Id. at 36 (citing Ex. 2015, Fig. 9).

8 We consider Petitioner’s reference to “Hasegawa” instead of “He” in the
quoted portion of paragraph 93 of Exhibit 1002 to be an inadvertent
typographical error. Taken in context, in which Heading “C” refers to “He”
(Ex. 1002, 45), subheading “2” refers to “He in view of Yamamoto” (id. at
50), and the remainder of paragraph 93 refers to “He” (id. at 51), we
consider Petitioner clearly to have intended to refer to “He,” not
“Hasegawa.”
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Petitioner responds that Patent Owner’s argument “is based on the
assumption that He’s disclosure of ‘quick quenching’ refers to melt-
spinning,” but He does not refer to melt-spinning. Pet. Reply 24. Even if
we were to agree with Petitioner that He does not necessarily refer to melt-
spinning, we are not persuaded that Petitioner has explained sufficiently how
utilizing Yamamoto’s particular cooling rate would result in a more uniform
alloy, considering the lack of explanation by Petitioner regarding how
Yamamoto’s cooling rate would differ from that already provided by He’s
quick quenching. Petitioner further responds that even if He were referring
to melt-spinning, “[Patent Owner] disregards the fact that strip casting was a
well-known, highly advantageous process at the time of the invention.” Id.
Even if we were to agree with Petitioner that strip casting provides certain
advantages, this does not support provide evidentiary support for Petitioner’s
articulated rationale of pulverizing a more uniform alloy as set forth in its
Petition. We are persuaded by Patent Owner’s argument and determine that
Petitioner’s first articulated rationale, namely, producing a more uniform
alloy for pulverization, lacks evidentiary rational underpinning.
Petitioner, however, has also supported its conclusion of obviousness
based on the combination of prior art elements according to known methods
to yield a predictable result. Pet. 29 (citing Ex. 1002 ¶ 93). Petitioner has
shown, and Patent Owner has not disputed, that the claimed elements (i.e.,
steps) are known in the art, albeit not combined in a single reference, and are
used for their known purpose. Pet. 25–29; see Tr. 77:8–19. We are
persuaded that Petitioner has shown that a person of ordinary skill in the art
would have known how to combine He’s quick quenching with Yamamoto’s
particular cooling range of 102°C./sec to 104°C./sec and Yamamoto’s strip
casting method using known methods and would have recognized the results
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of the combination to be predictable. See Ex. 1002 ¶ 93; Pet. Reply 24
(citing Ex. 2005, 1) (describing strip casting as “similar to melt spinning”).
Petitioner also provides evidence that one of ordinary skill in the art would
have pursued the predictable combination. Pet. Reply 24 (citing Ex. 2003,
108:14–19) (explaining that even when melt-spinning and strip casting were
both well-known, most high-volume manufacturers utilized strip casting).
We determine that Petitioner has provided articulated reasoning with rational
underpinning for combining the references based on the combination of
prior art elements according to known methods to yield a predictable result.
After considering Petitioner’s and Patent Owner’s positions, as well as
their supporting evidence, we conclude that Petitioner has demonstrated, by
a preponderance of the evidence, that dependent claims 5 and 6 of the ’385
patent would have been obvious over the combined teachings of He and
Yamamoto under 35 U.S.C. § 103(a).
III. CONCLUSION
We determine Petitioner has established by a preponderance of the
evidence that: claims 1, 5, and 6 are unpatentable under 35 U.S.C. § 103(a)
as obvious over the combination of Hasegawa and Yamamoto; claims 1, 5,
and 6 are unpatentable under 35 U.S.C. § 103(a) as obvious over the
combination of Ohashi and Yamamoto; claim 1 is unpatentable under 35
U.S.C. § 102(b) as anticipated by He; and claims 5 and 6 are unpatentable
under 35 U.S.C. § 103(a) as obvious over the combination of He and
Yamamoto.
IV. ORDER
In consideration of the foregoing, it is:
ORDERED that claims 1, 5, and 6 of the ’385 patent have been shown
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by a preponderance of the evidence to be unpatentable.
This is a Final Written Decision. Parties to this proceeding seeking
judicial review of our decision must comply with the notice and service
requirements of 37 C.F.R. § 90.2.
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FOR PETITIONER:

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

FOR PATENT OWNER:

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