Presumption of Nexus or “Presumptions All the Way Down”

by Dennis Crouch

Xactware Solutions, Inc. v. Eagle View Techs., Inc. (Fed. Cir. 2019)

Both of these companies use drones to measure houses — their reports are then used for roofing, solar, and insurance estimates. In 2015, Eagle View sued Xactware for patent infringement — that case is ongoing.  Meanwhile, Xactware filed a series of inter partes review petitions – the subject of the appeal here.

For its part, the PTAB agreed to hear the IPRs — finding initially that the petitions had merit.  Ultimately, however, the PTAB sided with the patentee and found in its final decision that the challenged claims were not proven invalid. On appeal, the Federal Circuit has also affirmed.

Nexus between Secondary Indicia and the Claimed Invention:  The briefing focused on Eagle View’s secondary indicia of non-obviousness.  The service is clearly commercially successful and has been lauded with industry praise for solving solving a long-recognized problem.  Xactware argued, however, that these secondary indicia did not have a close enough nexus with the particular inventions claimed in the patents.  Without discussion, the Federal Circuit concluded that the Board’s finding of nexus was supported by substantial evidence.

Presumption of Nexus. The court did not touch the trickier question of presumption-of-nexus.

Patent claims are presumed patentable and non-obvious.  Thus, any obviousness challenge must present evidence sufficient to overcome that presumption.  Secondary indicia of nonobviousness are akin to rebuttal evidence — only needed if the challenger meets that initial prima facie burden.

Secondary indicia of non-obvousness involve two important elements (1) the indicia itself (such as commercial success or industry praise of a product); and (2) a nexus between the indicia and the claimed invention at issue.  This second element – nexus – is generally more difficult to actually prove.  However, the Federal Circuit has created a presumption-of-nexus doctrine.  We assume a nexus if the patentee shows that the successful/praised product (1) “embodies the claimed features” and (2) is “coextensive with the claimed features.” Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000).  Here, the “coextensive” requirement prevents presumption-of-nexus when the claimed invention is just a small component of a multi-component product. However, we have an ongoing debate on how to know when a product has too-many non-claimed-features to still be coextensive with the claims.

Although the parties asked for further guidance on this issue, the Federal Circuit ruled that no determination on presumption-of-nexus was necessary because the patentee had provided actual proof of nexus — that the claimed features were the cause of the success/praise/etc.

= = = = =

Of note, the first result of my Google search for “xactware” is an advertisement for EagleView. I am amused but not confused. See Eric Goldman, Another Court Says Competitive Keyword Advertising Doesn’t Cause Confusion, Technology & Marketing Law Blog (2018).

29 thoughts on “Presumption of Nexus or “Presumptions All the Way Down”

  1. 2

    A bit TOO loose (and therefore inaccurate):

    Patent claims are presumed patentable and non-obvious. Thus, any obviousness challenge must present evidence sufficient to overcome that presumption. Secondary indicia of nonobviousness are akin to rebuttal evidence — only needed if the challenger meets that initial prima facie burden.

    For a number of reasons.

    First, it is important to distinguish that the presence (AND level) of presumption is for GRANTED patent claims (as opposed to patent application claims). See i4i.

    Second, the view of secondary evidence as merely “rebuttal” has been rejected by the courts (and the patent office). Note that in prosecution, the “action” of “rebuttal” creates a NEW evaluation based on the TOTALLITY of the indicators, as opposed to any “true” form of rebuttal.

    This is important particularly in this case as the (improper) use of the sense of rebuttal as some separate consideration appears to attempt to parse the over-riding (singular) notion that the GRANTED patent has obtained the presence AND level of the presumption.

    That presumption is a critical stick in the bundle of PROPERTY rights of a granted patent. It is a disservice (both in context of this case, as well as in important other contexts) to be so sloppy with the concept.

    1. 2.1

      These patents stink and the idea that post-filing data totally unrelated the obviousness of the technology can somehow rescue them from invalidation is repulsive.

      Flying machines have been used to measure objects below them for hundreds of years. What. The. F.

      1. 2.1.1

        Your feelings are noted. Now try to join the dialogue with an on-point and cogent legal contribution.

        1. 2.1.1.1

          Commercial success is irrelevant to the obviousness of a patent claim. It is best understood as a a judge-created exception to a 103 determination.

          Patents aren’t rewards for good business practices.

          1. 2.1.1.1.1

            Your feelings are again noted, but the legal point of relevance is simply different than those feelings.

            1. 2.1.1.1.1.1

              Your feelings about my feelings and your feelings about patent law are probably the least important feelings on earth, Billy. GFY.

              1. 2.1.1.1.1.1.1

                Funny that YOU want to dwell on feelings and when I try to pull you to an actual discussion of law, all that you can offer is GFY…

      2. 2.1.2

        Others will eventually infringe these patents- how could they not, since the point of a drone with a camera is to look at things below- and they won’t be subject to estoppel of district court litigation. That should be fun- for someone.

        1. 2.1.2.1

          I’m measuring building sizes with a drone right now for the purpose of generating a roofing estimate.

    2. 2.2

      The presumption of validity is not a stick in a bundle of anything. It’s just a presumption.

      More importantly, post-filing “commercial success” as an indicator of non-obviousness is judge-fabricated nonsense that directly contradicts the patent statute.

      1. 2.2.1

        I “get” that that is how you feel, Malcolm, but you are simply legally incorrect.

        1. 2.2.1.1

          103 states that obviousness is determined as of the filing date of the application. Do you disagree with that?

          1. 2.2.1.1.1

            The object to which a state of obviousness is to be determined is the object at the filing date.

            You appear to confuse timing of what may happen to support the object (and the object’s timing) with the timing of the support.

            And yes, this reflects your inability to control your feelings.

          2. 2.2.1.1.2

            Commercial success (after the filing date) is evidence of a commercial need at the time of filing. If there was a need for the invention at the time of filing, and the need was not met (no anticipation of the invention) at the time of filing, that means that the invention was not obvious at the time of filing. So, nobody disagrees that obviousness is determined at the time of filing.

            1. 2.2.1.1.2.1

              Thanks PiKa – well stated in distinguishing the different timings of the filed item and of support, albeit later, still reflects the earlier item.

              Notwithstanding your present fine explanation, Malcolm is aware of this distinction because — as he claims — he is a patent attorney.

      2. 2.2.2

        When one asks a politician a question that is too difficult to answer, said politician answers another question entirely.

        To ask a judge the question “Was it obvious” is to pose a question far too difficult for them. Their gut will provide an answer of sorts, but not a reasoned answer, and reasoning is what is expected and required.

        Much easier to answer the questions: i) is there evidence of commercial success and ii) is there a nexus. Reasoning easy. Problem solved.

      3. 2.2.3

        MM: ” … is judge-fabricated nonsense that directly contradicts the patent statute.”

        You mean like with Mayo/Alice contradicting s101; right?

        Hypocrisy.

      4. 2.2.4

        I agree. The sticks in a bundle model for property is that each sticks represents a separable property right. Treating the presumption of validity as a stick in a bundle is one the most absurd “arguments” ever conceived. One could think of the presumption of validity as reflecting the overall strength/flammability of the bundle or of a particular stick. However, treating it as a stick in its own right is a weak attempt to bolster a weak argument.

        1. 2.2.4.1

          I find your feelings themselves to be nothing more than a weak “argument.”

          Maybe go back and read the Supreme Court i4I case and think about it for awhile.

  2. 1

    My company uses prior art drones to measure the size of foreclosed houses and large dog houses plus we send an alert to your phone when the flight is happening so you can watch the sky. This is 21st century technology at its finest.

    1. 1.1

      Great, aside from the ample snark, did you have an actual legal point to make…?

      1. 1.1.1

        It’s a very successful company. Therefore, I deserve a patent. It says so right there in the statute… right?

        1. 1.1.1.1

          Your obtuseness is noted.

          Again, did you have an actual legal point to make?

          1. 1.1.1.1.1

            I am making “legal points”, Billy. Just because I don’t rely on ALL CAPS to and incoherent fist pounding like you doesn’t mean that points aren’t being made. GFY

            1. 1.1.1.1.1.1

              That you feel that you are making legal points with your feelings is part and parcel of your problem, Malcolm.

              You seem absolutely unable to manage your feelings or note the separation of those feelings from reality.

              1. 1.1.1.1.1.1.1

                You are projecting, Billy.

                [shrugs]

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