Redline Detection, LLC v. Star Envirotech, Inc., 811 F.3d 435

Background

The ’808 patent (owned by Star Envirotech) claims methods for generating smoke to detect leaks in potentially explosive closed fluid systems (e.g., vehicle EVAP systems) by producing smoke in a closed chamber and carrying it with a non-combustible gas.
Redline filed an IPR challenging claims 9 and 10 of the ’808 patent; the PTAB instituted review but denied Redline’s motion to submit supplemental evidence (including a 60‑page expert declaration) under 37 C.F.R. § 42.123(a).
The PTAB excluded the supplemental materials as untimely and more than merely supplemental, finding Redline had not justified withholding the material until after institution and that admission would conflict with the PTAB’s mandate to conduct just, speedy, and efficient proceedings.
On the merits the PTAB found Redline failed to prove claims 9 and 10 obvious in view of Gilliam combined with Stoyle, or Gilliam combined with Pauley and a 1999 website; the Board concluded there was no motivation to combine the prior art to achieve the claimed closed‑chamber inert‑gas smoke method.
The Federal Circuit reviews the PTAB’s regulatory interpretation for reasonableness and its factual findings for substantial evidence, and affirms the PTAB: (1) the PTAB permissibly exercised discretion in applying § 42.123(a) within the broader Part 42 regulatory scheme; and (2) substantial evidence supports the PTAB’s obviousness findings.

Issues

Issue	Redline's Argument	Star's Argument	Held
Whether § 42.123(a)'s timeliness and relevance requirements bar the PTAB from applying other procedural criteria when deciding motions to submit supplemental information	§ 42.123(a) contains only two requirements (timeliness and relevance); if satisfied the motion must be granted	§ 42.123(a) must be read within Subpart A and the PTAB’s statutory mandate; PTAB may impose discretionary, case‑specific criteria	PTAB’s interpretation upheld: § 42.123(a) does not preclude consideration of other governing rules or discretionary factors; denial was not plainly erroneous
Whether the PTAB acted arbitrarily or capriciously by treating Redline differently from other panels that admitted supplemental evidence	PTAB inconsistently applied § 42.123(a); other panels admitted expert declarations under that subsection	Other panels’ admissions were factually distinguishable; PTAB gave permissible reasons tied to timing, prejudice, and efficient administration	Not arbitrary or capricious; other decisions were distinguishable and PTAB provided adequate rationale
Whether excluding Redline’s supplemental expert evidence deprived the PTAB of necessary factual bases to decide obviousness	Excluded expert testimony was essential to show motivation to combine references and PHOSITA understanding	Redline intentionally delayed submission; the petition could have included the expert declaration; exclusion was proper under Part 42 practice	Redline waived new arguments that relied on excluded evidence; PTAB’s exclusion was proper and within discretion
Whether claims 9–10 of the ’808 patent would have been obvious over Gilliam + Stoyle or Gilliam + Pauley + 1999 Website	A PHOSITA would have combined Gilliam’s leak‑testing apparatus with Stoyle/Pauley inert‑gas teachings to avoid explosion risk	The art used materially different smoke‑generation methods; no reason to substitute those teachings into Gilliam; substantial evidence shows no motivation to combine	Affirmed: substantial evidence supports PTAB’s finding that a PHOSITA would not have been motivated to combine the cited references and claims are not proved obvious

Key Cases Cited

In re Sullivan, 362 F.3d 1324 (Fed. Cir.) (deference to agency regulation interpretation)
Eli Lilly & Co. v. Bd. of Regents of Univ. of Wash., 334 F.3d 1264 (Fed. Cir.) (abuse of discretion standard for PTAB management of trials)
Graham v. John Deere Co. of Kan. City, 383 U.S. 1 (Sup. Ct.) (Graham factors for obviousness)
PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186 (Fed. Cir.) (motivation to combine and expectation of success requirements)
In re Gartside, 203 F.3d 1305 (Fed. Cir.) (obviousness legal standard and review)
Rambus Inc. v. Rea, 731 F.3d 1248 (Fed. Cir.) (factual findings reviewed for substantial evidence)
In re Watts, 354 F.3d 1362 (Fed. Cir.) (appellate review confined to the record before the board)