NJOY, Inc.v.FONTEM HOLDINGS 1 B.V.

Patent Trials and Appeals Board

Dec 9, 2015

13777927 - (D) (P.T.A.B. Dec. 9, 2015)

Trials@uspto.gov Paper No. 15
571.272.7822 Entered: December 9, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

NJOY, INC., CB DISTRIBUTORS, INC.,
DR DISTRIBUTORS, LLC, FIN BRANDING GROUP, LLC,
ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD.
f/k/a VICTORY ELECTRONIC CIGARETTES CORPORATION;
and LOGIC TECHNOLOGY DEVELOPMENT LLC,
Petitioner,

v.

FONTEM HOLDINGS 1 B.V.,
Patent Owner.
____________

Case IPR2015-01302
Patent 8,893,726 B2
____________

Before JOSIAH C. COCKS, DONNA M. PRAISS, and
JO-ANNE M. KOKOSKI, Administrative Patent Judges.

PRAISS, Administrative Patent Judge.

DECISION
Denying Institution of Inter Partes Review
37 C.F.R. § 42.108

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INTRODUCTION I.
NJOY, Inc., CB Distributors, Inc., DR Distributors, LLC, FIN
Branding Group, LLC, Electronic Cigarettes International Group, Ltd. f/k/a
Victory Electronic Cigarettes Corporation, and Logic Technology
Development LLC (“Petitioner”) filed a Petition requesting an inter partes
review of claims 1–4, 8–10, and 12–17 of U.S. Patent No. 8,893,726 B2
(Ex. 1001, “the ’726 patent”). Paper 2 (“Pet.”). Fontem Holdings 1 B.V.
(“Patent Owner”) filed a Preliminary Response to the Petition. Paper 6
(“Prelim. Resp.”).
We have jurisdiction under 35 U.S.C. § 314, which provides that an
inter partes review may not be instituted “unless . . . there is a reasonable
likelihood that the petitioner would prevail with respect to at least 1 of the
claims challenged in the petition.” 35 U.S.C. § 314(a). Upon considering
the Petition and Preliminary Response, we determine that Petitioner has not
established a reasonable likelihood that it would prevail in showing the
unpatentability of claims 1–4, 8–10, and 12–17. Accordingly, we decline to
institute an inter partes review of those claims.
A. Related Proceedings
Petitioner identifies as related matters the following cases filed by the
Patent Owner in the United States District Court for the Central District of
California against the indicated defendants: (i) Ballantyne Brands, LLC,
Nos. 2:14-cv-09269, 2:14-cv-08157, and 2:14-cv-01652; (ii) VMR Products,
LLC, Nos. 2:14-cv-09273, 2:14-cv-08161, and 2:14-cv-01655; (iii) Spark
Industries, LLC, Nos. 2:14-cv-09270, 2:14-cv-08158, and 2:14-cv-01653;
(iv) Vapor Corp., Nos. 2:14-cv-09267, 2:14-cv-08155, and 2:14-cv-01650;
(v) CB Distributors, Inc. and DR Distributors, LLC, Nos. 2:14-cv-09266,
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2:14-cv-08154, and 2:14-cv-01649; (vi) LOEC, Inc., Nos. 2:14-cv-09265,
2:14-cv-08149, and 2:14-cv-01648; (vii) Logic Technology Development
LLC, Nos. 2:14-cv-09271, 2:14-cv-08160, and 2:14-cv-01654; (viii) NJOY,
Inc., Nos. 2:14-cv-09263, 2:14-cv-08144, and 2:14- cv-01645; (ix) FIN
Branding Group, LLC and Electronic Cigarettes Int’l Group Ltd., Nos. 2:14-
cv-09268, 2:14-cv-08156, and 2:14-cv-01651. Pet. 4–5.
Petitioner concurrently filed petitions for inter partes review of
related patents in IPR2015-01299 (US 8,910,641 B2), IPR2015-01301
(US 8,863,752 B2), and IPR2015-01304 (US 8,899,239 B2). Id. at 5.
Petitioner also identifies the following petitions for inter partes review of
related patents: IPR2013-00387 (US 8,156,944 B2), IPR2014-01300
(US 8,490,628 B2), IPR2014-01289 (US 8,393,331 B2), IPR2014-01529
(US 8,689,805 B2), IPR2015-00098 (US 8,375,957 B2), IPR2015-00859
(US 8,365,742 B2), IPR2015-01027 (US 8,689,805 B2), IPR2015-01513
(US 8,375,957 B2), IPR2015-01587 (US 8,365,742 B2), IPR2015-01578
(US 8,689,805 B2), and IPR2015-01604 (US 8,863,752 B2). Id.; Paper 5.
B. The ’726 patent (Ex. 1001)
The ’726 patent relates to an electronic atomization cigarette that
functions as a cigarette substitute. Ex. 1001, 1:59–60. The electronic
cigarette comprises, among other components, a shell, a mouthpiece, an air
inlet, an electronic circuit board, a sensor, an atomizer, and a “liquid-supply”
in contact with the atomizer. Id. at 1:59–2:3. Figures 1, 6, and 11 of the
’726 patent are reproduced below.
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Figure 1 depicts a schematic diagram of an embodiment of the electronic
cigarette, Figure 6 depicts a structural diagram of atomizer within the
electronic cigarette, and Figure 11 depicts a liquid-supplying bottle with a
mouthpiece. Id. at 2:11, 18, 25–26. In Figure 1, the electronic cigarette
comprises LED 1, cell 2, electronic circuit board 3, air inlet 4, normal
pressure cavity 5, sensor 6, vapor-liquid separator 7, atomizer 9, liquid-
supplying bottle 11, and mouthpiece 15, sequentially provided within shell
14. Id. at 2:36–40. In Figure 6, the atomizer (shown as atomizer 9 in Figure
1) comprises heating element 26 and atomization cavity wall 25 surrounded
by porous body 27, which includes bulge 36. Id. at 2:51–57, 66–67. In
Figure 11, solution storage porous body 28 is provided in liquid-supplying
bottle 11 with gas vent 17 and mouthpiece 15. Id. at 3:11–20. As described
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in the ’726 patent, “the solution storage porous body 28 in the liquid-
supplying bottle 11 is in contact with the bulge 36 on the atomizer 9, thereby
achieving the capillary infiltration liquid-supplying.” Id. at 3:64–67.
C. Illustrative Claims
Claims 1, 14, and 15 of the ’726 patent are independent.
Claims 1 and 15 are illustrative and are reproduced below:
1. An electronic cigarette, comprising:
[A] a housing having an inlet and an outlet;
[B] a liquid storage body in the housing holding a liquid;
[C] an air flow path through the housing; and
[D] an atomizer in the housing between the inlet and the
outlet including:
[E] a porous body in contact with the liquid storage body;
and
[F] a heating wire in the atomizer surrounded by the porous
body.
15. An electronic cigarette, comprising;
[A] a housing having an inlet and an outlet;
[B] an electronic circuit board and
[C] an atomizer having a heating element, within the
housing;
[D] a battery electrically connected to the electronic circuit
board;
[E] a stream passage within the housing leading from the
inlet to the atomizer;
[F] a liquid storage body including fiber material in a
cylindrical section of the housing,
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[G] with the liquid storage body in physical contact with the
atomizer; and
[H] an aerosol passage from the atomizer to the outlet.
Id. at 5:2–10, 6:17–28 (indentation and paragraph lettering added).
Independent claim 14 is similar to claim 1, but recites “a porous cylindrical
atomizer,” “the porous cylindrical atomizer in contact with the liquid storage
body,” and “a heating wire coil within and surrounded by the porous
cylindrical atomizer.” Id. at 6:12–16.
D. The Asserted Grounds of Unpatentability
Petitioner challenges the patentability of claims 1–4, 8–10, and 12–17
of the ’726 patent on the following grounds:
References Basis Claims
Takeuchi
1
and Counts
2
§ 103 1, 3, 4, 8, 9, 10, 12, and 14
Takeuchi and Kaufmann
3
§ 103 15 and 16
Takeuchi, Counts, and Kaufman 103 2, 13, and 17

ANALYSIS II.
A. Person of Ordinary Skill in the Art
The parties dispute the proper definition of a person of ordinary skill
in the art. Petitioner contends that a person of ordinary skill in the art would
have had a bachelor’s degree in electrical engineering, mechanical
engineering, biomedical engineering, or a related discipline, with two years
of experience in designing electromechanical devices. Pet. 16. Patent

1
Takeuchi, US 6,155,268, issued Dec. 5, 2000 (Ex. 1003).
2
Counts et al., US 5,144,962, issued Sep. 8, 1992 (Ex. 1004).
3
Kaufmann et al., US 6,322,268 B1, issued Nov. 27, 2001 (Ex.1005).
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Owner includes an industrial design degree or equivalent work experience
for the education level of one of ordinary skill the art, but disagrees with
Petitioner’s degree of practical experience. According to Patent Owner, a
person of ordinary skill in the art would have had experience on the order of
5–10 years in the area of electromechanical devices. Prelim. Resp. 7.
For purposes of this Decision, we do not discern an appreciable
difference between Petitioner’s and Patent Owner’s proposed levels of
ordinary skill in the art that would impact our ultimate conclusions. We also
consider the cited prior art as representative of the level of ordinary skill in
the art. See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001)
(finding the absence of specific findings on “level of skill in the art does not
give rise to reversible error ‘where the prior art itself reflects an appropriate
level and a need for testimony is not shown’”) (quoting Litton Indus. Prods.,
Inc. v. Solid State Sys. Corp., 755 F.2d 158, 163 (Fed. Cir. 1985)).
B. Claim Construction
In an inter partes review, the Board interprets claim terms in an
unexpired patent according to the broadest reasonable construction in light
of the specification of the patent in which they appear. See In re Cuozzo
Speed Techs., LLC, 793 F.3d 1268, 1278 (Fed. Cir. 2015); 37 C.F.R.
§ 42.100(b). Under that standard, and absent any special definitions, we
give claim terms their ordinary and customary meaning, as would be
understood by one of ordinary skill in the art at the time of the invention.
See In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). Any
special definitions for claim terms must be set forth with reasonable clarity,
deliberateness, and precision. See In re Paulsen, 30 F.3d 1475, 1480
(Fed. Cir. 1994).
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1. “electronic cigarette”
Each independent claim recites in its preamble an “electronic
cigarette.” Petitioner requests that the term be construed consistent with the
decisions on institution in IPR2014-01289 and IPR2014-01300, which
involve related patents that share the ’726 patent Specification. Pet. 17–19;
see Ex. 2001, 7–8; Ex. 2002, 7–8. While Patent Owner agrees that the term
“‘electronic cigarette’ does not need to be shaped like a traditional cigarette
or mimic the look and feel of a traditional cigarette,” Patent Owner asserts
that the Board’s earlier construction is too broad. Prelim. Resp. 8. Patent
Owner asserts that the term should be construed to mean “an electronic
device that simulates the feel and experience of a cigarette without burning.”
Id. at 9.
The Specification summarizes the invention as “An electronic
atomization cigarette that functions as substitutes for quitting smoking and
cigarette substitutes . . . .” Ex. 1001, 1:59–61. Components of the device
are generically described as including “a shell; a mouthpiece; an air inlet.”
Id. at 1:61. The Specification states that nicotine is the active ingredient in a
cigarette and that tar is the major harmful substance in tobacco. Id. at 1:35,
42–43. Prior cigarette substitutes that are free from tar are described in the
Specification as a nicotine patch, nicotine mouthwash, nicotine chewing
gum, and nicotine drink, which have a major disadvantage of not reaching
an effective peak concentration due to slow absorption of nicotine. Id. at
1:45–52. According to the Specification, the prior art substitutes also “can
not satisfy habitual smoking actions of a smoker, for example, inhaling
action, and thus are not likely to be widely accepted as effective substitutes
for smoking.” Id. at 1:52–55.
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We find that these disclosures of an electronic atomization cigarette
and other cigarette substitutes do not limit the shape, size, look, feel, or other
sensations of the electronic cigarette of the invention beyond delivering
atomization to satisfy the need for a user to experience an inhaling action.
Accordingly, on the current record, we determine the broadest reasonable
interpretation of the term “electronic cigarette” to be “a device for
generating liquid droplets for inhalation by a user, where the device
functions as a substitute for smoking, e.g., by providing nicotine without
tar.”
2. “atomizer”
Each of the independent claims recites an “atomizer.” Petitioner
asserts that this limitation should be construed as in prior related inter
parties review proceedings to mean “a part of the electronic cigarette that
includes components that participate in facilitating atomization, but not
components included in other recited parts of the electronic cigarette, such
as the liquid supply.” Pet. 19. Patent Owner disagrees with Petitioner’s
construction “to the extent it extends beyond components that cause
atomization (i.e., converting liquid into aerosol or vapor) to components that
do not cause atomization (e.g., components that merely transport liquid to
the atomizer or components that receive atomized particles after atomization
has occurred).” Prelim. Resp. 13. According to Patent Owner, a skilled
artisan would understand that the term refers to “a component that converts
liquid into aerosol or vapor.” Id.
The Specification does not limit an “atomizer” to a single component
that converts liquid into a vapor. The Specification depicts an “atomizer”
embodiment having multiple components, e.g., heating element 26,
atomization cavity 10, atomization cavity wall 25, and porous body 27.
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Ex. 1001, Fig. 6, 2:18, 2:48–3:4. The atomizer depicted in Figure 6, above,
also includes first piezoelectric element 23. Id. at 3:2–3. The first
piezoelectric element subjects the nicotine solution to ultrasonic atomization
and is further atomized by heating element 26. Id. at 3: 52–58.
Accordingly, based on the record before us, we determine that the broadest
reasonable interpretation of the term “atomizer” is “a part of the electronic
cigarette that includes components that participate in facilitating
atomization.”
3. “contact”/“physical contact”
Independent claims 1 and 14 require, respectively, “a porous body” or
a “porous cylindrical atomizer” in contact with “the liquid storage body.”
Ex. 1001, 5:8, 6:13–14. Independent claim 15 requires a “liquid storage
body in physical contact with the atomizer.” Id. at 6:26–27. Patent Owner
asserts that the broadest reasonable construction of “contact” and “physical
contact” is “direct contact” because “[a]ll of the embodiments disclosed in
the ’726 Patent specification show a liquid storage body in direct contact
with the atomizer.” Prelim. Resp. 19. Petitioner does not propose a
construction for these terms, but notes that “physical contact” was construed
to mean “direct contact” in IPR2014-01289. Pet. 18 n.3.
The Specification does not explicitly state “physical contact,” but uses
the term “contact” when it describes that “[t]he liquid-supply is in contact
with the atomizer,” “[t]he atomizer 9 is in contact with the liquid-supplying
bottle 11 via the bulge 36,” and “[t]he solution storage porous body 28 in the
liquid-supplying bottle 11 is in contact with the bulge 36 on the atomizer,
thereby achieving the capillary infiltration liquid-supplying.” Ex. 1001, 2:2–
3, 2:48–49, 3:64–67. We determine that, based on the current record, the
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broadest reasonable interpretation of the terms “contact” and “physical
contact” is “direct contact.”
4. Remaining Claim Terms
The parties propose constructions for other claim terms in the ’726
patent. Based on the current record, however, we determine that the
remaining claim terms need not be construed explicitly for purposes of this
Decision. Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803
(Fed. Cir. 1999) (only terms in controversy need to be construed and only to
the extent necessary to resolve the controversy).
C. Obviousness over Takeuchi and Counts
Petitioner asserts that claims 1, 3, 4, 8, 9, 10, 12, and 14 would have
been obvious under 35 U.S.C. § 103 over the combination of Takeuchi and
Counts. Pet. 21–42. Petitioner relies on the testimony of its declarant,
Samir Nayfeh, Ph.D. (Ex. 1002). Patent Owner opposes Petitioner’s
assertions. Prelim. Resp. 27–48. Based on our review of the Petition and
the Preliminary Response, we determine that Petitioner has not established a
reasonable likelihood that it would prevail in showing the claims are
unpatentable as having been obvious over the cited references.
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1. Takeuchi (Ex. 1003)
Takeuchi describes a “flavor-generating device for enjoying
inhalation of flavor or for enjoying simulated smoking.” Ex. 1003, 1:3–6.
Takeuchi teaches “where the device is used as a simulated smoking article, it
is possible for the liquid flavor source 34 to contain tobacco components
such as tobacco extracts and a tobacco smoke condensate.” Id. at 5:43–46.
One embodiment of the device is shown in Figure 1, reproduced below.

Figure 1 depicts a sectional view of a flavor-generating device. Id. at 3:55.
The device comprises casing 12, gas passageway 20 “for forming a gaseous
stream of a flavor which is to be inhaled by a user,” mouth piece 16, lamp 56
(such as “a light emitting diode”), air intake port 18, battery 44, control
circuit 46, sensor 52, heater 42, capillary tube 36, liquid 34, and liquid
container 32. Ex. 1003, 4:29–47, 5:28–35, 6:4–14, 6:55–62, 7:2–9, 7:51–
8:15.
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Takeuchi teaches the “inner space of the casing 12 is partitioned into
an upper chamber 121 and a lower chamber 122 by a partition wall 13.” Id.
at 4:31–33. In addition, Takeuchi teaches “capillary tube 36 defines a liquid
passageway 37 for the liquid flavor source, and its lower end 36a is
positioned in the vicinity of the bottom of the liquid container 32.” Id. at
5:49–52. Capillary tube 36 also includes outlet portion 36b, where “liquid
flavor source 34 within the outlet port 36[b] is instantly gasified by the heat
generated from the heater 42 as shown in FIG. 2B so as to be supplied into
the gas passageway 20.” Id. at 7:57–8:4. Takeuchi further teaches that
“cooling chamber 21,” in upper chamber 121, constitutes a part of gas
passageway 20. Id. at 5:1–7.
Figure 4 of Takeuchi, which presents an embodiment of capillary tube
36 with heater 74, is reproduced below.

Figure 4 depicts a perspective view of rod-like heater 74 inserted into outlet
port 36b of capillary tube 36. Id. at 2:53–55, 8:22–26.
Figure 15 of Takeuchi, which depicts an embodiment of the liquid
passageway for a liquid flavor source with pore structure 302 and heater
425, is reproduced below.
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Figure 15 illustrates a liquid passageway for a liquid flavor source in which
an intercommunicating pore structure 302 fills enclosure 301, which may be
a tube. Id. at 10:50–67. “[A] heater 425 can be provided on the protruded
end of the intercommunicating pore structure 302.” Id. at 10:61–63.
2. Counts (Ex. 1004)
Counts relates to a flavor generating device that uses an electric
heating element. Figure 1, below, is a fragmentary perspective view of one
embodiment.

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Figure 1 depicts heating element 14 surrounded by flavor-generating
medium 12 in thermally-insulating tube 20. Ex. 1004, 1:16–54. In a
preferred embodiment, the heating element is a resistive wire coil. Id. at
4:5–7.
3. Analysis
Petitioner asserts the combination of Takeuchi and Counts would have
rendered obvious claims 1, 3, 4, 8, 9, 10, 12, and 14. Pet. 21. Petitioner
contends “Takeuchi’s ‘rod-like heater 74’ could be implemented with one of
several known heating components, including Counts’ ‘resistive wire coil . .
. disposed within an insulating tube,’ with predictable results. Id. at 25
(citing Ex. 1002 ¶ 46). Because such a combination would have been “a
combination of known elements with predictable results, . . . a [person of
ordinary skill in the art] would have had reason to combine the teaching of
Takeuchi and Counts in this way.” Id. at 27 (citing Ex. 1002 ¶ 48).
Regarding claim 1, Petitioner provides a summary and claim chart
identifying the disclosures of Takeuchi and Counts that purportedly teach or
suggest each limitation. Pet. 27–34. For example, Petitioner asserts that
Takeuchi discloses an electronic cigarette because Takeuchi’s device “is
used as a simulated smoking article” and contains “tobacco components
such as tobacco extracts and a tobacco smoke condensate.” Id. at 30 (citing
Ex. 1003, 5:43–46); id. at 27 (citing Ex. 1002 ¶ 51). Petitioner also
identifies in Takeuchi’s disclosure a housing (casing 12) having an inlet
(intake port 18) and outlet (inhalation port 22), a liquid storage body (liquid
container 32) in the housing holding a liquid (liquid flavor source 34), and
an air flow path through the housing (gas passageway 20 in upper chamber
121) as required by claim 1 (elements A–C). Id. at 27–28 (citing Ex. 1002
¶¶ 52–54), 30–31 (citing Ex. 1003, 2:1–7, 4:29–50, 5:28–30, Fig. 1).
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Regarding the atomizer required by claim 1 (element D), Petitioner contends
that Takeuchi’s atomizer comprises the liquid passageway that is in fluid
communication with the liquid at one end and a gas passageway at a second
end where a heater is mounted for gasifying or evaporating the liquid
transported from the liquid container to outlet portion 36b of capillary tube
36. Id. at 28 (citing Ex. 1002 ¶¶ 55, 56, 70), 31–32 (citing Ex. 1003, 2:1–16,
6:4–7, 5:1–37). Petitioner contends that the intercommunicating pore
structure 302 of Takeuchi reads on the porous body in contact with the liquid
storage body required by claim 1 (element E). Id. at 28 (citing Ex. 1002 ¶¶
56, 70), 32–33 (citing Ex. 1003, 2:1–10, 3:36–50, 10:50–59, Figs. 1 and 14).
Petitioner asserts that the combination of Takeuchi and Counts
discloses a “heating wire in the atomizer surrounded by the porous body” as
recited in claim 1 (element F). Id. at 29 (citing Ex. 1002 ¶¶ 59, 63, 72), 33–
34 (citing Ex. 1003, 8:16–23, 8:27–36, 10:57–59, Figs. 1, 4, 6, 14; Ex. 1004,
Abstr., 1:29–34, 3:15–29, 4:1–11, Figs. 1, 2). Petitioner’s argument
explaining how the combination discloses this element of claim 1 is
presented in the Petition as follows:
Takeuchi and Counts disclose a heating wire in the
atomizer surrounded by the porous body, as recited in element
F of Claim 1 (by the porous cylindrical atomizer, as recited in
element F of claim 14). Takeuchi explains that a “rod-like
heater 74” can be inserted into the “liquid passageway 37,”
which, again, may be contain a “intercommunicating pore
structure 302.” Ex. 1003 at 8:16-23; id. at 8:30-36; id. at 5:49-
50; id. at 8:27-29; id. at 10:57-59; Nayfeh Decl. at ¶¶ 59 and 70.
Counts provides a way to implement Takeuchi’s “rod-like
heater 74” using a heating wire (a “resistive wire coil” “heating
element”). Ex. 1004 at 4:5-11; Nayfeh Decl. at ¶ 72. Therefore,
the combination of Takeuchi and Counts disclose[s] a heating
wire coil within and surrounded by the porous body or
cylindrical atomizer. Nayfeh Decl. at ¶ 63.
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Id. at 29.
Paragraph 59 of the Nayfeh Declaration describes Takeuchi’s
disclosure of rod-like heater 74. Paragraph 63 states that
Combining Takeuchi and Counts in the way described in Part
V.A.1 above would lead to a configuration similar to the
following, which is presented below for demonstration
purposes only. In this configuration, the “intercommunicating
pore structure 302” (porous body) surrounds the “resistive wire
coil” (heating wire).

Ex. 1002 ¶ 63 (citing Ex. 1004, Fig. 2, Ex. 1003, Fig. 4).
Part V.A.1 is a heading in the Nayfeh Declaration that precedes
paragraphs 38–48, which do not mention the intercommunicating pore
structure 302 of Takeuchi. Paragraphs 70 and 72 refer to claim 14
(paragraph 70 states that Takeuchi’s intercommunicating pore structure 302
is a disclosure that the atomizer can include a porous body and paragraph 72
states that Takeuchi’s liquid passageway can be a porous cylindrical tube
and is part of the atomizer because it facilitates atomization). Id. ¶¶ 70, 72.
Petitioner relies on essentially the same support and analysis for claim
1 in order to show that independent claim 14, which further requires that the
atomizer is a “porous cylindrical atomizer,” would have been obvious over
the combination of Takeuchi and Counts. See Pet. 27–29, 34–35.
In response, Patent Owner argues that the disclosures in Takeuchi
relied upon by Petitioner and Dr. Nayfeh “do[] not support incorporating
‘rod-like heater 74’ into an embodiment that includes intercommunicating
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pore structure.” Prelim. Resp. 25–26 (citing Ex. 1003, 8:27–29, 1057–59,
Fig. 1). Patent Owner argues that “[i]n all of the specific embodiments
disclosed by Takeuchi that utilize an intercommunicating pore structure, the
heater is located outside of the tube (see, e.g., Figures 14 and 15 of
Takeuchi)”. Id. Patent Owner challenges Dr. Nayfeh’s opinion that one of
ordinary skill in the art “‘would have had a reason to combine those
elements from the prior art in the same arrangements shown in the claims I
examined’” as conclusory and insufficient for an obviousness analysis. Id.
at 26–27 (quoting Ex. 1002 ¶ 37).
Section 103(a) forbids issuance of a patent when “the differences
between the subject matter sought to be patented and the prior art are such
that the subject matter as a whole would have been obvious at the time the
invention was made to a person having ordinary skill in the art to which said
subject matter pertains.” Graham v. John Deere Co. of Kansas City, 383
U.S. 1, 13 (1966). In Graham, the Court set out a framework for applying
the statutory language of § 103:
Under § 103, the scope and content of the prior art are to be
determined; differences between the prior art and the claims at
issue are to be ascertained; and the level of ordinary skill in the
pertinent art resolved. Against this background, the
obviousness or nonobviousness of the subject matter is
determined.
Id. at 17. “While the sequence of these questions might be reordered in any
particular case, the factors continue to define the inquiry that controls.” KSR
Int’l. v. Teleflex Inc., 550 U.S. 398, 407 (2007).
The Supreme Court has made clear that we apply “an expansive and
flexible approach” to the question of obviousness. Id. at 415. Whether a
patent claiming the combination of prior art elements would have been
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obvious is determined by whether the improvement is more than the
predictable use of prior art elements according to their established functions.
Id. at 417. To reach this conclusion, however, requires more than a mere
showing that the prior art includes separate references covering each
separate limitation in a claim under examination. Unigene Labs., Inc. v.
Apotex, Inc., 655 F.3d 1352, 1360 (Fed. Cir. 2011). Rather, obviousness
requires the additional showing that a person of ordinary skill at the time of
the invention would have selected and combined those prior art elements in
the normal course of research and development to yield the claimed
invention. Id.
Against this general background, we have considered Petitioner’s
arguments and evidence together with the Preliminary Response. On this
record, we agree with Patent Owner that Petitioner has not met the threshold
for instituting an inter partes review of the ’726 patent. Petitioner and
Dr. Nayfeh state that “the combination of Takeuchi and Counts disclose[s] a
heating wire coil within and surrounded by the porous body or cylindrical
atomizer.” Pet. 29; see Ex. 1002 ¶ 63. However, Petitioner cites insufficient
evidence to support this statement. For example, Petitioner and Dr. Nayfeh
assert that Takeuchi discloses that a liquid passageway portion of the
atomizer is in contact with a liquid storage body and may be porous. Pet.
28; Ex. 1002. Petitioner also asserts that Takeuchi discloses “a ‘rod-like
heater 74’ [that] can be inserted into the ‘liquid passageway 37.’” Pet. 29;
see Ex. 1002 ¶¶ 59, 70. Because the liquid passageway of Takeuchi “may []
contain [an] ‘intercommunicating pore structure 302’” and because “Counts
provides a way to implement Takeuchi’s ‘rod-like heater 74’ using a heating
wire,” Petitioner and Dr. Nayfeh conclude that “the combination of
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Takeuchi and Counts disclose[s] a heating wire coil within and surrounded
by the porous body or cylindrical atomizer.” Pet. 29; see Ex. 1002 ¶ 63.
We are not persuaded, however, that these observations of the prior
art provide a rational basis for combining the separate embodiments of
Takeuchi, namely the intercommunicating pore structure 302 and the rod-
like heater 74, together with the resistive wire coil of Counts, in the
configuration required by independent claims 1 and 14. Where the claimed
subject matter cannot be fairly characterized as involving the simple
substitution of one known element for another, there must be a showing of
“an apparent reason to combine the known elements in the fashion
claimed . . . .” KSR, 550 U.S. at 418 (citing In re Kahn, 441 F.3d 977, 988
(Fed. Cir. 2006) (“[R]ejections on obviousness grounds cannot be sustained
by mere conclusory statements; instead, there must be some articulated
reasoning with some rational underpinning to support the legal conclusion of
obviousness”)).
We acknowledge that the Petition and Dr. Nayfeh provide an
overview of the scope and content of the prior art and the relationship to
the ’726 patent. Pet. 9–14, 21–27; Ex. 1002 ¶¶ 23–36. We also
acknowledge that the Petition includes a claim chart for claim 1 (and
element F) that quotes Takeuchi’s disclosures that “[a]ny of these
modifications permits producing the particular function described previously
in conjunction with the embodiment shown in FIG. 1” and “[i]n this
embodiment [referring to Figure 14], a heater or heaters (not shown) may be
arranged as in FIG. 1.” Pet. 33 (citing Ex. 1003, 8:27–29, 10:57–59).
Despite that background information and the citations to the prior art, we
determine that Petitioner has not explained sufficiently why a person of
ordinary skill in the art would have had a reasonable expectation of success
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combining the various embodiments disclosed in the prior art references in
the manner claimed by the ’726 patent. Simply stating that Takeuchi’s
liquid passageway may contain an intercommunicating pore structure is
insufficient. Petitioner fails to explain why one of ordinary skill in the art
would have selected the rod-like heater configuration instead of other heater
configurations disclosed by Takeuchi, specifically, the heater configuration
depicted with the intercommunicating pore structure in Figure 15 of
Takeuchi. See Prelim. Resp. 26.
Without such an explanation regarding the combination of Takeuchi
and Counts, we determine that Petitioner has failed to establish a reasonable
likelihood that it would prevail in its assertion that claims 1 and 14, as well
as dependent claims 3, 4, 8–10, and 12, are unpatentable as obvious over
Takeuchi and Counts.
D. Obviousness over Takeuchi and Kaufmann
Independent claim 15 requires “a liquid storage body including fiber
material in a cylindrical section of the housing, with the liquid storage body
in physical contact with the atomizer.” Ex. 1001, 6:25–28. Claim 16
depends from independent claim 15 and requires a “sensor electrically
linked to the electronic circuit board.” Id. at 6:29–31. Petitioner argues that
claims 15 and 16 are unpatentable as obvious over Takeuchi and Kaufman.
Pet. 42–54. Specifically, Petitioner argues “Kaufmann recognizes the
problems of fluid dispensers like Takeuchi’s that have a ‘large volume of
fluid . . . in a non-capillary container,’ a ‘capillary conveying line’ through
which fluid is ‘transferred from the container to the delivery end,’ and an air
inlet through which air enters to maintain an appropriate pressure.” Pet. 43
(citing Ex. 1005, 1:23–44; Ex. 1002 ¶ 86).
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According to Petitioner, “Kaufmann’s solution is to use a porous
material (e.g., a fiber) in part of the storage container as a buffer between the
air inlet and the liquid.” Id. (citing Ex. 1005, 3:12–41; Ex. 1002 ¶ 88).
Kaufman’s fluid dispenser is depicted in Figure 5, below:

Petitioner describes the embodiment shown in Figure 5, above, as including
a capillary storage (16) and conveying line (14) that are tapered in a rear
portion (140) to interface with the liquid storage area (11). Id. at 43–44.
Petitioner contends that substitution of Kaufmann’s fluid dispensing utensil
for Takeuchi’s liquid storage portion would lead to the configuration shown
below:

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The configuration shown above merges Figure 5 of Kaufman (outlined in
red) with Figure 1 of Takeuchi. Id. at 46–47. According to Petitioner,
“[b]ecause both Kaufmann’s ‘tip (15)’ and Takeuchi’s ‘liquid passageway’
can be porous, the ‘liquid passageway’ could be modified as an extension of
‘tip (15)’ –– characterized at the outlet by Takeuchi and at the interface with
the ‘capillary storage (16)’ by Kaufman.” Id. at 47 (citing Ex. 1005, 10:35–
38, Ex. 1003, 10:50–59, Ex. 1002 ¶ 97).
Regarding the element of claim 15 labeled F, which recites “a liquid
storage body including fiber material in a cylindrical section of the housing,”
Petitioner contends that “Takeuchi discloses a liquid storage area in the
housing” and that “the advantage of Kaufmann’s fluid dispenser over
Takeuchi is the ‘fibrous materials’ that ‘create porous paths by being
bundled together’ in the liquid storage body.” Id. at 49 (citing Ex. 1005,
9:8–41, Ex. 1002 ¶ 106). Petitioner asserts that Takeuchi provides a reason
for configuring container 32 to be in the cylindrical upper chamber 121 in
order to beneficially limit condensation on the inside wall of upper chamber
121 and enhance aerosol formation. Id. at 49 (citing Ex. 1003, 9:59–10:12,
Ex. 1002 ¶ 107). This configuration, Petitioner argues, provides even
stronger reason to use Kaufman “so as not to ‘clog the air intake port 18.’”
Id. (citing Ex. 1003, 9:23–26, Ex. 1002 ¶ 108).
Patent Owner contends that one of ordinary skill in the art would not
have combined Takeuchi with Kaufman because Kaufman relates to writing
utensils and not smoking devices and also because Takeuchi avoids leakage
from opening 33, even if turned upside down, by providing a sufficiently
small diameter. Prelim. Resp. 51–52 (citing Ex. 1003, 6:1–3). Patent
Owner further argues that Takeuchi does not disclose an atomizer because
“[c]apillary tube 36 functions solely to transport liquid from the liquid
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storage body to heater 42, and plays no role in atomizing the liquid from the
liquid supply to an aerosol.” Id. at 51.
We agree with Patent Owner that Petitioner has not shown sufficiently
that one of ordinary skill in the art would have had a reason to combine
Kaufman’s fibers in a particular arrangement of Takeuchi’s device. We also
are not persuaded that, because Kaufmann’s liquid dispensing system has
porous tip 15 and Takeuchi’s flavor-generating device has a porous liquid
passageway, one of ordinary skill in the art would have modified Takeuchi
to incorporate Kaufmann’s liquid delivery system. We are not persuaded
that Petitioner’s combinations and reasons for inserting the disclosures of
Kaufmann into the system of Takeuchi in the manner of claim 15 have
rational underpinnings instead of improper hindsight.
We determine that Petitioner has failed to show sufficiently that claim
15 and, for the same reasons, dependent claim 16, are unpatentable as
obvious over the cited references.
E. Obviousness over Takeuchi, Counts, and Kaufmann
Claims 2 and 13 depend from claim 1 and claim 17 depends from
claim 15. Claim 2 requires “the liquid storage body including fiber
material.” Ex. 1001, 5:11–12. Claim 13 requires that “the porous body
comprises a porous bulge section which projects into the liquid storage
body.” Id. at 6:5–7. Claim 17 requires that “the heating element
compris[es] a wire coil in a cavity in the atomizer.” Id. at 6:32–33.
Petitioner argues that claims 2, 13, and 17are unpatentable as obvious over
Takeuchi, Counts, and Kaufman. Pet. 54–60. Petitioner relies on the same
reasons for combining Takeuchi with Counts and Kaufman as argued
previously. Id. at 54. For the same reasons stated above with respect to
claims 1 and 15, we determine that Petitioner has failed to demonstrate
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sufficiently that claims 2, 13, and 17 are unpatentable as obvious over the
cited references.

CONCLUSION III.
We conclude that Petitioner has not established a reasonable
likelihood of prevailing on its assertions that claims 1–4, 8–10, and 12–17 of
the ’726 patent are unpatentable as obvious.

ORDER IV.
In consideration of the foregoing, it is hereby ordered that the Petition
is denied.

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PETITIONER:

James H. Morris
Edmund J. Walsh
WOLF, GREENFIELD & SACKS, P.C.
JMorris-PTAB@wolfgreenfield.com
EWalsh-PTAB@wolfgreenfield.com

PATENT OWNER:

Michael J. Wise
Joseph P. Hamilton
PERKINS COIE LLP
patentprocurement@perkinscoie.com
MWise@perkinscoie.com
JHamilton@perkinscoie.com