by Dennis Crouch
Great question in the new Supreme Court petition of SRAM, LLC v. FOX Factory, Inc. The Federal Circuit has tightened its belt on Secondary Indicia of nonobviousness — only rarely finding that the claimed indicia are closely enough tied to the claims at issue and creating additional hoops of proof for the patentee. The petition argues that those requirements go beyond the statute and Supreme Court precedent. When I wrote about the original 2019 FedCir decision, I explained that This is “not a good case for patent holders.”
The court here again raised the “nexus” hurdle by holding that a presumption of nexus can only be achieved by proving that the product being sold by the patentee is “essentially the claimed invention.”
Dennis Crouch, Nexus: Product must be “Essentially the Claimed Invention”, Patently-O (December 18, 2019).
New Question Presented:
In Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), this Court recognized the pivotal importance of “objective indicia” of nonobviousness (also known as “secondary considerations”) – including the long-felt but unsolved need for the patented invention, the failure of others to arrive at the invention, and the invention’s subsequent commercial success – in determining whether a patent’s claims were obvious to a person of ordinary skill in the art at the time of the invention under 35 U.S.C. § 103.
In this case, the Federal Circuit effectively undermined this Court’s standard by improperly creating a new categorical and overly restrictive limitation on the consideration of objective indicia of nonobviousness that exists nowhere in the Patent Act or this Court’s jurisprudence.
The question presented is:
Whether the Federal Circuit erred in holding that, under 35 U.S.C. § 103, before a nexus can be presumed between objective indicia of nonobviousness and the patent claim, a patentee must first prove that a commercial product is “essentially the claimed invention” – to the exclusion of all other product features.
Below at 5.3, Greg “I use my real name” DeLassus muses on two points, of which I reveal a fallacy to the first condition and remark that I had already noted an issue with the second.
Here, more on that second point:
link to dictionary.findlaw.com
In particular, a critical mind will immediately notice an attempt to make exclusive or elevate to a “but for” condition that which is provided in the alternative as presented in the legal definition (emphasis added):
“ Nexus
nexus n
pl: nex·us·es or: nexus [-səs, -süs]
[Latin, bond, tie, from nectere to bind]
: a connection or link between things, persons, or events esp. that is or is part of a chain of causation.”
MAY an ‘identity’ situation occur?
Sure.
MUST an ‘identity’ situation occur?
Only if you rewrite the definition of nexus.
This seems like an obvious slam dunk reversal. But it also brings up WHY — as in, why the animus against the patent holder and the attempt to elevate ‘nexus’ to be a ‘but for’ condition?
And a further WHY— why are the pundits silent as to the painfully clear bias?
I’ve never seen an examiner, a panel of APJ’s, or the Fed. Cir. evaluate secondary considerations correctly. Ever. I see lip service to the actual law, that secondary considerations are part of the record and have to be evaluated along with all of the evidence and arguments, and not in their ability on their own to knock down the determination of obviousness, but I’ve never seen that actually done.
In 21+ years of practice I’ve used secondary considerations successfully 3 times. But I always advise clients not to expect them to turn the tide.
I’ve never seen an examiner… evaluate secondary considerations correctly.
This is my experience as well.
I always advise clients not to expect them to turn the tide.
This is also my advice to clients, although I also think that it matters greatly the category of secondary considerations. Failure of others >>> teaching away >>>>> commercial success.
Yes, it’s rarely successful, but as noted at 3 below it can also depend on what is, and how good is, the secondary evidence put into the record before it gets to the PTAB, or on to the Fed. Cir., and that effort can get more expensive than most applicants are willing to pay for application prosecution?
Look how much of the objective secondary considerations defined in Graham v. Deere Co. [cited above] need to be obtained by research work by the applicant or patent owner. I.e., obtained from sources Other than legally ordered discovery from an opponent: “long-felt but unsolved need for the patented invention, the failure of others to arrive at the invention, and the invention’s subsequent commercial success.”
In United States v. Adams, 383 U.S. 39 (1966) [the companion case to Graham v. John Deere Co.] hte Court seems to give great importance to nexus. The term ‘nexus’ as understood under Adams, designates a factually and legally sufficient connection between the objective evidence of nonobviousness and the claimed invention so that the evidence is of probative value in the determination of nonobviousness.
Interesting but the cert petition left-out the discussion oon nexus in leading Riding Circuit and US Supreme Court case before 1952 such as Smith v. Goodyear Dental Vulcanite Co., 93 U.S. 486 (1877); Webster Loom Co. v. Higgins, 105 U.S. 580 (1882); Magowan v. New York Belting & Packing Co., 141 U.S. 332 (1891); or even the extensive discussion more recently in Wyers v. Master Lock Co., 616 F.3d 1231, 1246 (Fed. Cir. 2010) or the foundational case of the CCPA on nexus and its requirement to linked to the claimed invention in Solder Removal Co. v. USITC, 582 F.2d 628 (CCPA 1978) (Court holding a nexus is required between the merits of the claimed invention and the evidence offered, if that evidence is to be given substantial weight enroute to conclusion on the obviousness issue. );
The first question should be if it were obvious and commercially successful, why wasn’t it done before? If the challenger alleges the invention was trivial and did not contribute to the commercial success, then the next question is why does the challenger prefer litigation over using the prior art; i.e., what is the advantage sought by using the claimed invention rather than the prior art?
Often, the invention was only obvious in hindsight and the inventor earned the patent. Inventors are being penalized for inventing useful technologies that their competitors couldn’t and didn’t.
For one, the invention may not have been made before if the motivation to combine elements of the prior art was published just the day before the relevant date.
Inventions actually being made is not the legal touch point.
This speaks to the difference between 102 and 103.
If something HAS actually been made, then you are in ‘102 land.’
The ‘103 land’ keep out zone is simply not the same thing as the ‘102 land’ keep out zone.
The first question should be if it were obvious and commercially successful, why wasn’t it done before?
I agree that this should be the first question, but there are two potentially solid answers to this question that do not bolster the validity of a patent claim.
1) Whim of fashion. This was what was going on in Hotchkiss. The inventors there did not teach the art how to do anything that the rest of their competitors had not known how to do before. Rather, everyone had known previously how to make porcelain doorknobs, but the buying public did not want porcelain doorknobs. Metal doorknobs were the fashion, and then fashion changed. The patent system exists to incentivize technological progress, not tastemaking, so the patent grant failed as obvious, even though the invention was commercially quite successful.
2) Piece of a whole. When all of your evidence for “commercial success” comes from the sales of a device of which your invention is just one small part, the “commercial success” (such as it is) does not tell one much about the obviousness of the claimed invention. Is the device overall commercially successful because of this patented component, or because of any one or more of a hundred other patented components in the device?
This probably should be unpacked a bit as these are two very different things (with the first being more pertinent to a primary factor of obviousness, rather than a secondary consideration, and the second is reflected in my post below.
… the first will call to mind the point that I have made previously about the necessary PRO patent effect of KSR (that is so often attempted to be ignored) in that there is a Doctrine of Equivalents effect in rejecting new attempts at innovation because prior innovation (sometimes that prior having lapses into the public domain, but critically, sometime NOT) cover more than their mere literal words.
This too impacts WHY we employ the legal term of “ladders of abstraction” in claim writing, and why so often those in the ‘picture claim’ arts have a really difficult time understanding the larger picture of patents and innovation in non-picture claim arts.
Nabbed by autocorrect: lapses ==> lapsed.
One also must be aware of the trap that Greg falls into here with his choice of using “incentivize progress” instead of “promote progress,” as the choice of the original word of “promote” carried with it MORE THAN just the notion of ‘advance’ as in some type of linear and immediate advance.
It carried with it the notion of ‘promote’ in the advertising sense of the word – very much more aligned with what Greg deprecates as “whim of fashion.” That advertising sense carries more to mere presentation of options.
Anyone who has made a study of innovation (and the history of science and innovation) readily picks up that innovation is NOT linear. It must be appreciated that the non-linearity, and a priori unknowable-ness of tomorrow’s innovation is fostered and “incentivized” better without the overly-strict (even somewhat Marxist in a ‘five year plan mode) sense that Greg’s view leads one to.
Again, the old television show featuring James Burke (Connections) beautifully highlighted this nature.
To think that some ‘lineal advance’ must be present shows a lack of understanding of how innovation works.
Dennis, I see that you are cited in this cert petition:
“Other Authorities:
Dennis Crouch, Nexus: Product must be ‘Essentially the Claimed Invention’(Dec. 19, 2019) (available at link to patentlyo.com invention.html)………32″
Not about this particular case, but in general, when [as usual] the IPR is filed in response to a patent suit, the suing patent owner should logically be submitting the kind of secondary evidence of unobviousness into the IPR trial that they would normally be submitting in the patent suit, to the extent that they can. I.e., not treating the IPR as if it is an ex parte PTO proceeding. E.g., submitting independent magazine articles, consumer purchaser and/or purchasing agent testimony, etc., of the commercial importance of the claimed features. Not just declarations of a hired academic expert. You don’t get a second bite on this issue in the parallel patent suit, but you might get some discovery if that is has not, or not yet, been stayed?
PTAB does not permit discovery of objective evidence (i.e., only subjective evidence is allowed…).
JM, the discovery reference was to “the parallel patent suit.” Yes, getting additional discovery in the IPR itself requires permission that can be difficult to get, but there is no such specific limitation to “not permit discovery of objective evidence (i.e., only subjective evidence is allowed).”
This petition looks like a “cert denied” to me. The “presumption of nexus” rule was a pre-KSR invention of the Federal Circuit’s 1988 decision in Demaco. The Supreme Court has never endorsed it. In the unlikely event the Supreme Court agreed to take this case, the justices might end up throwing out the presumption altogether as consistent with the flexible framework of KSR.
In any case, a certiorari petition complaining about how the Federal Circuit applies its own precedents, on a common law rule whose existence the Supreme Court has not even acknowledged, seems like something the justices would find uninteresting.
+1
…especially as it appears to only harm patent holders.
agree
Nexus makes sense to me. “Presumption of nexus” doesn’t. Patentees who argue that a product’s sales are evidence of a patent claim’s nonobviousness should have to substantiate that inference. The more closely the product matches the claim, the less the patentee will need to do. If there’s an exact match, the patentee might not need to do anything…
“Presumption of nexus” sounds like an awkward description for the far end of the spectrum where the connection between the product’s sales and the claim’s nonobviousness is self-evident. It seems like an unnecessary shortcut the Federal Circuit has invented, and that patentees rely on at their own risk.
As the panel opinion explains (top of page 11, at link to cafc.uscourts.gov ), patentees can always put on evidence to explain why a product’s sales are evidence of a claim’s nonobviousness. A patentee who relies on the “presumption” and puts on zero evidence takes a risk.
“If there’s an exact match, the patentee might not need to do anything…”
No.
Nexus of identity is only part of the picture. The bigger picture here contains a “FOR ONLY” aspect that can be attacked on a wide range of other aspects, from the presence of other features to the presence of marketing campaigns (or even relative effectiveness of marketing campaigns).
I’m not that sure we disagree. I may have been too vague, but I’m not sure exactly what you’re saying.
If you are not aware of what I am saying at the same time admitting that you were too vague, then I am pretty sure that you understand my counter point.
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